UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________________

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2024~~2025

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-41163

__________________________________________________

TERAWULF INC.

(Exact name of registrant as specified in its charter)

__________________________________________________


DE		87-1909475
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

9 Federal Street		21601
Easton	MD
(Address of principal executive offices)	(State)	(Zip Code)


(410) 770-9500
(Registrant’s telephone number, including area code)

Securities registered pursuant to 12(b) of the Exchange Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.001 per share	WULF	The Nasdaq Capital Market

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. x

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o

Indicate by check mark whether any of those error corrections are restatements that ~~are~~ required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to 240.10D-1(b). o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The aggregate market value of voting common stock held by non-affiliates of the registrant as of June 30, ~~2024~~2025, the last business day of the registrant’s second fiscal quarter, was approximately $1,~~300~~272,~~536~~261,~~223~~399.

There were ~~383~~424,~~137~~068,~~722~~125 shares of common stock outstanding as of February 2624, ~~2025~~2026.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information required for Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K is incorporated by reference to the registrant’s definitive proxy statement for the ~~2025~~2026 annual meeting of stockholders.

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TERAWULF INC.

TABLE OF CONTENTS

PART I		1
ITEM 1.	Business	1
ITEM 1A.	Risk Factors	10
ITEM 1B.	Staff Comments	2521
ITEM 1C.	Cybersecurity	2521
ITEM 2.	Properties	2623
ITEM 3.	Legal Proceedings	2724
ITEM 4.	Mine Safety Disclosures	2724
PART II		2825
ITEM 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	2825
ITEM 6.	[Reserved]	2825
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2825
ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risk	4140
ITEM 8.	Financial Statements and Supplementary Data	41
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	87102
ITEM 9A.	Controls and Procedures	87102
ITEM 9B.	Other Information	89104
ITEM 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	89104
PART III		90105
ITEM 10.	Directors, Executive Officers and Corporate Governance	90105
ITEM 11.	Executive Compensation	90105
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	90105
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	90105
ITEM 14.	Principal Accounting Fees and Services	90105
PART IV		91106
ITEM 15.	Exhibits, Financial Statement Schedules	91106
ITEM 16.	Form 10-K Summary	96111
Signatures		97112

(i)

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TERAWULF INC.

As used in this Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (this “Annual Report”), the terms “Company,” “TeraWulf,” “we,” “us” or “our” refers to TeraWulf Inc., a Delaware corporation and its consolidated subsidiaries, unless otherwise indicated.

PART I

ITEM 1. Business

Overview

~~TeraWulf~~We ~~Inc.~~are ~~(“we,” “us,” “the Company,” or “TeraWulf”) is~~ a vertically integrated owner, developer, and operator of ~~next~~large-~~generation~~scale digital infrastructure, ~~primarily~~in ~~powered~~the byUnited ~~predominantly~~States, ~~zero~~purpose-~~carbon~~built ~~energy.~~to Wesupport ~~develop and operate~~ high-performance ~~data centers optimized for both bitcoin mining and high-performance~~ computing (“HPC”) workloads, ~~leveraging~~including ~~clean~~artificial intelligence (“AI”), ~~cost-effective~~machine learning, and ~~reliable~~advanced ~~energy~~cloud ~~sources to drive long-term sustainability in digital infrastructure~~applications.

Our ~~operations~~strategy ~~are~~is ~~anchored~~grounded atin ~~the~~controlling ~~Lake~~infrastructure ~~Mariner~~at ~~Facility~~utility inscale ~~upstate~~and ~~New~~pairing ~~York,~~compute‑optimized ~~strategically~~facilities ~~located~~with onreliable, ~~the~~long‑duration ~~shores~~power ofresources. ~~Lake~~By ~~Ontario~~controlling ~~(the~~land ~~“Lake~~use ~~Mariner~~through ~~Facility”~~ownership or ~~“Lake~~long-term ~~Mariner”).~~ground ~~Developed~~leases, ontogether ~~the~~with ~~site~~interconnection ofrights, aelectrical ~~decommissioned~~and ~~coal-fired~~cooling ~~power~~infrastructure, ~~plant~~and, ~~Lake~~where ~~Mariner~~applicable, ison-site ~~designed~~generation, ~~for~~we ~~scalable~~deliver ~~growth~~resilient, ~~with~~cost-efficient ~~the~~ capacity to ~~expand~~hyperscale upand toenterprise ~~500~~customers ~~megawatts~~through ~~(“MW”) in the near~~ long-term ~~and~~hosting ~~750 MW with certain transmission upgrades~~arrangements. This ~~scale,~~infrastructure-first ~~combined~~approach ~~with~~enables ~~access~~TeraWulf to ~~low-cost,~~serve ~~predominantly zero~~Tier-~~carbon~~1 ~~power,~~counterparties ~~makes~~while ~~Lake~~maintaining ~~Mariner~~operational ancontrol, ~~attractive~~development ~~site~~flexibility, ~~for hyperscale~~ and ~~enterprise~~disciplined ~~customers~~capital allocation.

~~Since~~Our ~~our~~platform ~~public~~is ~~debut~~differentiated inby December 2021, bitcoin mining has been our primary revenue driver. However, we have strategically expanded our focus to include HPC hosting and colocation services, positioning ourselves at the intersection of energy and digital compute infrastructure. A key milestone in this transition occurred on December 23, 2024, when we entered into long-term ~~data~~control ~~center~~of ~~lease~~utility-scale ~~agreements with Core42 Holding US LLC (“Core42”)~~infrastructure, adeep ~~G42 company specializing~~ in-house ~~sovereign~~power ~~cloud,~~and AIgrid ~~infrastructure~~expertise, and ~~digital~~a ~~services,~~scalable ~~securing~~development ~~72.5~~model MWsupported ~~of HPC hosting capacity at Lake Mariner for GPU compute workloads. The lease agreements include an option, exercisable through March 31, 2025, to expand~~ by ~~an additional 135 MW. This marks a significant step forward in our HPC hosting strategy~~long-term, ~~reinforcing~~credit-enhanced ~~our~~customer ~~position in the rapidly growing market for artificial intelligence (AI) and machine learning compute infrastructure~~contracts.

WeHPC ~~primarily~~Platform ~~operate~~and ~~through~~Development ~~two wholly-owned subsidiaries:~~Pipeline

~~•Lake~~Our ~~Mariner~~contracted ~~Data~~HPC ~~LLC~~platform –currently weconsists ~~operate a fleet~~ of ~~high-performance~~two ~~bitcoin~~primary ~~miners—primarily~~campuses: sourced from Bitmain Technologies Limited—to validate transactions on the bitcoin blockchain. As of December 31, 2024, we had an operational self-mining capacity of 195 MW, with an additional 50 MW under construction and expected to come online in the first half of 2025. Our focus remains on optimizing operational efficiencies to reduce costs and maximize bitcoin production.

•~~Wulf~~Lake ~~Compute~~Mariner ~~LLC~~Data –Campus ~~established~~(the in“Lake ~~2024,~~Mariner weData ~~have constructed and are continuing to expand our purpose-built infrastructure to provide HPC hosting and colocation services for GPU-based workloads~~Campus”), ~~AI,~~located ~~machine~~in ~~learning~~Barker, ~~and~~New ~~cloud~~York ~~computing~~within ~~applications.~~the ~~By leveraging our engineering expertise, scalable infrastructure, and cost~~single-~~efficient~~state ~~power~~New ~~model,~~York weIndependent ~~aim~~System toOperator ~~become~~(“NYISO”) amarket; ~~premier hosting provider for enterprises requiring high-density compute capacity.~~and

We•Abernathy ~~believe~~HPC ~~TeraWulf’s~~Campus ~~dual-purpose~~(the ~~digital~~“Abernathy ~~infrastructure~~HPC ~~strategy~~Campus”), ~~strengthens~~located ~~operational~~in ~~efficiency~~Abernathy, ~~diversifies revenue streams~~Texas, ~~and~~within ~~enhances our position in~~ the ~~evolving~~Southwest ~~digital~~Power ~~economy~~Pool (SPP).

Both campuses have been engineered for phased, large‑scale deployments of liquid‑cooled, hyperscale compute and are supported by long‑term contractual arrangements with credit‑enhanced counterparties. Together, these campuses have contracted 522 MW of critical IT load with long‑dated revenue visibility.

In addition, the Company holds a long‑term ground lease in Lansing, New York (the “Cayuga Site”), which, upon completion of permitting and site development, has the potential to support up to 400 MW of gross capacity, representing approximately 320 MW of contractual critical IT load. The Cayuga Site provides a third anchor location with existing interconnection and supporting infrastructure and represents a key component of the Company’s forward development pipeline.

Through a combination of contracted capacity and future expansion opportunities, TeraWulf has established a multi‑regional HPC platform designed to support sustained growth. The Company’s development model targets the contraction of approximately 250 MW to 500 MW of new critical IT HPC capacity annually, aligned with customer demand, power availability, and regional grid conditions.

Business Strategy

TeraWulf’s business strategy is ~~built~~focused on ~~leveraging~~the ~~our~~development, ~~owned~~ownership, and ~~scalable~~operation ~~digital~~of ~~infrastructure~~large‑scale, topower‑advantaged ~~drive~~digital ~~revenue~~infrastructure ~~and~~serving ~~profitability~~hyperscale ~~through both bitcoin mining~~ and enterprise HPC ~~hosting~~workloads. AsOur aapproach ~~vertically~~is ~~integrated~~differentiated ~~operator, we own and control our infrastructure, allowing us to optimize efficiency, reduce costs, and maintain a highly competitive cost structure.~~by:

We•Infrastructure ~~focus~~Control ~~primarily on earning bitcoin through mining~~ and ~~selling~~Vertical ~~the~~Integration ~~bitcoin~~– ~~generated~~We ~~for~~retain ~~cash,~~majority ~~activities~~ownership ~~directly~~and ~~related~~direct tooperational ~~growing~~control ~~our~~over ~~digital~~core infrastructure ~~and~~assets, ~~enhancing~~including ~~efficiencies~~land inpositions ~~our operations~~ (~~e.g.,~~through ~~reducing~~ownership ~~our~~or ~~cost~~long‑term toground ~~mine~~leases)., ~~While~~interconnection ~~bitcoin~~rights, ~~mining~~electrical ~~remains a core focus~~systems, wecooling ~~are strategically shifting an increasing portion of our~~ infrastructure, ~~at Lake Mariner to support HPC hosting~~ and ~~colocation~~, ~~capitalizing~~where applicable, on‑site ~~the rapid growth of AI and cloud computing~~generation. ~~Our~~This ~~transition~~vertical tointegration ~~GPU-based~~enables ~~workloads~~disciplined isexecution, agovernance ~~natural evolution of our platform~~oversight, ~~originally designed for bitcoin mining~~ and ~~now~~infrastructure‑style ~~expanding to accommodate the growing demand for GPU-driven computing~~returns.

A key milestone in this strategy was the execution of our December 2024 data center lease agreements with Core42, securing an initial 72.5 MW of data center infrastructure and hosting capacity at Lake Mariner for GPU compute workloads. This capacity is expected to ramp up in 2025, with an option to expand near-term HPC hosting capacity for Core42 by an additional 135 MW. These agreements accelerate our entry into the fast-growing hyperscale data center market and strengthen our position in the evolving digital economy.

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~~Our modular~~•Long‑Term, ~~scalable~~Credit‑Enhanced ~~data~~Contracting ~~center~~– ~~design~~Our ~~enables~~HPC usarrangements toare ~~efficiently~~structured ~~co-locate~~as ~~HPC~~long‑term ~~infrastructure~~data ~~near~~center ~~reliable~~leases, ~~low-cost~~typically ~~power~~with ~~sources,~~base ~~reducing~~terms ~~energy~~ranging ~~costs~~from ~~while~~10 ~~maintaining~~to ~~operational~~25 ~~flexibility. As demand for AI~~years, ~~cloud~~contractual ~~computing~~escalators, and ~~machine~~renewal ~~learning~~and ~~continues~~contraction tooptions. ~~surge,~~Certain ~~our~~projects ~~ability~~benefit tofrom ~~design,~~investment‑grade ~~build,~~credit ~~and operate large-scale~~support, ~~sustainable~~materially ~~data~~strengthening ~~centers~~the ~~uniquely~~risk ~~positions~~profile usand todurability ~~capitalize~~of oncontracted ~~this transformation~~revenues.

~~Looking ahead~~•Scalable, weMulti‑Phase ~~remain~~Development ~~focused~~– onEach ~~expanding~~campus ~~our~~is ~~infrastructure,~~designed ~~optimizing~~for ~~operations,~~modular ~~and~~expansion. ~~enhancing~~Initial ~~our~~phases ~~competitive~~deliver ~~advantages~~near‑term incontracted ~~both~~capacity, ~~bitcoin~~while ~~mining~~subsequent ~~and~~phases ~~HPC~~are ~~hosting.~~developed Byin ~~prioritizing~~line ~~sustainable~~with ~~digital~~customer ~~infrastructure~~deployment schedules and ~~low-cost~~power ~~energy~~availability. ~~solutions,~~This ~~TeraWulf~~phased isapproach ~~well-positioned~~allows us to ~~drive~~efficiently ~~long-term~~convert ~~value~~advantaged ~~for~~infrastructure ~~shareholders~~positions ~~while~~into ~~shaping~~incremental ~~the~~contracted ~~future~~capacity ofover ~~energy-driven compute infrastructure~~time.

WeOur ~~generate~~strategy ~~revenue~~is bydesigned ~~operating~~to ~~our~~produce ~~digital~~durable, infrastructure‑like ~~and~~cash ~~mining~~flows ~~computers~~while aspreserving ~~part~~flexibility ofto ascale ~~blockchain~~alongside ~~transaction~~accelerating ~~processing~~demand ~~pool, receiving digital assets in the form of bitcoin in exchange~~ for ~~our activity~~compute. ~~Our HPC hosting services will focus on providing colocation, cloud, and connectivity services for GPU-based HPC operations and will generate revenue through hosting fees paid by third-party customers.~~

~~Bitcoin,~~Evolution ~~introduced in 2008, fundamentally transformed the landscape~~ of ~~digital~~Our ~~currency~~Business ~~by providing a decentralized mechanism for exchanging~~ and ~~preserving~~Capital value. It operates on a consensus-based network, utilizing a public ledger termed as the “blockchain” to meticulously record every bitcoin transaction, allowing users to send and receive payments without the need for banks and other intermediaries. Bitcoin is not linked to any fiat currency or country’s monetary policy, therefore serves as a store of value outside of government control.Allocation

~~Bitcoin~~TeraWulf ~~mining~~has ~~involves~~undergone ~~validating transactions through~~ a ~~proof-of-work~~deliberate ~~consensus~~strategic ~~method,~~transition ~~where~~toward ~~miners~~HPC ~~solve~~hosting ~~complex mathematical problems to add transactions to the blockchain. The blockchain is maintained by a robust and public open-source architecture consisting of a network of computers, known~~ as ~~nodes,~~its ~~that~~primary ~~work together to verify and validate new transactions~~business. ~~Because~~While the ~~blockchain~~Company isoperates ~~decentralized~~legacy ~~and~~bitcoin transparent, all users can verify the legitimacy of a transaction without having to rely on a third party. This eliminates the need for intermediaries, which can be slow and expensive, and makes the network resistant to censorship and fraud. Bitcoin mining ~~plays~~facilities ~~a key role in the maintenance~~ and ~~growth~~leverages ofthis ~~the~~flexible ~~bitcoin~~compute ~~network~~load ~~by providing the computational power needed~~ to ~~verify~~support ~~transactions~~early ~~and~~HPC ~~add~~infrastructure ~~new blocks to the blockchain. Factors such as computing capacity~~development, ~~electricity~~going ~~costs,~~forward ~~and~~capital ~~location~~allocation ~~play~~will ~~pivotal~~be ~~roles~~focused inon ~~mining~~HPC ~~operations.~~data ~~Generally,~~center ~~the greater the share a single mining rig can capture of the blockchain’s total network hashrate~~development, orlong-term ~~the~~hosting ~~aggregate hashrate deployed to solving a block on the bitcoin blockchain~~arrangements, ~~the greater the rig’s chances of solving a block~~ and ~~therefore~~infrastructure ~~earning~~supporting ~~the~~AI-driven ~~reward~~compute workloads.

~~Network~~While ~~difficulty,~~the ~~which~~Company iscurrently aderives ~~measure~~the majority of ~~how~~its ~~hard~~revenue itfrom ~~is for miners to solve a block on the~~ bitcoin ~~blockchain (and, thus, earn a~~ mining ~~reward)~~, isHPC ~~determined~~hosting ~~by the network’s total hashrate (i.e., the total computational power devoted to solving a block), which~~ is ~~adjusted~~now ~~every 2,016 blocks (with a new block being added approximately every ten minutes). Therefore, as more miners join~~ the ~~network and the network~~Company’s ~~global~~primary ~~hashrate~~growth ~~increases,~~driver ~~its difficulty will increase. Conversely, if miners leave the network~~ and ~~its~~operating ~~hashrate decreases, its difficulty will decrease~~focus.

~~Bitcoin~~Power ~~Reward~~Strategy ~~Halving~~and Responsible Design

~~The~~TeraWulf’s ~~bitcoin~~power ~~subsidy~~strategy ~~issued~~emphasizes ~~by the bitcoin network for solving a block is subject to periodic incremental halving. The network halving is a preprogrammed~~reliability, fixed process of the bitcoin network where the bitcoin subsidy for solving a block received by miners is reduced by half approximately every four years. The network halving is a process designed to implement a periodic decreasing schedule of the issuance of new bitcoin into the marketefficiency, ~~which results in a predictable~~ and ~~controlled~~responsible ~~inflationary~~integration ~~rate.~~with ~~The~~regional ~~network~~electric ~~halving will continue to occur on this schedule until the amount of bitcoin in existence reaches the cap of 21~~grids.0 ~~million.~~Our ~~After~~campuses ~~each~~are ~~halving,~~designed ~~the decrease in the subsidy provided~~ to ~~miners~~operate ~~from the bitcoin network leads to fewer rewards for miners and therefore a decrease in revenues should the price of bitcoin remain the same. Transaction fees, which together~~ with ~~the block subsidy comprise the block reward for successfully solving a block~~long-duration, ~~are~~cost-competitive ~~not~~power ~~directly~~resources ~~impacted~~that bysupport ~~the~~both ~~halving.~~customer Onuptime ~~April~~requirements ~~19,~~and ~~2024,~~broader ~~the~~grid ~~bitcoin rewards issued for each block solved dropped from 6~~stability.~~25 to 3.125, effectively reducing the bitcoin earned from bitcoin mining by 50% (excluding transactions fee rewards).~~

The Company’s development and operations team brings deep experience in power generation, transmission, interconnection, and large-scale energy infrastructure, which informs site selection, facility design, and day-to-day operations. This expertise enables TeraWulf to evaluate and develop complex, power-intensive sites efficiently and to structure infrastructure solutions that support high-density, mission-critical compute. We believe this power and infrastructure experience provides meaningful differentiation relative to many data center developers that do not have comparable in-house energy expertise.

As part of this strategy, the Company expects to acquire and develop sites that may include on-site generation, battery storage, and other dispatchable resources, primarily to enhance reliability for mission-critical compute and to support grid operations where appropriate. These assets are intended to improve operational resilience, enable participation in ancillary services, and reduce congestion and volatility on regional power systems. Rather than relying on a singular energy narrative, TeraWulf focuses on responsible facility design, efficient power utilization, and long-term infrastructure stewardship.

Environmental and Power Considerations

TeraWulf’s approach to environmental and energy considerations is grounded in responsible infrastructure design, operational efficiency, and reliable integration with regional electric grids. The Company develops and operates digital infrastructure on existing industrial and energy sites, prioritizing reuse of legacy assets and minimizing incremental land disturbance.

Our data center campuses are engineered to support high-density, mission-critical compute while emphasizing efficient power utilization, advanced cooling architectures, and resilient electrical design. These facilities are designed to operate with a range of long-duration power resources, including grid-supplied electricity and, where appropriate, on-site generation.

The Company’s environmental focus is centered on disciplined development, efficient operations, and long-term infrastructure stewardship rather than reliance on any single energy source or environmental attribute.

Our Facilities

TeraWulf currently conducts its operations at its data center campus, the Lake Mariner Facility, in upstate New York. The Company has an operational mining capacity of 195 MW and is completing constructing an additional 50 MW of bitcoin mining capacity, expected to be operational in the first half of 2025. Additionally, TeraWulf is developing HPC data centers to provide hosting services for Core42, supporting up to 72.5 MW of data center infrastructure dedicated to GPU compute workloads. This capacity is expected to come online throughout 2025. Core42 also has an option,

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~~exercisable through March 31, 2025, to secure an additional 135 MW of data center infrastructure at the~~ Lake Mariner ~~Facility.~~Data Campus

AsThe ofLake ~~December~~Mariner ~~31,~~Data ~~2024,~~Campus is TeraWulf’s ~~mining~~flagship ~~operations~~HPC ~~were~~campus ~~powered~~and bya ~~predominantly~~core ~~zero-carbon~~component ~~energy,~~of ~~underscoring~~the ~~our~~Company’s ~~commitment~~contracted toHPC ~~sustainability~~platform. ~~Our~~Located ~~energy~~in ~~sourcing~~Barker, ~~methodology~~New isYork ~~based~~ on ~~electricity~~the ~~production~~site ~~data~~of ~~from~~a ~~the~~former ~~New~~coal‑fired ~~York~~power ~~Independent~~plant ~~System~~that ~~Operator~~was ~~(“NYISO”),~~retired ~~specifically~~and ~~covering~~repurposed ~~NYISO~~into ~~Zones~~a ~~A-E,~~modern ~~where~~digital ~~the~~infrastructure ~~Lake~~campus, ~~Mariner~~operations ~~Facility~~commenced isin ~~located~~March 2022. ~~This~~The ~~approach~~site ~~aligns~~benefits ~~with~~from ~~the~~substantial ~~recommended~~existing ~~geographic~~transmission ~~resolution~~infrastructure ~~for~~and ~~projected~~is ~~emissions~~designed ~~factors~~ for ~~upstate~~scalable ~~New York, as published by the New York State Energy Research and Development Authority~~expansion.

As of December 31, 2025, the Lake Mariner ~~Facility~~Data Campus operated 245 MW of legacy bitcoin mining capacity and had 18 MW of critical IT HPC capacity. The campus is undergoing phased expansion to support additional HPC contracted deployments with gross capacity of approximately 500 MW in the near term, with potential expansion to approximately 750 MW, subject to additional approvals from the NYISO.

~~Located~~The atLake aMariner ~~site~~Data ~~adjacent~~Campus tosources ~~the~~power ~~now-decommissioned~~from ~~coal-fired~~the ~~power~~NYISO ~~plant~~Zone inA ~~Barker~~grid, ~~New~~which ~~York,~~is ~~the~~characterized ~~Lake~~by ~~Mariner~~low-cost, ~~Facility~~low-carbon ~~began mining bitcoin in March 2022~~energy. AsOf ~~of December 31, 2024,~~ the ~~Lake~~campus’s ~~Mariner~~total ~~Facility~~power isneeds, ~~operating~~90 ~~approximately 195~~ MW ofis ~~bitcoin~~allocated ~~mining~~under ~~capacity at the site. The Company has~~ an agreement ~~in place~~ with the ~~Power Authority of the State of~~ New York Power Authority (“NYPA”) ~~for~~executed 90in MWFebruary of2022, providing high-load factor power tounder ~~support its bitcoin mining operations (the “PPA”). The PPA was executed on February 12, 2022, and has~~ a ~~term of~~ ten-year ~~years~~term ~~from~~commencing ~~the~~with ~~date of commencement of~~ NYPA’s initial power delivery. The Lake Mariner Facility is situated on an expansive site on the shores of Lake Ontario and has the ability to scale up to 500 MW of capacity in the near term and up to 750 MW with certain transmission upgrades..

~~Nautilus~~The ~~Cryptomine~~Lake ~~Facility~~Mariner ~~Sale~~Data Campus is designed to support multiple hyperscale and enterprise tenants through modular, phased development and incorporates advanced liquid-cooling systems, redundant electrical architectures, and scalable mechanical and network infrastructure optimized for high-density GPU deployments.

OnTeraWulf ~~October~~operates ~~2, 2024,~~ the ~~Company~~Lake ~~sold~~Mariner ~~its~~Data ~~entire~~Campus ~~25%~~through ~~equity~~its ~~interest~~subsidiaries inLa ~~Nautilus~~Lupa ~~Cryptomine~~Data LLC (“~~Nautilus”)~~La ~~to a subsidiary of Talen Energy Corporation (the “Talen Member~~Lupa”) ~~for~~and ~~$85.0~~Akela ~~million~~Data inLLC ~~cash, subject to a customary working capital adjustment~~ (~~the~~ “~~Nautilus Sale~~Akela”). ~~In connection with the Nautilus Sale~~Collectively, ~~Nautilus~~La ~~transferred~~Lupa ~~to the Company all of its right, title,~~ and ~~interest~~Akela inrepresent ~~and~~438 toMW ~~all~~ of ~~its~~contracted ~~miners,~~critical ~~including~~IT ~~miners~~HPC ~~previously~~capacity ~~contributed~~at bythe ~~Talen~~Lake ~~Member,~~Mariner ~~along~~Data ~~with certain other related equipment owned by Nautilus. The Nautilus Sale included customary representations and warranties and standard covenants. Additionally~~Campus, aswith ~~part~~some ofdeliveries ~~the~~having ~~transaction,~~commenced ~~the Talen Member agreed to pay the Company 25% of the net proceeds received~~ in ~~excess~~2025 ofand ~~$300.0~~others ~~million~~extending ininto ~~the aggregate in any future sale of all or substantially all of the assets, or a majority of the equity interests, of Nautilus~~2026.

AsLa a result of the Nautilus Sale, TeraWulf no longer has an ownership interest in Nautilus or any bitcoin mining operations located in Berwick, Pennsylvania (the “Nautilus Cryptomine Facility”). The Company remains focused on expanding its Lake Mariner Facility and expanding its digital infrastructure to support high-performance computing.Lupa

~~Environmental~~In ~~Considerations~~December 2024, La Lupa entered into long-term data center lease agreements with Core42 (the “Core42 Leases”), pursuant to which we committed to deliver 60 MW of critical IT load. The Core42 Leases have an initial ten-year term with two five-year renewal options and include customary provisions governing operating standards, service levels, and expansion rights. Construction commenced in 2024 and continued into 2025; commissioning activities commenced in 2025 with phased deliveries aligned to meet Core42’s deployment schedule.

~~TeraWulf prioritizes sustainability, sourcing the vast majority of its energy from clean, non-fossil fuel sources like hydroelectric and nuclear power—both of which produce zero carbon emissions.~~Akela

~~While~~In ~~concerns~~August ~~about~~2025, ~~bitcoin~~Akela ~~mining’s~~entered ~~energy~~into ~~consumption~~three ~~persist—particularly~~data ~~regarding~~center ~~reliance~~lease onagreements ~~non-renewable~~(the ~~sources—there~~“Akela isFluidstack ~~often~~Leases”) ~~less~~with ~~recognition~~Fluidstack ofUSA ~~its~~I ~~positive~~Inc. ~~role~~(together inwith ~~enhancing~~its ~~grid~~affiliates, ~~stability~~“Fluidstack”), ~~and~~a ~~strengthening~~leading ~~energy~~AI ~~infrastructure~~cloud platform. AtUnder ~~TeraWulf~~the Akela Fluidstack Leases, we ~~believe~~will ~~responsible~~provide ~~mining~~378 ~~practices~~MW ~~can~~of ~~improve~~critical ~~grid~~IT ~~efficiency~~load ~~and~~at ~~resilience~~the ~~while~~Lake ~~accelerating~~Mariner ~~the~~Data ~~broader~~Campus. ~~transition~~The Akela facilities are being developed in multiple phases, with construction having commenced in 2025 and delivery expected to ~~clean~~commence ~~energy~~in 2026.

~~Our~~The ~~Lake~~Akela ~~Mariner~~Fluidstack ~~Facility~~Leases ~~plays~~benefit afrom ~~critical~~substantial ~~role~~credit insupport ~~stabilizing~~provided ~~the grid~~ by ~~helping operators balance supply and demand~~Google, ~~particularly~~which assupports ~~intermittent~~Fluidstack’s ~~renewable~~payment ~~energy~~and ~~sources~~performance ~~contribute~~obligations ~~more~~under ~~power.~~the Inleases ~~2024,~~and wematerially ~~actively~~enhances ~~participated~~the incredit ~~three~~quality ~~ancillary~~and ~~demand~~bankability ~~response~~of ~~programs~~our incontracted ~~New~~lease ~~York:~~revenues. ~~the~~This ~~Commercial~~credit ~~System~~support ~~Relief~~was ~~Program~~a ~~(CSRP),~~key ~~the~~factor ~~Demand~~in ~~Side~~enabling ~~Ancillary~~efficient ~~Services~~financing ~~Program (DSASP),~~ and ~~the~~phased ~~Special~~development ~~Case~~of ~~Resource~~the ~~(SCR)~~Akela ~~program—reinforcing our commitment to grid reliability~~facilities.

AsAbernathy ofHPC December 31, 2024, the energy powering our mining operations came from predominantly clean sources, primarily hydro and nuclear. Sustainability is embedded in our business strategy, driving operational efficiencies through cost-effective design and the use of carbon-free energy. We believe this approach differentiates TeraWulf in the industry—allowing us to attract and retain customers, generate strong cash flow, and mitigate operational risks.Campus

~~Below~~The isAbernathy aHPC ~~breakdown~~Campus ~~detailing~~reflects the ~~regional~~extension ~~and~~of ~~location-specific,~~the asCompany’s ~~applicable~~relationship with Fluidstack, ~~energy~~also ~~sources~~supported ~~utilized~~by credit enhancement from Google, to ~~operate~~an ~~our~~additional ~~bitcoin~~site ~~mining~~in ~~facilities~~Texas. ~~for~~The campus is being developed through a joint venture in which the ~~year~~Company ~~ended~~holds ~~December~~a ~~31,~~50.1% ~~2024:~~ownership interest.

In October 2025, the Company entered into an amended and restated limited liability company agreement (the “Abernathy Joint Venture Agreement”) with Fluidstack CS I Inc. (the “Fluidstack Member”) to govern the terms of operation of FS CS 1 LLC (the “Abernathy Joint Venture”), which will develop, lease and operate the Abernathy HPC Campus.

The Abernathy HPC Campus is designed for 168 MW critical IT load, representing the full build-out of the site. This capacity is fully pre-leased to Fluidstack USA III under a 25-year data center lease with built-in rent escalators and options for term contraction (the “Abernathy Fluidstack Lease” and, together with the Akela Fluidstack Leases, the

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Percentage of energy consumption by facility	Lake Mariner Facility(1)	Nautilus Cryptomine Facility
Zero Carbon(2)	93.0%	100.0%
Carbon(3)	7.0%	0.0%
Total	100.0%	100.0%

“Fluidstack Leases”). Construction is proceeding in phases, with completion and delivery currently targeted for the second half of 2026.

~~_______~~Similar to Akela, the Abernathy Fluidstack Lease benefits from credit support from Google, which provides financial support for Fluidstack’s obligations under the sublease, materially strengthening the risk profile of our contracted revenues and facilitating third-party financing.

~~(1)~~Infrastructure ~~Source:~~First ~~NYISO’s~~Growth ~~2021-2040 System & Resource Outlook.~~Model

~~(2)~~Across ~~Zero~~all ~~carbon~~campuses, ~~usage~~TeraWulf ~~includes~~prioritizes ~~hydro~~reuse of existing industrial and energy infrastructure, ~~nuclear~~accelerated permitting pathways, ~~solar~~and disciplined expansion aligned with customer demand. By combining utility-scale infrastructure control, long-term contracted revenues supported by credit-enhanced counterparties, and ~~wind~~a ~~power~~scalable ~~resources~~development pipeline, the Company is positioned to support the growing demand for AI and high-density compute while delivering durable value to shareholders.

(3) Carbon usage includes coal and gas power resources.

Our Strengths

Infrastructure Control and Vertical Integration

TeraWulf’s ~~ownership~~business ofis ~~its~~built ~~digital~~around ~~infrastructure—spanning~~long-term ~~bitcoin~~control ~~mining~~of ~~and~~digital ~~HPC~~infrastructure ~~hosting—ensures operational efficiency~~assets, ~~cost~~including ~~control,~~land ~~and~~use ~~reliability.~~through ~~Managing~~ownership ~~complex~~or ~~energy~~long-term ~~assets~~ground ~~requires~~leases, ~~specialized~~interconnection ~~expertise~~rights, ~~and~~data ~~direct~~center ~~ownership~~buildings, ~~enables~~electrical ~~seamless~~and ~~execution~~cooling systems, ~~supply~~and, ~~chain~~where ~~oversight~~applicable, ~~and~~on-site ~~accountability~~generation. This ~~approach~~infrastructure-centric ~~enhances~~model ~~transparency~~enables ~~for~~disciplined ~~stakeholders~~execution ~~while~~across ~~reinforcing~~development ~~TeraWulf’s~~and ~~commitment~~operations, toenhances ~~sustainability~~reliability, and ~~community~~supports ~~engagement.~~efficient Bydelivery ~~controlling~~of ~~its infrastructure, TeraWulf drives long~~large-~~term~~scale ~~success,~~HPC ~~resilience, and responsible growth~~capacity.

~~Environmentally~~Direct ~~Clean~~control over critical infrastructure allows the Company to maintain governance authority, manage development risk, and align capital deployment with long-term customer commitments, while supporting transparency and accountability for stakeholders.

~~TeraWulf~~Reliable ~~leads in sustainable bitcoin mining~~ and ~~HPC hosting, with the Lake Mariner Facility’s energy sourced from predominantly zero~~Cost-~~carbon~~Competitive ~~resources,~~Power primarily hydro and nuclear power, per NYISO. Our efficient design and sourcing of carbon-free energy enhance sustainability, attract customers, and drive cash flow. As demand for compute infrastructure accelerates, TeraWulf is strategically leveraging its scalable infrastructure and low-cost, predominantly zero-carbon energy advantage to support both bitcoin mining and HPC hosting. Strategy

~~Low~~TeraWulf develops and operates its campuses in power-~~Cost~~advantaged ~~Energy~~markets ~~Supply~~with access to long-duration, cost-competitive electricity. Our infrastructure is designed to support high-load-factor operations and mission-critical compute, while maintaining flexibility to integrate grid-supplied power and, where appropriate, on-site dispatchable resources.

~~TeraWulf~~This ~~expects~~approach tosupports ~~maintain~~predictable ~~one~~operating ~~of the industry's lowest electricity~~ costs, ~~estimated~~enhances ~~at approximately $0.045 per kilowatt-hour over the long term. Historically~~resilience, ~~market~~and ~~power~~enables ~~costs~~participation atin ~~the Lake Mariner Facility have averaged around $0.040 per kilowatt~~grid-~~hour.~~support ~~Strategically located at structurally congested point in New York~~mechanisms, positioning the ~~Lake~~Company ~~Mariner Facility is well-positioned~~ to ~~optimize~~serve ~~power~~hyperscale ~~usage~~ and ~~provide~~enterprise ~~ancillary~~customers ~~services~~with todemanding ~~the~~uptime ~~electrical~~and ~~grid~~performance requirements.

~~Scale~~Scalable ~~Rapidly~~Platform with ~~Proprietary~~Embedded Expansion ~~Pipeline~~Optionality

TeraWulf’s ~~growth~~campuses isare ~~fueled~~designed byfor ~~its access to high-power operational data center capacity~~modular, ~~competitive~~phased ~~power arrangements~~expansion, ~~and~~allowing ~~deep~~capacity ~~expertise in energy infrastructure and operations. We strategically manage our assets~~ to ~~maximize~~be ~~cash~~added ~~flow~~efficiently ~~and~~as ~~drive~~customer ~~cost~~demand ~~efficiencies, leveraging our scale for optimal performance~~materializes. The ~~Lake~~Company’s ~~Mariner~~development ~~Facility~~pipeline ~~can~~leverages ~~rapidly~~existing ~~scale~~industrial tosites, ~~500~~established MWinterconnection, inand ~~the~~scalable ~~near~~electrical ~~term~~ and upcooling toarchitectures ~~750 MW with targeted transmission upgrades. With a low-cost, predominantly zero-carbon power supply, TeraWulf is uniquely positioned~~ to ~~meet~~shorten ~~the~~development ~~surging~~timelines ~~demand for bitcoin mining~~ and ~~HPC~~reduce ~~hosting,~~execution ~~solidifying its leadership in sustainable digital infrastructure~~risk.

~~Experienced~~At ~~Team~~the Lake Mariner Data Campus, the Company can scale capacity to approximately 500 MW in the near term and up to approximately 750 MW with additional approvals from the NYISO. Together with the Abernathy HPC Campus and the Cayuga Site, this platform supports the Company’s objective of contracting 250 MW to 500 MW of new critical IT HPC capacity annually, subject to market conditions and power availability.

~~TeraWulf’s~~Experienced ~~senior~~Management ~~management team brings decades of experience in the energy infrastructure sector, with a proven track record as developers, owners,~~ and ~~operators~~Operations of large-scale energy assets in the U.S. and internationally. This deep industry expertise provides us with a significant competitive advantage, positioning TeraWulf at the forefront of energy-efficient digital infrastructure. To align leadership incentives with long-term shareholder value, a substantial portion of senior management and director compensation is in the form of common equity interests in the Company.Team

~~Additionally,~~ TeraWulf’s ~~benefits~~senior ~~from~~management ~~the~~team ~~expertise~~brings ~~and~~decades ~~support~~ of ~~Beowulf~~experience ~~Electricity~~in &energy ~~Data~~infrastructure ~~Inc.~~development, ~~(“Beowulf~~ownership, ~~E&D”)~~and operations, ~~which~~including ~~operates~~large-scale ~~under~~power ~~the~~generation ~~leadership~~and ofindustrial ~~TeraWulf’s~~asset ~~CEO~~redevelopment. ~~With~~This ~~more~~experience ~~than~~underpins 30the ~~years~~Company’s ofability ~~collective~~to ~~experience~~execute ~~managing~~complex ~~large-scale~~projects, ~~energy~~manage ~~facilities~~grid interdependencies, ~~the~~and ~~Beowulf~~operate ~~E&D~~mission-critical ~~team~~infrastructure. ~~plays~~To aalign ~~critical~~management ~~role~~incentives inwith ~~ensuring~~long-term ~~the~~shareholder ~~efficient~~value, ~~development~~a ~~and~~substantial ~~operation~~portion of ~~TeraWulf’s~~our ~~data~~senior ~~center~~management ~~facilities~~and director compensation is equity-based.

The Company also benefits from the expertise of its subsidiary Beowulf Electricity & Data LLC (“Beowulf E&D”), which supports development, construction, and operational functions. The Beowulf E&D team has more than 30

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years of experience managing large-scale energy facilities and plays a key role in supporting the Company’s data center operations.

Competition

WeTeraWulf ~~operate~~operates in a highly competitive ~~industry~~market ~~with~~for adigital ~~growing~~infrastructure ~~number~~serving HPC and ~~scale~~AI workloads. Competition is primarily centered on securing and developing high-power sites, accessing reliable and cost-competitive electricity, and attracting capital to build and operate facilities capable of ~~participants~~supporting high-density compute.

WeThe ~~compete~~Company competes with ~~mining~~a ~~operations~~range ~~throughout~~of ~~the~~participants, ~~world~~including todata ~~complete~~center ~~new~~real ~~blocks~~estate oninvestment ~~the~~trusts ~~blockchain~~(REITs), ~~and~~independent ~~earn~~data ~~the~~center ~~reward~~developers, inhyperscalers, ~~the~~infrastructure ~~form~~funds, ofand, ~~bitcoin.~~in Wecertain ~~compete~~cases, ondigital ~~the~~asset ~~basis~~miners ofwith ~~our~~infrastructure ~~total~~suitable ~~number~~for ofHPC ~~miners,~~conversion. ~~the~~Competitive ~~degree~~factors ofinclude ~~mining~~site ~~difficulty~~availability, ~~the~~power ~~efficiency~~availability ofand ~~our~~economics, ~~mining~~execution ~~operations~~capability, ~~and~~access ~~the~~to ~~fiat~~capital, ~~value~~and ofcustomer ~~the mining reward~~relationships.

~~With~~Bitcoin ~~the~~Mining ~~fluctuation of bitcoin prices~~Operations, ~~we acknowledge the potential for additional miners to enter the market during periods of price increases. Conversely~~Equipment, ~~during~~and periods of price decline, less efficient miners may find it economically challenging to remain operational. We are confident TeraWulf maintains a competitive advantage by offering some of the most cost-effective unit economics in comparison to other publicly traded bitcoin miners.Suppliers

~~The~~While ~~success~~TeraWulf’s ofprimary ~~our~~strategic ~~HPC~~focus ~~hosting~~has ~~and~~shifted ~~colocation~~to ~~services~~HPC ~~will~~hosting, ~~greatly~~the ~~depend~~Company oncontinues ~~our ability~~ to ~~retain~~operate ~~and~~bitcoin ~~develop~~mining ~~opportunities~~assets ~~with~~utilizing ~~our~~ existing ~~customer, attract new customers, and secure additional~~ infrastructure. WeThe ~~compete~~Company ~~with~~owns aspecialized ~~diverse~~mining ~~range~~computers ofconfigured ~~providers,~~to ~~including~~validate ~~major~~transactions ~~data~~on ~~center~~the ~~real~~bitcoin ~~estate~~network. ~~investment~~Substantially ~~trusts~~all ~~(REITs),~~of ~~data~~these ~~center~~miners ~~developers,~~were ~~hyperscalers,~~manufactured ~~and~~by ~~bitcoin~~Bitmain ~~miners~~and ~~with~~incorporate ~~infrastructure~~application-specific ~~suited~~integrated ~~for~~circuit ~~HPC~~(“ASIC”) ~~hosting~~chips. ~~This~~As ~~competition~~of isDecember ~~primarily~~31, ~~centered~~2025, onthe ~~securing~~Company ~~and~~had ~~developing~~approximately ~~high-power sites~~49,400 asbitcoin ~~well~~miners asoperational ~~attracting~~at the ~~necessary~~Lake ~~capital~~Mariner toData ~~build~~Campus, orrepresenting ~~retrofit~~approximately ~~facilities~~9.3 ~~for~~EH/s ~~HPC~~of ~~workloads~~self-mining capacity.

We believe our scalable digital infrastructure capacity, combined with the energy expertise, industry knowledge, and strong relationships of our development and operations team, uniquely position us to meet the surging demand for HPC infrastructure effectively.

Mining Equipment

We own specialized mining computers configured for the purpose of validating transactions on the bitcoin network. Substantially all of the miners we own were manufactured by Bitmain and incorporate application-specific integrated circuit (“ASIC”) chips specialized to solve blocks on the bitcoin blockchain in return for bitcoin digital asset rewards. As of December 31, 2024, we had deployed approximately 62,000 bitcoin miners at the Lake Mariner Facility, which represented 9.7 EH/s of self-mining capacity.

Suppliers

We have periodically entered into agreements with Bitmain to supply the majority of miners for our operations. Like agreements with other mining equipment manufacturers, these contracts typically require significant deposits paid months in advance of delivery, followed by additional monthly installment payments. These agreements also include terms that are generally favorable to the manufacturer.

Research and Development

TeraWulf’s strategic investments in research and development drive innovation across power management, data center infrastructure, and HPC hosting. Our expertise in designing, constructing, and operating proprietary data centers at scale sets us apart in the market.

With deep experience in mining equipment installation, operation, and optimization, we continuously refine our data center designs to maximize hardware performance and longevity. Leveraging our extensive knowledge of data center architecture and systems integration, we are evolving digital asset mining infrastructure to support the rigorous demands of HPC hosting. Our proprietary designs accommodate higher rack energy densities, meeting the increasing computational needs of AI and other advanced applications.

Additionally, we continuously seek to develop and/or identify hardware and software solutions to enhance operational efficiency and infrastructure management. Through sustained investment in research and development, we are expanding our platform capabilities, reinforcing our leadership in digital asset mining, and positioning ourselves for long-term growth in HPC hosting.

Regulation

~~Due~~TeraWulf tooperates ~~the~~in ~~relatively~~a ~~short~~highly ~~history~~regulated ofenvironment, ~~digital~~including ~~assets~~regulations applicable to data centers, ~~and~~power ~~their~~generation, ~~emergence~~grid asinterconnection, aenvironmental ~~new~~compliance, ~~asset~~and, ~~class~~to a lesser extent, ~~government~~digital ~~regulation~~asset ofmining. ~~blockchain~~Regulatory ~~and~~frameworks governing digital assets iscontinue ~~constantly~~to ~~evolving~~evolve, ~~with~~and ~~increased~~changes ~~interest~~in ~~expressed~~laws byor ~~U.S.~~regulations ~~and~~could affect the Company’s remaining mining operations.

5The Company actively monitors regulatory developments and engages with policymakers and industry organizations to provide input on issues relevant to digital infrastructure, power markets, and grid reliability.

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international regulators. We anticipate a heightened focus on regulatory oversight in the near future, and the potential ramifications of forthcoming regulations on our operations remain uncertain.

TeraWulf conscientiously monitors public policy and relevant legislation across all jurisdictions in which we operate. Our primary objective is to provide policymakers with informed insights and advocate for measures that promote the welfare of our employees and align with the overarching goals of the Company. Additionally, we strategically engage with carefully selected industry associations to collaboratively advance our public policy and business objectives.

Intellectual Property

TeraWulf utilizes ~~specific~~proprietary processes and third-party hardware and software ~~tailored~~in ~~for~~connection ~~both~~with its ~~bitcoin mining operations and~~ HPC hosting. ~~Given the prevalence of open-source technology in the blockchain, cryptocurrency,~~ and ~~computing~~bitcoin ~~sectors,~~mining ~~certain~~operations. ~~source~~Certain ~~code and~~ software components may be subject to open-source licenses~~. In such cases~~, weand ~~strictly adhere to~~ the ~~terms~~Company ~~outlined~~complies inwith ~~the~~applicable ~~respective~~ license ~~agreements~~terms.

AtThe ~~present,~~Company ~~TeraWulf~~does ~~neither~~not ~~possesses~~currently ~~nor~~hold ~~intends to pursue~~ patents ~~for~~and ~~its~~relies ~~existing~~on ~~or planned bitcoin mining or HPC hosting operations. Instead, we safeguard our competitive advantages through~~ trade secrets, trademarks, service marks, ~~trade names,~~ copyrights, and ~~other~~contractual ~~intellectual~~protections ~~property~~to ~~rights.~~safeguard ~~Additionally,~~its ~~we anticipate procuring licenses for utilizing~~ intellectual property ~~rights owned~~ and ~~managed~~competitive ~~by third parties~~position. ~~In the future, TeraWulf may develop proprietary software applications to optimize and enhance both our cryptocurrency operations as well as our HPC hosting services.~~

Human Capital Resource Management

As of the date of this Annual Report ~~on Form 10-K (the “Annual Report”)~~, TeraWulf ~~has~~had 12141 full-time employees ~~and officers. Additionally~~, including employees of Beowulf E&D, aits ~~business~~wholly ~~overseen~~owned ~~by TeraWulf’s CEO~~subsidiary, ~~support~~who ~~the~~perform ~~Company’s ongoing business, including, among others,~~ services related to construction, technical and engineering, operations and maintenance, procurement, information technology, finance and accounting, human resources, legal, risk management and external affairs consultation. All of TeraWulf’s and Beowulf E&D’s employees are ~~located~~ in the United States, primarily in New York, ~~Maryland~~ and ~~Colorado~~Maryland. None of TeraWulf’s or Beowulf E&D’s employees are represented by a labor union or covered by collective bargaining agreements~~, and we have not experienced any work stoppages~~.

We recognize the pivotal role played by our workforce in the Company’s success and prioritize their well-being and dedication. To support our employees, TeraWulf offers a comprehensive benefits program tailored to their needs. This program encompasses a 401(k) retirement plan, flexible work hours, ample leave policies, and initiatives aimed at promoting mental and physical well-being. In accordance with our commitment to employee satisfaction, we conduct annual evaluations of our benefits offerings to ensure they remain aligned with the evolving needs of our workforce. Feedback from employees is actively sought to facilitate continuous improvement of our support systems.

Furthermore, each employee of TeraWulf and many employees of Beowulf E&D hold ownership in the Company through equity awards granted under our 2021 Omnibus Incentive Plan (as amended, the “Plan”). The primary objective of ~~the Plan is to attract, retain, and motivate employees, executive officers, and directors through the provision of stock-based compensation awards.~~

~~Diversity, Equity and Inclusion~~5

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the Plan is to attract, retain, and motivate employees, executive officers, and directors through the provision of stock-based compensation awards.

TeraWulf is dedicated to cultivating a diverse and inclusive workforce. We prioritize hiring and recruitment based on merit and qualifications, recognizing the inherent value of varied perspectives and experiences.

The Company’s Diversity Policy serves as a fundamental framework, outlining TeraWulf’s commitment to fostering an inclusive environment where all individuals are treated with respect and esteem. We believe that embracing a range of perspectives not only enhances our organizational culture but also bolsters our capacity to respond to change and stimulate innovation.

Cybersecurity

TeraWulf ~~has~~maintains ~~adopted~~ a ~~thorough~~cybersecurity ~~strategy~~risk ~~for~~management ~~information~~program ~~security~~that ~~and~~includes ~~data governance, incorporating~~ physical, procedural, and technical safeguards designed to protect information systems and data. These measures aim to safeguard sensitive information and protect our operations against unauthorized access. The Company has established a cybersecurity risk management program detailed in our Information Security and Cybersecurity Policy. This policy is designed to uphold the confidentiality, integrity, and availability of our critical systems and information.

6As of the current filing date, the Company has not experienced material cybersecurity incidents that have had a significant impact on its operations or financial condition.

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As of the current filing date, we have not encountered significant impacts from recognized cybersecurity threats on our operations, business strategy, financial condition, or results of operations.

Insurance

The ~~For~~Company ~~our~~maintains ~~Lake~~property ~~Mariner~~and ~~Facility,~~casualty ~~we carry replacement cost all-risk property~~ insurance ~~with a~~ coverage ~~limit of $100 million per occurrence. Given the current scarcity of business interruption insurance options~~ for ~~bitcoin~~its ~~mining,~~facilities weand ~~actively~~assets ~~monitor~~consistent ~~the~~with ~~global~~industry ~~insurance~~practice ~~market~~ for ~~alternative~~digital ~~solutions.~~infrastructure ~~We also maintain separate cyber liability insurance policies with an aggregate limit of $10 million~~operations. ~~Each year, we engage our insurance broker to solicit proposals from underwriters, either to renew our existing coverages or to update our policies as needed.~~

For its bitcoin mining assets at the Lake Mariner Data Campus, the Company carries replacement cost all-risk property insurance with coverage limits of approximately $50 million per occurrence. Given the limited availability of business interruption insurance for bitcoin mining operations, the Company does not currently maintain business interruption coverage for these assets and continues to monitor market availability.

For its operating HPC infrastructure assets, the Company maintains replacement cost all-risk property insurance with coverage limits generally up to estimated full replacement value, together with business interruption insurance designed to protect against certain losses resulting from covered events.

In addition, the Company maintains separate cyber liability insurance with an aggregate limit of approximately $15 million. Insurance coverage levels are reviewed annually in consultation with the Company’s insurance advisors, and the Company may adjust coverage as its asset base and operational profile evolve.

Corporate Information

TeraWulf was incorporated under the laws of the State of Delaware in February 2021 and commenced trading on The Nasdaq Stock Market LLC (the “Nasdaq”) under the symbol “WULF” on December 14, 2021. Our principal executive offices are located at 9 Federal Street, Easton, Maryland 21601. Our telephone number is (410) 770-9500 and our website address is www.terawulf.com. Please note that the contents of, or information accessible through, our website are not part of this Annual Report).

Available Information

We maintain a link to investor relations information on our website, www.terawulf.com, where we make available, free of charge, our filings with the United States Securities and Exchange Commission (“SEC”), including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. All SEC filings are also available at the SEC’s website at www.sec.gov. Our website and the information contained on or connected to our website are not incorporated by reference herein, and our web address is included as an inactive textual reference only.

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Forward-Looking Statements

This Annual Report contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. All statements other than statements of historical facts contained in this Annual Report, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management, and expected market growth are forward-looking statements. These forward- looking statements are contained principally in the sections entitled “Business,” “Risk Factors,” and “~~Use~~Management’s Discussion and Analysis of ~~Proceeds~~Financial Condition and Results of Operations.” Without limiting the generality of the preceding sentence, any time we use the words “expects,” “intends,” “will,” “anticipates,” “believes,” “confident,” “continue,” “propose,” “seeks,” “could,” “may,” “should,” “estimates,” “forecasts,” “might,” “goals,” “objectives,” “targets,” “planned,” “projects,” and, in each case, their negative or other various or comparable terminology and similar expressions, we intend to clearly express that the information deals with possible future events and is forward-looking in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. For TeraWulf, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include, without limitation:

•~~conditions in~~ the ~~cryptocurrency~~ability ~~mining~~to ~~industry,~~complete ~~including~~our ~~any~~data ~~prolonged~~center ~~substantial~~campuses ~~reduction in cryptocurrency prices,~~ and ~~specifically,~~future ~~the~~strategic ~~value~~growth ofinitiatives ~~bitcoin,~~in ~~which could cause~~ a ~~decline~~timely inmanner ~~the~~or ~~demand~~within ~~for~~anticipated ~~TeraWulf’s~~cost ~~services~~estimates;

•~~competition~~the ~~among~~ability ~~the~~to ~~various~~attract ~~providers~~additional ofcustomers ~~data~~to ~~mining~~lease ~~services~~our HPC data centers;

•the need to raise additional capital to meet our business requirements in the future, which may be costly or difficult to obtain or may not be obtained (in whole or in part) and, if obtained, could significantly dilute the ownership interests of TeraWulf’s shareholders;

•the ability to implement certain business objectives and the ability to timely and cost-effectively execute integrated projects;

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•adverse geopolitical or economic conditions, including a high inflationary environment and the implementation of new tariffs and more restrictive trade regulations;

•security threats or unauthorized or impermissible access to our data centers, our operations or our digital wallet;

•counterparty risk with respect to our digital asset custodian and our mining pool provider;

•employment workforce factors, including the loss of key employees;

•changes in governmental safety, health, environmental and other regulations, which could require significant expenditures;

•~~liability~~conditions ~~related~~in tothe cryptocurrency mining industry, including any prolonged substantial reduction in the ~~use~~value of ~~TeraWulf’s services~~bitcoin;

•currency exchange rate fluctuations; and

•other risks, uncertainties and factors included or incorporated by reference in this Annual Report, including those set forth under “Risk Factors” in this ~~this~~ Annual Report.

These forward-looking statements reflect our views with respect to future events as of the date of this Annual Report and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. These forward-looking statements represent our estimates and assumptions only as of the date of this Annual Report and, except as required by law, we undertake no obligation to update or review publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this Annual Report. We anticipate that subsequent events and developments will cause our views to change. You should read this Annual Report completely and with the understanding that our actual future results may be materially different from what we expect. Our forward-looking statements do not reflect the potential impact of any future acquisitions, ~~merger~~mergers, dispositions, joint ventures or investments we may undertake. We qualify all of our forward-looking statements by these cautionary statements.

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Risk Factor Summary

Below is a summary of the principal factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below and should be carefully considered, together with other information included in this Annual Report. See “Item 1A— Risk Factors.”

Risks Related to Our HPC and Data Center Business

•Our HPC business strategy may not perform as planned.

•If we ~~fail~~are unable to ~~increase~~complete our ~~hash~~data ~~rate,~~center wecampuses ~~may~~and befuture ~~unable~~strategic togrowth ~~compete,~~initiatives ~~and~~in a timely manner or within anticipated cost estimates, our business and results of operations could ~~suffer~~be adversely affected.

•WeDelays ~~expect~~in ~~the~~lease ~~cost~~commencement, oflimitations ~~acquiring~~in ~~new~~customer ~~miners~~backstop toarrangements ~~continue~~and tothe bepotential ~~affected~~insufficiency byof ~~the~~completion ~~ongoing~~guarantees ~~global~~could ~~supply~~adversely ~~chain~~affect ~~crisis.~~our financial condition and results of operations.

•We may ~~not~~ be ~~able~~harmed by increased costs to ~~timely~~procure ~~complete~~power, ~~our~~prolonged ~~future~~power ~~strategic~~and ~~growth~~internet ~~initiatives~~outages, shortages or ~~within~~capacity ~~our~~constraints ~~anticipated~~as ~~cost~~well ~~estimates,~~as ifinsufficient ataccess ~~all.~~to power.

•WeOur ~~may~~ability beto ~~unable~~successfully todevelop ~~access~~projects ~~sufficient~~is ~~additional~~impacted ~~capital~~by ~~for~~the ~~future~~availability ~~strategic~~of, ~~growth~~and ~~initiatives.~~access to, interconnection facilities and transmission systems.

•~~Expansion~~Since ofthe ~~our~~development, ~~Lake~~construction ~~Mariner~~and ~~Facility~~operation ~~potentially~~of ~~exposes~~the usAbernathy HPC Campus is subject to ~~additional~~the ~~risks~~terms of a joint venture agreement, TeraWulf may have less control over strategic decisions.

•We ~~have~~depend ~~financed~~on ~~our~~significant ~~strategic~~customers ~~growth~~for ~~by issuing new shares of~~ our ~~common~~HPC ~~stock~~data ~~in public offerings, which dilutes the ownership interests of our current stockholders, and which may adversely affect the market price of our securities~~centers.

•Our contracts with HPC data center customers could subject us to significant liability.

•Certain of our agreements with HPC data center customers may include restrictions on providing HPC hosting and colocation services to certain third parties, which could have a material adverse effect on us.

•We may be unable to access sufficient additional capital for future strategic growth initiatives, and any such capital raises may be dilutive or subject to restrictive terms.

•Failure to successfully integrate acquired businesses could negatively impact our balance sheet and results of operations.

•We may experience increased compliance costs as a result of our strategic acquisitions.

•The development and advancement in the efficiency of AI models presents risks and challenges that may adversely impact our business and operating results.

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

•We are currently making considerable investments in our information technology systems and processes. Difficulties from or disruptions to these efforts may interrupt our normal operations and adversely affect our business and results of operations.

•We depend on attracting and retaining officers, managers, and skilled professionals.

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•Enhanced tariff, import/export restrictions, or other trade barriers may have an adverse impact on global economic conditions.

•We have a history of operating losses, and we may report additional operating losses in the future.

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

Risks Related to the Price of Bitcoin

•Our ability to achieve profitability is largely dependent on the price of bitcoin, which has historically been volatile.

•~~Bitcoin~~Instability, ~~market~~fraud ~~exposure~~or tofailures ~~financially~~within ~~troubled~~the broader cryptocurrency~~-related~~ ~~companies~~ecosystem may ~~impact~~adversely ~~our~~affect ~~reputation,~~ the price of bitcoin and ~~the~~our ~~profitability~~results of ~~our bitcoin mining~~ operations.

•Bitcoin is subject to halving, and our bitcoin mining operations may generate less revenue as a result.

•Transaction fees may decrease demand for bitcoin and prevent expansion.

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

Risks Related to our Operations

•To remain competitive in our industry, we seek to grow our hash rate to match the growing network hash rate and increasing network difficulty of the bitcoin blockchain, and if we are unable to grow our hash rate at pace with the global network hash rate, our chance of earning bitcoin from our mining operations would decline.

•Because our miners are designed specifically to mine bitcoin and may not be readily adaptable to other uses, a sustained decline in bitcoin’s value could adversely affect our business and results of operations.

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

•Our use of a third-party mining pool exposes us to certain risks.

•We may not be able to realize the benefits of forks.

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

•Incorrect or fraudulent bitcoin transactions may be irreversible and we could lose access to our bitcoin.

•Our business could be harmed by prolonged power and internet outages, shortages, or capacity constraints.

•Digital assets held by the Company are not subject to FDIC or SIPC protections.

Risks Related to Governmental Regulation and Enforcement

•We are subject to a highly-evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our business, reputation, prospects or operations.

•Bitcoin and bitcoin mining, as well as cryptocurrencies generally, may be made illegal in certain jurisdictions, including the ones we operate in, which could adversely affect our business prospects and operations.

•Changing environmental regulation and public energy policy may expose our business to new risks.

•~~Regulatory~~The ~~changes~~compliance orcosts ~~actions may alter the nature~~ of anresponding ~~investment~~to innew usand orchanging ~~restrict~~regulations ~~the~~could ~~use of cryptocurrencies in a manner that~~ adversely ~~affects~~affect our ~~business, prospects, or~~ operations.

•The implementation of new tariffs, more restrictive trade policies or the renegotiation of existing U.S. trade agreements may adversely affect our business, prospects, or operations.

•Our interactions with a blockchain may expose us to specially designated nationals (“SDN”) or blocked persons and new legislation or regulation could adversely impact our business or the market for cryptocurrencies.

9•We may be at a higher risk of litigation and other legal proceedings due to heightened regulatory scrutiny of the cryptocurrency industry, which could ultimately be resolved against the Company, requiring material future cash payments or charges, which could impair our financial condition and results of operations.

~~Table~~•The ofCompany ~~Contents~~may be classified as an inadvertent investment company.

•~~Bitcoin~~If ~~and~~federal ~~bitcoin~~or ~~mining,~~state aslegislatures ~~well~~or asagencies ~~cryptocurrencies~~initiate ~~generally,~~or ~~may~~release betax ~~made~~determinations ~~illegal~~that inchange ~~certain~~the ~~jurisdictions,~~classification ~~including~~of ~~the~~bitcoins ~~ones~~as weproperty ~~operate~~for tax purposes (in the context of when such bitcoins are held as an investment), ~~which~~such determination could ~~adversely~~have ~~affect~~a ~~our~~negative ~~business~~tax ~~prospects~~consequence ~~and~~on ~~operations~~the Company or its shareholders.

Risks Related to Ownership of our Common Stock

•The trading price of shares of our common stock has been subject to volatility.

•We have financed our strategic growth through our at-the-market (“ATM”) offerings and issuances of our common stock. Holders of our common stock may experience dilution as a result of such issuances.9

~~•We~~Table previously identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of ~~internal controls, any of which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.~~Contents

•We are and may continue to be subject to short selling strategies.

•We have financed our strategic growth through our at-the-market (“ATM”) offerings and issuances of our common stock.

•The issuance, conversion, or exercise of our convertible notes and other convertible securities and warrants will dilute our stockholders’ ownership.

•Because we do not currently intend to pay any cash dividends on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them.

ITEM 1A. Risk Factors

Our business faces many risks. Before deciding whether to invest in our common stock, you should carefully consider the risk factors discussed in this Annual Report. If any of the risks or uncertainties described herein actually occurs, our business, financial condition, results of operations or cash flow could be materially and adversely affected. This could cause the trading price of our common stock to decline, resulting in a loss of all or part of your investment. The risks and uncertainties we have described are not the only ones facing our company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business operations.

Risks Related to Our HPC and Data Center Business

Our HPC business strategy may not perform as planned.

We believe the potential for HPC hosting complements our current business model with expected stable, long-term and high margin revenue. We also believe that using our existing infrastructure for HPC customers provides more consistent dollar-based revenue and substantially less risk than our traditional bitcoin mining customers or our bitcoin self-mining operations. However, the success of our HPC hosting services may not develop as anticipated, and may be affected by factors such as the reliability and timing of power supply, supply chain disruption (including local labor availability), the implementation of new tariffs and more restrictive trade regulations and changes in in-house specialized expertise to manage the business. A failure to ~~success~~successfully implement our HPC business strategy may adversely affect our business, prospects, or operations.

If we ~~fail~~are unable to ~~increase~~complete our ~~hash~~data ~~rate,~~center wecampuses ~~may~~and befuture ~~unable~~strategic togrowth ~~compete,~~initiatives ~~and~~in a timely manner or within anticipated cost estimates, our business and results of operations could ~~suffer~~be adversely affected.

~~Generally,~~Our abusiness ~~bitcoin~~depends ~~miner’s~~upon ~~chance of solving a block on~~ the ~~bitcoin~~completion ~~blockchain~~ and ~~earning~~build-out aof ~~bitcoin~~our ~~reward~~HPC isand aAI-focused ~~function~~data ofcenter ~~the~~campuses ~~miner’s hash rate~~ (~~i.e.,~~including the ~~amount~~Lake ofMariner ~~computing~~Data ~~power~~Campus ~~devoted~~and ~~to supporting~~ the ~~bitcoin~~Abernathy ~~blockchain~~HPC Campus), ~~relative~~and toother ~~the~~future ~~global~~strategic ~~network~~growth ~~hash rate~~initiatives. AsUntil ~~greater~~we ~~adoption~~complete construction of ~~bitcoin~~the ~~occurs,~~facilities werequired ~~expect~~by ~~the~~our ~~demand~~customer ~~for~~leases ~~bitcoin~~and ~~will~~hosting ~~increase further~~agreements, ~~drawing~~we ~~more~~will ~~mining~~not ~~companies~~realize ~~into~~ the ~~industry~~full ~~and~~amount ~~thereby~~of ~~increasing~~projected ~~the~~revenue ~~global~~from ~~network~~those ~~hash rate~~leases. AsWhile ~~new~~our ~~and~~present ~~more~~expansion ~~powerful~~projects ~~miners~~ are ~~deployed,~~proceeding ~~the~~on ~~global~~track ~~network~~with ~~hash~~our ~~rate will continue to increase~~expectations, ~~meaning~~we acannot ~~miner’s~~guarantee ~~chance~~we ofwill ~~earning~~complete ~~bitcoin~~these ~~rewards~~expansions ~~will~~or ~~decline~~future ~~unless~~strategic itgrowth ~~deploys~~initiatives ~~additional~~on ~~hash~~time ~~rate~~or atwithin ~~pace~~our ~~with~~anticipated ~~the~~cost ~~industry. Accordingly~~estimates, toif ~~compete~~at ~~in this highly competitive industry~~all, wedue ~~believe~~in wepart ~~will need~~ to ~~continue~~ongoing tochallenges ~~acquire new miners, both~~ to ~~replace~~the ~~those~~global ~~lost~~supply tochain, ~~ordinary~~the ~~wear-and-tear~~implementation ~~and~~of ~~other~~new ~~damage,~~tariffs and tomore ~~increase~~restrictive ~~our~~trade ~~hash~~policies, ~~rate~~increased toinflation, ~~keep~~and upchanging ~~with~~conditions awithin ~~growing~~the ~~global~~United ~~network~~States ~~hash~~labor ~~rate~~market.

WeThe ~~plan~~expansion toand ~~increase~~build-out of our ~~hash~~data ~~rate~~center bycampuses ~~acquiring~~expose ~~newer,~~us ~~more~~to ~~effective~~significant ~~and~~construction ~~energy-efficient~~risks, ~~miners.~~including ~~These~~risks ~~new~~related ~~miners~~to ~~are~~construction ~~highly~~delays; ~~specialized~~lack ~~servers~~of ~~that~~availability ~~are~~of ~~very~~parts ~~difficult~~and/or tolabor; ~~produce~~increased atprices; ~~scale.~~labor Asdisputes aand ~~result,~~work ~~there~~stoppages; ~~are~~unanticipated ~~limited~~environmental ~~producers~~issues ~~capable~~and ofgeological ~~producing~~problems; ~~large~~delays ~~numbers~~related ofto ~~sufficiently~~permitting ~~effective~~and ~~miners,~~approvals ~~and,~~from aspublic ~~demand~~agencies ~~for~~and ~~new~~utility ~~miners~~companies; ~~has~~and ~~increased~~delays in ~~response~~site readiness leading to ~~increased~~our ~~bitcoin~~failure ~~prices,~~to wemeet ~~have~~commitments. ~~observed~~Construction-related ~~the~~projects ~~price~~depend ofon ~~these~~the ~~new~~skill, ~~miners~~experience, ~~has~~and ~~increased.~~performance Ifof wedesigners, ~~are~~contractors, ~~unable~~subcontractors toand ~~acquire~~key ~~enough~~suppliers. ~~new~~Should ~~miners~~any orsuch ~~access~~party ~~sufficient~~experience ~~capital~~financial todifficulties ~~fund~~or ~~our~~other ~~acquisitions~~problems, ~~the~~we ~~results~~could ofexperience ~~our~~significant ~~operations~~delays, ~~and~~increased ~~financial~~costs ~~condition~~and ~~could~~other benegative ~~adversely~~impacts ~~affected,~~to ~~as could investments in~~ our ~~securities~~expected returns.

Delays in lease commencement, limitations in customer backstop arrangements and the potential insufficiency of completion guarantees could adversely affect our financial condition and results of operations.

Under certain circumstances, lessees may have the right to terminate applicable leases if there are significant delays in construction, subject to extension for force majeure events. We and certain affiliated entities have agreed to provide subsidiaries with funds necessary to achieve target commencement dates under applicable customer leases; however, these completion guarantees may not be sufficient. If we are unable to complete projects within anticipated cost

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Weestimates, ~~expect~~we ~~the~~may ~~cost~~not ofhave ~~acquiring~~sufficient ~~new~~funds ~~miners~~to ~~and~~provide ~~other~~necessary ~~digital~~support. ~~infrastructure~~The ~~equipment~~failure to ~~continue~~complete toprojects bein ~~affected~~a bytimely ~~ongoing~~manner ~~challenges~~could tohave ~~the~~a ~~global~~material ~~supply~~adverse ~~chain~~effect on our financial condition and results of operations.

~~Similarly~~Customer backstop arrangements of obligations under certain leases (for example, ~~ongoing~~Google’s ~~challenges~~Backstop toof Fluidstack’s obligations under the ~~global~~applicable ~~supply~~Fluidstack ~~chain,~~Leases) ~~coupled~~are ~~with~~only ~~increased~~effective ~~demand~~following ~~for~~the ~~computer~~commencement ~~chips~~of ~~and~~the ~~semiconductors~~relevant ~~and~~lease. ~~resulting~~If ~~shortages,~~one ~~have~~or ~~resulted~~more inleases ~~production~~do ~~cost~~not ~~increases~~commence ~~affecting~~as of their respective targeted commencement dates, then the ~~miners~~corresponding webackstop ~~employ~~may innot ~~our~~become ~~bitcoin~~effective ~~mining~~until ~~operations~~completion ~~and~~of ~~other~~the ~~digital~~applicable ~~infrastructure~~project. ~~equipment~~If ~~for~~completion ~~our~~of a data ~~centers~~center campus is delayed beyond specified thresholds, ~~and~~the ~~their~~customer ~~manufacturers~~may have ~~passed~~the onright ~~increased~~to ~~production~~terminate ~~costs~~the toapplicable ~~purchasers~~lease. ~~like~~Such ustermination event would not trigger the backstop. ~~Therefore~~In addition, webackstop ~~expect~~arrangements toare ~~continue~~only totriggered ~~incur~~upon ~~higher~~a ~~than~~payment ~~usual~~or ~~costs~~insolvency toevent ~~obtain~~of ~~and~~default ~~deploy~~under ~~new~~the ~~miners~~applicable ~~and~~lease. There are other ~~digital~~events ~~infrastructure~~of ~~equipment,~~default ~~which~~or ~~could~~termination ~~adversely~~events ~~affect~~that ~~our~~may ~~financial~~result ~~condition~~in ~~and~~the ~~results~~termination of ~~operations~~a lease without triggering the applicable backstop. In addition, if we have a disagreement about whether a backstop has been triggered, there can be no assurance that such backstop will be honored in a timely manner or at all.

We may ~~not~~ be ~~able~~harmed by increased costs to ~~timely~~procure ~~complete~~power, ~~our~~prolonged ~~future~~power ~~strategic~~and ~~growth~~internet ~~initiatives~~outages, shortages or ~~within~~capacity ~~our~~constraints ~~anticipated~~as ~~cost~~well ~~estimates,~~as ifinsufficient ataccess ~~all~~to power.

~~While~~Our ~~our~~bitcoin ~~present~~mining ~~expansion~~and ~~projects~~HPC ~~are~~data ~~proceeding~~center onoperations ~~track~~require ~~with~~a ~~our~~significant ~~expectations,~~amount weof ~~cannot~~electrical ~~guarantee~~power weand ~~will~~access ~~complete these expansions (or any future strategic growth initiatives) on time or within our cost estimates, if at all, due in part~~ to ~~the~~high-speed ~~ongoing~~internet ~~challenges~~ to ~~the~~be ~~global~~successful. ~~supply~~Any ~~chain,~~power ~~the implementation of new tariffs~~ and ~~more~~internet ~~restrictive~~outages, ~~trade policies~~shortages, ~~increased~~capacity ~~inflation~~constraints ~~and~~or ~~changing~~significant ~~conditions~~increases ~~within~~in the ~~United States labor market. If we are unable to complete our planned expansions on schedule and within our anticipated~~ cost ~~estimates, our deployment~~ of ~~newly~~power ~~purchased miners~~ may behave ~~delayed,~~an ~~which~~adverse ~~could~~effect ~~affect~~on our ~~competitiveness~~business and our results of ~~operation~~operations, ~~which~~including ~~could have a material adverse effect on~~ our ~~financial~~mining ~~condition~~ and ~~the~~data ~~market~~center ~~price for our securities~~operations.

We ~~may~~rely beon ~~unable~~third parties, third party infrastructure, governments, and global supplies to provide a sufficient amount of power to maintain our bitcoin mining and HPC data center operations to meet the needs of our current and future HPC hosting and colocation customers. Any limitation on the delivered energy supply could limit our ability to operate our bitcoin mining and HPC data centers. These limitations could have a negative impact on our existing data center campuses or limit our ability to grow our business, which could negatively affect our financial performance and results of operations. Each new HPC data center requires access to significant quantities of electricity. Limitations on generation, transmission and distribution may limit our ability to obtain sufficient ~~additional~~power ~~capital~~capacity for potential expansion sites or existing markets. Utility companies may impose onerous operating conditions to any approval or provision of power or we may experience significant delays and substantial increased costs to provide the level of electrical service required by our current or future ~~strategic~~data ~~growth~~center ~~initiatives~~designs.

~~The~~Our ~~expansion~~ability ~~of our miner fleet, our existing mining facilities and our digital infrastructure~~ to ~~support~~successfully ~~HPC~~develop ~~hosting and colocation are capital-intensive~~ projects, ~~and~~is weimpacted ~~anticipate~~by that future strategic growth initiatives will likewise continue to be capital-intensive. We expect to raise additional capital to fund these and other future strategic growth initiatives; however, we may be unable to do so in a timely manner, in sufficient quantities, or on terms acceptable to us, if at all. If we are unable to raise the ~~additional~~availability ~~capital needed to execute our future strategic growth initiatives~~of, ~~we may be less competitive in our industry~~ and ~~the~~access ~~results of our operations and financial condition may suffer~~to, ~~and~~interconnection ~~the~~facilities ~~market price for our securities may be materially~~ and ~~adversely~~transmission ~~affected~~systems.

~~Expansion~~In ofrecent ~~our~~years, ~~Lake~~the ~~Mariner~~time ~~Facility~~and ~~potentially~~costs ~~exposes~~required us to secure and expand interconnection facilities and transmissions systems have increased, complicating project planning and creating additional ~~risks~~contractual and financial risk for projects under construction. We may face difficulties in expanding our interconnection facilities and access to transmissions systems in a timely manner and at a reasonable cost as well as curtailment resulting from transmission facility downtime, which could materially and adversely affect our results of operations and cash flow.

~~Expansion~~Since ofthe ~~our existing mining facilities and digital infrastructure to support HPC hosting and colocation potentially exposes us to additional risks~~development, ~~including risks related to, among other sources:~~ construction ~~delays; lack of availability of parts~~ and~~/or~~ ~~labor,~~operation ~~increased prices as a result, in part,~~ of ~~inflation,~~the ~~and~~Abernathy ~~delays~~HPC ~~for~~Campus ~~data~~is ~~center~~subject ~~equipment; labor disputes and work stoppages, including interruptions in work due~~ to pandemics, epidemics, and other health risks; unanticipated environmental issues and geological problems; delays related to permitting and approvals to commence operations from public agencies and utility companies; and delays in site readiness leading to our failure to meet commitments made in connection with such expansion. All construction-related projects depend on the ~~skill,~~terms ~~experience, and attentiveness~~ of ~~our personnel throughout the design and construction process. Should~~ a ~~designer,~~joint ~~general~~venture ~~contractor~~agreement, ~~significant~~TeraWulf ~~subcontractor~~may orhave ~~key~~less ~~supplier~~control ~~experience~~over ~~financial~~strategic difficulties or other problems during the design or construction process, we could experience significant delays, increased costs to complete the project and/or other negative impacts to our expected returnsdecisions.

IfOn weOctober ~~are~~27, ~~unable~~2025, tothe ~~overcome~~TeraWulf ~~these~~Member ~~risks~~entered ~~and~~into ~~additional~~the ~~pressures~~Abernathy toJoint ~~complete~~Venture ~~our~~Agreement ~~expansion~~with ~~and~~the ~~construction~~Fluidstack ~~projects~~Member. inThe aAbernathy ~~timely~~Joint ~~manner~~Venture Agreement provides that, ifexcept atfor ~~all~~certain specified matters, wedecisions ~~may~~are ~~not~~to ~~realize~~be ~~their~~made ~~anticipated~~by ~~benefits,~~a ~~and~~majority ~~our~~vote ~~business~~of the board of managers. The board of managers will initially comprise three designees of TeraWulf and ~~financial~~two ~~condition~~designees of the Fluidstack Member. Any significant disagreements between joint venture partners on strategic decisions or the inability of the Fluidstack Member to meet obligations to the Abernathy Joint Venture or third parties may ~~suffer~~impede asTeraWulf’s aability ~~result~~to control aspects of the development, construction, and operation of the Abernathy HPC Campus.

~~Economic~~We ~~and~~depend ~~geopolitical~~on ~~events~~significant ~~and~~customers ~~macroeconomic~~for ~~conditions~~our ~~may~~HPC ~~create~~data ~~increased uncertainty and price changes~~centers.

WeMany ~~are~~factors, ~~subject~~including toglobal ~~price~~economic ~~volatility~~conditions, ~~and~~may ~~uncertainty~~cause ~~due~~our toHPC ~~geopolitical~~data ~~crises~~center ~~and~~customers ~~economic~~to ~~downturns.~~experience ~~Such~~a ~~geopolitical~~downturn ~~crises~~in ~~and~~their ~~global~~businesses ~~economic~~or ~~downturns~~otherwise ~~may~~experience be a ~~result~~lack of ~~invasion~~liquidity, orwhich ~~possible~~may ~~invasion~~weaken bytheir ~~one~~financial ~~nation~~condition ofand ~~another,~~impact ~~global~~our ~~outbreaks~~estimates ofas ~~various~~to ~~epidemics or disease,~~ the ~~implementation~~probability of ~~new~~collectability ~~tariffs~~of ~~and more restrictive trade regulations~~payments, ~~leading to increased inflation~~ and ~~supply~~ultimately ~~chain~~result ~~volatility.~~in ~~Such~~their ~~crises~~failure ~~will likely continue~~ to ~~have~~make antimely ~~effect~~rental onand ~~our~~other ~~ability~~payments toor dotheir ~~business~~default inunder atheir ~~cost-effective~~agreements ~~manner~~with us. ~~Inflation~~Further, ~~has caused~~ the ~~price~~development of ~~materials~~new totechnologies, ~~increase leading to increased expenses to our business. Global crises and economic downturns may also have~~ the ~~effect~~adoption of ~~discouraging~~new ~~investment~~industry instandards ~~bitcoin~~or asother ~~investors~~factors ~~shift their investments to less volatile assets. Such shifts~~ could ~~have~~render aour ~~materially~~HPC ~~adverse~~data ~~effect~~center oncustomers’ ~~our~~current ~~business,~~products ~~operations~~ and ~~the value of the bitcoin we mine.~~

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~~Sustaining~~services ~~our~~obsolete ~~growth~~or ~~plans~~unmarketable ~~will require the ongoing readiness~~ and ~~solvency~~contribute ofto ~~our suppliers and vendors,~~ a ~~stable~~downturn ~~and~~in ~~motivated~~their ~~production workforce~~businesses, ~~and~~thereby ~~government~~increasing ~~cooperation,~~the ~~each~~likelihood ofthat ~~which~~they ~~may~~default beunder ~~affected~~their byleases, ~~macroeconomic~~become ~~factors~~insolvent ~~outside~~or offile ~~our~~for ~~immediate control~~bankruptcy. WeIf ~~cannot~~a ~~predict~~customer ~~the~~defaults ~~duration~~ or ~~direction~~fails ofto ~~current~~make ortimely ~~new~~rent ~~global trends~~ or ~~their~~other ~~sustained impact. Ultimately~~payments, we ~~continue~~may toexperience ~~monitor~~delays ~~macroeconomic~~in ~~conditions~~enforcing ~~to remain flexible and to optimize and evolve~~ our ~~business~~rights as ~~appropriate,~~landlord and wemay ~~will~~incur ~~have~~substantial tocosts ~~accurately~~in ~~project~~protecting ~~demand and infrastructure requirements globally and deploy~~ our ~~workforce and capital resources accordingly. If we experience unfavorable global market conditions~~investment, orwhich ifcould weadversely ~~cannot~~affect ~~or do not maintain operations at a scope that is commensurate with such conditions or are later required to or choose to suspend such operations,~~ our ~~business, prospects,~~ financial condition, and ~~operating~~ results ~~may~~of ~~be harmed~~operations.

Enhanced tariff, import/export restrictions, or other trade barriers may have an adverse impact on global economic conditions.

There have been, and continue to be, uncertainties with respect to the global economy and trade relations between the U.S. and other countries globally, including trade policies, treaties, tariffs, and customs duties and taxes. Implementation of more restrictive trade policies or the renegotiation of existing U.S. trade agreements or trade agreements of other countries where we procure supplies and materials for our digital infrastructure could negatively impact our business results of operations, cash flows, and financial condition. Tariffs, sanctions and other barriers to trade could adversely affect the business of our customers and suppliers, which could in turn negatively impact our net revenue and results of operations. If tariffs, trade restrictions or trade barriers are expanded or increased, then our exposure to future taxes and duties on imported products and components could be significant and could have a material effect on our financial results.

We cannot predict the extent to which the U.S. or other countries will impose new or additional quotas, duties, tariffs, taxes, or other similar restrictions upon the import of goods and services in the future, nor can we predict future trade policy or the terms of any renegotiated trade agreements and their impact on our business. The continuing adoption or expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies has the potential to adversely impact demand for our HPC data centers, our costs, our customers, our suppliers, and the U.S. economy, which in turn could have a material adverse effect on our business, operating results, and financial condition.

We may be harmed by increased costs to procure power, prolonged power outages, shortages or capacity constraints as well as insufficient access to power.

Any power outages, shortages, capacity constraints or significant increases in the cost of power may have an adverse effect on our business and our results of operations.

We rely on third parties, third party infrastructure, governments, and global supplies to provide a sufficient amount of power to maintain our bitcoin mining and HPC data center operations to meet the needs of our current and future HPC hosting and colocation customers. Any limitation on the delivered energy supply could limit our ability to operate our bitcoin mining and HPC data centers. These limitations could have a negative impact on the Lake Mariner Facility or limit our ability to grow our business, which could negatively affect our financial performance and results of operations. Each new HPC data center requires access to significant quantities of electricity. Limitations on generation, transmission and distribution may limit our ability to obtain sufficient power capacity for potential expansion sites or existing markets. Utility companies may impose onerous operating conditions to any approval or provision of power or we may experience significant delays and substantial increased costs to provide the level of electrical service required by our current or future data center designs.

We depend on significant customers for our HPC data centers.

Many factors, including global economic conditions, may cause our HPC data center customers to experience a downturn in their businesses or otherwise experience a lack of liquidity, which may weaken their financial condition and impact our estimates as to the probability of collectability of payments, and ultimately result in their failure to make timely rental and other payments or their default under their agreements with us. Further, the development of new technologies, the adoption of new industry standards or other factors could render our HPC data center customers’ current products and services obsolete or unmarketable and contribute to a downturn in their businesses, thereby increasing the likelihood that they default under their leases, become insolvent or file for bankruptcy. If a customer defaults or fails to make timely rent

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or other payments, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment, which could adversely affect our financial condition and results of operations.

If a customer becomes a debtor in a case under the U.S. Bankruptcy Code, we cannot evict the customer solely because of the bankruptcy. In addition, the bankruptcy court might authorize the customer to reject and terminate its contracts with us. Our claim against the customer for unpaid, future rent and other payments would be subject to a statutory cap that might be substantially less than the remaining amounts actually owed under their agreements with us. In either case, our claim for unpaid rent and other amounts would likely not be paid in full. Our revenue could be materially adversely affected if a significant customer were to become bankrupt or insolvent, suffer a downturn in its businesses, fail to renew its contract or renew on terms less favorable to us than its current terms.

Our contracts with HPC data center customers could subject us to significant liability.

In the ordinary course of business, we aim to continuously enter into agreements with customers pursuant to which we provide data center space, power, environmental controls, physical security and connectivity products to our HPC hosting and colocation customers. These contracts typically contain indemnification and liability provisions, in addition to service level commitments, which could potentially impose a significant cost on us in the event of losses arising out of certain breaches of such agreements, services to be provided by us or our subcontractors or from third-party claims. HPC data center customers increasingly are looking to pass through their regulatory obligations and other liabilities to their outsourced data center providers and we may not be able to limit our liability or damages in an event of loss suffered by such customers whether as a result of our breach of an agreement or otherwise. If such an event of loss occurred, we could be liable for material monetary damages and could incur significant legal fees in defending against such an action, which could adversely affect our financial condition and results of operations.

We may also develop space specifically for HPC data center customers pursuant to agreements signed prior to beginning or early in the development process. In those cases, if we fail to meet our development obligations under those agreements, these customers may be able to terminate their agreements and we would be required to find a new customer for this space. In addition, in certain circumstances we may lease HPC data center facilities prior to their completion. If we fail to complete the facilities in a timely manner, the customer may be entitled to terminate its agreement, seek damages or penalties against us or pursue other remedies and we may be required to find a new customer for the space. If we are not able to complete an HPC data center in a timely manner, if development costs are higher than we currently estimate, our financial condition, results of operations and cash flow could be materially adversely affected.

Additionally, a customer’s decision to lease space and power in our HPC data center typically involves a significant commitment of resources and due diligence on the part of our customers regarding the adequacy of our facilities. As a result, we may expend significant time and resources in pursuing a particular transaction that may not result in revenue. Economic conditions, including market downturns and the implementation of new tariffs and more restrictive trade regulations may impact customers’ ability to plan future business activities, which could cause customers to slow spending or delay decision-making. Our inability to adequately manage the risks associated with these developments may adversely affect our business, financial condition and results of operations.

Certain of our agreements with HPC data center customers may include restrictions on providing HPC hosting and colocation services to certain third parties, which could have a material adverse effect on us.

Certain of our customer agreements may prohibit us from providing HPC hosting and colocation services to certain third parties, including competitors of existing HPC data center customers. The existence of such restrictions could hinder our ability to enter into agreements with additional HPC data center customers, which could materially adversely affect our business, financial condition and results of operations.

We may be unable to access sufficient additional capital for future strategic growth initiatives, and any such capital raises may be dilutive or subject to restrictive terms.

The expansion of our digital infrastructure to support HPC hosting and colocation and our future strategic growth initiatives are capital-intensive. We expect to raise additional capital to fund these initiatives; however, we may be unable to do so in a timely manner, in sufficient quantities, or on terms acceptable to us, if at all. If we raise additional equity financing, our stockholders may experience dilution of their ownership interests, and the per share value of our common stock could decline.

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If we engage in debt financing, the holders of any debt we issue would likely have priority over the holders of shares of our common stock in terms of order of payment preference and may require us to accept restrictive covenants. If we are unable to generate sufficient cash flows from operations to support our strategic growth, we may be required to reduce or delay investments, sell assets, or obtain financing on terms that may be onerous or highly dilutive.

Failure to successfully integrate acquired businesses could negatively impact our balance sheet and results of operations.

Strategic acquisitions and/or combinations are a component of our growth strategy and the success of any acquisition we make depends in part on our ability to integrate the acquired business and realize anticipated synergies. Integrating acquired businesses may involve unforeseen difficulties, may require a disproportionate amount of our management’s attention, and may require us to reallocate our resources, financial or otherwise.

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For example, we may encounter challenges in the integration process such as: difficulties associated with managing the resulting larger and more complex company; conforming administrative and corporate structures and standards, controls, procedures and policies, business cultures, hiring and retention of key employees, and compensation and benefits structures, coordinating geographically dispersed operations; and our ability to deliver on our strategy going forward.

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

We can give no assurance that we will ultimately be able to effectively integrate and manage the operations of any acquired business or realize anticipated synergies. The failure to successfully integrate the cultures, operating systems, procedures and information technologies of an acquired business could have a material adverse effect on our financial condition and results of operations.

We may experience increased compliance costs as a result of our strategic acquisitions.

Future strategic acquisitions could carry substantial compliance burdens, which may limit our ability to realize the anticipated benefits of such acquisitions, and which may require our management and personnel to shift their focus to such compliance burdens and away from their other functions. Such increased costs and compliance burdens could affect our ability to realize the anticipated benefits of such strategic acquisitions, and our business, results of operations, and financial condition may suffer as a result.

WeThe ~~have~~development ~~financed~~and ~~our~~advancement ~~strategic growth primarily by issuing new shares of our common stock~~ in ~~public offerings, which dilutes~~ the ~~ownership~~efficiency ~~interests~~ of ~~our~~AI ~~current~~models ~~stockholders,~~presents risks and ~~which~~challenges that may adversely ~~affect~~impact ~~the~~our ~~market~~business ~~price~~and ofoperating ~~our securities~~results.

WeThe ~~have~~introduction ~~raised capital to finance the strategic growth~~ of ~~our business through public offerings of our common stock~~, and weadvancement ~~expect~~in ~~to raise additional capital through similar public offerings to finance~~ the ~~completion~~efficiency of ~~current~~AI ~~and~~models ~~future expansion initiatives. We may not be able to obtain additional debt or equity financing on favorable terms, if at all, which~~ could ~~impair~~potentially ~~our growth and~~ adversely ~~impact~~affect ~~our~~data ~~existing~~center ~~operations.~~usage ~~From 2022 through 2024, a number of digital asset platforms and exchanges filed for bankruptcy and/or became the subjects of investigation~~ by ~~various~~significantly ~~governmental~~reducing ~~agencies for, among other things, fraud. These disruptions in~~ the ~~crypto~~computational ~~asset~~power ~~market~~needed ~~may impact our ability~~ to ~~obtain~~train ~~favorable~~AI ~~financing. If we raise additional equity financing~~models, ~~our~~potentially ~~stockholders~~leading ~~may experience dilution of their ownership interests, and the per share value of our common stock could decline. If we are unable~~ to ~~generate~~less ~~cash~~demand ~~flows~~for ~~from~~high-power ~~operation sufficient to support our strategic growth~~density, weliquid-cooled ~~may~~data becenter ~~required~~infrastructure toand ~~adopt~~colocation ~~one or more alternatives, such as reducing or delaying investments or capital expenditures, selling assets, or obtaining additional equity financing on terms that may be onerous or highly dilutive~~facilities. ~~Furthermore,~~New ifadvancements ~~we engage~~ in ~~debt~~AI ~~financing,~~models ascould wealso ~~currently~~alter ~~do,~~ the ~~holders~~way ofdata ~~any~~centers ~~debt~~are wecurrently ~~issue~~designed ~~would~~and ~~likely~~utilized ~~have~~and ~~priority over the holders of shares of our common stock in terms of order of payment preference. We~~ may beadversely ~~required~~affect ~~to accept terms that restrict~~ our ~~ability~~business toand ~~incur~~results ~~additional indebtedness or take other actions including accepting terms that require us to maintain specified liquidity or other ratios that could otherwise not be in the interests~~ of ~~our stockholders~~operations.

WeCyber-attacks, ~~have~~data abreaches ~~history~~or ofmalware may disrupt our operations and trigger significant liability for us, which could harm our operating ~~losses~~results and financial condition, and wedamage ~~may~~our ~~report~~reputation ~~additional~~or ~~operating~~otherwise ~~losses~~materially inharm ~~the~~our ~~future~~business.

~~Our~~As ~~primary~~a ~~business~~publicly istraded ~~bitcoin mining~~company, ~~and~~at times we ~~have~~experience ~~recorded~~cyber-attacks, ~~historical~~such ~~losses~~as phishing, and ~~negative~~other ~~cash~~attempts ~~flows~~to ~~from~~gain unauthorized access to our ~~operations~~systems, ~~when~~and ~~the~~we ~~value~~anticipate continuing to be subject to such attempts. There is an ongoing risk that some or all of our bitcoin weor ~~mine~~customer ~~does~~or ~~not~~Company ~~exceed~~data ~~our~~could ~~associated~~be ~~costs.~~lost ~~Further,~~or stolen as ~~part~~a result of ~~our~~one ~~strategic~~or ~~growth~~more ~~plans~~of these incursions. As we increase in size, we ~~have~~may ~~made~~become ~~capital~~a ~~investments~~more inappealing ~~expanding~~target ~~our~~of ~~bitcoin~~hackers, ~~mining~~malware, ~~operations~~cyber-attacks ~~and~~or ~~transitioning~~other ansecurity ~~increasing~~threats, ~~portion~~and, ofdespite our ~~Lake~~implementation ~~Mariner~~of ~~Facility~~strict tosecurity ~~support~~measures, ~~HPC~~it ~~hosting~~is ~~and~~impossible ~~colocation~~to eliminate all such vulnerability. ~~However~~For instance, ~~future~~we ~~market~~may ~~prices~~not be able to ensure the adequacy of ~~bitcoin~~the ~~are~~security ~~difficult~~measures toemployed ~~predict~~by third parties, ~~and~~such as our service providers. Additionally, though we provide cybersecurity training for all employees, we cannot guarantee that ~~our~~we ~~future~~will ~~revenue~~not ~~from~~be ~~bitcoin~~affected ~~mining~~by ~~and~~further ~~HPC~~phishing ~~data~~attempts. ~~center~~Efforts to limit the ability of malicious actors to disrupt the operations ~~will~~of ~~exceed~~the internet or undermine our ~~associated~~own ~~costs~~security efforts may be costly to implement and may not be successful.

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~~The~~Such ~~lack~~breaches, ofwhether ~~regulation~~attributable ofto ~~digital~~a ~~asset~~vulnerability ~~exchanges~~in ~~which~~our ~~bitcoin,~~systems ~~and~~or ~~other cryptocurrencies~~otherwise, ~~are~~could ~~traded~~result onin ~~may~~claims ~~expose us to the effects~~ of ~~negative~~liability ~~publicity~~against ~~resulting~~us, ~~from~~damage ~~fraudulent~~our ~~actors~~reputation ~~in the cryptocurrency space~~ and ~~can~~materially ~~adversely~~harm ~~affect~~our ~~an investment in the Company~~business.

~~The~~We ~~digital asset exchanges on which bitcoin is traded~~ are ~~relatively~~currently ~~new~~making ~~and~~considerable ~~largely~~investments ~~unregulated.~~in ~~Many~~our ~~digital asset exchanges do not provide the public with significant~~ information ~~regarding~~technology ~~their~~systems ~~ownership~~and ~~structure, management teams, corporate practices, or regulatory compliance~~processes. AsDifficulties afrom ~~result, the marketplace may lose confidence in,~~ or ~~may~~disruptions ~~experience problems relating~~ to, ~~such~~these ~~digital~~efforts ~~asset~~may ~~exchanges,~~interrupt ~~including~~our ~~prominent~~normal ~~exchanges~~operations ~~handling~~and aadversely ~~significant~~affect ~~portion~~our ofbusiness ~~the volume of digital asset trading. From 2022 through 2024, a number of digital asset exchanges filed for bankruptcy proceedings~~ and~~/or~~ ~~became~~results ~~the subjects~~ of ~~investigation by various governmental agencies for, among other things, fraud, causing a loss of confidence and an increase in negative publicity for the digital asset ecosystem~~operations. As a result, many digital asset markets, including the market for bitcoin, have experienced increased price volatility. The bitcoin ecosystem may continue to be negatively impacted and experience long term volatility if public confidence decreases.

~~These~~We ~~events~~have ~~are~~been ~~continuing~~making toconsiderable ~~develop~~investments ~~and~~in itour isinformation ~~not~~technology ~~possible~~systems toand ~~predict,~~processes atand ~~this~~expect ~~time,~~such ~~every~~investment ~~risk~~to ~~that~~continue ~~they~~for ~~may~~the ~~pose~~foreseeable tofuture ~~us,~~in support of our ~~service~~bitcoin ~~providers,~~mining oroperations ~~the~~and ~~digital~~our ~~asset~~expansion ~~industry~~into asHPC ahosting ~~whole~~and colocation. AThese ~~perceived~~continuing ~~lack~~investments ofand ~~stability~~upgrades ininclude the ~~digital~~implementation ~~asset~~of ~~exchange~~new ~~market~~tools and ~~the~~technologies ~~closure~~to orfurther ~~temporary~~streamline ~~shutdown~~and ofautomate ~~digital~~processes, ~~asset~~including ~~exchanges~~with ~~due~~respect to ~~business failure~~procurement, ~~hackers~~and orto ~~malware,~~support ~~government-mandated~~our ~~regulation,~~compliance orwith ~~fraud~~evolving ~~may~~U.S. ~~reduce~~GAAP. ~~confidence~~These ininvestments ~~digital~~and ~~asset~~upgrades ~~networks~~ and ~~result~~may intake ~~greater~~longer ~~volatility~~to incomplete ~~cryptocurrency~~and ~~values~~cost more than originally planned. ~~These~~As ~~potential~~a ~~consequences~~result of aour ~~digital~~continued ~~asset~~work ~~exchange’s~~on ~~failure~~these ~~could~~projects, we may experience difficulties with our systems and business disruptions. Any such difficulties or disruptions may adversely affect our business and anresults ~~investment~~of ~~in the Company~~operations.

We depend on attracting and retaining officers, managers, and skilled professionals.

Our success depends, in large part, on our ability to hire, retain and motivate talented officers, leadership, and professionals. We cannot guarantee that such employees will be retained which may inhibit our management functions, strategic development, and other critical functions. Our growth may be constrained by human capital resource limitations as we compete with other companies for skilled employees. We will need to take strategic action to develop our pool of management and skilled employees as well as grow such pool to meet the demands of our corporate functions. If we are not able to do so, our business, and thus our ability to grow, may be materially adversely affected.

~~Risks~~Enhanced ~~Related~~tariff, toimport/export ~~the~~restrictions, ~~Price~~or ofother ~~Bitcoin~~trade barriers may have an adverse impact on global economic conditions.

Increased scrutiny and changing expectations from stakeholders with respect to our environmental, social, and governance (ESG) practices and the impacts of climate change may result in additional costs or risks.

Companies across many industries are facing increasing scrutiny related to their ESG practices. Investor advocacy groups, certain institutional investors, investment funds and other influential investors are also increasingly focused on ESG practices and in recent years have placed increasing importance on the non-financial impacts of their investments. Furthermore, increased public awareness and concern regarding environmental risks, including global climate change, has resulted in and may continue to result in increased public scrutiny of our business and our industry, and our management team may divert significant time and energy away from our operations and towards responding to such scrutiny and reassuring our employees.

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renovate or retrofit facilities to better withstand extreme weather events. If environmental laws or regulations or industry standards are either changed or adopted and impose significant operational restrictions and compliance requirements on our operations, or if our operations are disrupted due to the physical impacts of climate change, our business, capital expenditures, results of operations, financial condition and competitive position could be negatively impacted.

We have a history of operating losses, and we may report additional operating losses in the future.

We have recorded historical losses and negative cash flows from our operations, including from our bitcoin mining activities when the value of bitcoin mined did not exceed our associated costs. As we transition an increasing portion of our business toward HPC hosting and colocation, we are making substantial capital investments in developing and expanding our data center campuses. These investments are capital-intensive and revenue from HPC hosting is dependent upon the completion and commencement of customer leases. Future market prices of bitcoin remain difficult to predict, and demand for HPC hosting services may not develop as anticipated. There can be no assurance that revenue from our bitcoin mining operations and HPC data center operations will exceed our associated operating and capital costs.

Risks Related to the Bitcoin Mining Business

Our ability to achieve profitability is largely dependent on the price of bitcoin, which has historically been volatile.

Our existing bitcoin mining operations ~~and the expansions of our Lake Mariner Facility~~ are largely based on our assumptions regarding the future value of bitcoin, which has been subject to significant historical volatility and may be subject to influence from malicious actors, real or perceived scarcity of bitcoin, political, economic, and regulatory conditions and speculation making bitcoin’s price more volatile or creating “bubble” type risks for the trading price of bitcoin. Further, unlike traditional stock exchanges, which have listing requirements and vet issuers, requiring companies to comply with rigorous listing standards and rules, which monitor transactions for fraud and other improprieties, markets for bitcoin and other cryptocurrencies tend to be unregulated or underregulated. In general, less stringent markets are perceived to have a higher risk of fraud or manipulation and any lack of oversight or perceived lack of transparency could reduce confidence in the price of bitcoin and other cryptocurrencies, which could adversely affect the price of bitcoin. Bitcoin and crypto asset markets generally may be subject to increased scrutiny and regulation by the U.S. legislature and government agencies, and such evolving regulatory and legal environment may impact our bitcoin mining activities and therefore an impact on our business.

These factors make it difficult to accurately predict the future market price of bitcoin and may also inhibit consumer trust in, and market acceptance of, cryptocurrencies as a means of exchange, which could limit the future adoption of bitcoin and, as a result, our assumptions could prove incorrect. If our assumptions prove incorrect and the future price of bitcoin is not sufficiently high, our revenue from our bitcoin mining operations may not exceed our costs, and our operations may not be profitable, which would have a material adverse effect on our results of operations and financial condition.

~~Bitcoin~~Instability, ~~market~~fraud, ~~exposure~~or tofailures ~~financially~~within ~~troubled~~the broader cryptocurrency~~-related~~ ~~companies~~ecosystem may ~~impact~~adversely ~~our~~affect ~~reputation,~~ the price of bitcoin and ~~the~~our ~~profitability~~results of ~~our bitcoin mining~~ operations.

~~The~~Digital ~~failure~~asset ofexchanges ~~several~~and cryptocurrency platforms ~~has~~are ~~impacted~~relatively new and, ~~may~~in ~~continue~~many cases, lightly regulated. Certain exchanges have filed for bankruptcy or become subject to ~~impact~~investigation ~~the~~by ~~broader~~governmental ~~cryptocurrency~~agencies ~~economy;~~for ~~the~~fraud ~~full~~or ~~extent~~other ofmisconduct, ~~these~~resulting ~~impacts~~in ~~may~~increased ~~not~~volatility ~~yet~~and beloss ~~known~~of confidence in digital asset markets. Bitcoin is subject to price volatility resulting from financial instability, poor business practices, fraudulent activities of participants in the broader cryptocurrency market and heightened regulatory scrutiny.

A perceived lack of stability in the digital asset exchange market, the closure or temporary shutdown of exchanges due to business failure, cyber-attacks, government-mandated regulation or fraud, or other disruptions in the cryptocurrency ecosystem may reduce confidence in digital asset networks and result in greater volatility in bitcoin values. Such developments could adversely affect our bitcoin mining operations and our financial condition.

Bitcoin is subject to halving, and our bitcoin mining operations may generate less revenue as a result.

The number of new bitcoin awarded for solving a block is cut in half at mathematically predetermined intervals, known as “halving”. The next halving for the bitcoin blockchain is currently anticipated to occur in April 2028. While bitcoin prices have historically increased around these halving events, there is no guarantee that the price change will be favorable or would compensate for the reduction in mining rewards. If a corresponding and proportionate increase in the price of bitcoin does not follow future halving events, the revenue we earn from our bitcoin mining operations would see a decrease, which could have a material adverse effect on our results of operations and financial condition.

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resulting from financial instability, poor business practices, and fraudulent activities of players in the broader cryptocurrency market. When investors in cryptocurrency and cryptocurrency-based companies experience financial difficulty as a result of price volatility, poor business practices, and/or fraud, it has caused, and may continue to cause, loss of confidence in the cryptocurrency space, reputational harm to cryptocurrency assets, heightened scrutiny by regulatory authorities and law makers, and a steep decline in the value of bitcoin, among other material impacts. Such adverse effects have affected, and may in the future, affect the profitability of our bitcoin mining operations.

Bitcoin is subject to halving, and our bitcoin mining operations may generate less revenue as a result.

The number of new bitcoin awarded for solving a block is cut in half at mathematically predetermined intervals, known as “halving”. The next halving for the bitcoin blockchain is currently anticipated to occur in March 2028. While bitcoin prices have historically increased around these halving events, there is no guarantee that the price change will be favorable or would compensate for the reduction in mining rewards. If a corresponding and proportionate increase in the price of bitcoin does not follow future halving events, the revenue we earn from our bitcoin mining operations would see a decrease, which could have a material adverse effect on our results of operations and financial condition.

Transaction fees may decrease demand for bitcoin and prevent expansion.

As the number of bitcoin currency rewards granted for solving a block in the bitcoin blockchain has decreased, transaction fees have increasingly been used to incentivize miners to continue to contribute to the bitcoin network. However, high bitcoin transaction fees may slow the adoption of bitcoin as a means of payment, which may decrease demand for bitcoin and future prices of bitcoin may suffer as a result. If bitcoin prices are not sufficiently high, our bitcoin mining revenue may not exceed our associated costs, and our results of operations and financial condition may suffer. Further, because the price of shares of our common stock may be linked to the price of bitcoin, if demand for bitcoin decreases, causing future bitcoin prices to decrease, the market price of our securities may be materially and adversely affected, limiting our ability to raise additional capital to fund our strategic growth plans and would have a material adverse effect on our results of operations and financial condition.

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

Bitcoin (and cryptocurrencies, generally) face significant scaling obstacles that can lead to high fees or slow transaction settlement times and attempts to increase the volume of transactions may not be effective. Scaling cryptocurrencies is essential to the widespread acceptance of cryptocurrencies as a means of payment, including bitcoin. Many cryptocurrency networks face significant scaling challenges. For example, cryptocurrencies are limited with respect to how many transactions can occur per second. Participants in the cryptocurrency ecosystem debate potential approaches to increasing the average number of transactions per second that a network can handle and have implemented mechanisms or are researching ways to increase scale, such as increasing the allowable sizes of blocks, and therefore the number of transactions per block, and sharding (a horizontal partition of data in a database or search engine), which would not require every single transaction to be included in every single miner’s or validator’s block. There is, however, no guarantee that any of the mechanisms in place or being explored for increasing the scale of settlement of cryptocurrency transactions will be effective. If adoption of bitcoin (and cryptocurrencies, generally) as a means of payment does not occur on the schedule or scale we anticipate, the demand for bitcoin may stagnate or decrease, which could adversely affect future bitcoin prices, and our results of operations and financial condition, which could have a material adverse effect on the market price for our securities.

Risks Related to Our Operations

To remain competitive in our industry, we seek to grow our hash rate to match the growing network hash rate and increasing network difficulty of the bitcoin blockchain, and if we are unable to grow our hash rate at pace with the global network hash rate, our chance of earning bitcoin from our mining operations would decline.

As the adoption of bitcoin has increased, the price of bitcoin has generally appreciated, causing the demand for new bitcoin rewards for successfully solving blocks on the bitcoin blockchain to likewise increase. This has encouraged more miners to attempt to mine bitcoin, which increases the global network hash rate deployed in support of the bitcoin blockchain.

Because a miner’s relative chance of successfully solving a block and earning a new bitcoin reward is generally a function of the ratio of the miner’s individual hash rate relative to the global network hash rate, as the global network hash rate increases, a miner must increase its individual hash rate to maintain its chances of earning new bitcoin rewards.

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Therefore, as new miners enter the industry and as miners deploy greater numbers of increasingly powerful machines, existing miners must seek to continually increase their hash rate to remain competitive. Thus, a feedback loop is created: as bitcoin gains popularity and its relative market price increases, more miners attempt to mine bitcoin and the bitcoin network hash rate is increased; in response, existing miners and new miners devote more and more hash rate to the bitcoin blockchain by deploying greater numbers of increasingly powerful machines in an attempt to ensure their ability to earn additional bitcoin rewards does not decrease. Compounding this feedback loop, the network difficulty of the bitcoin network (i.e., the amount of work (measured in hashes) necessary to solve a block) is periodically adjusted to maintain the pace of new block additions (with one new block added to the blockchain approximately every ten minutes), and thereby control the supply of bitcoin. As miners deploy more hash rate and the bitcoin network hash rate is increased, the bitcoin network difficulty is adjusted upwards by requiring more hash rate to be deployed to solve a block. Thus, miners are further incentivized to grow their hash rate to maintain their chance of earning new bitcoin rewards. In theory, these dual processes should continually replicate themselves until the supply of available bitcoin is exhausted. In response, miners have attempted to achieve greater hash rate by deploying increasingly sophisticated and expensive miners in ever greater quantities. Moreover, because there are very few manufacturers of miners capable of producing a sufficient number of miners of adequate quality to meet this need, scarcity results, leading to higher prices. Compounding this phenomenon, it has been observed that some manufacturers of bitcoin miners may increase the prices for new miners as the market price of bitcoin increases.

Accordingly, to maintain our chances of earning new bitcoin rewards and remaining competitive in our industry, we must seek to continually add new miners to grow our hash rate at pace with the growth in the bitcoin global network hash rate. However, as demand has increased and scarcity in the supply of new miners has resulted, the price of new miners has increased sharply, and we expect this process to continue in the future as demand for bitcoin increases. Therefore, if the price of bitcoin is not sufficiently high to allow us to fund our hash rate growth through new miner acquisitions and if we are otherwise unable to access additional capital to acquire these miners, our hash rate may stagnate and we may fall behind our competitors. If this happens, our chances of earning new bitcoin rewards would decline and, as such, our results of operations and financial condition may suffer.

Because our miners are designed specifically to mine bitcoin and may not be readily adaptable to other uses, a sustained decline in bitcoin’s value could adversely affect our business and results of operations.

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

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

The performance and reliability of our miners and our technology is critical to our reputation and our operations. We currently predominantly use Bitmain Technologies Limited (“Bitmain”) miners, and if there are issues with those machines, such as a design flaw in the ASIC chips they employ, our system could be substantially affected. Any system error or failure may significantly delay response times or even cause our system to fail. Any disruption in our ability to continue mining could result in lower yields and harm our reputation and business. Any exploitable weakness, flaw, or error common to the Bitmain miners we currently utilize could affect substantial portions of our miners; therefore, if a defect or other flaw exists and is exploited, a majority of, or all of our miner fleet could be adversely impacted. Any interruption, delay or system failure could result in financial losses, a decrease in the trading price of our common stock and damage to our reputation.

Our use of a third-party mining pool exposes us to certain risks.

We receive bitcoin rewards from our mining activity through a third-party mining pool operator, Foundry. Mining pools allow miners to combine their processing power, increasing their chances of solving a block and getting paid by the network. The rewards are distributed by the pool operator, proportionally to our contribution to the pool’s overall mining power, after deducting the applicable pool fee, if any, used to solve a block on the bitcoin blockchain. Should the pool operator’s system suffer downtime due to a cyber-attack, software malfunction or other issue, it could negatively impact our ability to mine and receive revenue, if we are unable to quickly switch to another pool or to self-mine without a pool. Furthermore, it is possible that the mining pool operator could fail to accurately record the total processing power provided to the pool for a given bitcoin mining application, which would inhibit our ability to confirm the proportion of that total processing power which we provided. While we have internal methods of tracking both the hash rate we provide and the total used by the pool, the mining pool operator uses its own record-keeping to determine our proportion of a given reward, which may not match our own. If we are unable to consistently obtain accurate proportionate rewards from our mining pool operator, we may not receive accurate block rewards from the pool, and we would have limited recourse to correct these inaccuracies. This could lead us to decide against further participation in a mining pool, or mining pools generally, which may affect the predictability of our mining returns, which could have an adverse effect on our business and operations.

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network. The rewards are distributed by the pool operator, proportionally to our contribution to the pool’s overall mining power, after deducting the applicable pool fee, if any, used to solve a block on the bitcoin blockchain. Should the pool operator’s system suffer downtime due to a cyber-attack, software malfunction or other issue, it could negatively impact our ability to mine and receive revenue, if we are unable to quickly switch to another pool or to self-mine without a pool. Furthermore, it is possible that the mining pool operator could fail to accurately record the total processing power provided to the pool for a given bitcoin mining application, which would inhibit our ability to confirm the proportion of that total processing power which we provided. While we have internal methods of tracking both the hash rate we provide and the total used by the pool, the mining pool operator uses its own record-keeping to determine our proportion of a given reward, which may not match our own. If we are unable to consistently obtain accurate proportionate rewards from our mining pool operator, we may not receive accurate block rewards from the pool, and we would have limited recourse to correct these inaccuracies. This could lead us to decide against further participation in a mining pool, or mining pools generally, which may affect the predictability of our mining returns, which could have an adverse effect on our business and operations.

If Foundry were to cease operations, there would be some delay and consequently lost revenue until we pointed our miners at our backup pool provider, which we would do by using a mass command issued with our management software. Furthermore, while we receive daily reports from Foundry detailing the total processing power provided to its mining pool and our proportion of that total processing power to determine the distribution of rewards to us, we are dependent on the accuracy of Foundry’s record keeping. We have little means of recourse against Foundry if we determine the proportion of the reward paid out to us by Foundry is incorrect, other than leaving Foundry’s pool altogether. If we are unable to consistently obtain accurate proportionate rewards from our pools, we may experience reduced rewards for our efforts, which would have an adverse effect on our business and operations. Additionally, were Foundry to cease operations, declare insolvency or file for bankruptcy, there is a reasonable risk that recovery of any mining rewards or fees for any given day that had not yet been delivered into our wallet held at NYDIG would be delayed or unrecoverable.

We may not be able to realize the benefits of forks.

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

Cyber-attacks, data breaches or malware may disrupt our operations and trigger significant liability for us, which could harm our operating results and financial condition, and damage our reputation or otherwise materially harm our business. 16

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

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Weprotocol. ~~rely~~The oneffect of such a fork would be the ~~well-known~~existence ~~U.S.~~of ~~based~~two ~~third-party~~“versions” ~~digital~~of ~~asset-focused~~the ~~custodian,~~blockchain ~~NYDIG~~running in parallel that are not interchangeable, towhich ~~safeguard~~requires ~~our~~exchange-type ~~bitcoin~~transactions ~~using~~to ~~cold~~convert ~~storage~~between the two forks. ~~NYDIG~~Additionally, ~~receives~~it ~~and~~may ~~holds~~be ~~our~~unclear ~~custodied~~following ~~assets,~~a fork which ~~includes~~of ~~both~~the ~~our~~two ~~digital~~protocols ~~assets~~represents the original and ~~any~~which ~~cash~~is wethe ~~may~~new ~~choose~~protocol. Different metrics adopted by industry participants to ~~custody~~determine ~~with~~which ~~NYDIG.~~is ~~Only~~the ~~NYDIG~~original ~~holds~~asset following a fork in the ~~private~~bitcoin ~~keys~~blockchain tomay ~~our~~include: ~~wallet,~~referring ~~and~~to nothe ~~one~~blockchain atwith the ~~Company~~greatest ~~has~~network ~~access~~hash rate, or to ~~our~~the ~~wallet’s~~“length” ~~private~~of ~~keys~~blockchain (i.e., Ifthe ~~our~~time ~~third-party~~between ~~service~~the ~~provider~~first ~~experiences~~transaction arecorded ~~security~~in ~~breach~~the orblockchain’s ~~cyber-attack~~distributed ledger and ~~unauthorized~~the ~~parties~~date ~~obtain~~of ~~access~~the tomost ~~our~~recent ~~bitcoin~~transaction). Accordingly, weit ~~may~~is ~~lose~~possible ~~some~~that ora ~~all~~fork ofmay ~~our~~occur ~~bitcoin~~on ~~and~~the ~~our~~bitcoin ~~financial~~blockchain ~~condition~~that ~~and~~ results ofin ~~operations~~an ~~could~~asset bedifferent ~~materially~~from ~~adversely~~our ~~affected.~~current Tobitcoin ~~date~~holdings, weor ~~have~~a ~~not~~protocol ~~experienced~~different afrom ~~material~~SHA-256 ~~cyber~~(which ~~incident;~~our ~~however,~~miners weare ~~continue~~specifically designed to ~~encounter~~operate), ~~ongoing~~gaining ~~cyber-attacks~~predominance, and the ~~occurrence~~value of ~~any~~our ~~such~~bitcoin ~~event~~assets inmay ~~the~~suffer, ~~future~~or ~~could~~we ~~subject~~may usnot tobe ~~liability~~able to adapt our ~~customers,~~miners ~~suppliers,~~to ~~business~~the ~~partners~~new ~~and~~protocol. ~~others~~Therefore, orwe ~~give~~may ~~rise~~not torealize ~~legal~~the ~~and/or~~economic ~~regulatory~~benefit ~~action,~~of ~~which~~a ~~could~~fork ~~damage~~in ~~our~~the ~~reputation~~bitcoin blockchain, either immediately or ~~otherwise~~ever, ~~materially~~which ~~harm~~could ~~our~~adversely ~~business,~~affect ~~operating~~an ~~results,~~investment ~~and~~in ~~financial~~our ~~condition~~securities.

However, pursuant to our Digital Asset Custodial Agreement, dated as of March 10, 2022, between us and NYDIG (as may be amended, modified or supplemented from time to time, the “Custodial Agreement”), NYDIG has covenanted that it holds our digital assets in a segregated account that will at all times be identifiable in NYDIG’s database as being stored for our benefit; that NYDIG has no right, interest or title in our digital assets; and that our digital assets do not constitute an asset on the balance sheet of NYDIG. To the extent NYDIG holds any cash on our behalf, NYDIG may hold our cash in one or more omnibus “for benefit of customers” accounts at one or more U.S. insured depository institutions. However, at this time, the Company has no cash custodied, and has no immediate or future plans to custody, any cash with NYDIG. Furthermore, NYDIG has covenanted that our digital assets will not be commingled with other digital assets held by NYDIG, except temporarily (typically for no longer than 12 hours, but in no case longer than 72 hours) as an operational matter, if required, to effect a transfer into or out of our digital asset account. Significantly, NYDIG represents and warrants that beneficial and legal ownership of all our digital assets is, and will remain, freely transferable without the payment of money or value and that NYDIG has no ownership interest in our account.

While we believe that the Custodial Agreement provides our business with reasonable protections for our business’s operations and the safe storage of our digital assets, we make no assurances that storing our digital assets with NYDIG is free from risk, given the various risks enumerated above. To the best of our knowledge, NYDIG safely stores our digital assets in segregated accounts as represented in the Custodial Agreement; however, if NYDIG were to be in breach of the Custodial Agreement, our digital assets could be compromised. Additionally, if NYDIG were to cease operations, declare insolvency or file for bankruptcy, there is a reasonable risk that recovery of our assets, though kept in segregated accounts, would be delayed or unrecoverable. Additionally, if NYDIG were to cease operations, declare insolvency or file for bankruptcy, we do not have a readily available backup custodian at this time, and so we would need to self-custody our digital assets using cold storage until we could contract with another adequate custodian for the safe storage of our assets which may have a disruptive effect on our business. In the meantime, our mined bitcoin would continue to aggregate in our proprietary wallet until we found a suitable cold storage custodian.

Incorrect or fraudulent bitcoin transactions may be irreversible and we could lose access to our bitcoin.

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

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Our business could be harmed by prolonged power and internet outages, shortages, or capacity constraints.

Our bitcoin mining and HPC data center operations require a significant amount of electrical power and access to high-speed internet to be successful. If we are unable to secure sufficient electrical power, or if we lose internet access for a prolonged period, we may be required to reduce our operations or cease them altogether. If this occurs, our business and results of operations may be materially and adversely affected.

We may incur expenses or delays relating to such events outside of our control, which may not be covered by insurance, and such events could have a material adverse impact on our business, operating results and financial condition.

Digital assets held by the Company are not subject to FDIC or SIPC protections.

The Company does not hold its digital assets with a banking institution or a member of the Federal Deposit Insurance Corporation (“FDIC”) or the Securities Investor Protection Corporation (“SIPC”) and, therefore, its digital assets are not subject to the protections enjoyed by depositors with FDIC or SIPC member institutions.

Companies across many industries are facing increasing scrutiny related to their ESG practices. Investor advocacy groups, certain institutional investors, investment funds and other influential investors are also increasingly focused on ESG practices and in recent years have placed increasing importance on the non-financial impacts of their investments. Furthermore, increased public awareness and concern regarding environmental risks, including global climate change, has resulted and may continue to result in increased public scrutiny of our business and our industry, and our management team may divert significant time and energy away from our operations and towards responding to such scrutiny and reassuring our employees.

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

We are currently making considerable investments in our information technology systems and processes. Difficulties from or disruptions to these efforts may interrupt our normal operations and adversely affect our business and results of operations.

We have been making considerable investments in our information technology systems and processes and expect such investment to continue for the foreseeable future in support of our bitcoin mining operations and our expansion into HPC hosting and colocation. These continuing investments and upgrades include the implementation of new tools and technologies to further streamline and automate processes, including with respect to procurement, and to support our compliance with evolving U.S. GAAP. These investments and upgrades and may take longer to complete and cost more than originally planned.. As a result of our continued work on these projects, we may experience difficulties with our systems and business disruptions. Any such difficulties or disruptions may adversely affect our business and results of operations.

The development and advancement in the efficiency of AI models presents risks and challenges that may adversely impact our business and operating results.

The introduction of, and advancement in the efficiency of AI models could potentially adversely affect data center usage by significantly reducing the computational power needed to train AI models, potentially leading to less demand for high-power density, liquid-cooled data center infrastructure and colocation facilities such as those we are building at the Lake Mariner Facility.. New advancements in AI models could also alter the way data centers are currently designed and utilized and may adversely affect our business and results of operations.

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Risks Related to Governmental Regulation and Enforcement

We are subject to a highly-evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our business, reputation, prospects or operations.

As cryptocurrencies have grown in both popularity and market size, governments around the world have reacted differently to cryptocurrencies; certain governments have deemed them illegal, and others have allowed their use and trade without restriction, while some jurisdictions, such as the United States, subject the mining, ownership and exchange of cryptocurrencies to certain, and in some cases overlapping, unclear and evolving regulatory requirements.

We currently only operate in the United States, and do not currently have any plans to expand our operations beyond the United States. As bitcoin has grown in popularity and in market size, the U.S. regulatory regime, namely the Federal Reserve Board, U.S. Congress and certain U.S. agencies (e.g., the SEC, the CFTC, FinCEN and the Federal Bureau of Investigation) have begun to examine the operations of the bitcoin network, bitcoin users and the bitcoin exchange market. The complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of the cryptocurrency industry requires us to exercise our judgment as to whether certain laws, rules, and regulations apply to us, and it is possible that governmental bodies and regulators may disagree with our conclusions. To the extent we have not complied with such laws, rules, and regulations, we could be subject to significant fines, revocation of licenses, limitations on our products and services, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect our business, operating results, and financial condition.

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Potentially increasing regulation and regulatory scrutiny may result in new costs for the Company and Company’s management having to devote increased time and attention to regulatory matters, change aspects of the Company’s business or result in limits on the utility of bitcoin. In addition, regulatory developments and/or the Company’s business activities may require the Company to comply with certain regulatory regimes. Increasingly strict legal and regulatory requirements and any regulatory investigations and enforcement may result in changes to our business, as well as increased costs, and supervision and examination for ourselves and our service providers. Ongoing and future regulation and regulatory actions could also significantly restrict or eliminate the market for or uses of bitcoin and/or may adversely affect the Company’s business, reputation, financial condition and results of operations. Moreover, new laws, regulations, or interpretations may result in additional litigation, regulatory investigations, and enforcement or other actions. Adverse changes to, or our failure to comply with, any laws and regulations may have an adverse effect on our reputation and brand and our business, operating results, and financial condition.

Bitcoin and bitcoin mining, as well as cryptocurrencies generally, may be made illegal in certain jurisdictions, including the ones we operate in, which could adversely affect our business prospects and operations.

It is possible that state or federal regulators may seek to impose harsh restrictions or total bans on bitcoin mining which may make it impossible for us to do business without relocating our mining operations, which could be very costly and time consuming. Further, although bitcoin and bitcoin mining, as well as cryptocurrencies generally, are largely unregulated in most countries (including the United States), regulators could undertake new or intensify regulatory actions that could severely restrict the right to mine, acquire, own, hold, sell, or use cryptocurrency or to exchange it for traditional fiat currency such as the United States Dollar. Such restrictions may adversely affect us as the large-scale use of bitcoin as a means of exchange is presently confined to certain regions globally. Such circumstances could have a material adverse effect on us, which could have a material adverse effect on our business, prospects or operations and potentially the value of any bitcoin we mine or otherwise acquire or hold for our own account, and thus harm investors.

Changing environmental regulation and public energy policy may expose our business to new risks.

Our bitcoin mining and HPC data center operations require a substantial amount of power and can only be successful, and ultimately profitable, if the costs we incur, including for electricity, are lower than the revenue we generate from our operations. As a result, any bitcoin mining and HPC data center facility we establish can only be successful if we can obtain sufficient electrical power for that facility on a cost-effective basis, and our establishment of new facilities requires us to find locations where that is the case. If new regulations are imposed, or if existing regulations are modified, the assumptions we made underlying our plans and strategic initiatives may be inaccurate, and we may incur additional costs to adapt our planned business, if we are able to adapt at all, to such regulations.

In addition, there continues to be a lack of consistent climate legislation, which creates economic and regulatory uncertainty for our business because the bitcoin mining industry, with its energy demand, may become a target for future environmental and energy regulation. New legislation and increased regulation regarding climate change could impose significant costs on us and our suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting, and other costs to comply with such regulations. Further, any future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such limitations.

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

Given the political significance and uncertainty around the impact of climate change and how it should be addressed, and energy disclosure and use regulations, we cannot predict how legislation and regulation will affect our financial condition and results of operations in the future in the United States. However, due to the use of predominantly zero-carbon power in our operations, we believe we are advantageously positioned relative to our competitors in this regard. Further, even without such regulation, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change or energy use by us or other companies in our industry could harm our reputation. Any of the foregoing could result in a material adverse effect on our business and financial condition.

We currently only operate in the United States, and do not currently have any plans to expand our operations beyond the United States. As bitcoin has grown in popularity and in market size, the U.S. regulatory regime, namely the Federal Reserve Board, U.S. Congress and certain U.S. agencies (e.g., the SEC, the CFTC, FinCEN and the Federal Bureau of Investigation have begun to examine the operations of the bitcoin network, bitcoin users and the bitcoin exchange market. The complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of the cryptocurrency industry requires us to exercise our judgment as to whether certain laws, rules, and regulations apply to us, and it is possible that governmental bodies and regulators may disagree with our conclusions. To the extent we have not complied with such laws, rules, and regulations, we could be subject to significant fines, revocation of licenses, limitations on our products and services, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect our business, operating results, and financial condition.

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~~Potentially~~about ~~increasing~~potential ~~regulation~~impacts ~~and~~on ~~regulatory~~climate ~~scrutiny may result in new costs for the Company and Company’s management having to devote increased time and attention to regulatory matters,~~ change ~~aspects of the Company’s business~~ or ~~result~~energy inuse ~~limits~~by onus ~~the utility of bitcoin. In addition, regulatory developments and/~~or ~~the~~other ~~Company’s~~companies business activities may require the Company to comply with certain regulatory regimes. Increasingly strict legal and regulatory requirements and any regulatory investigations and enforcement may result in ~~changes to~~ our ~~business,~~industry ascould ~~well~~harm ~~as increased costs, and supervision and examination for ourselves and~~ our ~~service providers~~reputation. ~~Ongoing~~Any ~~and future regulation and regulatory actions could also significantly restrict or eliminate the market for or uses~~ of ~~bitcoin and/or may adversely affect~~ the ~~Company’s~~foregoing ~~business,~~could ~~reputation, financial condition and results of operations. Moreover, new laws, regulations, or interpretations may~~ result in ~~additional~~a ~~litigation,~~material ~~regulatory investigations, and enforcement or other actions. Adverse changes to, or our failure to comply with, any laws and regulations may have an~~ adverse effect on our ~~reputation and brand and our~~ business, ~~operating results,~~ and financial condition.

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

We are subject to various federal, state and local laws and regulations, including those relating to the generation, storage, handling, and disposal of hazardous substances and wastes. Certain of these laws and regulations also impose joint and several liability, without regard to fault, for investigation and cleanup costs on current and former owners and operators of real property and persons who have disposed of or released hazardous substances into the environment. Our operations may involve the use of hazardous substances and materials, such as petroleum fuel for temporary generators, as well as batteries, cleaning solutions, and other materials.

The course of future legislation and regulation in the United States remains difficult to predict, and potential increased costs associated with new legislation or regulation cannot be estimated at this time.

Our interactions with a blockchain may expose us to specially designated nationals (“SDN”) or blocked persons and new legislation or regulation could adversely impact our business or the market for cryptocurrencies.

The Office of Financial Assets Control (“OFAC”) of the U.S. Department of Treasury requires us to comply with its sanction program and not conduct business with persons named on its SDN list. However, because of the pseudonymous nature of blockchain transactions we may inadvertently and without our knowledge engage in transactions with persons named on OFAC’s SDN list. Our Company’s policy prohibits any transactions with such SDN individuals, and we take all commercially reasonable steps to avoid such transactions, but we may not be adequately capable of determining the ultimate identity of the individual with whom we transact with respect to selling bitcoin assets. Moreover, there is a risk that some bad actors will continue to attempt to use cryptocurrencies, including bitcoin, as a potential means of avoiding federally imposed sanctions, such as those imposed in connection with the Russian invasion of Ukraine.

We are unable to predict the nature or extent of new and proposed legislation and regulation affecting the bitcoin industry, or the potential impact of the use of bitcoin by SDN or other blocked or sanctioned persons, which could have material adverse effects on our business and our industry more broadly. Further, we may be subject to investigation, administrative or court proceedings, and civil or criminal monetary fines and penalties as a result of any regulatory enforcement actions, all of which could harm our reputation and affect the value of our common stock.

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We may be at a higher risk of litigation and other legal proceedings due to heightened regulatory scrutiny of the cryptocurrency industry, which could ultimately be resolved against the Company, requiring material future cash payments or charges, which could impair our financial condition and results of operations.

The size, nature and complexity of the Company’s business could make it susceptible to various claims, both in litigation and binding arbitration proceedings, legal proceedings, and government investigations. The Company believes that since cryptocurrency mining, and the digital asset industry generally, is a relatively new business sector, it is more likely subject to government investigation and regulatory determination. Any claims, regulatory proceedings or litigation that could arise in the course of the Company’s business could have a material adverse effect on the Company, its business or operations, or the industry as a whole.

The Company may be classified as an inadvertent investment company.

The Company is not engaged in the business of investing, reinvesting or trading in securities and does not hold itself out as being engaged in those activities. Under the Investment Company Act, however, a company may be deemed an investment company under Section 3(a)(1)(C) if the value of its investment securities is more than 40% of its total assets (exclusive of government securities and cash items) on a consolidated basis.

The Company will be engaging in digital asset mining, the outputs of which are cryptocurrencies, which may be deemed a security. In the event that the digital assets held by the Company exceed 40% of its total assets, exclusive of cash, the Company may inadvertently become an investment company. An inadvertent investment company can avoid being classified as an investment company if it can rely on one of the exclusions under the Investment Company Act. One such exclusion, namely Rule 3a-2 under the Investment Company Act, allows an inadvertent investment company a grace period of one year from the earlier of (i) the date on which an issuer owns securities and/or cash having a value exceeding 50% of the issuer’s total assets on either a consolidated or unconsolidated basis and (ii) the date on which an issuer owns or proposes to acquire investment securities having a value exceeding 40% of the value of such issuer’s total assets (exclusive of government securities and cash items) on an unconsolidated basis. The Company is putting in place policies that it expects will work to keep the digital assets held by the Company at less than 40% of its total assets, liquidating its digital assets or seeking a no-action letter from the SEC if the Company is unable to maintain sufficient total assets or liquidate sufficient digital assets in a timely manner.

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expects will work to keep the digital assets held by the Company at less than 40% of its total assets, liquidating its digital assets or seeking a no-action letter from the SEC if the Company is unable to maintain sufficient total assets or liquidate sufficient digital assets in a timely manner.

As Rule 3a-2 is available to a company no more than once every three years, and assuming no other exclusions are available to the Company, the Company would have to keep within the 40% limit for at least three years after it ceases being an inadvertent investment company. This may limit the Company’s ability to make certain investments or enter into joint ventures that could otherwise have a positive impact on the Company’s earnings. In any event, the Company does not intend to become an investment company engaged in the business of investing and trading securities.

Classification as an investment company under the Investment Company Act requires registration with the SEC. If an investment company fails to register, it would have to stop doing almost all business, and its contracts would become voidable. Registration is time consuming and restrictive and would require a restructuring of the Company’s operations, and the Company would be very constrained in the kind of business it could do as a registered investment company. Furthermore, the Company would become subject to substantial regulation concerning management, operations, transactions with affiliated persons and portfolio composition, and would need to file reports under the Investment Company Act regime. The cost of such compliance would result in the Company incurring substantial additional expenses, and the failure to register if required may adversely affect the Company’s business, financial condition and results of operations.

If federal or state legislatures or agencies initiate or release tax determinations that change the classification of bitcoins as property for tax purposes (in the context of when such bitcoins are held as an investment), such determination could have a negative tax consequence on the Company or its shareholders.

Current guidance from the Internal Revenue Service indicates that digital assets such as bitcoin should be treated and taxed as property and that transactions involving the payment of bitcoin for goods and services should be treated as barter transactions. While this treatment creates a potential tax reporting requirement for any circumstance where the ownership of a bitcoin passes from one person to another, usually by means of bitcoin transactions (including off-blockchain transactions), it would also apply capital gains treatment to those transactions which may adversely affect the Company’s business, financial condition and results of operations.

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Risks Related to Ownership of Our Common Stock

The trading price of shares of our common stock has been subject to volatility.

The trading price of our common stock has been, and is likely to continue to be, volatile, and may be influenced by various factors including the risks, uncertainties and factors described in this Annual Report and our other filings with the SEC, as well as factors beyond our control or of which we may be unaware. If these risks happen and our business and results of operation suffer as a result, the market price of our securities may decline, which could have a material adverse effect on an investment in our securities.

Bitcoin is subject to price volatility resulting from financial instability, poor business practices, fraudulent activities of players in the market, and other factors outside of our control. Such factors may cause a decline in the price of bitcoin, which may affect the trading price of our shares of common stock. We have issued, and may continue to issue, new shares of our common stock, which has a dilutive effect.

We are and may continue to be subject to short selling strategies.

Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is therefore in the short seller’s best interests for the price of the stock to decline, may short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business prospects to create negative market momentum and generate profits for themselves after selling a stock short. These short attacks have, in the past, led to selling of shares in the market.

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of common stock and negative publicity. We may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable federal or state law or issues of commercial confidentiality. In addition, any related inquiry or formal investigation from a governmental organization or other regulatory body, including any inquiry from the SEC or the U.S. Department of Justice, could result in a material diversion of our management’s time and could have a material adverse effect on our business and results of operations. Such a situation could be costly and time consuming and could distract our management from operating our business. SEC investigations are generally fact-finding inquiries and do not necessarily mean that the SEC has concluded that we have violated the federal securities laws or that the SEC has a negative view of the Company. Even if such allegations are ultimately proven to be groundless, allegations against us could adversely impact our business, and cause downward pressure and increased volatility in the price of our shares of common stock. In October 2024, we received an inquiry from the SEC relating to the allegations in the recent short seller reports relating to the sources of electricity used in our operations and the proportion of energy attributable to zero-carbon energy sources. We believe these allegations to be misleading and cooperated fully with the SEC. On January 31, 2025, the SEC informed us that the investigation was closed and that the SEC does not intend to recommend an enforcement action by the SEC against the Company.

We have financed our strategic growth through our at-the-market (ATM) offerings and issuances of our common stock.

Our ATM offerings allow us to raise capital as needed by tapping into the existing trading market for our shares by selling newly issued shares into the market depending on prevailing market prices. Our efforts to raise capital is for the purpose of executing on development plans and strategic growth opportunities as they arise; however, holders of our common stock may experience dilution as a result of our sales of newly issued shares of our common stock in such ATM offerings.

The issuance, conversion, or exercise of convertible notes and other convertible securities and warrants will dilute our stockholders' ownership.

We have issued, and may continue to issue, convertible securities and warrants to business counterparties and institutional investors. We have also issued convertible notes to certain institutional investors in private offerings. The exercise, conversion, or exchange of these instruments, including for other securities, will dilute existing stockholders’ ownership percentages. This dilution may negatively impact our ability to obtain additional capital. Holders of these securities may choose to exercise or convert them at times when we could otherwise secure equity capital on more favorable terms or when our common stock is trading above the exercise or conversion price.

Because we do not currently intend to pay any cash dividends on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them.

We currently intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the near future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. There is no assurance that stockholders will be able to sell shares when desired.

We are and may continue to be subject to short selling strategies.

We are, and may in the future may be, the subject of unfavorable allegations made by short sellers. For example, in August and October of this year, short sellers published reports that contained certain allegations against us that we believe to be misleading. Any such allegations may be followed by periods of instability in the market price of our shares of common stock and negative publicity. We may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable federal or state law or issues of commercial confidentiality. In addition, any related inquiry or formal investigation from a governmental organization or other regulatory body, including any inquiry from the SEC or the U.S. Department of Justice, could result in a material diversion of our management’s time and could have a material adverse effect on our business and results of operations. Such a situation could be costly and time consuming and could distract our management from operating our business. SEC investigations are generally fact-finding inquiries and do not necessarily mean that the SEC has concluded that we have violated the federal securities laws or that the SEC has a negative view of the Company. Even if such allegations are ultimately proven to be groundless, allegations against us could adversely impact our business, and cause downward pressure and increased volatility in the price of our shares of common stock. In October 2024, we received an inquiry from the SEC relating to the allegations in the recent short seller reports relating to the sources of electricity used in our operations and the proportion of energy attributable to zero-carbon energy sources. We believe these allegations to be

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misleading and cooperated fully with the SEC. On January 31, 2025, the SEC informed us that the investigation was closed and that the SEC does not intend to recommend an enforcement action by the SEC against the Company.

ITEM 1B. Unresolved Staff Comments

None.

ITEM 1C. Cybersecurity

Cybersecurity Risk Management and Strategy

We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program is one component of our information security program that guides continuous improvement to, and evaluates these security objectives for our critical systems, data, and operations. Additionally, ~~our~~the ~~cybersecurity~~Company ~~risk~~maintains ~~management~~an ~~program~~Information ~~includes~~Security Program designed to prevent, detect, and respond to cyberattacks, and maintains a cybersecurity incident response plan designed to enable the Company to respond to cybersecurity incidents, coordinate such responses with law enforcement and other governmental agencies, and notify clients and customers, as applicable. Our approach to controls and risk management is based on guidance from the National Institute of Standards and Technology (“NIST”). This does not mean that we meet any particular technical standards, specifications, or requirements, but rather that we use NIST frameworks, guidance and recommendations to help us identify, assess, and manage cybersecurity controls and risks relevant to our business.

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Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.

Our cybersecurity risk management program includes:

•identifying cybersecurity risks that could impact our facilities, third-party vendors/partners, operations, critical systems, information, and broader enterprise information technology environment. Risks are informed by threat intelligence, current and historical adversarial activity, and industry specify threats;

•risk assessments designed to help identify material cybersecurity risks to our critical systems, information, services, and our broader enterprise IT environment;

•an Information Security and Cybersecurity policy which establishes administrative, physical, and technical controls and procedures to protect data and systems;

•individuals, including employees and external third party service providers, who are responsible for managing our cybersecurity risk assessment processes, our security controls, and our response to cybersecurity incidents;

•the use of external service providers, where appropriate, to assess, test, monitor, respond or otherwise assist with aspects of our security controls;

•cybersecurity awareness training of our employees, incident response personnel, and senior management; and

•a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents.

We have not identified risks from known cybersecurity threats that have materially affected us, including our operations, business strategy, results of operations, or financial condition. We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. See “Risk Factors - Cyberattacks, data breaches or malware may disrupt our operations and trigger significant liability for us, which could harm our operating results and financial condition, and damage our reputation or otherwise materially harm our business.”

Cybersecurity Governance

Our Audit Committee of the Board considers cybersecurity risk as part of its risk oversight function and oversees management’s implementation of our cybersecurity risk management program.

25The Board and the Audit Committee receive periodic reports from management on our cybersecurity risks. In addition, management updates the Board and the Audit Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Board and the Audit Committee also receive briefings from management on our cyber risk management program. Board and Audit Committee members receive presentations on cybersecurity topics from our Vice President of Cyber Security, risk management and internal security staff or external experts as part of the Board and the Audit Committee’s continuing education on topics that impact public companies.

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The Board receives periodic reports from management on our cybersecurity risks. In addition, management updates the Board, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Board also receives briefings from management on our cyber risk management program. Board members receive presentations on cybersecurity topics from our Vice President of Information Technology, risk management and internal security staff or external experts as part of the Board’s continuing education on topics that impact public companies.

Our management team is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our information security organization is comprised of internal and external security and technology professionals. We continue to make investments in information security resources to mature, expand, and adapt our capabilities to address emerging cybersecurity risks and threats. In addition, we have a multifunctional cybersecurity committee comprised of information technology, operations, risk, and finance members who will meet quarterly to assess new vulnerabilities and threats, update risk assessments and assess the implementation of the Company’s cybersecurity risk management program. This committee will report periodically to the management team on matters involving cybersecurity risks and incidents.

Our Vice President of ~~Information~~Cyber ~~Technology~~Security also serves as our Chief Information Security Officer and is responsible for managing and implementing the Company’s Information Security and Cybersecurity policy, which can be found on the Company’s website. In addition, the Vice President of ~~Information~~Cyber ~~Technology~~Security sets company-wide control requirements, assesses adherence to controls, identifies and prioritizes cybersecurity risks, and oversees incident protection and response. The ~~Vice President of Information Technology has over three decades of Information Technology experience overseeing cybersecurity as an integral part of the IT function.~~

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Company’s Chief Information Officer possesses over 20 years of experience in information technology and the recently appointed Vice President of Cyber Security has more than 15 years of information technology and cybersecurity oversight.

ITEM 2. Properties

Corporate Headquarters

TeraWulf maintains its principal corporate offices in Easton, Maryland and New York, New York. Office space at these locations is provided by Beowulf E&D, a company controlled by TeraWulf’s CEO, under an Administrative and Infrastructure Services Agreement dated April 27, 2021. Since January 1, 2023, the use of TeraWulf’s corporate offices has been covered under the base fee outlined in Amendment No. 1 to the Services Agreement (as amended, the “Services Agreement”). The Company considers its current office space adequate for its existing operations.

Lake Mariner ~~Facility~~Data Campus

TeraWulf owns and operates the Lake Mariner ~~Facility~~Data Campus, a high-performance digital infrastructure campus located in Barker, New York, on the site of a former coal-fired power plant. The ~~facility~~campus began sustainably mining bitcoin in March 2022 and, as of December 31, ~~2024,~~2025 ~~has~~the ~~approximately~~Lake ~~195~~Mariner Data Campus operated 245 MW of ~~operational~~legacy bitcoin mining capacity and had 18 critical IT MW of HPC capacity. The ~~site~~campus is ~~designed~~undergoing ~~for~~phased ~~scalable~~ expansion, ~~with~~to ~~the~~support ~~ability~~additional toHPC ~~increase~~contracted deployments with gross capacity upof toapproximately 500 MW in the near term, ~~and~~with ~~potentially~~potential expansion to approximately 750 MW ~~with~~subject ~~targeted~~to ~~transmission~~additional ~~upgrades~~approvals from the NYISO.

The Lake Mariner ~~Facility~~Data Campus operates under a lease agreement with Somerset Operating Company, LLC (“Somerset”), a company controlled by TeraWulf’s CEO. Under the agreement, the Lake Mariner Data Campus leases approximately 157 acres in Niagara County, New York, for an initial term of 35 years which automatically renews for up to nine additional periods of five years each, unless ~~Lake~~the ~~Mariner~~Company provides written notice to Somerset to terminate the lease at least six months prior to the expiration of the initial term or the then-current renewal term, as applicable. The Lake Mariner ~~site~~Data Campus’s strategic location provides access to low-cost, ~~predominantly zero~~low-carbon power, making it an optimal hub for both bitcoin mining and HPC hosting operations.

26Abernathy HPC Campus

~~Table~~The Abernathy HPC Campus is designed to support HPC and AI workloads, with a total gross capacity of ~~Contents~~240 MW and a critical IT load of 168 MW, fully pre-leased to Fluidstack USA III and backstopped by Google’s credit support. The Abernathy HPC Campus will be constructed on a 29.3-acre parcel in Abernathy, Texas, and will feature a purpose-built building of over 637,000 square feet. The site benefits from high-voltage electrical service delivered to two separate substation transformers, ensuring redundancy and reliability for mission-critical operations. Designed with state-of-the-art infrastructure, the campus incorporates N+1 system redundancy, modular and scalable architecture, and advanced cooling systems tailored for HPC and AI workloads. The facility’s strategic location in Abernathy provides direct access to diverse fiber routes and high-bandwidth connectivity to major metropolitan areas across Texas, supporting low-latency data transmission and seamless integration with regional and national networks.

Nautilus Cryptomine Facility

Prior to divesting its interest in 2024 in the Nautilus joint venture (“Nautilus”), TeraWulf operated bitcoin mining activities at the Nautilus Cryptomine Facility, located in Berwick, Pennsylvania. The facility was operated under a ground lease agreement between Nautilus and Cumulus Data LLC (“Cumulus Data”), an affiliate of Talen Energy Corporation. The lease covered the site of the Nautilus Cryptomine Facility for an initial five-year term, with two three-year extension options and an additional interim extension option of up to six and a half months.

~~TeraWulf~~On ~~began~~March ~~mining~~1, ~~bitcoin~~2024, atCumulus Data sold substantially all its assets to an unaffiliated third party, including the land leased to Nautilus ~~Cryptomine~~under ~~Facility~~the inground Q1lease. ~~2023,~~In connection with 50the MWasset ofsale, ~~operational~~the ~~capacity~~Nautilus asground lease was assigned to the purchaser of ~~December~~the 31assets, ~~2024~~with no changes to its terms and conditions. OnSubsequently, ~~February~~on 28October 2, 2024, TeraWulf sold its entire 25% equity interest in Nautilus to Cumulus Coin LLC, allowing the Company ~~exercised~~to ~~its~~reallocate ~~option~~capital totoward ~~increase~~the expansion of its ~~energy~~wholly ~~allocation~~owned bydigital aninfrastructure ~~additional~~at 50the ~~MW,~~Lake ~~bringing~~Mariner ~~its~~Data ~~total~~Campus ~~attributable~~and ~~capacity~~its tohigh-performance ~~100~~computing MWstrategy.

OnCayuga March 1, 2024, Cumulus Data sold substantially all its assets to an unaffiliated third party, including the land leased to Nautilus under the ground lease. In connection with the asset sale, the Nautilus ground lease was assigned to the purchaser of the assets, with no changes to its terms and conditions. Subsequently, on October 2, 2024, TeraWulf sold its entire 25% equity interest in Nautilus to Cumulus Coin LLC, allowing the Company to reallocate capital toward the expansion of its wholly owned digital infrastructure at Lake Mariner and its high-performance computing strategy.Site

The Company holds a long‑term ground lease in Lansing, New York which, upon completion of permitting and site development, has the potential to support up to 400 MW of gross capacity, representing approximately 320 MW of contractual critical IT load. The ground lease agreement is with Cayuga Operating Company LLC (“Cayuga”), a company controlled by TeraWulf’s CEO. Under the agreement, the Company leases approximately 183 acres, including all

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structures, equipment, facilities and fixtures located thereon for an initial term of 80 years with no renewal rights. Any time after the 50th anniversary of the lease effective date (i) TeraWulf may elect to purchase the leased premises for $100, either as an asset acquisition or through the purchase of all membership interests in Cayuga, and (ii) Cayuga and Cayuga’s parent may require TeraWulf to purchase the leased premises on the same terms.

Hawesville Site

In February 2026, the Company entered into an Agreement of Purchase and Sale for a former industrial site in Hawesville, Kentucky (“Hawesville Site”). The Hawesville Site is a strategically located brownfield infrastructure site which includes more than 250 buildable acres with immediate access to power infrastructure, including multiple high-voltage transmission lines, an on-site energized substation, and a direct connection to the regional transmission network. The Company plans on constructing and operating a HPC/AI data center on the Hawesville Site.

ITEM 3. Legal Proceedings

From time to time, TeraWulf may be involved in various legal and administrative proceedings, lawsuits and claims incidental to the conduct of its business. Some of these proceedings, lawsuits or claims may be material and involve highly complex issues that are subject to substantial uncertainties and could result in damages, fines, penalties, non-monetary sanctions or relief. TeraWulf recognizes provisions for claims or pending litigation when it determines that an unfavorable outcome is probable, and the amount of loss can be reasonably estimated. Due to the inherent uncertain nature of litigation, the ultimate outcome or actual cost of settlement may materially vary from estimates. TeraWulf is not subject to any material pending legal and administrative proceedings, lawsuits or claims as of the date of this Annual Report. TeraWulf’s business and operations are also subject to extensive regulation, which may result in regulatory proceedings against TeraWulf.

ITEM 4. Mine Safety Disclosures

Not applicable.

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PART II

ITEM 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market for the Registrant’s Common Equity

Our common stock is listed on the Nasdaq under the symbol “WULF.” As of February 2624, ~~2025~~2026, there were 6349 registered owners of our common stock.

Dividends

We did not declare or pay any cash dividends on our common stock during ~~2024~~2025. We do not currently intend to pay dividends on our common stock and we intend to retain our future earnings, if any, to fund the development and growth of our business. In addition, the terms of certain existing and any future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock may be your sole source of gain for the foreseeable future.

Any future determination relating to our dividend policy will be made at the discretion of our board of directors and will depend on then existing conditions, including our financial condition, results of operations, contractual restrictions, capital requirements, business prospects, and other factors our board of directors may deem relevant.

Issuer Purchases of Equity Securities

On October 23, 2024, the Company announced that the Company’s board of directors approved a share repurchase program authorizing the Company to repurchase up to $200.0 million of the Company’s outstanding shares of ~~Common~~its ~~Stock~~common stock through December 31, 2025. In May 2025, the Board of Directors agreed that the share repurchase program authorization shall continue unless and until the Company purchases $200.0 million of its common stock or it is revoked by the Board of Directors.

During the fourth quarter of ~~2024~~2025, the Company repurchased shares of ~~Common~~its ~~Stock~~common stock as follows:

Period	(a) Total number of shares purchased	(b) Average price paid per share		(c) Total number of shares purchased as part of publicly announced program	(d) Maximum dollar value of shares that may yet be purchased under the program
October 1 through October 31, 2024	17,968,750	$	6.4000	17,968,750	$	85,000,000
October 1 through October 31, 2025	—	$	—	—	$	200,000,000
November 1 through November 30, 2024	—	—		—	85,000,000
November 1 through November 30, 2025	—	—		—	200,000,000
December 1 through December 31, 2024	600,000	5.3424		600,000	81,794,560
December 1 through December 31, 2025	—	—		—	200,000,000
Total	~~18,568,750~~—	$	~~6.3658~~—	~~18,568,750~~—	$	81200,~~794~~000,~~560~~000

Unregistered Sale of Equity Securities

There have been no sales of unregistered securities by the Company during the year ended December 31, ~~2024~~2025, except as previously disclosed on Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

ITEM 6. [Reserved]

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the other Items included in this Annual Report ~~on Form 10-K (the “Annual Report”)~~ and with the accompanying consolidated financial statements and notes thereto included elsewhere in this report. All figures presented below represent results from continuing operations, unless otherwise specified. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Consolidated Financial Statements. Unless the context otherwise requires, references in this Annual Report to the “Company,” “TeraWulf,” “we,” “us” or “our” refers to TeraWulf Inc. and its consolidated subsidiaries. Certain statements contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations may be deemed forward-looking statements. See “Forward-Looking Statements.”

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This MD&A generally discusses ~~2024~~2025 and ~~2023~~2024 items and year-to-year comparisons between ~~2024~~2025 and ~~2023~~2024. Discussions of ~~2022~~2023 items and year-to-year comparisons between ~~2023~~2024 and ~~2022~~2023 are not included, and can be found in "Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024.

Overview

We are a vertically integrated owner, developer, and operator of ~~next-generation~~ digital infrastructure, ~~purpose-built~~assets to support bitcoin mining and HPC workloads. With a strong commitment to sustainability, our operations are powered predominantly by zero-carbon energy, reinforcing our focus on environmentally responsible data center operations in the United States~~. By leveraging clean~~, ~~cost~~purpose-~~effective,~~built ~~and~~to ~~reliable~~support ~~energy~~HPC ~~sources~~workloads, weincluding ~~aim~~AI, tomachine ~~drive~~learning, ~~long-term efficiency~~ and ~~resilience~~advanced ~~within~~cloud ~~the digital infrastructure sector~~applications.

~~Our~~The ~~primary~~Company ~~operations~~has ~~are~~undergone ~~centered~~a atdeliberate ~~the~~strategic ~~Lake~~transition ~~Mariner~~toward ~~Facility,~~HPC ~~strategically~~hosting ~~located~~as onits ~~the~~primary ~~shores of Lake Ontario~~business. ~~Developed~~While onTeraWulf ~~the~~historically ~~site~~operated ofbitcoin amining ~~decommissioned~~facilities ~~coal-fired power plant, this expansive facility is designed for scalable growth, with the ability to expand up to 500 MW in the near term~~ and upleveraged toflexible ~~750~~compute MWloads ~~with targeted transmission upgrades. Purpose-built~~ to support ~~both~~early ~~bitcoin~~infrastructure ~~mining~~development, ~~and~~going ~~GPU-driven~~forward ~~HPC workloads,~~ the ~~Lake~~Company’s ~~Mariner~~capital ~~Facility~~allocation, isdevelopment ~~well-positioned~~activities, toand ~~meet~~operating ~~the~~focus ~~rising~~are ~~demand~~centered ~~for~~on ~~compute-intensive~~HPC ~~applications.~~data ~~This~~center ~~dual-purpose strategy enhances operational efficiency~~development, ~~diversifies~~long-term ~~revenue~~hosting ~~streams~~arrangements, and ~~strengthens~~infrastructure ~~our~~supporting ~~position~~AI-driven incompute ~~the evolving digital economy~~workloads.

~~Bitcoin~~Our strategy is grounded in controlling infrastructure at utility scale and ~~Blockchain~~pairing compute-optimized facilities with reliable, long-duration power resources. By controlling land use through ownership or long-term ground leases, together with interconnection rights, electrical and cooling infrastructure, and, where appropriate, on-site generation, the Company delivers resilient, cost-efficient capacity to hyperscale and enterprise customers under multi-year hosting arrangements.

~~Bitcoin,~~The ~~introduced~~Company’s inplatform ~~2008,~~is ~~revolutionized~~differentiated ~~digital finance~~ by ~~enabling~~long-term acontrol ~~decentralized~~of ~~system~~utility-scale ~~for exchanging and storing value without reliance on traditional financial institutions. It operates on a public ledger known as the “blockchain~~infrastructure,” ~~which~~deep ~~records~~in-house ~~every~~power ~~transaction transparently~~ and ~~securely.~~grid ~~This decentralized structure eliminates the need for intermediaries~~expertise, ~~enhancing transaction efficiency while making the network resilient to censorship~~ and ~~fraud.~~a ~~Unlike~~scalable ~~fiat~~development ~~currencies,~~model ~~bitcoin~~supported ~~is not controlled~~ by ~~any government or central bank~~long-term, ~~reinforcing~~credit-enhanced ~~its~~customer ~~role as a scarce, independent store of value~~contracts.

~~Bitcoin~~Strategy ~~mining~~Execution ~~is the process of validating transactions~~ and ~~securing~~Capital the network through proof-of-work consensus, where miners solve complex cryptographic puzzles to add new blocks to the blockchain. The network is maintained by a global pool of distributed nodes, ensuring transaction integrity and preventing double-spending. Key factors influencing mining economics include computing power, energy costs, and network difficulty, with miners competing to maximize their share of the total computational power (hashrate) deployed on the bitcoin network. As more miners participate, the network difficulty adjusts dynamically every 2,016 blocks (approximately every two weeks) to maintain a consistent block creation rate.Allocation

~~Bitcoin~~Management’s ~~Reward~~execution ~~Halving~~of the Company’s strategy is focused on converting advantaged infrastructure positions into long-dated, contracted HPC capacity. This execution model emphasizes vertical integration, long-duration customer contracts supported by credit enhancement, and phased development aligned with customer deployment schedules and power availability.

~~Bitcoin’s~~A ~~supply~~core ~~issuance~~element ~~follows~~of athis ~~predefined~~approach ~~halving~~is ~~schedule,~~infrastructure ~~reducing~~control. ~~the~~By ~~block~~retaining ~~reward~~control byover ~~50%~~land ~~approximately~~use, ~~every~~interconnection ~~four~~rights, ~~years.~~electrical ~~This~~and ~~mechanism~~cooling ~~enforces~~systems, aand ~~controlled~~on-site ~~supply~~generation ofwhere ~~bitcoin~~appropriate, ~~contributing~~the Company is able to ~~its~~manage ~~scarcity~~development risk, optimize capital deployment, and ~~long-term~~maintain ~~value~~operational ~~proposition.~~oversight ~~The~~throughout ~~total~~the ~~bitcoin~~lifecycle ~~supply~~of isits ~~capped~~facilities. atManagement 21believes ~~million~~this ~~coins,~~approach ~~and~~reduces ~~halvings~~execution ~~will~~risk ~~continue~~relative ~~until~~to ~~this~~third-party ~~limit~~development ismodels ~~reached~~and supports infrastructure-style returns.

The ~~most~~Company’s ~~recent~~contracting ~~halving~~strategy ~~occurred~~prioritizes onmulti-year ~~April~~hosting ~~19,~~arrangements ~~2024,~~with ~~reducing~~credit-supported ~~the block reward from 6~~counterparties.25 toThese ~~3.125~~arrangements ~~bitcoin~~provide ~~per~~long-dated ~~block.~~revenue ~~While~~visibility, ~~the~~support ~~halving~~project-level ~~decreases~~financing, ~~the~~and ~~direct~~reduce ~~mining~~cash ~~subsidy,~~flow ~~transaction~~volatility ~~fees~~as ~~remain~~the anplatform ~~additional~~scales. ~~source~~Credit ofenhancement ~~miner~~associated ~~revenue.~~with ~~This~~certain ~~built-in~~customer ~~supply~~contracts ~~constraint~~has ~~influences~~been ~~mining~~a ~~economics~~key ~~and~~factor ~~often~~in ~~plays~~accelerating adevelopment ~~role~~timelines inand ~~bitcoin’s~~enabling ~~long~~third-~~term~~party ~~price dynamics~~financing.

~~Business~~Each ~~Strategy~~campus is designed for modular, multi-phase expansion. Initial phases deliver near-term contracted capacity, while subsequent phases are developed in line with customer demand and power availability. Management believes this phased approach allows the Company to scale efficiently while maintaining capital discipline.

~~Our~~Consistent ~~strategy~~with isthis ~~centered~~strategy, onthe ~~leveraging~~Company ~~our~~has ~~owned~~deliberately ~~and~~shifted ~~scalable~~capital ~~digital~~allocation ~~infrastructure~~away tofrom ~~drive~~new ~~revenue and profitability through both~~ bitcoin mining investments and toward HPC ~~hosting.~~data Ascenter adevelopment. ~~vertically~~While ~~integrated~~legacy ~~operator,~~mining weoperations ~~own~~continue ~~and~~to ~~control~~utilize ~~our~~existing infrastructure, ~~allowing~~management usdoes tonot ~~optimize~~intend ~~efficiency,~~to ~~reduce~~deploy ~~costs,~~incremental ~~and~~growth ~~maintain~~capital ato ~~highly~~mining ~~competitive cost structure~~activities.

~~While~~Strategic bitcoin mining remains a core focus, we are strategically transitioning an increasing portion of the Lake Mariner Facility to support HPC hosting and colocation. This shift allows us to capitalize on the growing demand for AI, machine learning, and cloud computing workloads while further optimizing our power utilization and digital infrastructure.Transactions

29Acquisition of Beowulf E&D

On May 21, 2025 (the “Acquisition Date”), the Company acquired 100% of the membership interests in Beowulf Electricity & Data LLC, Beowulf E&D (NY) LLC and Beowulf E&D (MD) LLC (collectively, “Beowulf E&D”). Additional detail regarding the consideration paid and contingent consideration associated with the Beowulf E&D acquisition is included in Note 3 to the consolidated financial statements.

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AThe ~~key~~acquisition ~~milestone~~materially inexpanded ~~this~~the ~~transition~~Company’s ~~occurred~~internal oncapabilities ~~December~~across ~~22,~~power ~~2024,~~infrastructure ~~when we signed a multi-year data center lease agreement with Core42~~development, ~~securing~~site ~~72.5 MW of HPC hosting capacity at the Lake Mariner Facility for GPU compute workloads. This agreement includes an option to expand by an additional 135 MW through March 31~~operations, ~~2025~~engineering, ~~enabling total deployments to Core42 of up to 72.5 MW in 2025~~ and ~~135~~project ~~MW in 2026~~execution. ~~This~~Approximately ~~development~~94 ~~accelerates~~employees ~~our~~transitioned ~~HPC~~to ~~hosting~~the ~~expansion,~~Company ~~positioning~~as uspart atof the ~~intersection of energy and digital compute infrastructure~~transaction. ToManagement ~~support~~believes this ~~expansion,~~acquisition westrengthened ~~have~~operational ~~expanded~~integration ~~our~~and ~~digital~~execution ~~infrastructure~~capability atas the ~~site,~~Company ~~featuring~~scales ~~advanced~~its ~~liquid~~HPC ~~cooling systems and Tier 3 redundancy~~platform. ~~This infrastructure will be optimized for high-density compute workloads, reinforcing our ability to attract hyperscale and enterprise customers.~~

ByCayuga ~~prioritizing~~Site ~~cost-efficient~~Ground power utilization, sustainability, and scalable infrastructure, our strategy positions TeraWulf to maximize value creation while adapting to the evolving landscape of digital asset mining and AI-driven computing. Looking ahead, we remain focused on expanding our infrastructure, optimizing operations, and strengthening our competitive advantage in both bitcoin mining and HPC hosting.Lease

~~Our~~On ~~Facilities~~August 12, 2025, the Company entered into a long-term ground lease for approximately 183 acres in Lansing, New York. Upon completion of permitting and site development, the Cayuga Site has the potential for up to 400 MW of gross capacity, supporting approximately 320 MW of critical IT load. The Cayuga Site provides an additional anchor location with existing interconnection and supporting infrastructure and represents a key component of the Company’s forward development pipeline.

~~During~~Abernathy ~~the~~Joint year ended December 31, 2024, we operated bitcoin mining activities at two data centers: the Lake Mariner Facility and the Nautilus Cryptomine Facility in central Pennsylvania. In October 2024, we sold our entire equity interest in Nautilus, allowing us to consolidate operations and reinvest in future infrastructure growth.Venture

~~Lake~~On ~~Mariner~~October ~~Facility~~27, 2025, the Company entered into an amended and restated limited liability company agreement governing the Abernathy Joint Venture. The Company holds a 50.1% equity interest in the joint venture. The Abernathy HPC Campus represents the extension of the Company’s commercial relationship with Fluidstack, supported by the same credit enhancement framework, to an additional site.

~~Strategically~~The ~~located~~Abernathy inHPC ~~Barker,~~Campus ~~New~~is ~~York, on the site of a former coal-fired power plant, the Lake Mariner Facility began operations in March 2022,~~ designed tofor ~~support~~168 ~~sustainable bitcoin mining. As of December 31, 2024, the facility was operating 195~~ MW of ~~bitcoin~~critical ~~mining~~IT ~~capacity~~load, ~~with~~representing ~~an additional 50 MW under construction and expected to come online in~~ the ~~first~~full ~~half~~build-out of ~~2025~~the site. ~~Additionally,~~The ~~the~~campus ~~Company~~ is ~~developing~~100% ~~HPC~~pre-leased ~~data centers at the Lake Mariner Facility~~ to ~~provide~~Fluidstack ~~HPC~~under ~~hosting~~a ~~services~~25-year ~~for Core42, supporting up to 72.5 MW of~~ data center ~~infrastructure~~sublease ~~dedicated~~with tocontractual ~~GPU~~rent ~~compute~~escalators ~~workloads.~~and ~~This~~options ~~capacity~~for isterm ~~expected~~contraction. toLease ~~come~~obligations ~~online~~are ~~throughout~~supported ~~2025.~~by ~~Core42~~investment-grade ~~also~~credit ~~has~~enhancement anprovided ~~option,~~by ~~exercisable through March 31~~Google, ~~2025,~~materially tostrengthening ~~secure~~the ancredit ~~additional~~profile ~~135 MW~~ of ~~data~~the ~~center~~contracted ~~infrastructure~~revenues atand ~~the~~facilitating ~~Lake~~third-party ~~Mariner~~debt ~~Facility~~financing.

~~The~~Management ~~Company~~believes ~~has~~the aAbernathy ~~PPA~~Joint ~~with~~Venture ~~NYPA,~~reflects ~~securing~~the 90extension MW of ~~high-load factor power to support its bitcoin mining operations. The PPA, executed in February 2022, has a ten-year term from~~ the ~~commencement of NYPA~~Company’s ~~power~~commercial ~~delivery.~~relationship ~~The~~with ~~Lake~~Fluidstack, ~~Mariner~~supported ~~Facility~~by iscontinued ~~built~~credit ~~for~~enhancement ~~scalable~~from ~~expansion~~Google, ~~with the ability~~ to ~~grow~~an upadditional ~~to 500 MW in the near term and potentially 750 MW with targeted transmission upgrades. Its strategic location and access to low-cost, predominantly zero-carbon energy make it a highly attractive~~ site ~~for both bitcoin mining and HPC workloads~~.

AsOperations of December 31, 2024, we owned approximately 62,000 miners, of which approximately 58,800 are operational at the Lake Mariner Facility with the remainder undergoing maintenance, awaiting disposal or on standby to replace miners under repair. These miners were comprised as follows:Overview

Vendor and Model						Number of miners
Bitmain S19 XP						18,500
Bitmain S19j XP						18,100
Bitmain S19k Pro						4,200
Bitmain S21						8,300
Bitmain S21 Pro						12,900
						62,000

The Company’s primary operating campus is the Lake Mariner Data Campus, located in Barker, New York on the site of a former coal-fired power plant that was retired and repurposed into a modern digital infrastructure campus. The site benefits from substantial existing transmission infrastructure and is designed for scalable expansion.

As of December 31, ~~2024,~~2025 ~~our~~the ~~fleet~~Lake ofMariner ~~miners~~Data ~~ranged~~Campus inoperated ~~age~~245 ~~from~~MW ~~0.1 to 2.6 years and have an average age~~ of ~~approximately~~legacy ~~0.7~~bitcoin ~~years.~~mining Wecapacity doand ~~not~~had ~~have~~18 ~~scheduled~~critical ~~downtime~~IT ~~for~~MW our miners; however, while we periodically perform unscheduled maintenance on our miners, such downtime has not been significant historically. When performing unscheduled maintenance, depending on the length of ~~estimated~~HPC ~~repair time, we may replace a miner with a substitute miner to limit overall downtime~~capacity. AsThe ofCompany ~~December 31,~~commenced ~~2024,~~HPC ~~our~~leasing ~~fleet~~operations ~~of miners~~ at the Lake Mariner ~~Facility~~Data ~~had~~Campus ain ~~range~~July of2025 ~~energy~~and ~~efficiency~~is ~~from~~executing 15a tophased 23expansion ~~joules~~to ~~per~~support ~~terahash~~additional ~~(“j/th”)~~contracted ~~and~~HPC ~~has an average energy efficiency of 19~~deployments.~~8 j/th.~~

30The campus is capable of scaling to approximately 500 MW of gross capacity in the near term, with potential expansion to approximately 750 MW subject to additional approvals from the NYISO. Power for the Lake Mariner Data Campus is sourced from the NYISO Zone A grid, with 90 MW allocated under a long-term arrangement with the New York Power Authority.

The Company operates the Lake Mariner Data Campus through La Lupa and Akela. Together, the Company’s contracted HPC platform represents 522 MW of critical IT load, including the Company’s 50.1% attributable share of the Abernathy HPC Campus. As of December 31, 2025, the Company had energized 18 critical IT MW of HPC capacity and remains on track to deliver additional contracted capacity in phases aligned with customer deployment schedules.

Regional Diversification and Platform Resilience

The development of the Abernathy HPC Campus through the Abernathy Joint Venture provides the Company with meaningful regional diversification. By expanding its HPC platform beyond New York into the Southwest Power Pool region, the Company reduces concentration risk related to power markets, regulatory frameworks, weather events, construction timelines, and operational disruptions.

Geographic diversification also helps mitigate the potential impact of localized physical security incidents, natural disasters, and certain cyber events by distributing infrastructure across multiple regions and operating environments. Management believes this diversification enhances overall platform resilience, supports customer deployment flexibility, and strengthens the Company’s ability to maintain continuity of operations across its portfolio.

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~~Nautilus~~Power ~~Cryptomine Facility~~Strategy

The ~~Nautilus~~Company’s ~~Cryptomine~~power ~~Facility,~~strategy ~~located~~emphasizes ~~in Berwick~~reliability, ~~Pennsylvania~~efficiency, ~~was~~and aresponsible ~~joint~~integration ~~venture~~with ~~between~~regional ~~TeraWulf~~electric ~~and Talen Member~~grids. The ~~Nautilus~~Company’s ~~Cryptomine~~development ~~Facility was a 200 MW bitcoin mining operation, situated adjacent to the 2.5-gigawatt nuclear-powered Susquehanna Station~~ and ~~was~~operations ~~the~~team ~~first~~brings ~~bitcoin~~deep ~~mining~~experience ~~site~~in ~~powered~~power ~~entirely~~generation, ~~by behind-the-meter~~transmission, ~~zero-carbon nuclear energy~~interconnection, ~~operating~~and ~~under a fixed~~large-~~rate~~scale ~~power~~energy ~~contract~~infrastructure, ofwhich ~~2.0~~informs ~~cents~~site ~~per~~selection, ~~kilowatt-hour~~facility ~~for a five-year term~~design, ~~with~~and ~~options~~operational ~~for two three-year renewals~~execution.

~~Under~~This ~~the~~power ~~terms~~and ofinfrastructure ~~the~~expertise ~~joint~~enables ~~venture~~the ~~agreement,~~Company ~~TeraWulf held a 25% equity interest in Nautilus, while Talen Member held a 75% equity interest, with ownership subject~~ to ~~adjustments~~evaluate ~~based on capital contributions. TeraWulf began mining bitcoin at the Nautilus Cryptomine Facility in the first quarter of 2023~~complex, ~~with~~power-intensive ansites ~~allotted~~efficiently 50and MWprovides ofmeaningful ~~operational~~differentiation ~~capacity~~relative ~~prior~~ to ~~divesting~~data ~~its~~center ~~interest~~developers inwithout ~~Nautilus~~comparable in-house ~~October~~energy ~~2024~~capabilities. ~~While holding a 25% equity stake, TeraWulf’s share of mined bitcoin was determined by relative hashrate contributions.~~ The Company ~~had~~expects ~~contributed~~certain ~~approximately~~sites ~~1.9~~to ~~EH/s~~include ofon-site ~~the facility’s total 5.2 EH/s capacity~~generation, ~~representing~~battery ~~approximately~~storage ~~35.7%~~and ofother ~~the~~dispatchable ~~total~~resources ~~hashrate attributed~~ to ~~the~~enhance ~~Company.~~reliability Atfor ~~the~~mission-critical ~~time~~compute ofand ~~TeraWulf’s ownership, the Nautilus Cryptomine Facility deployed approximately 48,000 miners, of which 15,800 miners were attributed~~ to ~~TeraWulf’s~~support ~~contributions~~grid tooperations ~~utilize~~where ~~its 50 MW allotment~~appropriate.

InLiquidity ~~October 2024, TeraWulf sold its entire equity interest in Nautilus, allowing the Company to reallocate capital toward expanding its digital infrastructure at the Lake Mariner Facility~~ and ~~advancing~~Capital its HPC hosting strategy. As part of the transaction, Nautilus distributed to TeraWulf all of its right, title, and interest in its miners, as well as certain other related equipment. Following the sale, TeraWulf deployed 12,300 S19 XP miners and sold or otherwise disposed of 35,700 miners as of December 31, 2024.Resources

~~Bitcoin~~The ~~Mining~~Company’s primary sources of liquidity include cash on hand, cash generated from operations, sale proceeds from bitcoin, equity issuances, debt financing, and project-level ~~Combined~~financing ~~Facilities~~arrangements. Capital requirements are driven primarily by HPC data center development, construction activities, and associated infrastructure investments.

AsManagement ~~outlined~~expects ~~above,~~future ~~several~~capital ~~factors~~deployment ~~influence our ability~~ to ~~mine~~be ~~bitcoin~~focused ~~profitably,~~on ~~including~~contracted ~~bitcoin’s~~HPC ~~USD~~projects ~~value, mining difficulty, global hashrate, power costs, fleet energy efficiency,~~ and ~~overall~~disciplined ~~data~~expansion ~~center efficiency. Among these, energy efficiency is a critical driver~~ of ~~profitability, as power costs represent~~ the ~~most~~Company’s ~~significant~~development ~~direct expense in bitcoin mining~~pipeline. WeThe ~~believe~~Company wecontinues ~~operate~~to aevaluate ~~highly~~financing ~~efficient~~alternatives ~~mining fleet, optimized~~ to ~~maximize~~support ~~output~~growth while ~~minimizing~~managing ~~energy~~balance ~~consumption.~~sheet ~~To assess operational performance and effectiveness, the Company tracks key metrics, which we believe are also valuable to investors for evaluating our progress and benchmarking against industry peers~~risk.

~~The table below presents our miner efficiency and computing power as compared to the global computing power as of December 31, 2024 and 2023:~~Outlook

	December 31, 2024		December 31, 2023(1)
Global hashrate (EH/s)(2)	704.0		558.4
Miner efficiency (w/th)(3)	19.0		27.6
TeraWulf combined average operating hashrate (EH/s)(4)	9.7		5.0
TeraWulf % of Global hashrate	1.4	%	0.9	%

The Company expects future results to be increasingly influenced by the development and operation of its HPC data center platform. As contracted HPC capacity is delivered and energized under existing hosting arrangements, management expects the Company’s revenue mix to continue shifting toward HPC leasing and away from legacy bitcoin mining operations.

~~(1)~~Future ~~Results~~performance aswill depend on the timing of ~~December 31~~construction, ~~2023~~commissioning, ~~reflect~~customer ~~hashrate~~deployment ofschedules, ~~mining~~access ~~operations~~to atpower and interconnection, and the ~~Lake~~availability ~~Mariner~~of ~~Facility~~project-level ~~and~~financing. ~~TeraWulf’s~~Management ~~net~~expects ~~share~~capital ofdeployment ~~hashrate~~in ~~produced~~future atperiods to be focused primarily on contracted HPC projects and disciplined expansion of the ~~Nautilus~~Company’s ~~Cryptomine~~development ~~Facility~~pipeline.

The table below presents the lease and nonlease components of HPC lease revenue for the years ended December 31, 2025, 2024, and 2023.


	Year Ended December 31,
	2025		2024		2023
HPC lease revenue(1)
Rent	$	13,750	$	—	$	—
Power passthrough(2)	1,404		—		—
Tenant fit out, maintenance and other	1,745		—		—
Total HPC lease revenue	$	16,899	$	—	$	—

Cost of revenue (exclusive of depreciation)(2)	$	2,464	$	—	$	—

(1) Certain of the Core42 Leases commenced in 2025 which comprised 18 critical IT MW HPC lease capacity as of December 31, 2025. The remainder of the HPC Leases are expected to commence in 2026.

(2) Cost of revenue (exclusive of depreciation) represents power costs which are passed through to the customer without markup and are included on a gross basis in HPC lease revenue as well as includes costs incurred by the Company in connection with its fit-out services under the HPC Leases.

Bitcoin Mining Operations

As of December 31, 2025, we owned approximately 54,100 miners, with approximately 49,400 operational at our bitcoin mining facilities on the Lake Mariner Data Campus (the “LMD Bitcoin Mining Facilities”) and the remainder

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undergoing maintenance, awaiting disposal or on standby to replace miners under repair. These miners were comprised as follows:


Vendor and Model						Number of miners
Bitmain S19 XP						4,300
Bitmain S19j XP						13,400
Bitmain S19k Pro						1,500
Bitmain S21						8,200
Bitmain S21 Pro						26,700
						54,100

As of December 31, 2025, our fleet of miners ranged in age from 0.7 years to 3.6 years and have an average age of approximately 1.2 years. We do not have scheduled downtime for our miners and while we periodically perform unscheduled maintenance on our miners, such downtime has not been significant historically. When performing unscheduled maintenance, depending on the length of estimated repair time, we may replace a miner with a substitute miner to limit overall downtime. As of December 31, 2025, our fleet of miners at the LMD Bitcoin Mining Facilities had a range of energy efficiency from 15 to 23 joules per terahash (“j/th”) and has an average energy efficiency of 17.2 j/th.

Bitcoin Mining - Share of Global Hashrate

Several factors influence our ability to mine bitcoin profitably, including bitcoin’s USD value, mining difficulty, global hashrate, power costs, fleet energy efficiency, and overall data center efficiency. Among these, energy efficiency is a critical driver of profitability, as power costs represent the most significant direct expense in bitcoin mining. We believe we operate a highly efficient mining fleet, optimized to maximize output while minimizing energy consumption. To assess operational performance and effectiveness, the Company tracks key metrics, which we believe are also valuable to investors for evaluating our progress and benchmarking against industry peers.

The table below presents our miner efficiency and computing power as compared to the global computing power as of December 31, 2025 and 2024:


	December 31, 2025		December 31, 2024(1)
Global hashrate (EH/s)(2)	980.2		704.0
Miner efficiency (w/th)(3)	17.5		19.0
TeraWulf operational hashrate (EH/s)(4)	9.3		9.7
TeraWulf % of Global hashrate	0.9	%	1.4	%

(1) Results as of December 31, 2024 reflect hashrate of mining operations at the LMD Bitcoin Mining Facilities and TeraWulf’s net share of hashrate produced at the Nautilus Cryptomine Facility.

(2) Total global hashrate obtained from YCHARTS (https://ycharts.com/indicators/bitcoin_network_hash_rate)

(3) Joules of energy required to produce each terahash of processing power

(4) While nameplate ~~inventory~~ at the ~~Lake~~LMD ~~Mariner~~Bitcoin ~~Facility~~Mining Facilities was 910.79 EH/s ~~as of December 31, 2024~~ and ~~was 5~~9.57 EH/s ~~for TeraWulf’s two facilities~~ as of December 31, ~~2023,~~2025 ~~inclusive~~and of2024, ~~gross total hosted miners~~respectively, actual ~~monthly~~operational hashrate ~~performance~~ depends on a variety of factors, including (but not limited to) performance tuning to increase efficiency and maximize margin, scheduled outages (scopes to improve reliability or performance), unscheduled outages, curtailment due to participation in various cash generating demand response programs, derate of ASICS due to adverse weather and ASIC maintenance and repair.

As of December 31, ~~2024~~2025, our operating hashrate represented approximately 10.49% of the total global hashrate, aligning with our share of global blockchain rewards. As of that date, this translated to approximately 64 bitcoin mined per day. To maintain profitability, we focus on optimizing operational efficiency and cost management, ensuring that our mining rewards consistently cover direct operating expenses.

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~~The~~Bitcoin ~~table~~Mining ~~below~~- ~~presents~~Average ~~the~~Cost ~~average cost~~ of ~~mining~~Bitcoin each bitcoin, including bitcoin mined at the Lake Mariner Facility and the Company’s net share of bitcoin mined at the Nautilus Cryptomine Facility, for the years ended December 31, 2024 and 2023 and the total energy cost per kWh utilized within the facilities.Mined

	Year Ended December 31,
Cost of mining - Analysis of costs to mine one bitcoin	2024			2023
Cost of mining - Lake Mariner Facility and net share of the Nautilus Cryptomine Facility
Cost of energy per bitcoin mined	$	25,227		$	8,676
Other direct costs of mining - non energy utilities per bitcoin mined	$	41		$	29
Cost to mine one bitcoin(1)	$	25,268		$	8,705
Value of each bitcoin mined(2)	$	62,889		$	29,645
Cost to mine one bitcoin as % of value of bitcoin mined	40.2		%	29.4		%
Statistics
Lake Mariner Facility and net share of the Nautilus Cryptomine Facility
Total bitcoin mined(3)	2,728			3,343
Total value of bitcoin mined(2) ($ in thousands)	$	171,547		$	99,105
Total MWhs utilized	1,601,061			910,744
Total energy expense, net of expected demand response proceeds(4) ($ in thousands)	$	68,815		$	29,006
Cost per kWh	$	0.043		$	0.032
Energy expense, net as % of value of bitcoin mined	40.1		%	29.3		%
Other direct costs of mining ($ in thousands)	$	111		$	97

The table below presents the average cost of mining each bitcoin, including bitcoin mined at the LMD Bitcoin Mining Facilities and the Company’s net share of bitcoin mined at the Nautilus Cryptomine Facility, for the years ended December 31, 2025 and 2024 and the total energy cost per kWh utilized within the facilities.

(1) “Cost to mine one bitcoin” is a cash cost metric and does not include depreciation. 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. As a result, the Company does not consider the sunk costs or depreciation of past capital investments in its historical or forecasted breakeven analysis. If depreciation of our miner fleet were factored into the above cost of mining analysis, it would add $22,086 and $9,892 per bitcoin mined for the years ended December 31, 2024 and 2023, respectively, bringing the total “cost to mine one bitcoin” to $47,354 and $18,598 for the years ended December 31, 2024 and 2023, respectively.


	Year Ended December 31,
Cost of mining - Analysis of costs to mine one bitcoin	2025			2024
Cost of mining - LMD Bitcoin Mining Facilities and net share of the Nautilus Cryptomine Facility
Cost of energy per bitcoin mined	$	53,609		$	25,227
Other direct costs of mining - non energy utilities per bitcoin mined	$	72		$	41
Cost to mine one bitcoin(1)	$	53,681		$	25,268
Value of each bitcoin mined(2)	$	101,307		$	62,889
Cost to mine one bitcoin as % of value of bitcoin mined	53.0		%	40.2		%

Statistics
LMD Bitcoin Mining Facilities and net share of the Nautilus Cryptomine Facility
Total bitcoin mined(3)	1,496			2,728
Total value of bitcoin mined(2) ($ in thousands)	$	151,556		$	171,547
Total MWhs utilized	1,344,760			1,601,061
Total energy expense, net of expected demand response proceeds(4) ($ in thousands)	$	80,199		$	68,815
Cost per kWh	$	0.060		$	0.043
Energy expense, net as % of value of bitcoin mined	52.9		%	40.1		%
Other direct costs of mining ($ in thousands)	$	108		$	111

(21) “Cost ~~Computed~~to asmine ~~the~~one ~~weighted-average~~bitcoin” ~~opening~~is ~~price~~a ofcash ~~bitcoin~~cost onmetric ~~each~~and ~~respective~~does ~~day~~not include depreciation. Although the ~~mined~~Company ~~bitcoin~~recognizes depreciation with respect to its mining assets, it does not consider depreciation in determining whether it is ~~earned~~economical to operate its mining equipment. ~~Excludes~~As ~~bitcoin~~a ~~earned~~result, ~~from~~the ~~profit~~Company ~~sharing~~does ~~associated~~not ~~with~~consider athe ~~bitcoin~~sunk ~~miner~~costs ~~hosting~~or ~~agreement~~depreciation ~~that~~of ~~expired~~past capital investments in ~~February~~its historical or forecasted breakeven analysis. If depreciation of our miner fleet were factored into the above cost of mining analysis, it would add $41,930 and $22,086 per bitcoin mined for the years ended December 31, 2025 and 2024, atrespectively, bringing the ~~Lake~~total ~~Mariner~~“cost ~~Facility~~to mine one bitcoin” to $95,611 and $47,354 for the years ended December 31, 2025 and 2024, respectively.

(32) Computed ~~Excludes~~as ~~bitcoin~~the ~~earned~~weighted-average ~~from~~opening ~~profit~~price ~~sharing~~of ~~associated with a~~ bitcoin ~~miner~~on ~~hosting~~each ~~agreement~~respective ~~that~~day ~~expired in February 2024 at~~ the ~~Lake~~mined ~~Mariner~~bitcoin ~~Facility~~is ofearned. 6Excludes ~~and 64~~ bitcoin ~~for~~earned ~~the~~from ~~years~~profit ~~ended~~sharing ~~December 31,~~associated ~~2024~~with ~~and~~a ~~2023,~~bitcoin ~~respectively,~~miner ~~and~~hosting ~~includes~~agreement ~~TeraWulf’s~~that ~~net~~expired ~~share~~in ofFebruary ~~bitcoin~~2024 ~~mined~~ at the ~~Nautilus~~LMD ~~Cryptomine~~Bitcoin ~~Facility,~~Mining ~~based on the hashrate share attributed to the Company~~Facilities.

(43) Excludes ~~energy~~bitcoin ~~expenses~~earned from profit sharing associated with a bitcoin miner hosting agreement that expired in February 2024 at the ~~Lake~~LMD ~~Mariner~~Bitcoin ~~Facility~~Mining Facilities of 0 and 6 bitcoin for the years ended December 31, 2025 and 2024, respectively, and includes TeraWulf’s net share of ~~energy~~bitcoin ~~expense~~mined at the Nautilus Cryptomine Facility, based on ~~aggregate~~the ~~nameplate~~hashrate ~~power~~share ~~consumption of deployed miners~~ attributed to ~~TeraWulf’s~~the ~~contribution to Nautilus~~Company.

~~Power~~(4) Excludes ~~costs~~energy ~~are~~expenses ~~the~~associated ~~most~~with ~~significant~~a ~~expense in our~~ bitcoin ~~mining~~miner ~~operations,~~hosting ~~accounting~~agreement ~~for~~that ~~40.1%~~expired ~~and~~in ~~29.4%~~February of2024 ~~the~~at ~~total value of bitcoin mined for~~ the ~~years~~LMD ~~ended~~Bitcoin ~~ended~~Mining ~~December 31,~~Facilities ~~2024~~ and ~~2023,~~includes ~~respectively.~~TeraWulf’s ~~The~~net ~~increase~~share ~~in power costs as a percentage~~ of ~~bitcoin~~energy ~~mined~~expense inat ~~2024 compared to 2023 was primarily driven by a near doubling of network difficulty and~~ the ~~bitcoin~~Nautilus ~~halving~~Cryptomine ~~event in April 2024~~Facility, ~~which~~based ~~reduced~~on ~~block~~aggregate ~~rewards.~~nameplate ~~These~~power ~~impacts~~consumption ~~were~~of ~~partially~~deployed ~~offset~~miners byattributed ~~growth~~to inTeraWulf’s ~~our~~contribution ~~average~~to ~~operating hashrate and an increase in the average market value of each bitcoin mined~~Nautilus.

~~Energy~~Power ~~prices~~costs are ~~highly~~the ~~volatile,~~most ~~influenced~~significant byexpense ~~global~~in ~~events~~our ~~that~~bitcoin ~~can~~mining ~~drive~~operations, ~~nationwide~~accounting ~~fluctuations~~for in52.9% ~~power~~and ~~costs~~40.1% Atof the ~~Lake~~total ~~Mariner~~value ~~Facility,~~of ~~power~~bitcoin ~~costs~~mined ~~are~~for ~~subject~~the toyears ~~variable~~ended ~~market rates~~December 31, ~~which~~2025 ~~can~~and ~~change~~2024, ~~hourly~~respectively. ~~based~~The onincrease ~~wholesale~~in ~~electricity~~power ~~pricing.~~costs ~~While~~as ~~this~~a ~~introduces~~percentage ~~some~~of ~~unpredictability,~~bitcoin itmined ~~also~~in ~~provides~~2025 uscompared ~~with the flexibility~~ to ~~actively~~2024 ~~manage~~was ~~our~~primarily ~~energy~~driven ~~consumption,~~by ~~optimizing~~an ~~for~~approximate ~~profitability~~30% ~~and~~increase ~~efficiency.~~in ~~Energy~~the ~~prices~~realized ~~are~~cost ~~also~~per ~~highly~~kWh ~~sensitive to weather conditions, such as winter storms~~ and ~~polar~~a ~~vortices,~~near ~~which~~doubling ~~can~~of ~~increase~~network ~~regional~~difficulty ~~power demand~~ and ~~drive~~the upbitcoin ~~costs.~~halving ~~During~~event ~~such~~in ~~events,~~April ~~we may curtail operations to avoid consuming power at peak rates~~2024, ~~or we may be curtailed under demand response programs in~~ which wereduced ~~participate~~block rewards. ~~For~~These ~~the~~impacts ~~years~~were ~~ended~~partially ~~December~~offset ~~31,~~by ~~2024,~~growth ~~and~~in ~~2023,~~our ~~the~~ average ~~aggregate~~operating ~~realized~~hashrate ~~power~~for ~~prices~~a atportion ~~the~~of ~~Lake~~2025 ~~Mariner Facility~~ and ~~Nautilus~~an ~~Cryptomine~~increase ~~Facility~~in ~~were~~the ~~$0.043~~average ~~and~~market ~~$0.032~~value ~~per~~of ~~kilowatt~~each ~~hour,~~bitcoin ~~respectively~~mined.

~~Our~~Energy ~~management~~prices ~~team~~are ~~continuously~~highly ~~monitors~~volatile, ~~market~~influenced ~~conditions~~by toglobal ~~determine~~events ~~when~~that ~~and~~can ~~for~~drive ~~how~~nationwide ~~long~~fluctuations toin ~~curtail~~power ~~operations~~costs. IfAt ~~curtailment~~the isLMD ~~not~~Bitcoin ~~mandated~~Mining ~~under~~Facilities, ~~demand~~power ~~response~~costs ~~programs~~are subject to variable market rates, wewhich ~~make~~can ~~real-time~~change ~~decisions~~hourly based on wholesale electricity pricing. While this introduces some unpredictability, it also provides us with the flexibility to ~~curtail~~actively ~~mining~~manage ~~whenever~~our ~~power~~energy consumption, optimizing for profitability and efficiency. Energy prices ~~exceed~~are ~~the~~also ~~value~~highly ofsensitive ~~the~~to ~~fixed~~weather ~~bitcoin~~conditions, ~~reward~~such as winter storms and polar vortices, which can increase regional power demand and drive up costs. AsDuring asuch ~~result~~events, ~~curtailment~~we ~~increases~~may ~~when~~curtail ~~bitcoin’s~~operations ~~value~~to ~~declines~~avoid consuming power at peak rates, or ~~energy~~we ~~prices~~may ~~rise~~be curtailed under demand response programs in which we participate. For the years ended December 31, 2025 and ~~decreases~~2024, ~~when~~the ~~bitcoin’s~~average ~~value~~aggregate ~~appreciates~~realized orpower ~~energy~~prices ~~costs~~at ~~fall.~~the ~~These~~LMD ~~decisions~~Bitcoin ~~are~~Mining ~~actively~~Facilities ~~managed~~and onNautilus anCryptomine ~~hour-by-hour~~Facility ~~basis~~were to$0.060 ~~optimize~~and ~~profitability~~$0.043 per kilowatt hour, respectively.

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~~During~~Our ~~the~~management ~~years~~team ~~ended~~continuously ~~December 31,~~monitors ~~2024~~market conditions to determine when and ~~2023,~~for wehow ~~curtailed~~long to curtail operations. atIf ~~the~~curtailment ~~Lake~~is ~~Mariner~~not ~~Facility~~mandated inunder demand response toprograms, ~~weather~~we ~~events,~~make ~~energy~~real-time ~~price~~decisions ~~spikes,~~to ~~and~~curtail ~~participation~~mining inwhenever ~~demand~~power ~~response~~prices ~~programs.~~exceed ~~The~~the ~~Company~~value ~~records~~of ~~expected~~the ~~payments~~fixed tobitcoin bereward. ~~received~~As ~~for~~a ~~demand~~result, ~~response~~curtailment ~~programs~~increases aswhen abitcoin’s ~~reduction~~value indeclines ~~cost~~or ofenergy ~~revenue~~prices rise, ~~which~~and ~~amounted~~decreases towhen ~~$8.6~~bitcoin’s ~~million~~value ~~and~~appreciates $3or energy costs fall.5 ~~million~~These ~~for~~decisions ~~the~~are ~~years~~actively ~~ended~~managed ~~December 31,~~on ~~2024~~an ~~and~~hour-by-hour ~~2023,~~basis ~~respectively~~to optimize profitability.

~~The~~During ~~Company~~the ~~has~~years ~~purchased~~ended ~~all~~December 31, ~~miners~~2025 ~~with~~and ~~cash~~2024, ~~without~~we ~~relying~~curtailed onoperations ~~limited~~at ~~recourse~~the ~~equipment~~LMD ~~financing~~Bitcoin ~~for~~Mining ~~miner~~Facilities ~~acquisitions.~~in Toresponse ~~support~~to ~~operations~~weather events, ~~invest~~energy price spikes, and participation in ~~our~~demand ~~joint~~response ~~venture,~~programs. ~~and~~The ~~purchase~~Company ~~miners~~records ~~and~~expected ~~other~~payments ~~fixed~~to ~~assets,~~be wereceived ~~have~~for ~~raised~~demand ~~capital~~response ~~through~~programs ~~both~~as ~~equity~~a ~~issuances~~reduction ~~and~~in ~~corporate-level~~cost ~~debt.~~of ~~Costs~~revenue, ~~related~~which amounted to ~~these~~$17.7 ~~capital~~million ~~raises~~and ~~are~~$8.6 ~~not~~million ~~included~~for inthe ~~this~~years ~~analysis~~ended December 31, 2025 and 2024, respectively.

The Company has purchased all miners with cash, without relying on limited recourse equipment financing for miner acquisitions. To support operations, invest in our previously owned Nautilus joint venture, and purchase miners and other fixed assets, we have raised capital through both equity issuances and corporate-level debt. Costs related to these capital raises are not included in this analysis.

Miner acquisition costs, or capital expenditures, are not factored into the cost of mining analysis, as they do not impact the marginal cost of producing one bitcoin. Instead, these costs are recorded as property, plant, and equipment in the consolidated balance sheets. Depreciation of property, plant, and equipment is calculated using the straight-line method, with estimated useful lives of four years for miners and five years for computer equipment.

During the year ended December 31, ~~2024~~2025, the Company recorded an accelerated depreciation expense of $519.16 million related to a certain miner building and related miners ~~whose~~of ~~estimated~~which the Company shortened their useful lives ~~were~~based ~~shortened~~on ~~due~~expected shutdown of operations for purposes of supporting the HPC operations. During the year ended December 31, 2024, the Company recorded accelerated depreciation expense of $5.1 million related to ~~planned~~certain miners of which the Company shortened their estimated useful lives based on replacement by April 30, 2024. While our standard depreciation period for miners is four years, historically low power costs may allow for a longer actual useful life in certain cases. However, if depreciation were included in the cost of mining analysis, it would add $2241,~~086~~930 and $922,~~892~~086 per bitcoin mined for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

Estimating asset useful lives requires management judgment, particularly given the rapid evolution of next-generation mining rigs in industrial-scale bitcoin mining. Depreciation schedules may be adjusted if events, regulatory changes, or shifts in operating conditions indicate a need for revision. Management continuously evaluates factors such as future energy market conditions, operating costs, maintenance practices, and capital investment needs to ensure depreciation assumptions remain reasonable. When an asset’s estimated useful life is adjusted—either shortened or extended—depreciation provisions are updated accordingly, which could have a material impact on future financial results.

Recent Developments

InOn ~~October~~February ~~2024~~2, 2026, the Company’s ~~board~~entered into an Agreement of ~~directors~~Purchase ~~approved~~and Sale for a ~~share~~former ~~repurchase~~industrial ~~program~~site ~~authorizing~~in ~~the~~Hawesville, Kentucky (“Hawesville”). The Company exercised an exclusivity option to ~~repurchase~~purchase upHawesville, which includes more than 250 buildable acres with immediate access to ~~$200.0~~power ~~million~~infrastructure, ofincluding multiple high-voltage transmission lines, an on-site energized substation, and a direct connection to the ~~Company~~regional transmission network. The Hawesville seller was granted a 6.8% minority equity interest in TeraWulf’s ~~outstanding~~Hawesville ~~shares~~development ofentity, ~~Common~~which ~~Stock~~is ~~through~~intended ~~December~~to ~~31,~~develop ~~2025~~and own a high-performance computing/artificial intelligence data center on the property. ~~Subsequent~~The Hawesville seller has the right to ~~December 31,~~request ~~2024~~the ~~and~~redemption ~~through~~of ~~February 28,~~its ~~2025,~~minority interest starting on the ~~Company~~first ~~repurchased~~anniversary 5of the data center’s commencement of operations (the “Operations Anniversary Date”). The Hawesville seller will not participate in the development,~~900~~ financing,~~000~~ ~~shares~~construction, management or operation of the data center and will not have any obligations to contribute capital, unless its ~~Common~~minority ~~Stock~~interest ~~for~~is ~~$33~~not redeemed in full within 30 days after the Operations Anniversary Date.3 ~~million~~The Hawesville acquisition does not require any third-party consents or regulatory approvals and closed effective February 2, 2026.

InAdditionally, ~~December~~on ~~2024~~February 2, 2026, the Company ~~entered~~issued ~~into~~a ~~certain~~press ~~long-term~~release ~~data~~announcing ~~center~~the ~~lease~~entry ~~agreements~~into ~~with~~an ~~Core42,~~Equity aand ~~G42~~Asset ~~company~~Purchase ~~specializing~~Agreement in(the ~~sovereign~~“Morgantown ~~cloud,~~Purchase AIAgreement”) ~~infrastructure,~~for ~~and~~the ~~digital~~Morgantown ~~services,~~generating tostation ~~lease~~in ~~specified~~Charles ~~data~~County, ~~center~~Maryland, ~~infrastructure~~The ~~comprising~~Morgantown ~~72.5~~Purchase MWAgreement ofwas ~~HPC~~signed ~~hosting~~in ~~capacity~~late at2025 ~~the~~and ~~Lake~~contemplates ~~Mariner~~the ~~Facility~~acquisition toof the ~~customer~~Morgantown togenerating ~~support~~station, ~~the~~a ~~customer’s~~grid-connected ~~HPC~~power ~~operations~~generation ~~(the~~facility ~~“HPC~~with ~~Leases”).~~approximately As210 ofMW ~~the date~~ of ~~this~~current ~~Annual~~operational ~~Report~~capacity, ~~none~~including ofelectrical ~~the~~infrastructure, ~~HPC~~associated ~~Leases~~real ~~had~~property, ~~commenced~~contracts and ~~all~~other ~~are~~assets ~~expected~~(“Morgantown”). toThe ~~commence~~closing atof ~~various~~the ~~dates~~Morgantown inacquisition ~~2025,~~is ~~each~~subject ~~having~~to ancertain ~~initial~~third-party ~~term~~consents ~~of ten years~~ and ~~granting~~customary ~~the~~regulatory ~~customer~~approvals, ~~two~~including ~~five-year~~from ~~renewal options. Additionally,~~ the ~~HPC~~Federal ~~Leases~~Energy ~~provide~~Regulatory ~~Core~~Commission. 42The anCompany ~~option~~expects to ~~expand~~close ~~near-term~~on ~~HPC~~the ~~hosting~~Morgantown ~~capacity~~acquisition byin anthe ~~additional~~second ~~135~~quarter MWof ~~gross~~2026, ~~which~~subject ~~is equivalent~~ to ~~108~~receiving MWthese ofconsents ~~critical~~and ~~IT load, by March 31, 2025~~approvals.

The HPC Leases provide for certain prepaid rent amounts (“Prepaid Rent”) representing the first 12 months base rent under each lease for a total of $90.0 million and shall be applied towards each month’s base rent for 24 months commencing on the respective commencement date of each lease until the Prepaid Rent is exhausted. As of the date of this Annual Report, the Company has received all $90.0 million of Prepaid Rent.31

The Business Combination

On December 13, 2021, TeraWulf completed its business combination (the “Merger”) with IKONICS Corporation (“IKONICS”), through which the Company effectively acquired IKONICS and became a publicly traded entity on Nasdaq, which was the primary objective of the business combination.

As part of the Merger consideration, IKONICS shareholders received contractual contingent value rights (“CVR”) under a Contingent Value Rights Agreement (the “CVR Agreement”). Each IKONICS shareholder as of immediately prior to the Merger received one non-transferable CVR for each share of IKONICS common stock held at that time. The CVR holders were entitled to receive 95% of the Net Proceeds (as defined in the CVR Agreement) from any sale, transfer, disposition, spin-off, or licensing of IKONICS’ pre-merger business assets.

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~~During~~Results ~~the~~of ~~year~~Operations ~~ended~~- ~~December~~Comparative ~~31,~~Results ~~2023,~~for the ~~Company~~Years ~~fulfilled~~Ended ~~its CVR obligations, making $11.0 million in payments related to proceeds from the sale of net assets held for sale. As of~~ December 31, ~~2023,~~2025 ~~the Company had completed all required distributions to CVR holders,~~ and ~~the CVR Agreement was deemed terminated.~~2024

~~Results~~The Company generates revenue in the form of ~~Operations~~bitcoin -by ~~Comparative~~providing ~~Results~~hash ~~for~~computation ~~the~~services ~~Years~~to ~~Ended~~a ~~December 31,~~mining ~~2024~~pool operator to mine bitcoin and ~~2023~~validate transactions on the global bitcoin network using miners owned by the Company. The earned bitcoin are routinely sold for U.S. dollars. The Company also previously earned revenue by providing bitcoin miner hosting services to third parties.

~~The~~In July 2025, the Company ~~generates~~commenced ~~revenue~~its inHPC ~~the~~leasing ~~form~~operations. ofHPC ~~bitcoin~~lease revenue is generated by ~~providing~~leasing ~~hash~~datacenter ~~computation~~space and providing related services to aour ~~mining~~HPC ~~pool~~customers. ~~operator~~These toleasing ~~mine~~agreements ~~bitcoin~~include ~~and~~lease ~~validate~~components, ~~transactions~~nonlease oncomponents ~~the~~(such ~~global~~as ~~bitcoin~~power ~~network~~delivery, ~~using~~physical ~~miners~~security, ~~owned~~maintenance), byas ~~the~~well ~~Company.~~as ~~The~~non-component ~~earned~~elements ~~bitcoin~~such ~~are~~as ~~routinely~~taxes. ~~sold~~Under ~~for~~these ~~U.S.~~leases, ~~dollars.~~customers ~~The~~pay ~~Company~~fixed ~~also~~payments ~~earned~~(based ~~revenue~~on byelectric ~~providing~~capacity) ~~bitcoin~~and ~~miner~~variable ~~hosting~~payments ~~services~~on toa ~~third~~recurring ~~parties~~basis. ~~While~~HPC ~~the~~power ~~Company~~costs ~~may~~are ~~choose~~passed through to ~~mine~~the ~~other~~customer ~~digital~~without ~~currencies,~~markup itand ~~has~~are noincluded ~~plans~~on toa dogross sobasis ~~currently.~~in HPC lease revenue.

The Company’s business strategy centers on ~~growing~~maximizing revenue and profitability ~~by enhancing the capacity and efficiency~~ of our bitcoin mining fleet while expanding our ~~data~~datacenter ~~center~~ infrastructure to support HPC ~~hosting~~leasing activities. We plan to ~~strategically~~operate ~~develop the~~ infrastructure necessary for ~~profitability~~profitable of bitcoin mining while pursuing ~~adjacent~~ high-value HPC ~~hosting~~leasing opportunities that leverage our power utilization and digital infrastructure. We are confident ~~that~~ our expertise in power infrastructure and digital asset mining can be favorably applied to the design, development, and operation of large-scale ~~data centers~~datacenters. These ~~data~~datacenters ~~centers~~ are optimized for high-value applications such as cloud computing, machine learning, and artificial intelligence. We ~~will~~are actively ~~seek~~seeking opportunities to expand into these areas using our knowledge, expertise, and existing infrastructure wherever favorable market opportunities arise.

Revenue

The following table presents revenue (in thousands):

	Year Ended December 31,
	2024			2023
	2025			2024
Revenue	$	140,051		$	69,229
Revenue:
Digital asset revenue	$	151,556		$	140,051
HPC lease revenue	16,899			—
Total revenue	$	168,455		$	140,051
Percentage of total revenue
Digital asset revenue	90		%	100		%
HPC lease revenue	10		%	0		%
Total revenue	100		%	100		%

~~Revenue~~Total revenue for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 was $~~140~~168.15 million and $69140.21 million, respectively, representing an increase of $7028.96 million. The increase was primarily attributed to an increase in the average price of bitcoin during the year ended December 31, 2024 of $65,824 as compared to $28,788 during the same period in the prior year and an increase in mining capacity at the Lake Mariner Facility to approximately 195 MW as of December 31, 2024 as compared to 110 MW as of December 31, 2023, partially offset by decreases in the total bitcoin mined due to impacts of the halving in April 2024 and the increase in network hashrate, resulting in total bitcoin mined of 2,177 bitcoin during the year ended December 31, 2024 as compared to 2,168 bitcoin during the same period in the prior year.

~~During~~Digital asset revenue for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 ~~revenue~~was ~~from~~$151.6 ~~bitcoin~~million ~~miner~~and ~~hosting was~~ $0140.81 million, ~~and~~respectively, an increase of $711.5 million. The increase was primarily attributed to an increase in the average price of bitcoin during the year ended December 31, ~~respectively~~2025 of $101,658 as compared to $65,824 during 2024. This increase was partially offset by a decrease ~~due~~in the total bitcoin mined to 1,496 bitcoin during the ~~expiration~~year ofended December 31, 2025 as compared to 2,177 bitcoin mined during the same period in the prior year. Although the Company’s expanded its mining infrastructure capacity at the LMD Bitcoin Mining Facilities to approximately 245 MW as of December 31, 2025 as compared to 195 MW as of December 31, 2024, total bitcoin ~~miner~~mined ~~hosting~~decreased ~~contract~~due ~~with~~to athe ~~customer~~halving in ~~February~~April 2024 and the increase in network hashrate.

During the years ended December 31, 2025 and 2024, revenue from bitcoin miner hosting was $0 and $0.8 million, respectively, a decrease due to the expiration of the Company’s bitcoin miner hosting contract with a customer in February 2024.

HPC lease revenue for the year ended December 31, 2025 was $16.9 million. In July 2025, the Company commenced its HPC leasing operations and as of December 31, 2025 had energized 18 critical IT MW of HPC leasing capacity at the Lake Mariner Data Campus.

Costs and Expenses

The following table presents cost of revenue (exclusive of deprecation) (in thousands):

	Year Ended December 31,
	2024		2023
	2025		2024
Cost of revenue (exclusive of depreciation)	$	6282,~~608~~663	$	2762,~~315~~608

Cost of revenue (exclusive of depreciation) for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 was $6282.67 million and $2762.36 million, respectively, an increase of approximately $3520.31 million. Cost of revenues is primarily comprised of power expense ~~and~~which ~~the~~increased ~~increase~~for ~~was~~the ~~primarily~~year ~~due~~ended toDecember ~~the~~31, ~~increase~~2025 inas ~~mining~~compared ~~capacity due~~ to ~~infrastructure~~the ~~constructed~~year ~~and~~ended ~~placed in service between~~ December ~~31,~~ ~~2023 and December~~ 31, 2024 ~~at the Lake Mariner Facility and~~, toresulting afrom ~~lesser~~higher ~~extent, an increase in~~ realized power prices during the ~~year~~2025 ~~ended December 31, 2024 as compared to the same~~ period inpartially ~~the~~offset ~~prior~~by ~~year.~~higher ~~The Company records~~ proceeds ~~related~~from to participation in demand response programs ~~as a reduction in cost of revenue in the period corresponding to the underlying demand response program period; the amount of aggregate proceeds received or expected to be received were $8~~.~~6 million and $3.5 million for the years ended December 31, 2024 and 2023, respectively. The Company is actively expanding its enrollment in such available programs in New York State.~~

34Proceeds from participation in demand response programs are recorded as a reduction in cost of revenue in the period in which the underlying program occurs. These proceeds totaled $17.7 million and $8.6 million for the years ended December 31, 2025 and 2024, respectively. The Company is actively expanding its enrollment in such available programs in New York State.

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The following table presents operating expenses (in thousands):

	Year Ended December 31,
	2024		2023
	2025		2024
Operating expenses	$	312,~~387~~115	$	23,~~116~~387
Operating expenses - related party	47,~~262~~632		24,~~773~~262
	$	719,~~649~~747	$	47,~~889~~649

Operating expenses (including related party expenses) for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 were approximately $719.67 million and $47.96 million, respectively, a net increase of $212.71 million. Operating expenses increased primarily due to higher ~~engineering~~miner ~~expenses~~repairs of $02.49 million and ~~property~~increased ~~insurance~~site labor of $02.76 million driven by the expansion of operations at the Lake Mariner Data Campus. Operating expense - related party increased primarily due higher rent subsequent to the New Ground Lease in October 2024 of $04.4 million, inpartially ~~rent~~offset ~~expense~~by ~~and~~ $1.10 million ~~due~~of tosite ~~increased~~labor ~~staffing~~ at the Lake Mariner ~~Facility.~~Data ~~These~~Campus ~~increases~~which ~~related~~was topreviously ~~infrastructure~~reported ~~constructed~~in operating expenses-related party and ~~placed~~since the acquisition of Beowulf E&D in ~~service~~May ~~between~~2025 ~~December 31,~~is ~~2023~~included ~~and~~in ~~2024~~operating expenses.

The following table presents selling, general and administrative expenses (in thousands):

	Year Ended December 31,
	2024		2022
	2025		2024
Selling, general and administrative expenses	$	57139,~~883~~465	$	2357,~~693~~883
Selling, general and administrative expenses - related party	128,~~695~~292		1312,~~325~~695
	$	70147,~~578~~757	$	3770,~~018~~578

Selling, general and administrative expenses (including related party expenses) for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 were $70147.68 million and $3770.06 million, respectively, a net increase of $3377.62 million. Selling, general and administrative expenses increased primarily due to increased expense during the year ended December 31, ~~2024~~2025 as compared to the same period in the prior year of (i) ~~stock-based~~employee compensation and benefits of $2547.27 million, (ii) ~~employee~~stock-based compensation ~~and benefits~~ of $520.70 million, (iii) travel expenses of $02.64 million, (iv) legal and other professional fees of $15.41 million, (v) ~~charity, sponsorships~~ and investor relations of $1.1 million and (vi) other public company costs of $1.1 million, partially offset by decreases in insurance expense of $0.9 million. Selling, general and administrative expenses – related party decreased a net $1.3 million in fees paid under the Services Agreement with Beowulf E&D ~~primarily~~acquisition-related ~~due~~costs to performance milestone expense incurred during the year ended December 31, 2023 that were not incurred during the year ended December 31, 2024, offset by an increase in the base fee as well as increased travel expense of $01.65 million.

~~Depreciation~~Selling, ~~for~~general ~~the~~and ~~years~~administrative ~~ended~~expenses ~~December 31,~~– ~~2024~~related ~~and~~party ~~2023~~decreased ~~was~~a ~~$59.8~~net ~~million and~~ $~~28.~~4.5 million, ~~respectively. The increase was~~ primarily due to ~~the~~a ~~increase~~full inyear ~~mining~~of ~~capacity~~fees ~~due~~incurred tounder ~~infrastructure~~the ~~constructed~~Services ~~and~~Agreement ~~placed~~with inBeowulf ~~service~~E&D ~~between~~for ~~December 31, 2023 and December 31, 2024 at~~ the ~~Lake Mariner Facility. Additionally, during the~~ year ended December 31, 2024, ~~the~~as ~~Company~~compared ~~recorded accelerated depreciation expense of $5.1 million related to certain miners of which the Company shortened their estimated useful lives based on anticipated replacement by April 30, 2024.~~

Gain on fair value of digital currency, net during the year ended December 31, 2024 was $2.2 million as a result of the Company adopting Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2023-08, Intangible – Goodwill and Other – Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”), on January 1, 2024 which requires entities with certain crypto assets to subsequently measure such assets at fair value, with changes in fair value recorded in net income in each reporting period. Prior to the adoption of ASU 2023-08, the Company recorded impairment of digital currency of $3.0 million during the year ended December 31, 2023 representing the decline in bitcoin prices during the Company’s holding period of its bitcoin, which was not reversed during its holding period, and realized gain on sale of digital currency of $3.2 million during the year ended December 31, 2023 upon subsequent liquidation of bitcoin held. The Company elected to early adopt ASU 2023-08 effective January 1, 2024, resulting in a cumulative-effect change of $37,000 to increase the balance of digital currency with a corresponding decrease in the opening balance of accumulated deficit in the consolidated balance sheet as of January 1, 2024.33

~~During~~to ~~the~~2025 ~~years~~in ~~ended~~which ~~December 31,~~fees ~~2024~~were ~~and~~only ~~December 31,~~incurred ~~2023,~~up to the ~~Company~~termination ~~recorded a loss on disposal~~ of ~~property,~~the ~~plant~~Services ~~and~~Agreement ~~equipment~~in ofMay ~~$17.8~~2025 ~~million~~upon ~~and~~the ~~$1.2~~acquisition ~~million, respectively, related to disposals~~ of ~~miners~~Beowulf ~~and write-off of deposits on miners~~E&D.

35Depreciation for the years ended December 31, 2025 and 2024 was $88.6 million and $59.8 million, respectively. The increase was primarily due to mining and HPC infrastructure constructed and placed in service between December 31, 2024 and December 31, 2025 at the Lake Mariner Data Campus. Additionally, during the year ended December 31, 2025, the Company recorded accelerated depreciation expense of $19.6 million related to a certain miner building and related miners of which the Company shortened their useful life based on expected shutdown of operations for purposes of supporting the HPC operations. The increase was partially offset by (i) decrease in depreciation on certain electrical equipment and leasehold improvements related to a change in accounting estimate of useful lives in connection with the New Ground Lease in October 2024 and (ii) accelerated depreciation expense of $5.1 million during the year ended December 31, 2024 related to certain miners of which the Company shortened their estimated useful lives based on expected replacement by April 2024.

~~Table~~Loss (gain) on fair value of ~~Contents~~digital assets, net for the years ended December 31, 2025 and 2024 was $0.6 million and $(2.2) million due to the volatility in the price of bitcoin during the year ended December 31, 2025 as compared to a steady increase during the year ended December 31, 2024.

~~Interest~~Change ~~expense~~in fair value of contingent consideration was $10.4 million during the year ended December 31, 2025 related to fair value remeasurement of contingent consideration liabilities related to the acquisition of Beowulf E&D based on milestones achieved during the year ended December 31, 2025.

~~Interest~~During ~~expense for~~ the ~~years~~year ended December 31, ~~2024~~2025, ~~and~~the ~~2023~~Company ~~was~~sold ~~$19.8~~or ~~million~~otherwise ~~and~~disposed ~~$34.8~~of ~~million~~17,228 ~~respectively,~~miners aand ~~decrease~~received proceeds of $1511.06 million. ~~Interest~~resulting ~~expense~~in ~~through~~a ~~July~~net ~~2024~~loss ~~related~~on ~~primarily~~disposal ~~to the borrowings under the Loan, Guaranty and Security Agreement (the “LGSA”) with Wilmington Trust (the “Term Loans”), which had an original maturity date~~ of ~~December 1~~property, ~~2024~~plant and ~~was~~equipment ~~fully repaid in July 2024 ahead~~ of ~~maturity~~$4.9 Inmillion ~~October~~in ~~2024,~~ the ~~Company~~consolidated ~~completed~~statement ~~a private offering~~ of ~~convertible senior notes due 2030 (the “2030 Convertible Notes”) which accrue 2~~operations.~~75%~~ ~~interest~~During ~~annually. The decrease in interest expense during~~ the year ended December 31, 2024, asthe ~~compared~~Company tosold ~~the~~or ~~prior~~otherwise ~~year~~disposed isof ~~primarily~~62,970 ~~due~~miners toand ~~early~~received ~~repayments~~proceeds of ~~the~~$23.3 ~~Term~~million ~~Loans principal balance~~ resulting in a ~~decrease~~net ofloss ~~amortization~~on disposal of ~~debt~~property, ~~issuance~~plant ~~costs~~ and ~~debt~~equipment ~~discount~~ of $817.18 million. ~~Additionally,~~in ~~interest expense related to~~ the ~~stated~~consolidated ~~interest~~statement ~~rate decreased $9.4 million for the same reason, partially offset by $2.6 million~~ of ~~interest accrued during the year ended December 31, 2024 under the 2030 Convertible Notes and payable in May 2025~~operations.

~~Loss~~Interest onexpense ~~extinguishment~~for the years ended December 31, 2025 and 2024 was $80.2 million and $19.8 million, respectively, an increase of $60.4 million. The increase is primarily attributed to stated interest expense of $58.0 million and amortization of debt issuance costs of $22.2 million related to the 2030 Secured Notes, 2031 Convertible Notes and 2032 Convertible Notes which were issued during the year ended December 31, 2025 as well as the 2030 Convertible Notes issued in October 2024. The $19.8 million of interest expense recognized in the year ended December 31, 2024, primarily related to the borrowings under the Loan, Guaranty and Security Agreement with Wilmington Trust (the “Term Loans”), which were fully repaid in July 2024 ahead of maturity.

~~Loss~~Change onin ~~extinguishment~~fair value of ~~debt~~warrant ~~was~~and ~~$6.3~~derivative ~~million~~liabilities ~~for~~during the year ended December 31, ~~2024~~2025 ~~related~~was ~~to voluntary prepayments of the Term Loans in February and July 2024. The Company incurred prepayment fees of~~ $1429.38 million inrelated ~~connection~~to ~~with~~ the ~~voluntarily~~Google ~~prepayments~~Warrants and ~~derecognized~~the ~~unamortized~~conversion ~~debt~~feature ~~discount~~ of ~~$5.0 million associated with~~ the ~~principal~~2031 ~~repaid.~~Convertible ~~The~~Notes ~~Company~~which ~~made~~was nooriginally ~~prepayments~~accounted onfor ~~the~~separately ~~principal~~as ~~balance~~a ofderivative ~~the Term Loans during the year ended December 31, 2023~~liability.

~~Income~~Loss ~~tax~~on ~~benefit~~extinguishment of debt during the year ended December 31, 2024 was $6.3 million related to voluntary prepayment of the Term Loans in February and July 2024, reflecting $1.3 million of prepayment fees and the derecognition of unamortized debt discount of $5.0 million associated with the principal repaid. No loss on extinguishment of debt was recorded during the year ended December 31, 2025.

Income tax ~~benefit~~provision was $76,000 and $0 for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively. Based upon the level of historical U.S. losses and future projections over the period in which the net deferred tax assets are deductible, at this time, management believes it is more likely than not that the Company will not realize the benefits of the remaining deductible temporary differences, and as a result the Company has recorded a full valuation allowance against its ~~gross~~net deferred tax assets as of December 31, ~~2024~~2025 and ~~2023~~2024, except for a $76,000 deferred tax liability as of December 31, 2025 arising from indefinite-lived assets (e.g., tax-deductible goodwill related to the acquisition of Beowulf E&D) that cannot be used as a source of taxable income to support the realization of deferred tax assets when a full valuation allowance is in place.

Equity in net loss of investee, net of tax for the year ended December 31, 2025 was $4.1 million which represents TeraWulf’s proportional share of net loss of the Abernathy Joint Venture which was formed in October 2025 and has not yet commenced operations. The $3.4 million equity in net income of investee, net of tax for the year ended December 31, 2024 represents TeraWulf’s proportional share of the net income of Nautilus prior to the Company’s divestiture of its entire 25% equity interest in Nautilus in October 2024.

Equity in net income (loss) of investee, net of tax for the years ended December 31, 2024 and 2023 was $3.4 million and $(9.3) million, respectively, which represents TeraWulf’s proportional share of income or loss of Nautilus, which commenced operations in February 2023. The amount includes an impairment loss of $13.6 million for the year ended December 31, 2023 related to the distribution of miners from Nautilus to the Company whereby the miners were marked to fair value from book value on the date distributed. The impairment loss was the result of decreasing prices for miners between initial purchase and distribution.34

Additionally the Company recorded a gain on sale of equity interest in investee of $22.6 million in the consolidated statement of operations for the year ended December 31, 2024 as a result of the sale of its ~~entire 25% equity~~ interest in Nautilus ~~to the Talen Member~~ in October 2024.

Non-GAAP Measure

To provide investors with additional information in connection with our results as determined in accordance with generally accepted accounting principals in the United States (“U.S. GAAP”), we disclose Adjusted EBITDA as a non-GAAP measure. This measure is not a financial measure calculated in accordance with U.S. GAAP, and it should not be considered as a substitute for net loss, operating loss, or any other measure calculated in accordance with U.S. GAAP, and may not be comparable to similarly titled measures reported by other companies.

We define Adjusted EBITDA as net loss adjusted for (i) impacts of interest, taxes, depreciation and amortization; (ii) stock-based compensation expense, amortization of right-of-use asset and related party expense to be settled with respect to common stock, all of which are non-cash items that the Company believes are not reflective of its general business performance, and for which the accounting requires management judgment, and the resulting expenses could vary significantly in comparison to other companies; (iii) one-time, non-recurring transaction-based compensation expense related to the 2030 Convertible Notes (iv) equity in net ~~income~~ (loss) income of investee, net of tax, related to the Abernathy Joint Venture and Nautilus and the gain on sale of interest in Nautilus; (v) other income which is related to interest income or income for which management believes is not reflective of the Company’s ongoing operating activities; (vi) change in fair value of contingent consideration, change in fair value of warrant and derivative liabilities, loss on extinguishment of debt and net losses on disposals of property, plant and equipment, net, which are not reflective of the Company’s general business performance; and (vii) ~~loss~~acquisition-related transaction costs which management believes are not reflective of the Company’s ongoing operating activities. The Company’s Adjusted EBITDA also includes the impact of distributions from ~~discontinued~~investee ~~operations~~received in bitcoin related to a return on the Nautilus investment, which management believes, in conjunction with excluding the impact of equity in net (loss) income of ~~tax~~investee, ~~which~~net of tax, is ~~not~~reflective ~~applicable~~of toassets available for the Company’s ~~future~~use in its ongoing operations as a result of its investment in Nautilus.

36Management believes that providing this non-GAAP financial measure allows for meaningful comparisons between the Company's core business operating results and those of other companies, and provides the Company with an important tool for financial and operational decision making and for evaluating its own core business operating results over different periods of time. In addition to management's internal use of non-GAAP Adjusted EBITDA, management believes that Adjusted EBITDA is also useful to investors and analysts in comparing the Company’s performance across reporting periods on a consistent basis. Management believes the foregoing to be the case even though some of the excluded items involve cash outlays and some of them recur on a regular basis (although management does not believe any of such items are normal operating expenses necessary to generate the Company’s revenues). For example, the Company expects that share-based compensation expense, which is excluded from Adjusted EBITDA, will continue to be a significant recurring expense over the coming years and is an important part of the compensation provided to certain employees, officers, directors and consultants.

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business activities. The Company’s Adjusted EBITDA also includes the impact of distributions from investee received in bitcoin related to a return on the Nautilus investment, which management believes, in conjunction with excluding the impact of equity in net income (loss) of investee, net of tax, is reflective of assets available for the Company’s use in its ongoing operations as a result of its investment in Nautilus.

Management believes that providing this non-GAAP financial measure allows for meaningful comparisons between the Company's core business operating results and those of other companies, and provides the Company with an important tool for financial and operational decision making and for evaluating its own core business operating results over different periods of time. In addition to management's internal use of non-GAAP Adjusted EBITDA, management believes that Adjusted EBITDA is also useful to investors and analysts in comparing the Company’s performance across reporting periods on a consistent basis. Management believes the foregoing to be the case even though some of the excluded items involve cash outlays and some of them recur on a regular basis (although management does not believe any of such items are normal operating expenses necessary to generate the Company’s bitcoin related revenues). For example, the Company expects that share-based compensation expense, which is excluded from Adjusted EBITDA, will continue to be a significant recurring expense over the coming years and is an important part of the compensation provided to certain employees, officers, directors and consultants. Additionally, management does not consider any of the excluded items to be expenses necessary to generate the Company’s bitcoin related revenue.

The Company’s Adjusted EBITDA measure may not be directly comparable to similar measures provided by other companies in the Company’s industry, as other companies in the Company’s industry may calculate non-GAAP financial results differently. The Company's Adjusted EBITDA is not a measurement of financial performance under U.S. GAAP and should not be considered as an alternative to net loss or any other measure of performance derived in accordance with U.S. GAAP. Although management utilizes internally and presents Adjusted EBITDA, the Company only utilizes that measure supplementally and does not consider it to be a substitute for, or superior to, the information provided by U.S. GAAP financial results. Accordingly, Adjusted EBITDA is not meant to be considered in isolation of, and should be read in conjunction with, the information contained in the Company’s consolidated financial statements, which have been prepared in accordance with U.S. GAAP.

The following table is a reconciliation of the Company’s Adjusted EBITDA to its most directly comparable U.S. GAAP measure (i.e., net loss) for the periods indicated (in thousands):

	Year Ended December 31,
	2024		2023
	2025		2024
Net loss	$	(72661,~~418~~416)	$	(7372,~~421~~418)
Adjustments to reconcile net loss to non-GAAP Adjusted EBITDA:
Loss from discontinued operations, net of tax	—		129
Gain on sale of equity interest in investee	—		(22,602)
Gain on sale of equity interest in investee	(22,602)		—
Equity in net loss (income) of investee, net of tax	4,130		(3,363)
Equity in net (income) loss of investee, net of tax, related to Nautilus	(3,363)		9,290
Distributions from investee, related to Nautilus	—		22,776
Distributions from investee, related to Nautilus	22,776		21,949
Income tax provision	76		—
Income tax benefit	—		—
Other income	(39,044)		(3,927)
Other income	(3,927)		(231)
Loss on extinguishment of debt	—		6,300
Loss on extinguishment of debt	6,300		—
Change in fair value of warrants and derivatives	429,793		—
Interest expense	1980,~~794~~248		3419,~~812~~794
Loss on disposals of property, plant, and equipment, net	174,~~824~~895		117,~~209~~824
Depreciation	59,808		28,350
Change in fair value of contingent consideration	10,397		—
Amortization of right-of-use asset	1,373		1,001
Depreciation	88,597		59,808
Stock-based compensation expense	30,927		5,859
Amortization of right-of-use asset	4,456		1,373
Transaction-based compensation expense	3,885		—
Stock-based compensation expense	50,909		30,927
Related party expense to be settled with respect to common stock	—		2,917
Transaction-based compensation expense	—		3,885
Non-GAAP adjusted EBITDA	$	60,377	$	31,864
Related party expense to be settled with respect to common stock	2,375		—
Beowulf E&D acquisition-related transaction costs	1,475		—
Non-GAAP adjusted EBITDA	$	(23,109)	$	60,377

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Liquidity and Capital Resources

As of December 31, ~~2024~~2025, the Company had balances of cash and cash equivalents of $~~274~~3,266.14 million, working capital of $~~229~~1,742.64 million, total stockholders’ equity of $~~244~~140.4 million and an accumulated deficit of $~~332~~993.37 million. The Company incurred a net loss of $72661.4 million for the year ended December 31, ~~2024~~2025. The Company began mining bitcoin in March 2022 and had 9.73 EH/s of operating capacity as of December 31, ~~2024~~2025. In 2025, the Company commenced its HPC operations. To date, the Company has relied primarily on proceeds from the sale of bitcoin, both self-mined and distributed from the joint venture which owned the Nautilus Cryptomine Facility, and its issuances of debt and equity to fund its principal operations.

The principal uses of cash are for the operation and buildout of data center facilities, debt service, and general corporate activities and, to a lesser extent in ~~2023~~2024, investments in the Nautilus joint venture related to mining facility buildout and ~~general corporate~~ activities. Cash flow information is as follows (in thousands):

	Year Ended December 31,
	2024		2023
	2025		2024
Cash provided by (used in):
Operating activities:
Continuing operations	$	(24123,~~422~~180)	$	4(24,~~160~~422)
Discontinued operations	—		~~103~~—
Total operating activities	(24123,~~422~~180)		4(24,~~263~~422)
Investing activities	(911,~~159~~368,945)		(7891,~~013~~159)
Financing activities	~~335~~4,~~207~~940,835		~~119~~335,~~866~~207
Net change in cash and cash equivalents and restricted cash	$	~~219~~3,~~626~~448,710	$	46219,~~116~~626

Operating activities

Cash (used in) ~~provided by~~ operating activities for continuing operations was $~~(24~~123.4)2 million and $424.24 million for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, reflecting aan ~~decrease~~increase of $2898.68 million. During the year ended December 31, ~~2024~~2025, the Company ~~completed~~began ~~significant~~HPC ~~expansion of its bitcoin mining~~ operations ~~resulting in an increase in mining capacity at the Lake Mariner Facility to approximately 195 MW as of December 31, 2024 as compared to 110 MW as of December 31, 2023~~ which resulted in ~~stable~~segment ~~bitcoin~~profit ~~earned during the period despite the impacts~~ of ~~the~~$7.1 ~~halving in April 2024~~million. InWhile ~~addition,~~ the ~~average~~Company ~~price~~continued ofto ~~bitcoin~~profitably ~~increased~~mine bitcoin during the year ended December 31, ~~2024 to $65~~2025,~~824~~ ~~as compared to $28,788 during~~ the ~~same~~Company ~~period~~reported ~~in the prior year, resulting in an increase in revenue of~~ $7010.9 million. ~~Power~~lower ~~prices~~digital ~~increased~~asset ~~during~~segment ~~the~~profit ~~year ended December 31, 2024~~ as compared to ~~prior year and cost of revenue (exclusive of depreciation) increased approximately $35.3 million for~~ the ~~year ended December 31, 2024 as compared to the~~ prior year primarily due to the ~~increase~~halving in ~~mining~~April ~~capacity~~2024 and the ~~halving~~increase in ~~April~~network ~~2024.~~hashrate ~~Additionally,~~as ~~prior~~compared to ~~the~~prior ~~repayment~~year. ofThe ~~the~~Company ~~Term~~also ~~Loans~~received ininflows ~~July~~from ~~2024,~~(i) ~~the~~prepaid ~~Company~~rent ~~converted~~from ~~its~~customers ~~bitcoin~~net ~~holdings~~of ~~nearly~~commissions ~~immediately~~paid toof ~~cash~~$51.6 million and ~~the~~(ii) ~~related~~interest income proceeds ~~from~~net ~~sales~~of interest paid of ~~digital~~$28.1 ~~currency~~million, ~~were~~partially ~~included~~offset ~~within~~by ~~cash~~outflows ~~flows~~resulting from ~~operating~~(i) ~~activities~~increased inselling, ~~the~~general ~~consolidated~~and ~~statements~~administrative ofexpenses ~~cash~~(including ~~flows.~~related ~~Subsequently~~party, ~~proceeds~~but ~~from~~exclusive ~~sales~~ of ~~digital~~noncash ~~currency~~stock based compensation) of $6757.42 million ~~are~~and ~~included~~(ii) ~~within~~ cash ~~flows~~paid ~~from~~for ~~investing~~unearned ~~activities~~HPC intenant ~~the~~fit-out ~~consolidated statements~~ of ~~cash~~$11.0 ~~flows~~million, ~~for~~during the year ended December 31, ~~2024~~2025 as ~~the~~compared ~~Company~~to nothe ~~longer~~prior ~~converts bitcoin into cash on a nearly immediate basis~~year.

Additionally, prior to the repayment of the Term Loans in July 2024, the Company converted its bitcoin holdings nearly immediately to cash and the related proceeds from sales of digital assets of $97.6 million were included within cash flows from operating activities in the consolidated statements of cash flows.

Investing activities

Cash used in investing activities was $911,368.29 million and $7891.02 million for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively., ~~The~~reflecting ~~Company~~an ~~invested~~increase of $~~267~~1,277.98 million. The increase is primarily attributed to (i) an increase in purchases of plant and equipment of $75792.2 million inrelated ~~the~~to ~~buildout~~infrastructure ofintended ~~its~~to ~~facilities~~support atexpansion ~~the~~into ~~Lake~~HPC ~~Mariner~~leasing ~~Facility~~operations, ~~for~~(ii) ~~the~~lower ~~years~~proceeds ~~ended~~from ~~December 31~~sales of property, ~~2024~~plant and ~~2023~~equipment of $11.7 million, ~~respectively~~(iii) investments in joint venture of $450.0 million, ~~which~~and ~~included~~(iv) $6921.27 million ~~during~~for the ~~year~~acquisition ~~ended~~of ~~December 31,~~Beowulf ~~2024~~E&D. ~~related~~The toincrease ~~infrastructure~~in ~~intended~~cash toused ~~support~~in ~~expansion~~investing ~~into~~activities ~~HPC~~were ~~leasing~~partially ~~operations~~offset by increases in ~~2025~~cash provided by investing activities related to proceeds from sales of digital assets of $84.0 ~~Additionally,~~million during the year ended December 31, ~~2023~~2025 as compared to the prior year, as the Company ~~invested~~began ~~$2.8~~classifying ~~million~~proceeds from sales of digital assets in ~~its~~investing ~~joint~~activities ~~venture~~starting July 2024. ~~During~~Additionally, during the year ended December 31, 2024, the Company received proceeds from ~~the~~ sale of ~~its~~ equity interest in ~~the~~investee ~~joint venture~~ of $86.1 million, ~~proceeds~~related ~~from~~to the sale of ~~property, plant and equipment of $23~~Nautilus.~~3 million, and proceeds from sales of digital currency not converted nearly immediately into cash of $67.4 million.~~

Financing activities

Cash provided by financing activities was $~~335~~4,940.28 million and $~~119~~335.92 million for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively. ~~During~~reflecting an increase of $4,605.6 million. The increase is primarily attributed to the proceeds from issuance of long-term debt and convertible notes, net of issuance costs paid, of $5,106.7 million for the year ended December 31, 2025 as compared to $487.1 million in the prior year. Additionally, the Company purchased treasury stock of $33.3 million during the year ended December 31, 2025 as compared to $118.2 million in the prior year. These increases were partially offset by increases in cash used to purchase capped calls of $40.6 million, payments related to finance leases of $8.2 million, and payments for tax withholdings related to net share settlements of stock-based compensation awards of $4.8 million. Additionally, during the year ended December 31, 2024, the Company ~~received~~made ~~proceeds~~principal ~~from~~payments ~~(i)~~of ~~issuance~~long-term debt of $139.4 million as compared to $0 during the year ended December 31, 2025.

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of convertible notes, net of issuance costs paid, of $487.1 million, (ii) issuances of Common Stock, net of issuance costs, of $188.7 million and (iii) warrant exercises of $4.8 million. The cash provided by financing activities during the year ended December 31, 2024 was partially offset by principal payments on long-term debt of $139.4 million, repurchases of treasury stock of $118.2 million, purchases of capped call instruments of $60.0 million and payments related to tax withholdings related to net share settlements of stock-based compensation awards of $23.7 million. During the year ended December 31, 2023, the Company received proceeds from (i) issuances of Common Stock, net of issuance costs, of $135.9 million (ii) proceeds from warrant exercises of $2.5 million, and (iii) issuance of convertible promissory notes of $1.3 million. The cash provided by financing activities during the year ended December 31, 2023 was partially offset by payments of contingent value rights liability related to the proceeds from sales of net assets held for sale of RM 101 of $11.0 million, principal payments on long-term debt of $6.6 million, and payments related to tax withholdings related to net share settlements of stock-based compensation awards of $2.0 million.

Financial Condition

The Company incurred a net loss of $72661.4 million and reported cash used in operating activities of $24123.42 million for the year ended December 31, ~~2024~~2025. As of December 31, ~~2024~~2025, the Company had balances of cash and cash equivalents of $~~274~~3,266.14 million, working capital of $~~229~~1,742.64 million, total stockholders’ equity of $~~244~~140.4 million and an accumulated deficit of $~~332~~993.37 million. ~~The~~For ~~Company had 9.7 EH/s of operating capacity at~~ the ~~Lake~~year ~~Mariner~~ended ~~Facility as of~~ December 31, ~~2024. To date~~2025, the Company ~~has~~leveraged ~~relied~~its ~~primarily~~strategic ontransition ~~proceeds~~toward ~~from~~HPC ~~sales~~leasing ofand ~~bitcoin,~~execution ~~both~~of ~~self~~long-~~mined~~term ~~and~~lease ~~distributed~~agreements ~~from~~with ~~the~~Fluidstack, ~~joint~~which ~~venture~~benefit ~~which~~from ~~owned~~substantial ~~the~~credit ~~Nautilus~~support ~~Cryptomine~~provided ~~Facility~~by Google, ~~and~~to ~~its~~enable ~~issuances~~efficient financing and funding of ~~debt~~the ~~and~~phased ~~equity~~development toof ~~fund~~the ~~its~~La ~~principal~~Lupa ~~operations~~and Akela facilities. ~~Subsequent~~Prior to ~~December 31,~~these ~~2024~~developments, the Company ~~received~~historically ~~$90.0~~relied ~~million~~primarily ofon ~~Prepaid~~proceeds ~~Rent~~from ~~under~~sales ~~its~~of ~~HPC~~digital ~~Leases~~assets, ~~which~~both ~~shall~~self-mined beand ~~applied~~distributed ~~towards~~from ~~each~~the ~~month’s~~joint ~~base~~venture ~~rent~~which ~~for~~owned 24the ~~months~~Nautilus ~~commencing~~Cryptomine onFacility, ~~the~~and ~~respective~~its ~~commencement~~issuances ~~date~~ of ~~each~~debt ~~lease~~and ~~until~~equity ~~the~~to ~~Prepaid~~fund ~~Rent~~its isprincipal ~~exhausted~~operations.

Critical Accounting Estimates

The above discussion and analysis of the Company’s financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of the Company’s consolidated financial statements requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements.

be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements.

See Note 2 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report for a summary of the Company’s significant accounting policies.

~~Digital~~HPC ~~currency~~Leasing

~~Digital~~In ~~currency~~December is2024, ~~comprised~~the ofCompany ~~bitcoin~~entered ~~earned~~into aslong-term ~~noncash~~datacenter ~~consideration~~lease inagreements ~~exchange~~(the “HPC Leases”) with a customer for ~~providing~~specified ~~hash~~datacenter ~~computation~~infrastructure ~~services~~at the Lake Mariner Data Campus to support the customer’s HPC operations. In accordance with ASC 842, Leases, the Company determined at contract inception that these agreements contained a ~~mining~~lease, ~~pool~~comprising aslease ~~well~~components asrelated ~~consideration~~to the right to use datacenter space and nonlease components for ~~bitcoin~~power ~~miner~~delivery, ~~hosting~~physical security, and maintenance services. ~~From~~Certain ~~time~~of tothe ~~time,~~HPC Leases commenced in 2025 and the ~~Company~~remainder ~~also~~of ~~receives~~the ~~bitcoin~~HPC asLeases ~~distributions-in-kind~~are ~~from~~expected ~~its~~to ~~joint~~commence ~~venture.~~in 2026.

~~Bitcoin~~The ~~are~~Company ~~accounted~~has ~~for~~elected asthe ~~intangible~~practical ~~assets~~expedient ~~with~~available ~~indefinite~~under ~~useful~~ASC ~~life~~842, ~~and~~Leases, isto ~~included~~combine ~~in current assets in~~ the ~~consolidated~~nonlease ~~balance~~revenue ~~sheets~~components ~~due~~that tohave the ~~Company’s~~same ~~ability~~pattern toof ~~sell~~transfer itas ~~in a highly liquid marketplace and because~~ the ~~Company~~related ~~reasonably~~operating ~~expects~~lease tocomponents ~~liquidate~~into ~~its~~a ~~bitcoin~~single tocombined ~~support operations within the next twelve months~~component. The ~~Company~~single ~~elected~~combined tocomponent ~~early~~is ~~adopt~~accounted ~~ASU~~for ~~2023-08~~under ~~effective~~ASC ~~January~~842 1,as ~~2024,~~an ~~which~~operating ~~requires~~lease ~~digital~~if ~~currency~~the tolease becomponents ~~valued~~are atthe ~~fair~~predominant ~~value~~components ~~each~~and ~~reporting~~is ~~period~~accounted infor ~~accordance~~under ~~with~~ ASC ~~820~~606 ~~with~~if ~~changes~~the innonlease ~~fair~~components ~~value~~are ~~recorded~~the inpredominant ~~net income~~components. ~~Gains~~The ~~and~~lease ~~losses~~components ~~from~~are the ~~remeasurement~~predominant ofcomponents ~~digital currency are included within gain on fair value of digital currency, net~~ in the ~~consolidated statements of operations. The~~ Company’s ~~sells~~long ~~bitcoin~~term ~~and~~lease ~~gains~~agreements and ~~losses~~the ~~from~~single ~~such~~combined ~~transactions,~~component ~~measured~~in asthese ~~the~~arrangements ~~difference~~are ~~between~~accounted ~~the~~for ~~cash~~under ~~proceeds and~~ the ~~cost~~operating ~~basis~~lease guidance of ~~bitcoin~~ASC as842. ~~determined~~Recognition onof aHPC ~~first-in-first-out~~lease ~~basis,~~revenue ~~are~~begins ~~also~~when ~~included~~the ~~within~~Company ~~gain~~determines onthe ~~fair~~asset ~~value~~has ofbeen ~~digital~~made ~~currency,~~available ~~net~~for in the ~~consolidated~~customer’s ~~statements of operations~~use.

~~Prior~~The toCompany ~~the~~has ~~adoption~~concluded ofthat ~~ASU~~it ~~2023-08,~~is ~~bitcoin~~probable ~~was~~that ~~assessed~~substantially ~~for~~all ~~impairment~~of ~~annually,~~the orpayments ~~more~~will ~~frequently~~be ifcollected ~~events~~over orthe ~~changes~~term inof ~~circumstances~~the ~~indicate~~arrangements itand isrecognize ~~more likely than not that~~ the ~~asset~~total iscombined ~~impaired.~~fixed ~~The~~payments ~~Company~~under ~~elected to bypass~~ the ~~optional~~agreements ~~qualitative~~on ~~impairment~~a ~~assessment~~straight-line ~~and~~basis toover ~~track~~the ~~its~~noncancellable ~~bitcoin activity daily for impairment assessment purposes~~term. The Company ~~performed~~recognizes anthe ~~analysis~~difference ~~each~~between ~~day~~straight-line torevenue ~~identify~~recognized ~~whether~~during ~~events~~the orperiod ~~changes~~and ~~in circumstances, principally decreases in~~ the ~~quoted~~lease ~~price~~payments ofdue ~~bitcoin~~pursuant onto the ~~active~~underlying ~~trading~~arrangement ~~platform,~~as ~~indicated~~deferred ~~that~~rent itliability ~~was~~or ~~more~~accrued ~~likely~~rent ~~than~~receivable ~~not~~in ~~that~~the ~~its~~consolidated ~~bitcoin~~balance ~~were impaired~~sheets. ~~For~~Certain ~~impairment~~arrangements ~~testing~~include ~~purposes,~~options ~~the~~to ~~lowest~~extend ~~intraday~~the ~~trading~~term. ~~price~~These ofextension ~~bitcoin~~options ~~was~~are ~~identified~~not atreasonably ~~the~~certain ~~single~~to ~~bitcoin~~be ~~level~~exercised ~~(one~~and ~~bitcoin).~~are ~~The~~excluded ~~excess,~~from ~~if any, of~~ the ~~carrying~~lease ~~amount~~term ~~of bitcoin~~ and ~~the~~calculation ~~lowest~~of ~~daily~~lease ~~trading~~payments ~~price~~at oflease commencement.

39Payments for physical security and other routine maintenance services are included in the fixed lease payments. The lease agreements provide for variable payments for power delivery. Power delivery services represent a stand-ready obligation to make power available to the customer over the coterminous lease term and have the same pattern of transfer as the related operating lease components. Customers are charged monthly for actual power costs incurred at current utility rates. These payments from customers for power delivery are recognized as variable lease payments in accordance with the practical expedient elected. Variable lease payments are presented on a gross basis and are included in HPC lease revenue in the consolidated statements of operations.

~~Table~~The lease agreements also provide for variable payments for certain fit-out services as requested by the customer and the Company recognizes revenues as performance obligations are satisfied. In the course of ~~Contents~~providing its services, the Company routinely subcontracts for services and incurs other direct costs on behalf of its customers. These costs are passed through to the customers, generally with a mark-up, and, in accordance with U.S. GAAP, are included in the Company’s HPC lease revenue.

~~bitcoin~~Digital represented a recognized impairment loss. To the extent an impairment loss was recognized, the loss established the new cost basis of the asset. Subsequent reversal of previously recorded impairment losses was prohibited.assets

Digital assets is comprised of bitcoin earned as noncash consideration in exchange for providing hash computation services to a mining pool as well as consideration for bitcoin miner hosting services. From time to time, the Company also receives bitcoin as distributions-in-kind from its joint venture.

Bitcoin are accounted for as intangible assets with indefinite useful life and is included in current assets in the consolidated balance sheets due to the Company’s ability to sell it in a highly liquid marketplace and because the Company reasonably expects to liquidate its bitcoin to support operations within the next twelve months. The Company elected to early adopt ASU 2023-08 effective January 1, 2024, which requires digital assets to be valued at fair value each reporting period in accordance with ASC 820 with changes in fair value recorded in net income. Gains and losses from the remeasurement of digital assets are included within gain on fair value of digital assets, net in the consolidated statements of operations. The Company sells bitcoin and gains and losses from such transactions, measured as the difference between the

cash proceeds and the cost basis of bitcoin as determined on a first-in-first-out basis, are also included within gain on fair value of digital assets, net in the consolidated statements of operations.

Prior to the adoption of ASU 2023-08, bitcoin was assessed for impairment annually, or more frequently if events or changes in circumstances indicate it is more likely than not that the asset is impaired. The Company elected to bypass the optional qualitative impairment assessment and to track its bitcoin activity daily for impairment assessment purposes. The Company performed an analysis each day to identify whether events or changes in circumstances, principally decreases in the quoted price of bitcoin on the active trading platform, indicated that it was more likely than not that its bitcoin were impaired. For impairment testing purposes, the lowest intraday trading price of bitcoin was identified at the single bitcoin level (one bitcoin). The excess, if any, of the carrying amount of bitcoin and the lowest daily trading price of bitcoin represented a recognized impairment loss. To the extent an impairment loss was recognized, the loss established the new cost basis of the asset. Subsequent reversal of previously recorded impairment losses was prohibited.

Bitcoin earned through mining activities is recorded as an adjustment in the consolidated statements of cash flows, reconciling net loss to cash flows from operating activities. Bitcoin received as distributions-in-kind from equity investees is disclosed in supplemental noncash investing activities.

Prior to the repayment of the Term Loans in July 2024 (see Note 910), bitcoin sales proceeds were included in cash flows from operating activities, as bitcoin was converted into cash immediately during that period. Following repayment of the Term Loans, bitcoin sales proceeds are now classified under cash flows from investing activities, as the Company no longer converts bitcoin into cash immediately upon mining.

Long-lived Assets

Property, plant and equipment are recorded at cost, net of accumulated depreciation. Judgment is necessary in estimating the Company’s various assets’ useful lives. This includes evaluating the Company’s own usage experience with its currently owned assets, the quality of materials used in construction-related projects and, for its miners, the rate of technological advancement and market-related factors such as the price of bitcoin and the bitcoin network hashrate, which impact the value of the miners. Depreciation is computed using the straight-line method over the estimated useful lives of the assets (generally 5 years for computer equipment and 4 years for miners). Leasehold improvements and electrical equipment are depreciated over the shorter of their estimated useful lives or the lease term. Changes in depreciation and amortization, generally accelerated depreciation, are determined and recorded when estimates of the remaining useful lives or residual values of long-term assets change.

The Company reviews its long-lived assets, including property, plant and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset, or asset group, may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted cash flows expected to be generated by the asset. Significant judgment is used when estimating future cash flows, particularly the price of bitcoin and the network hashrate. Any impairment loss recorded is measured as the amount by which the carrying value of the assets exceeds the fair value of the assets. Should our estimates of useful lives, undiscounted cash flows, or asset fair values change, additional and potentially material impairments may be required, which could have a material impact on our reported financial results.

Stock-based compensation

The Company measures stock-based compensation cost related to share-based payment awards at the grant date of the award, based on the estimated fair value of the award. For restricted stock units (“RSUs”) with time-based vesting, the fair value is determined by the Company’s ~~Common~~common ~~Stock~~stock price on the date of the grant. For RSUs with vesting based on market conditions (“PSUs”), the effect of the market condition is considered in the determination of fair value on the grant date using a Monte Carlo simulation model. Stock-based compensation expense for PSUs is recorded over the derived service period unless the market condition is satisfied in advance of the derived service period, in which case a cumulative catch-up is recognized as of the date of achievement. Stock-based compensation for PSUs is recorded regardless of whether the market conditions are met unless the service conditions are not met. The Company accounts for forfeitures as they occur. The Company uses significant judgment in determining the likelihood of meeting milestones and market conditions. Inputs into valuation models such as Monte Carlo simulations include both the Company’s and guideline public company historical and expected annual volatility and, depending on the inputs selected, the Company could calculate significantly different estimated grant date fair values, materially impacting the valuation of our stock-based awards and the stock-based compensation expense we recognize in future periods.

Income Taxes

The Company accounts for income taxes pursuant to ASC 740, Income Taxes (“ASC 740”), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred tax asset will not be realized. The Company follows the provision of ASC 740 related to accounting for uncertain income tax positions. When tax returns are filed, it is more likely than not that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely that not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with the tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the Company’s balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The most critical estimate for income taxes is the determination of whether to record a valuation allowance for any net deferred tax asset, including net loss carryforwards, whereby management must estimate whether it is more likely than not that the deferred tax asset would be realized.

40Assets Acquired and Liabilities Assumed in a Business Combination

~~Table~~The Company accounts for business combinations under the acquisition method of ~~Contents~~accounting in accordance with ASC 805 - Business Combinations, by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, measured at the acquisition date fair value. The determination of fair value involves assumptions,estimates and judgments. Any purchase consideration in excess of the estimated fair values of net assets acquired is recorded as goodwill.

~~position~~Goodwill is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely that not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with the tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the Company’s balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The most critical estimate for income taxes is the determination of whether to record a valuation allowance for any net deferred tax asset, including net loss carryforwards, whereby management must estimate whether it is more likely than not that the deferred tax asset would be realized.Impairment

Goodwill is not subject to amortization, and instead, assessed for impairment annually, or more frequently when events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount in accordance with ASC 350.

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

The following discussion about our market risk exposures involves forward-looking statements. Actual results could differ materially from those projected in our forward-looking statements. For more information regarding the forward-looking statements used in this section and elsewhere in this Annual Report, see the “Cautionary Note Regarding Forward-Looking Statements” at the forepart of this Annual Report.

Risk Regarding the Price of Bitcoin.

Our business and development strategy is focused on ~~maintaining~~maximizing revenue and ~~expanding~~profitability of our bitcoin mining ~~operations to maximize the amount of new bitcoin rewards we earn~~fleet. As of December 31, ~~2024~~2025, our digital ~~currency~~assets balance was comprised of 53 bitcoin recorded at its fair value of $0.53 million, all of which were produced from our bitcoin mining operations.

We cannot predict the future market price of bitcoin, the future value of which will affect revenue from our operations, and any future declines in the fair value of the bitcoin we mine and hold for our account would be reported in our financial statements and results of operations as a charge against net income, which could have a material adverse effect on the market price for our securities.

A 10% increase or decrease in both the price of bitcoin produced during the year ended December 31, ~~2024~~2025 and the fair value of bitcoin as of December 31, ~~2024~~2025 would have increased or decreased net loss by approximately $1415.02 million.

A 10% increase or decrease in power prices during the year ended December 31, ~~2024~~2025 would have increased or decreased net loss by approximately $68.3 million.

ITEM 8. Financial Statements and Supplementary Data

The financial statements and schedules listed in Item 15(a)(1) are included in this Report beginning on page 42.

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TERAWULF INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

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			Page
Consolidated Financial Statements:
Report of Independent Registered Public Accounting Firms*			43
Consolidated Balance Sheets as of December 31, 2024 and 2023			46
Consolidated Balance Sheets as of December 31, 2025 and 2024			47
Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022			47
Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023			48
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024, 2023 and 2022			48
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025, 2024 and 2023			49
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022			50
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023			51
Notes to Consolidated Financial Statements			5152

*Deloitte & Touche LLP, PCAOB Firm ID No. 34; RSM US LLP, PCAOB Firm ID No. 49

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of TeraWulf Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance ~~sheet~~sheets of TeraWulf Inc. and subsidiaries (the "“Company"”) as of December 31, 2025 and 2024, the related consolidated statements of operations, stockholders'’ equity, and cash flows, for the ~~year~~years ~~ended~~then ~~December 31~~ended, ~~2024,~~ and the related notes (collectively referred to as the "“financial statements"”). In our opinion, the 2025 and 2024 financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the ~~year~~years ~~ended~~then ~~December 31~~ended, ~~2024,~~ in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company'’s internal control over financial reporting as of December 31, ~~2024~~2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 2827, ~~2025~~2026, expressed an unqualified opinion on the Company'’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company'’s management. Our responsibility is to express an opinion on the Company'’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit ~~Matter~~Matters

The critical audit ~~matter~~matters communicated below isare amatters ~~matter~~ arising from the current-period audit of the financial statements that ~~was~~were communicated or required to be communicated to the audit committee and that (1) ~~relates~~relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit ~~matter~~matters below, providing a separate ~~opinion~~opinions on the critical audit ~~matter~~matters or on the accounts or disclosures to which itthey ~~relates~~relate.

Mining Revenue- – Refer to Notes 2 and 5 to the financial statements

Critical Audit Matter Description

The Company participates in a cryptocurrency mining pool (“the mining pool”) to provide hash computation services to the mining pool operator. The Company recognizes revenue as they fulfill their performance obligation over time by providing hash computation services in exchange for Bitcoin. Once the hash computation services are transferred to the mining pool operator, the mining pool operator will compensate the Company for the hash computation services provided with a payout in Bitcoin. For the year ended December 31, ~~2024~~2025, revenue from mining (“mining revenue”) was $~~139~~151.26 million.

We identified the auditing of mining revenue as a critical audit matter due to the extent of audit effort required to perform audit procedures over the Company’s hash computation services provided to the mining pool operator, the associated contractual payouts including the blockchain contractual inputs, the Company’s valuation of bitcoin received from the mining pool operator, and evaluating the results of those procedures.

Table of Contents

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s process for recording mining revenue included the following, among others:

•With the assistance of our Information Technology (IT) specialists, we identified the significant systems used to monitor hash computation and tested the general IT controls over each of these systems, including complementary user entity controls.

•We tested the effectiveness of controls over the Company’s mining revenue calculation.

•We tested the amount of the mining revenue recorded by developing an expectation for the amount recorded based on the hash computation services provided to the mining pool operator and the payout method prescribed in the contract with the mining pool operator and comparing our expectation to the amount recorded by the Company.

•We confirmed with the mining pool operator the significant contractual terms utilized in the determination of mining revenue, total mining rewards earned, and the digital asset wallet addresses in which the rewards are deposited.

•We utilized our proprietary audit tool to independently obtain evidence from the Bitcoin blockchain to test the occurrence and accuracy of mining revenue.

•With the assistance of our Valuation specialists, we evaluated the reasonableness of the prices utilized by the Company to value bitcoin by obtaining independent bitcoin prices and comparing those to the prices selected by the Company.

Evaluation of the Accounting for a Related Party Business Combination and the Fair Value of the Contingent Consideration transferred - Refer to Notes 3 and 18 to the financial statements

Critical Audit Matter Description

On May 21, 2025, the Company acquired 100% of the membership interests in Beowulf Electricity & Data LLC, Beowulf E&D (NY) LLC and Beowulf E&D (MD) LLC (collectively, “Beowulf E&D”), a related party due to control by a member of the Company’s management. The transaction was accounted for as a business combination between entities not under common control . The fair value of the total consideration transferred in the business combination, including contingent consideration, was $54.6 million.

We identified the transaction as a critical audit matter due to the existing related party relationship and the significant judgment used by the Company to determine the fair value of contingent consideration transferred.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures performed to address this critical audit matter included the following:

•We tested the effectiveness of controls over management’s valuation of the contingent consideration transferred.

•We evaluated the Company’s accounting treatment for the business combination in accordance with applicable accounting guidance.

•We read the meeting minutes of the Board of Directors to validate that the transaction was negotiated and approved by the special independent committee.

•We evaluated whether the business assumptions used in the valuation model were reasonable, including the expected timing and probability of achieving the earnout milestones associated with the contingent consideration as outlined within the Membership Interest Purchase Agreement.

•With the assistance of our Valuation specialists, we evaluated the reasonableness of the methodology and the valuation assumptions utilized in the calculation of the fair value of the contingent consideration transferred.

/s/ DELOITTE & TOUCHE LLP

Houston, Texas

February 28, 2025

We have served as the Company's auditor since 2024.

~~Table~~Houston, ~~of Contents~~Texas

February 27, 2026

We have served as the Company’s auditor since 2024.

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of TeraWulf Inc. and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated ~~balance sheet of TeraWulf Inc. and subsidiaries (the Company) as of December 31, 2023, the related consolidated~~ statements of operations, stockholders’ equity and cash flows, for ~~each of~~ the ~~two~~year ~~years~~ended ~~then~~December ~~ended~~31, 2023 and the related notes (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the ~~financial position of the Company as of December 31, 2023, and the~~ results of its operations and its cash flows for ~~each of~~ the ~~two~~year ~~years~~ended ~~then~~December ~~ended~~31, 2023 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our ~~audits~~audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our ~~audits~~audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our ~~audits~~audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our ~~audits~~audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our ~~audits~~audit provide a reasonable basis for our opinion.

/s/ RSM US LLP

We served as the Company’s auditor from 2021 to 2024.

Minneapolis, Minnesota

March 19, 2024

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TERAWULF INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, ~~2024~~2025 AND ~~2023~~2024

(In thousands, except number of shares, per share amounts and par value)

	December 31, 2024		December 31, 2023
	December 31, 2025		December 31, 2024
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	~~274~~3,~~065~~266,389	$	54274,~~439~~065
Digital currency	476		1,801
Restricted cash	189,933		—
Prepaid expenses	2,493		4,540
Accounts receivable	1,212		475
Other receivables	3,799		1,001
Digital assets	270		476
Other current assets	598		806
Prepaid expenses	6,272		2,493
Total current assets	281,431		62,587
Other receivables	3,395		3,799
Equity in net assets of investee	—		98,613
Other current assets	10,802		123
Property, plant and equipment, net	411,869		205,284
Total current assets	3,478,273		281,431
Operating lease right-of-use asset	85,898		10,943
Property, plant and equipment, net	1,507,699		411,869
Finance lease right-of-use asset	7,285		—
Equity in net assets of investee	446,008		—
Other assets	1,028		679
Goodwill	55,457		—
TOTAL ASSETS	$	787,511	$	378,106
Operating lease right-of-use asset	103,975		85,898
Finance lease right-of-use asset	119,338		7,285
Restricted cash	266,453		—
Deferred charges	572,888		—
Other assets	8,091		1,028
TOTAL ASSETS	$	6,558,182	$	787,511
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	2465,~~382~~139	$	1524,~~169~~382
Accrued construction liabilities	16102,~~520~~582		116,~~526~~520
Accrued compensation	41,~~552~~717		4,~~413~~552
Other accrued liabilities	4,973		4,766
Accrued interest	52,775		2,559
Share based liabilities due to related party	—		2,500
Accrued lessor costs	27,625		—
Other amounts due to related parties	1,391		972
Other accrued liabilities	44,828		2,414
Current portion of operating lease liability	25		48
Other amounts due to related parties	200		1,391
Current portion of finance lease liability	2		—
Current portion of deferred rent liability	58,184		—
Insurance premium financing payable	—		1,803
Current portion of operating lease liability	2,015		25
Current portion of long-term debt	—		123,465
Current portion of finance lease liability	2		2
Total current liabilities	51,845		154,662
Warrant liabilities	844,698		—
Operating lease liability, net of current portion	3,427		899
Current portion of long-term debt	46,316		—
Finance lease liability, net of current portion	292		—
Short-term convertible notes	489,767		—
Long-term debt	—		56
Total current liabilities	1,735,848		51,845
Convertible notes	487,502		—
Deferred rent liability, net of current portion	23,285		—
TOTAL LIABILITIES	543,066		155,617
Operating lease liability, net of current portion	22,309		3,427
Commitments and Contingencies (See Note 12)
Finance lease liability, net of current portion	289		292
Long-term debt	3,052,240		—
Convertible notes	1,582,788		487,502
Deferred tax liabilities	76		—
Other liabilities	902		—
TOTAL LIABILITIES	6,417,737		543,066
Commitments and Contingencies (See Note 13)
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value, 100,000,000 authorized at December 31, 2024 and 2023; 9,566 shares issued and outstanding at December 31, 2024 and 2023; aggregate liquidation preference of $12,609 and $11,423 at December 31, 2024 and 2023, respectively.	9,273		9,273
Preferred stock, $0.001 par value, 100,000,000 authorized at December 31, 2025 and 2024; 0 and 9,566 shares issued and outstanding at December 31, 2025 and 2024, respectively; aggregate liquidation preference of $0 and $12,609 at December 31, 2025 and 2024, respectively	—		9,273
Common stock, $0.001 par value, 600,000,000 and 400,000,000 authorized at December 31, 2024 and 2023, respectively; 404,223,028 and 276,733,329 issued and outstanding at December 31, 2024 and 2023, respectively.	404		277
Common stock, $0.001 par value, 950,000,000 and 600,000,000 authorized at December 31, 2025 and 2024, respectively; 444,534,694 and 404,223,028 issued at December 31, 2025 and 2024, respectively; 420,065,944 and 385,654,278 outstanding at December 31, 2025 and 2024, respectively	444		404
Additional paid-in capital	~~685~~1,~~261~~285,202		~~472~~685,~~834~~261
Treasury Stock at cost, 18,568,750 and 0 at December 31, 2024 and 2023, respectively	(118,217)		—
Treasury stock at cost, 24,468,750 and 18,568,750 at December 31, 2025 and 2024, respectively	(151,509)		(118,217)
Accumulated deficit	(~~332~~993,~~276~~692)		(~~259~~332,~~895~~276)
Total stockholders' equity	~~244~~140,445		~~222~~244,~~489~~445
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	~~787~~6,~~511~~558,182	$	~~378~~787,~~106~~511

See Notes to Consolidated Financial Statements.

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TERAWULF INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, ~~2024~~2025, ~~2023~~2024 AND ~~2022~~2023

(In thousands, except number of shares and loss per common share)

	Year Ended December 31,
	2024		2023		2022
	2025		2024		2023
Revenue	$	140,051	$	69,229	$	15,033
Revenue:
Digital asset revenue	$	151,556	$	140,051	$	69,229
HPC lease revenue	16,899		—		—
Total revenue	168,455		140,051		69,229
Costs and expenses:
Cost of revenue (exclusive of depreciation shown below)	6282,~~608~~663		2762,~~315~~608		1127,~~083~~315
Operating expenses	312,~~387~~115		23,~~116~~387		2,~~038~~116
Operating expenses — related party	47,~~262~~632		24,~~773~~262		12,~~248~~773
Selling, general and administrative expenses	57139,~~883~~465		2357,~~693~~883		2223,~~770~~693
Selling, general and administrative expenses — related party	128,~~695~~292		1312,~~325~~695		13,~~280~~325
Depreciation	5988,~~808~~597		2859,~~350~~808		628,~~667~~350
Gain on fair value of digital currency, net	(2,200)		—		—
Loss (gain) on fair value of digital assets, net	612		(2,200)		—
Realized gain on sale of digital currency	—		(3,174)		(569)
Realized gain on sale of digital assets	—		—		(3,174)
Impairment of digital currency	—		3,043		1,457
Impairment of digital assets	—		—		3,043
Loss on disposals of property, plant, and equipment, net	17,824		1,209		—
Change in fair value of contingent consideration	10,397		—		—
Loss on nonmonetary miner exchange	—		—		804
Loss on disposals of property, plant, and equipment, net	4,895		17,824		1,209
Total costs and expenses	~~216~~354,~~267~~668		98216,~~650~~267		5898,~~778~~650
Operating loss	(76186,~~216~~213)		(2976,~~421~~216)		(4329,~~745~~421)
Interest expense	(1980,~~794~~248)		(3419,~~812~~794)		(2434,~~679~~812)
Loss on extinguishment of debt	(6,300)		—		(2,054)
Change in fair value of warrants and derivatives	(429,793)		—		—
Other income	3,927		231		—
Loss on extinguishment of debt	—		(6,300)		—
Loss before income tax and equity in net income (loss) of investee	(98,383)		(64,002)		(70,478)
Other income	39,044		3,927		231
Income tax benefit	—		—		256
Loss before income tax and equity in net (loss) income of investee	(657,210)		(98,383)		(64,002)
Equity in net income (loss) of investee, net of tax	3,363		(9,290)		(15,712)
Income tax provision	(76)		—		—
Gain on sale of equity interest in investee	22,602		—		—
Equity in net (loss) income of investee, net of tax	(4,130)		3,363		(9,290)
Loss from continuing operations	(72,418)		(73,292)		(85,934)
Gain on sale of equity interest in investee	—		22,602		—
Loss from discontinued operations, net of tax	—		(129)		(4,857)
Loss from continuing operations	(661,416)		(72,418)		(73,292)
Net loss	$	(72,418)	$	(73,421)	$	(90,791)
Loss from discontinued operations, net of tax	—		—		(129)
Net loss	$	(661,416)	$	(72,418)	$	(73,421)
Loss per common share:
Continuing operations	$	(01.2166)	$	(0.3521)	$	(0.7835)
Discontinued operations	—		—		~~(0.04)~~—
Basic and diluted	$	(01.2166)	$	(0.3521)	$	(0.8235)
Weighted average common shares outstanding:
Basic and diluted	~~351~~397,~~315~~608,~~476~~216		~~209~~351,~~956~~315,~~392~~476		~~110~~209,~~638~~956,~~792~~392

See Notes to Consolidated Financial Statements.

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TERAWULF INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, ~~2024~~2025, ~~2023~~2024 AND ~~2022~~2023

(In thousands, except number of shares)

	Preferred Stock			Common Stock			AdditionalPaid-in Capital		TreasuryStock		AccumulatedDeficit		Total
	Number	Amount		Number	Amount
Balances as of January 1, 2022	—	$	—	99,976,253	$	100	$	218,762	$	—	$	(95,683)	$	123,179
Issuance of Series A Convertible Preferred Stock, net of issuance costs	9,566	9,273		—	—		—		—		—		9,273
Warrant issuances in conjunction with debt offerings	—	—		—	—		8,315		—		—		8,315
Warrant issuances in conjunction with equity offerings	—	—		—	—		5,700		—		—		5,700
Stock-based compensation expense	—	—		—	—		1,568		—		—		1,568
Warrant exercise	—	—		5,714,823	6		52		—		—		58
Modifications to embedded conversion feature of convertible promissory notes	—	—		—	—		1,592		—		—		1,592
Issuance of common stock, net of issuance costs	—	—		39,801,895	39		58,821		—		—		58,860
Net loss	—	—		—	—		—		—		(90,791)		(90,791)
Balances as of December 31, 2022	9,566	$	9,273	145,492,971	$	145	$	294,810	$	—	$	(186,474)	$	117,754
Common stock reacquired in exchange for warrants	—	—		(12,000,000)	(12)		(12,479)		—		—		(12,491)
Warrant issuance in conjunction with debt modification	—	—		—	—		16,036		—		—		16,036
Warrant offerings	—	—		—	—		14,991		—		—		14,991
Warrant exercise	—	—		25,871,539	27		3,500		—		—		3,527
Common stock offering, net of issuance costs	—	—		99,136,670	98		132,444		—		—		132,542
Convertible promissory notes converted to common stock	—	—		11,762,956	12		4,693		—		—		4,705
Common stock issued for share based liabilities due to related party	—	—		2,460,513	2		14,998		—		—		15,000
Stock-based compensation expense and issuance of stock	—	—		5,586,736	5		5,854		—		—		5,859
Tax withholdings related to net share settlements of stock-based compensation awards	—	—		(1,578,056)	—		(2,013)		—		—		(2,013)
Net loss	—	—		—	—		—		—		(73,421)		(73,421)
Balances as of December 31, 2023	9,566	$	9,273	276,733,329	$	277	$	472,834	$	—	$	(259,895)	$	222,489
Cumulative-effect adjustment due to the adoption of Accounting Standard Update 2023-08 (See Note 2)	—	—		—	—		—		—		37		37
Cumulative effect of change in accounting principle (See Note 2)	—	—		—	—		—		—		37		37
Warrant exercise	—	—		31,853,909	32		4,776		—		—		4,808
Common stock offering, net of issuance costs	—	—		67,368,125	67		189,146		—		—		189,213
Common stock issued for share based liabilities due to related party	—	—		1,083,189	1		2,499		—		—		2,500
Common stock issued for new ground lease to related party	—	—		20,000,000	20		68,740		—		—		68,760
Purchase of capped call	—	—		—	—		(60,000)		—		—		(60,000)
Treasury stock repurchased	—	—		—	—		—		(118,217)		—		(118,217)
Stock-based compensation expense and issuance of stock	—	—		12,241,621	7		30,920		—		—		30,927
Tax withholdings related to net share settlements of stock-based compensation awards	—	—		(5,057,145)	—		(23,654)		—		—		(23,654)
Net loss	—	—		—	—		—		—		(72,418)		(72,418)
Balances as of December 31, 2024	9,566	$	9,273	404,223,028	$	404	$	685,261	$	(118,217)	$	(332,276)	$	244,445
Conversion of preferred stock to common stock	(9,566)	(9,273)		1,356,738	1		9,260		—		—		(12)
Warrant exercise	—	—		6,166,231	6		5,680		—		—		5,686
Common stock issued for share based liabilities due to related party	—	—		798,319	1		2,374		—		—		2,375
Common stock issued as consideration for business acquisition	—	—		7,968,852	8		39,339		—		—		39,347

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Purchase of capped call	—	—		—	—		(60,000)		—		—		(60,000)
Treasury stock repurchased	—	—		—	—		—		(118,217)		—		(118,217)
Stock-based compensation expense and issuance of stock	—	—		12,241,621	7		30,920		—		—		30,927
Tax withholdings related to net share settlements of stock-based compensation awards	—	—		(5,057,145)	—		(23,654)		—		—		(23,654)
Net loss	—	—		—	—		—		—		(72,418)		(72,418)
Balances as of December 31, 2024	9,566	$	9,273	404,223,028	$	404	$	685,261	$	(118,217)	$	(332,276)	$	244,445

See Notes to Consolidated Financial Statements.

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Common stock issued for Cayuga lease to related party	—	—		18,554,688	19		110,274		—		—		110,293
2031 Convertible Notes conversion feature	—	—		—	—		511,191		—		—		511,191
Purchase of capped call	—	—		—	—		(100,600)		—		—		(100,600)
Treasury stock repurchased	—	—		—	—		—		(33,292)		—		(33,292)
Stock-based compensation expense and issuance of stock	—	—		10,033,634	5		50,904		—		—		50,909
Tax withholdings related to net share settlements of stock-based compensation awards	—	—		(4,566,796)	—		(28,481)		—		—		(28,481)
Net loss	—	—		—	—		—		—		(661,416)		(661,416)
Balances as of December 31, 2025	—	$	—	444,534,694	$	444	$	1,285,202	$	(151,509)	$	(993,692)	$	140,445

See Notes to Consolidated Financial Statements.

TERAWULF INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, ~~2024~~2025, ~~2023~~2024 AND ~~2022~~2023

(In thousands)

	Year Ended December 31,
	2024		2023		2022
	2025		2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(72661,~~418~~416)	$	(7372,~~421~~418)	$	(9073,~~791~~421)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Amortization of debt issuance costs, commitment fees and accretion of debt discount	1122,~~382~~181		1911,~~515~~382		1119,~~676~~515
Related party expense to be settled with respect to common stock	—2,375		~~2,917~~—		2,~~083~~917
Common stock issued for interest expense	—		26—		8226
Stock-based compensation expense	3050,~~927~~909		530,~~859~~927		15,~~568~~859
Depreciation	5988,~~808~~597		2859,~~350~~808		628,~~667~~350
Amortization of right-of-use asset	14,~~373~~456		1,~~001~~373		~~303~~1,001
Revenue recognized from digital currency mining and hosting services	(139,278)		(63,877)		(10,810)
Revenue recognized from digital asset mining and hosting services	(151,556)		(139,278)		(63,877)
Gain on fair value of digital currency, net	(2,200)		—		—
Loss (gain) on fair value of digital assets, net	612		(2,200)		—
Realized gain on sale of digital currency	—		(3,174)		(569)
Realized gain on sale of digital assets	—		—		(3,174)
Impairment of digital currency	—		3,043		1,457
Impairment of digital assets	—		—		3,043
Proceeds from sale of digital currency	97,559		83,902		9,739
Proceeds from sale of digital assets	—		97,559		83,902
Digital currency paid as consideration for services	370		—		—
Digital assets paid as consideration for services	—		370		—
Loss on disposals of property, plant, and equipment, net	17,824		1,209		—
Change in fair value of contingent consideration	10,397		—		—
Loss on nonmonetary miner exchange	—		—		804
Loss on disposals of property, plant, and equipment, net	4,895		17,824		1,209
Loss on extinguishment of debt	6,300		—		2,054
Change in fair value of warrants and derivatives	429,793		—		—
Deferred income tax benefit	—		—		(256)
Loss on extinguishment of debt	—		6,300		—
Equity in net loss of investee, net of tax	(3,363)		9,290		15,712
Deferred income tax provision	76		—		—
Gain on sale of equity interest in investee	(22,602)		—		—
Equity in net loss (income) of investee, net of tax	4,130		(3,363)		9,290
Loss from discontinued operations, net of tax	—		129		4,857
Gain on sale of equity interest in investee	—		(22,602)		—
Loss from discontinued operations, net of tax	—		—		129
Changes in operating assets and liabilities:
Decrease (increase) in prepaid expenses	2,047		555		(3,601)
Increase in accounts receivable	(914)		—		—
Decrease in amounts due from related parties	—		—		815
(Increase) decrease in prepaid expenses	(6,592)		2,047		555
Increase in other receivables	(2,774)		(1,001)		—
Decrease (increase) in other receivables	459		(2,774)		(1,001)
Decrease (increase) in other current assets	288		(215)		(46)
(Increase) decrease in other current assets	(10,672)		288		(215)
(Increase) decrease in other assets	(466)		310		(994)
Increase in deferred charges	(57,407)		—		—
Increase (decrease) increase in accounts payable	740		(7,272)		10,197
(Increase) decrease in other assets	(832)		(466)		310
Increase (decrease) in accrued compensation and other accrued liabilities	694		(931)		5,916
(Decrease) increase in accounts payable	(3,238)		740		(7,272)
Increase (decrease) increase in other amounts due to related parties	480		(2,013)		700
Increase in accrued lessor costs	27,625		—		—
(Decrease) increase in operating lease liability	(11,113)		(42)		175
Increase (decrease) in accrued compensation and other accrued liabilities	43,217		694		(931)
Net cash (used in) provided by operating activities from continuing operations	(24,422)		4,160		(32,262)
(Decrease) increase in other amounts due to related parties	(565)		480		(2,013)
Net cash (used in) provided by operating activities from discontinued operations	—		103		(1,804)
Increase in deferred rent liability	81,469		—		—
Net cash (used in) provided by operating activities	(24,422)		4,263		(34,066)
Decrease in operating lease liability	(781)		(11,113)		(42)
Decrease in other liabilities	(398)		—		—
Net cash (used in) provided by operating activities from continuing operations	(123,180)		(24,422)		4,160
Net cash provided by operating activities from discontinued operations	—		—		103
Net cash (used in) provided by operating activities	(123,180)		(24,422)		4,263
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in joint venture, including direct payments made on behalf of joint venture	—(450,000)		~~(2,845)~~—		(462,~~172~~845)
Reimbursable payments for deposits on plant and equipment made on behalf of a joint venture or joint venture partner	—		—		(11,741)
Proceeds from sale of equity interest in investee	—		86,086		—
Reimbursement of payments for deposits on plant and equipment made on behalf of a joint venture or joint venture partner	—		—		11,716
Purchase of and deposits on plant and equipment	(1,060,189)		(267,940)		(75,168)
Proceeds from sale of equity interest in investee	86,086		—		—
Proceeds from sales of property, plant and equipment	11,648		23,324		—
Purchase of and deposits on plant and equipment	(267,940)		(75,168)		(61,116)
Acquisitions, net of cash acquired	(21,731)		—		—
Proceeds from sales of property, plant and equipment	23,324		—		—
Proceeds from sale of digital assets	151,327		67,371		—
Proceeds from sale of net assets held for sale	—		—		13,266
Net cash used in investing activities	(1,368,945)		(91,159)		(78,013)
Proceeds from sale of digital currency	67,371		—		—
Net cash used in investing activities	(91,159)		(78,013)		(94,047)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt, net of issuance costs paid of $0, $0 and $38	—		—		22,462
Proceeds from issuance of long-term debt, net of issuance costs paid of $67,062, $0 and $0	3,132,938		—		—
Principal payments on long-term debt	~~(139,401)~~—		(6139,~~599~~401)		—(6,599)
Payments of prepayment fees associated with early extinguishment of long-term debt	~~(1,261)~~—		—(1,261)		—
Principal payments on finance lease	(~~941~~9,159)		—(941)		—
Proceeds from insurance premium and property, plant and equipment financing	~~211~~—		~~2,513~~211		72,~~041~~513
Principal payments on insurance premium and property, plant and equipment financing	~~(2,103)~~—		(2,~~738~~103)		(42,~~924~~738)
Proceeds from issuance of promissory notes to stockholders	—		—		3,416
Payment for settlement of preferred stock conversion	(12)		—		—
Proceeds from issuance of common stock, net of issuance costs paid of $663, $1,051 and $142	188,715		135,917		47,326
Proceeds from issuance of common stock, net of issuance costs paid of $0, $663 and $1,051	—		188,715		135,917
Proceeds from exercise of warrants	45,~~808~~686		24,~~500~~808		52,~~700~~500
Purchase of capped call	(60100,~~000~~600)		—(60,000)		—
Purchase of treasury stock	(~~118~~33,~~217~~292)		—(118,217)		—
Payments of tax withholding related to net share settlements of stock-based compensation awards	(2328,~~654~~481)		(223,~~013~~654)		—(2,013)
Proceeds from issuance of preferred stock	—		—		9,566
Proceeds from issuance of convertible notes, net of issuance costs paid of $51,246, $12,950, and $0	1,973,755		487,050		—
Proceeds from issuance of convertible notes, net of issuance costs paid of $12,950, $0, and $0	487,050		—		—
Proceeds from issuance of convertible promissory note	—		—		1,250
Proceeds from issuance of convertible promissory note	—		1,250		14,700
Payment of contingent value rights liability related to proceeds from sale of net assets held for sale	—		—		(10,964)
Principal payments on convertible promissory note	—		—		(15,306)
Net cash provided by financing activities	4,940,835		335,207		119,866
Payment of contingent value rights liability related to proceeds from sale of net assets held for sale	—		(10,964)		—
Net change in cash, cash equivalents and restricted cash	3,448,710		219,626		46,116
Net cash provided by financing activities	335,207		119,866		89,981
Cash, cash equivalents and restricted cash at beginning of year	274,065		54,439		8,323
Net change in cash, cash equivalents and restricted cash	219,626		46,116		(38,132)
Cash, cash equivalents and restricted cash at end of year	$	3,722,775	$	274,065	$	54,439
Cash, cash equivalents and restricted cash at beginning of year	54,439		8,323		46,455
Cash, cash equivalents and restricted cash at end of year	$	274,065	$	54,439	$	8,323
Cash paid during the year for:
Interest	$	613,~~957~~999	$	196,~~572~~957	$	1319,~~989~~572
Income taxes	$	—	$	—	$	—

See Notes to Consolidated Financial Statements.

5051

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TERAWULF INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION

Organization

TeraWulf Inc. (“TeraWulf” or the “Company”) is a vertically integrated owner and operator of next-generation digital infrastructure, ~~primarily~~ powered by ~~zero~~low-carbon energy. The Company develops and operates high-performance ~~data~~datacenters ~~centers~~ optimized for bitcoin mining and high-performance computing (“HPC”) workloads, leveraging clean, cost-effective, and reliable energy sources to ~~drive~~promote long-term sustainability in digital infrastructure.

~~The~~TeraWulf ~~Company~~derives ~~generates~~the majority of its revenue by providing hash computation services to a mining pool operator, ~~enabling~~facilitating ~~the~~transaction validation of transactions on the global bitcoin network using the Company’s fleet of application-specific integrated circuit (“ASIC”) miners ~~owned by TeraWulf~~. ~~The~~Bitcoin ~~bitcoin~~ earned as consideration is routinely ~~sold~~converted ~~for~~to U.S. dollars. The Company also previously generated revenue by ~~providing bitcoin miner~~ hosting ~~services to~~ third-party ~~parties~~bitcoin miners. While ~~the~~capable ~~Company~~of ~~has~~mining ~~the capability to mine~~ other digital ~~currencies~~assets, itthe Company has no current plans to do so.

In 2024, the Company ~~established~~launched WULF Compute, anLLC ~~internal~~(“WULF ~~initiative~~Compute”), which is focused on development and deployment of scalable digital infrastructure to support a broader HPC strategy. ~~aimed~~This atbusiness ~~diversifying~~aims ~~revenue~~to ~~streams~~diversify revenue by ~~providing~~offering HPC ~~hosting~~leasing and colocation, cloud, and connectivity services for GPU-based ~~HPC~~workloads ~~operations~~ (see Note 78). ~~Given~~Starting in December 2024, the Company has entered into long-term datacenter lease agreements with customers for specified datacenter infrastructure at its Lake Mariner Data Campus in upstate New York (the “Lake Mariner Data Campus”) to support those customers’ HPC operations. With growing demand for high-density compute ~~loads~~, TeraWulf’s assets are well-positioned to ~~supply~~deliver low-cost, ~~predominantly zero~~low-carbon power to support these workloads.

~~During~~As ~~the~~of ~~years ended~~ December 31, ~~2024 and 2023~~2025, TeraWulf owned and operated ~~two~~ bitcoin mining ~~facilities:~~activities at the Lake Mariner ~~Facility~~Data Campus, which began mining bitcoin in ~~upstate~~March ~~New~~2022, ~~York~~and ~~(the~~had ~~“Lake~~energized ~~Mariner~~245 ~~Facility”)~~MW of capacity across five buildings and supporting infrastructure at the ~~Nautilus~~site. ~~Cryptomine~~As ~~Facility~~of inDecember 31, ~~central~~2025, ~~Pennsylvania~~TeraWulf (had energized 18 critical IT MW of HPC leasing capacity at the ~~“Nautilus~~Lake ~~Cryptomine~~Mariner ~~Facility”)~~Data Campus.

~~The~~On ~~Lake~~May 21, ~~Mariner~~2025 ~~Facility~~(the ~~began~~“Acquisition ~~mining~~Date”), ~~bitcoin~~the inCompany ~~March~~acquired ~~2022,~~100.0% ~~and~~of asthe membership interests of ~~December 31~~each of Beowulf Electricity & Data LLC, ~~2024~~Beowulf E&D (MD) LLC, ~~the~~and ~~Company~~Beowulf ~~had~~E&D ~~energized~~(NY) ~~195~~LLC MW(collectively, “Beowulf E&D”). The fair value of ~~capacity~~total ~~across~~consideration ~~four~~for ~~buildings~~the transaction was approximately $54.6 million, including $3.0 million in cash and ~~supporting~~5.0 ~~infrastructure~~million shares of the Company’s common stock (“Common Stock”) issued on the Acquisition Date. The ~~Company~~purchase ~~plans~~agreement also included up to ~~energize~~$19.0 amillion ~~fifth~~in ~~miner~~contingent ~~building~~cash payments and up to $13.0 million in additional Common Stock, ~~adding~~subject 50to MWthe achievement of ~~incremental~~several ~~capacity~~earnout milestones related to the expansion of the Company’s datacenter business and project financing initiative (see Note 3). As part of the acquisition, ~~bringing~~94 employees of Beowulf E&D, including site staff at the Lake Mariner ~~Facility’s~~Data ~~total~~Campus ~~operational~~and ~~capacity~~corporate personnel, were transitioned to ~~approximately~~TeraWulf. ~~245~~In MWaddition, inthe existing Administrative and Infrastructure Services Agreement (the ~~first~~“Services ~~half~~Agreement”) of(see ~~2025~~Note 18) with Beowulf E&D was terminated on the Acquisition Date.

The Company previously had bitcoin mining activities at the Nautilus Cryptomine Facility in central Pennsylvania (the “Nautilus Cryptomine Facility”), developed through a joint venture (see Note 1112),. The Nautilus Cryptomine Facility commenced bitcoin mining operations in February 2023 and, byachieved ~~April 2023, had reached~~ full energization of ~~the Company~~TeraWulf’s 50 MW ~~allotted~~share ~~capacity~~by April 2023. In October 2024, TeraWulf sold its ~~entire~~ 25% equity interest in the Nautilus joint venture ~~which owns~~ (the “Nautilus ~~Cryptomine~~Joint ~~Facility~~Venture”), ~~enabling~~reallocating ~~the~~capital ~~Company~~ to ~~reallocate~~expand ~~capital toward expanding~~ its wholly owned ~~digital~~ infrastructure and ~~advancing~~advance its HPC strategy at the Lake Mariner Data Campus.

InOn ~~December~~October ~~2021~~27, ~~TeraWulf~~2025, ~~completed~~the aCompany, ~~strategic~~through ~~business~~its ~~combination~~subsidiary Big Country Wulf LLC (the “~~Merger~~TeraWulf Member”), ~~with~~and ~~IKONICS~~Fluidstack ~~Corporation~~CS I Inc. (“~~IKONICS~~Fluidstack Member”), (each a ~~Minnesota~~“Member” ~~corporation,~~and ~~pursuant~~collectively tothe ~~which,~~“Abernathy ~~among~~Members”) ~~other~~entered ~~things,~~into ~~the~~an ~~Company~~amended ~~effectively acquired IKONICS~~ and ~~became~~restated alimited ~~publicly~~liability ~~traded~~ company onagreement (the ~~National~~“Abernathy ~~Association~~Joint ofVenture ~~Securities Dealers Automated Quotations (“Nasdaq~~Agreement”), ~~which~~to ~~was~~govern the ~~primary~~terms ~~purpose~~ of ~~the~~operation ~~business combination. As~~ of ~~the~~FS ~~date~~CS ofI ~~the~~LLC ~~Merger, TeraWulf classified~~ (the ~~IKONICS~~“Abernathy ~~business~~Joint asVenture”), ~~held~~which ~~for~~will ~~sale~~construct and ~~discontinued~~operate ~~operations~~a in168 ~~its~~MW ~~consolidated~~critical ~~financial~~IT ~~statements.~~load ~~During~~datacenter ~~the~~campus ~~year~~in ~~ended December 31~~Abernathy, ~~2023,~~Texas (the ~~Company~~“Abernathy ~~completed~~HPC ~~the~~Campus”). ~~sale~~The ofFluidstack ~~substantially~~Member ~~all~~is ~~IKONICS’~~a ~~historical~~subsidiary ~~net~~of ~~assets~~Fluidstack ~~(see Note 3)~~Ltd. ~~Subsequent to the asset sales~~, ~~IKONICS’~~a ~~name~~leading ~~was~~AI ~~changed~~cloud ~~to RM 101 Inc~~platform. ~~(“RM 101”).~~

In December 2021, TeraWulf completed a strategic business combination (the “Merger”) with IKONICS Corporation (“IKONICS”), a Minnesota corporation, pursuant to which, among other things, the Company effectively acquired IKONICS and became a publicly traded company on the National Association of Securities Dealers Automated Quotations

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TERAWULF INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(“Nasdaq”), which was the primary purpose of the business combination. As of the date of the Merger, TeraWulf classified the IKONICS business as held for sale and discontinued operations in its consolidated financial statements. During the year ended December 31, 2023, the Company completed the sale of substantially all IKONICS’ historical net assets (see Note 3). Subsequent to the asset sales, IKONICS’ name was changed to RM 101 Inc. (“RM 101”).

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated. Certain prior period amounts have been reclassified to conform with current period presentation.

Use of Estimates in the Financial Statements

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for (but are not limited to) such items as the fair values of assets acquired and liabilities assumed in business combinations, fair value of contingent consideration issued in a business combination, the establishment of useful lives for property, plant and equipment and intangible assets, the fair value of equity securities or warrants to purchase the Company’s Common Stock issued individually or as a component of a debt or equity offering, the fair value of changes to the conversion terms of embedded conversion features, the fair value and requisite service periods of stock-based compensation, the fair value of assets received in nonmonetary transactions, the establishment of right-of-use assets and lease liabilities that arise from leasing arrangements, the timing of commencement of capitalization for plant and equipment, impairment of indefinite-lived intangible assets, impairment of long-lived assets, recoverability of deferred tax assets, amortization of deferred issuance costs and debt discount, the fair value of leased assets for the purpose of lease classification, and the recording of various accruals. These estimates are made after considering past and current events and assumptions about future events. Actual results could differ from those estimates.

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TERAWULF INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for (but are not limited to) such items as the fair value of contingent consideration issued in a business combination, the establishment of useful lives for property, plant and equipment and intangible assets, the fair value of equity securities or warrants to purchase the Company’s common stock (“Common Stock”) issued individually or as a component of a debt or equity offering, the fair value of changes to the conversion terms of embedded conversion features, the fair value and requisite service periods of stock-based compensation, the fair value of assets received in nonmonetary transactions, the establishment of right-of-use assets and lease liabilities that arise from leasing arrangements, the timing of commencement of capitalization for plant and equipment, impairment of indefinite-lived intangible assets, impairment of long-lived assets, recoverability of deferred tax assets, amortization of deferred issuance costs and debt discount, the fair value of leased assets for the purpose of lease classification, and the recording of various accruals. These estimates are made after considering past and current events and assumptions about future events. Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenue under Financial Accounting Standards Board (“FASB”) 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 following five steps are applied to achieve that core principle:

•Step 1: Identify the contract with the customer

•Step 2: Identify the performance obligations in the contract

•Step 3: Determine the transaction price

•Step 4: Allocate the transaction price to the performance obligations in the contract

•Step 5: Recognize revenue when the Company satisfies a performance obligation

In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

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The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:

•Variable consideration

•Constraining estimates of variable consideration

•The existence of a significant financing component in the contract

•Noncash consideration

•Consideration payable to a customer

Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

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standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

Mining Pool

The Company has entered into an arrangement with a cryptocurrency mining pool (the Foundry USA Pool) to perform hash computations (i.e. hashrate) for the mining pool in exchange for consideration. Providing hash computation services to a mining pool is an output of the Company’s ordinary activities. The provision of such hash computation services is the sole performance obligation. The mining pool arrangement is terminable at any time without substantial penalty by Foundry USA Pool and may be terminated without substantial penalty by the Company upon providing one Contract Day’s, as defined, prior written notice. The Company’s enforceable right to compensation only begins when and continues while the Company provides hash computation services to its customer, the mining pool operator. Accordingly, the contract term with Foundry USA Pool is deemed to be less than 24 hours and to continuously renew throughout the day. Additionally, the Company concluded that the mining pool operator’s (i.e., the customer’s) renewal right is not a material right because the renewal rights do not include any discounts; that is, the terms, conditions, and compensation amounts are at the then-current market rates.

There is no significant financing component in these transactions.

The mining pool applies the Full Pay Per Share (“FPPS”) payout model. Under the FPPS model, in exchange for providing hash computation services to the pool, the Company is entitled to pay-per-share base amount and transaction fee reward compensation, calculated on a daily basis, at an amount that approximates the total bitcoin that could have been mined and transaction fees that could have been awarded using the Company’s hash computation services, based upon the then current blockchain difficulty. Under this model, the Company is entitled to compensation, payable in bitcoin, regardless of whether the pool operator successfully records a block to the bitcoin blockchain.

The transaction consideration the Company receives, if any, is noncash consideration and is all variable. Because digital ~~currency~~assets isare considered noncash consideration, fair value of the digital ~~currency~~asset award received would generally be determined using the quoted price of the related digital ~~currency~~asset in the Company’s principal market at the time of contract inception. The Company has adopted an accounting policy to aggregate individual contracts with individual terms less than 24 hours within each intraday period and apply a consistent valuation point, the start of day Coordinated Universal Time (00:00:00 UTC), to value the related noncash consideration. Revenue is recognized when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, which is the same day that control of the contracted service transfers to the mining pool and is the same day as the contract inception. After every 24-hour contract term, the mining pool transfers the digital ~~currency~~asset consideration to the Company’s designated digital currency wallets.

Consideration payable to the customer in the form of a pool operator fee, which is incurred only to the extent that the Company has generated FPPS consideration, is deducted from the bitcoin the Company receives and is recorded as contra-revenue, as it does not represent a payment for a distinct good or service.

~~The Company recorded revenue from mining of $139.3 million, $61.7 million, and $10.5 million during the years ended December 31, 2024, 2023, and 2022, respectively.~~54

Bitcoin Miner Hosting

The Company’s bitcoin miner hosting contracts were structured as service agreements with a single performance obligation. The primary service provided under these contracts included hosting customers’ miners within a secure data center while supplying electrical power, internet connectivity, ambient air cooling, and access to maintenance resources.

Bitcoin miner hosting revenue was recognized over time, as customers simultaneously received and consumed the benefits of the Company’s services. Revenue was recognized only to the extent that it was not subject to a significant risk of reversal. Customers were invoiced monthly, with payments primarily made in cash, although some consideration was received in digital currency. Because digital currency is treated as noncash consideration, its fair value was determined at the time of contract inception based on the quoted market price of the digital currency in the Company’s principal market.

The Company had certain bitcoin miner hosting contracts, the last of which expired in February 2024. At the time of contract inception, the quoted price of bitcoin in the Company’s principal market was approximately $38,000. The

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The Company recorded ~~bitcoin~~revenue ~~miner~~from ~~hosting~~mining ~~revenue~~ of $0151.86 million, $7139.53 million, and $461.67 million during the years ended December 31, 2025, 2024, ~~2023~~ and ~~2022~~2023, respectively.

~~HPC~~Bitcoin Miner Hosting

InThe ~~December 2024, the~~ Company ~~entered~~had ~~into~~one ~~long-term~~bitcoin ~~data~~miner ~~center~~hosting ~~lease~~contract ~~agreements~~which ~~(the~~expired ~~“HPC~~in ~~Leases”)~~February ~~with a customer to lease specified data center infrastructure at the Lake Mariner Facility to support the customer’s HPC operations~~2024. InAt ~~accordance with ASC 842, Leases (“ASC 842”),~~ the ~~Company~~time ~~determined~~of at contract inception ~~that these agreements contain a lease~~, ~~including lease components related to~~ the ~~right~~quoted toprice ~~use~~of ~~data~~bitcoin ~~center~~in ~~space,~~the asCompany’s ~~well~~principal asmarket ~~non-lease~~was ~~components~~approximately ~~covering power delivery~~$38, ~~physical security, and maintenance services~~000. The ~~HPC~~Company ~~Leases~~recorded ~~are~~bitcoin ~~expected~~miner tohosting ~~commence~~revenue ~~at various dates in 2025, each with an initial term~~ of ~~ten years~~$0.8 ~~The~~million ~~agreements~~and ~~also~~$7.5 ~~provide~~million during the ~~customer~~years ~~with~~ended ~~two~~December 31, ~~five-year~~2024 ~~renewal options~~ and ~~include~~2023, ~~a provision for expanding near-term HPC hosting capacity (see Note 7)~~respectively.

HPC Leasing

In December 2024 and August 2025, the Company entered into long-term datacenter lease agreements (the “Core42 HPC Leases” and the “Fluidstack HPC Leases”, respectively, and collectively, the “HPC Leases”) with customers for specified datacenter infrastructure at the Lake Mariner Data Campus to support the customers’ HPC operations. In accordance with ASC 842, Leases, the Company determined at contract inception that these agreements contained a lease, comprising lease components related to the right to use datacenter space and nonlease components for power delivery, physical security, and maintenance services. Certain of the Core42 HPC Leases commenced in 2025 and the remainder of the HPC Leases are expected to commence in 2026.

The Company has elected the practical expedient available under ASC 842 to combine the nonlease revenue components that have the same pattern of transfer as the related operating lease components into a single combined component. The single combined component is accounted for under ASC 842 as an operating lease if the lease components are the predominant components and is accounted for under ASC 606 if the nonlease components are the predominant components. The lease components are the predominant components in the Company’s HPC Leases and the single combined component in these arrangements are accounted for under the operating lease guidance of ASC 842. Recognition of HPC lease revenue begins when the Company determines the asset has been made available for the customer’s use.

The Company has concluded that it is probable that substantially all of the payments will be collected over the term of the arrangements and recognizes the total combined fixed payments under the agreements on a straight-line basis over the noncancellable term. The Company recognizes the difference between straight-line revenue recognized during the period and the lease payments due pursuant to the underlying arrangement as deferred rent liability or accrued rent receivable in the 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.

Payments for physical security and other routine maintenance services are included in the fixed lease payments. The lease agreements provide for variable payments for power delivery. Power delivery services represent a stand-ready obligation to make power available to the customer over the coterminous lease term and have the same pattern of transfer as the related operating lease components. Customers are charged monthly for actual power costs incurred at current utility rates. These payments from customers for power delivery are recognized as variable lease payments in accordance with the practical expedient elected. Variable lease payments are presented on a gross basis and are included in HPC lease revenue in the consolidated statements of operations.

The lease agreements also provide for variable payments for certain fit-out services as requested by the customer and the Company recognizes revenues as performance obligations are satisfied. In the course of providing its services, the Company routinely subcontracts for services and incurs other direct costs on behalf of its customers. These costs are passed through to the customers, generally with a mark-up, and, in accordance with GAAP, are included in the Company’s HPC lease revenue.

For the year ended December 31, 2025, the Company recorded HPC lease revenue of $16.9 million. There was no HPC lease revenue recorded during the years ended December 31, 2024 and 2023.

Cost of Revenue

Cost of revenue for mining pool revenue is comprised primarily of direct costs of electricity, but excludes depreciation which is separately presented. Cost of revenue for bitcoin miner hosting is comprised primarily of direct costs of electricity, ~~labor and internet provision.~~

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labor and internet provision. Cost of revenue for HPC lease revenue is comprised primarily of direct costs of electricity and also includes costs incurred by the Company in connection with its fit-out services under the HPC Leases.

Power Curtailment Credits

Proceeds from participation in demand response programs are recorded as a reduction in cost of revenue in the consolidated statements of operations for the period in which the corresponding demand response program occurs. The Company recorded demand response program amounts of approximately $817.67 million, $38.56 million and $03.15 million during the years ended December 31, ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, respectively.

Cash and Cash Equivalents

Highly liquid instruments with an original maturity of three months or less are classified as cash equivalents. As of December 31, ~~2024~~2025 and ~~2023~~2024, the Company had cash and cash equivalents of $~~274~~3,266.14 million and $54274.41 million, respectively.

The Company maintains cash and cash equivalent balances primarily at ~~two~~three financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company’s accounts at these institutions are insured, up to $250,000, by the FDIC. As of December 31, ~~2024~~2025, the Company bank balances exceeded the FDIC insurance limit by $43,649.70 million. To reduce its risk associated with the failure of such financial institutions, the Company evaluates at least annually the rating of the financial institutions in which it holds deposits.

54Restricted Cash

The Company considers cash and marketable securities to be restricted when withdrawal or general use is legally restricted. The Company reports restricted cash in the consolidated balance sheets and determines current or noncurrent classification based on the expected duration of the restriction. The Company had restricted cash of $189.9 million and $266.5 million classified as current and noncurrent assets, respectively, in the consolidated balance sheet as of December 31, 2025. The Company had no restricted cash as of December 31, 2024.

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that total to the amounts shown in the consolidated statements of cash flows (in thousands):


	December 31, 2025		December 31, 2024
Cash and cash equivalents	$	3,266,389	$	274,065
Restricted cash (current)	189,933		—
Restricted cash (noncurrent)	266,453		—
Cash, cash equivalents and restricted cash	$	3,722,775	$	274,065

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Supplemental Cash Flow Information

The following table shows supplemental cash flow information (in thousands):

	Year Ended December 31,
	2024		2023		2022
	2025		2024		2023
Supplemental disclosure of noncash activities:
Cumulative-effect adjustment due to the adoption of Accounting Standard Update 2023-08	$	37—	$	—37	$	—
Operating right-of-use asset obtained in exchange for lease obligation	$	77,056	$	—	$	11,223
Purchases of and deposits on plant and equipment in accounts payable, accrued construction liabilities, other accrued liabilities and long-term debt	$	167,356	$	27,661	$	5,182
Finance right-of-use asset obtained in exchange for lease obligation	$	6,557	$	—	$	—
Purchases of and deposits on plant and equipment with digital assets	$	—	$	316	$	437
Contribution of plant and equipment or deposits on plant and equipment to joint venture	$	—	$	35,792	$	11,267
Increase in plant and equipment for miners assigned in connection with sale of equity interest in investee	$	—	$	15,715	$	—
Deferred financing costs in accounts payable or other accrued liabilities	$	—	$	—	$	249
Investment in joint venture in other accrued liabilities, other amounts due to related parties and long-term debt	$	—	$	—	$	452
Common stock issuance costs in accounts payable	$	—	$	—	$	131
Contribution of plant and equipment or deposits on plant and equipment to joint venture	$	—	$	—	$	35,792
Preferred stock issuance costs in other accrued liabilities or accounts payable	$	—	$	—	$	293
Decrease to investment in joint venture due to bitcoin received as distribution from investee	$	—	$	22,776	$	21,949
Purchases of and deposits on plant and equipment in accounts payable, accrued construction liabilities, other accrued liabilities and long-term debt	$	27,661	$	5,182	$	8,451
Decrease to investment in joint venture and increase in plant and equipment for distribution or transfer of nonmonetary assets	$	—	$	—	$	6,868
Purchases of and deposits on plant and equipment with digital currency	$	316	$	437	$	—
Operating right-of-use asset obtained in exchange for lease obligation	$	13,192	$	77,056	$	—
Investment in joint venture in other accrued liabilities, other amounts due to related parties and long-term debt	$	—	$	452	$	5,203
Finance right-of-use asset obtained in exchange for lease obligation	$	—	$	6,577	$	—
Convertible promissory notes converted to common stock	$	—	$	4,666	$	—
Debt issuance costs in other accrued liabilities	$	38,312	$	—	$	—
Convertible promissory notes deferred issuance costs in accounts payable	$	—	$	—	$	104
Common stock issued to related party pursuant to operating lease	$	—	$	63,368	$	—
Common stock issued for share based liabilities due to related party	$	2,500	$	15,000	$	—
Common stock issued to related party pursuant to finance lease	$	110,293	$	5,392	$	—
Common stock issued to related party pursuant to operating lease	$	63,368	$	—	$	11,489
Common stock issued for share based liabilities due to related party	$	2,375	$	2,500	$	15,000
Common stock issued to related party pursuant to finance lease	$	5,392	$	—	$	—
Common stock issued for business acquisition	$	39,347	$	—	$	—
Common stock issued for payment on convertible promissory notes	$	—	$	—	$	168
Consideration related to transition services agreement for business acquisition	$	1,300	$	—	$	—
Common stock warrants issued for long-term debt commitment fee	$	—	$	—	$	1,967
Settlement of preexisting relationships in business acquisition	$	2,315	$	—	$	—
Common stock warrants issued for discount on long-term debt	$	—	$	16,036	$	6,348
Convertible promissory notes converted to common stock	$	—	$	—	$	4,666
Decrease to investment in joint venture and increase in plant and equipment for distribution or transfer of nonmonetary assets	$	—	$	6,868	$	51,978
Convertible preferred stock converted to common stock	$	9,265	$	—	$	—
Decrease to investment in joint venture due to bitcoin received as distribution from investee	$	22,776	$	21,949	$	—
Common stock warrants issued for deferred charges	$	515,481	$	—	$	—
Increase in plant and equipment for miners assigned in connection with sale of equity interest in investee	$	15,715	$	—	$	—
Common stock warrants issued for discount on long-term debt	$	—	$	—	$	16,036
Common stock reacquired in exchange for warrants	$	—	$	~~12,491~~—	$	—12,491
Change in fair value of embedded conversion feature of convertible promissory note in additional paid-in capital	$	—	$	—	$	1,591

Nonmonetary Transactions

The Company accounts for goods and services exchanged in nonmonetary transactions at fair value unless the underlying exchange transaction lacks commercial substance or the fair value of the assets received or relinquished is not reasonably determinable, in which case the nonmonetary exchange would be measured based on the recorded amount of the nonmonetary asset relinquished.

55Digital Assets

Digital assets consists of bitcoin earned as noncash consideration for providing hash computation services to a mining pool and for bitcoin miner hosting services, in accordance with the Company’s revenue recognition policy. From time to time, the Company also received bitcoin as distributions-in-kind from its Nautilus Joint Venture. Digital assets is classified as a

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~~Digital~~current ~~currency~~asset in the consolidated balance sheets as it is highly liquid and the Company expects to sell it within the next twelve months to support operations.

~~Digital~~In ~~currency~~December ~~consists~~2023, ofthe ~~bitcoin~~Financial ~~earned~~Accounting asStandards ~~noncash~~Board ~~consideration~~(“FASB”) ~~for~~issued ~~providing~~Accounting ~~hash~~Standards ~~computation~~Update ~~services~~(“ASU”) toNo. a2023-08, ~~mining~~Intangibles ~~pool~~– Goodwill and ~~for~~Other ~~bitcoin~~– ~~miner~~Crypto ~~hosting~~Assets ~~services,~~(Subtopic in350-60): ~~accordance~~Accounting ~~with~~for ~~the~~and ~~Company’s~~Disclosure ~~revenue~~of ~~recognition~~Crypto ~~policy~~Assets (“ASU 2023-08”). ~~From~~The ~~time~~new standard requires certain crypto assets to ~~time,~~be ~~the~~subsequently ~~Company~~measured ~~also~~at ~~received~~fair ~~bitcoin~~value, aswith ~~distributions-~~changes recognized in~~-kind~~ ~~from~~net ~~its~~income ~~joint~~each ~~venture~~reporting period. ~~Digital~~The ~~currency~~Company iselected ~~classified~~to asearly aadopt ~~current~~ASU ~~asset~~2023-08 effective January 1, 2024, resulting in ~~the~~a ~~consolidated~~cumulative-effect ~~balance~~change ~~sheets~~of $37,000, asincreasing itthe isdigital ~~highly~~asset ~~liquid~~balance and decreasing the ~~Company~~opening ~~expects~~balance toof ~~sell~~accumulated itdeficit ~~within~~in the ~~next~~consolidated ~~twelve~~balance ~~months~~sheet toas ~~support~~of ~~operations~~January 1, 2024.

InFollowing ~~December~~adoption of ASU 2023-08, the ~~FASB~~Company ~~issued~~measures ~~Accounting~~digital ~~Standards~~assets ~~Update~~at fair value each reporting period in accordance with ASC 820, Fair Value Measurement (“~~ASU~~ASC 820”) No. ~~2023-08,~~Fair ~~Intangibles~~value –is ~~Goodwill~~determined ~~and~~using ~~Other~~Level –1 ~~Crypto~~inputs ~~Assets~~based ~~(Subtopic~~on ~~350-60):~~quoted ~~Accounting~~prices ~~for~~from ~~and~~the ~~Disclosure~~active oftrading ~~Crypto~~platform ~~Assets~~on ~~(“ASU~~which ~~2023-08”).~~the ~~This~~Company ~~standard~~regularly ~~requires~~transacts, ~~entities~~which tois ~~subsequently~~considered ~~measure~~its ~~certain~~principal ~~crypto~~market ~~assets~~for atbitcoin. ~~fair~~Because ~~value~~bitcoin is continuously traded, ~~with~~the ~~changes~~Company inuses ~~fair~~the ~~value~~midnight ~~recorded~~UTC inprice ~~net~~to ~~income~~align ~~each~~with ~~reporting~~its ~~period~~revenue recognition policy. ~~The~~Gains ~~standard~~and ~~applies~~losses tofrom ~~crypto~~remeasurement ~~assets~~are ~~that~~included ~~meet~~within ~~all~~“loss (gain) on fair value of digital assets, net” in the ~~following~~consolidated ~~criteria:~~statements of operations.

~~•Qualify~~For bitcoin sales, gains and losses are calculated as ~~intangible~~the difference between cash proceeds and the cost basis, using a first-in, first-out (FIFO) method. These gains and losses are also included within “loss (gain) on fair value of digital assets, ~~under~~net” ~~ASC~~in ~~350~~the consolidated statements of operations. During the years ended December 31, 2025 and 2024, the Company recorded loss (gain) on fair value of digital assets, net of $0.6 million and $(2.2) million, respectively.

~~•Do~~Accounting ~~not~~for ~~provide~~Digital ~~the~~Assets ~~holder~~Prior ~~with enforceable rights~~ to ~~underlying~~ASU ~~goods, services, or assets~~2023-08

~~•Exist~~Before onadopting aASU ~~distributed~~2023-08, ~~ledger~~the ~~utilizing~~Company ~~blockchain~~accounted for bitcoin as an indefinite-lived intangible asset. Under this model, digital assets were not amortized, but assessed for impairment annually, or ~~similar~~more ~~technology~~frequently if events indicated a potential impairment. An impairment loss was recognized if the carrying amount exceeded fair value, determined using Level 1 inputs under ASC 820.

~~•Are~~For ~~secured~~impairment ~~through~~testing, ~~cryptography~~the Company bypassed the optional qualitative assessment and monitored daily bitcoin price movements. The lowest intraday trading price was used to determine impairment at the single bitcoin level, with any excess of the carrying amount over the lowest daily trading price recorded as an impairment loss. Once impaired, the new cost basis was established, and subsequent reversals were prohibited. During the year ended December 31, 2023, the Company recognized digital assets impairment losses of $3.0 million.

•Are fungible

•Are not created or issued by the reporting entity or its affiliates

Entities must also provide additional disclosures regarding their crypto asset holdings.

ASU 2023-08 is effective for fiscal years beginning after December 15, 2024, including interim periods. However, early adoption is permitted, and the Company elected to early adopt the standard effective January 1, 2024.The adoption resulted in a cumulative-effect adjustment of $37,000, increasing the digital currency balance and decreasing the opening balance of accumulated deficit in the consolidated balance sheet as of January 1, 2024.

Upon adoption of ASU 2023-08, the Company now measures digital currency at fair value as of each reporting period under ASC 820, Fair Value Measurement (“ASC 820”). Fair value is determined using Level 1 inputs, based on quoted prices from the active trading platform the Company normally transacts on, which has been identified as its principal market for bitcoin. Since bitcoin is traded continuously, the Company utilizes the midnight UTC price, aligning with its revenue recognition policy. Gains and losses from remeasurement of digital currency are recorded under “Gain on fair value of digital currency, net” in the consolidated statements of operations.

Bitcoin sales proceeds are measured as the difference between cash proceeds and the bitcoin cost basis, determined on a first-in, first-out basis. These gains and losses are also recorded under “Gain on fair value of digital currency, net”. During the year ended December 31, 2024, the Company recognized a net fair value gain of $2.2 million.

Accounting for Digital Currency Prior to ASU 2023-08

Before adopting ASU 2023-08, the Company accounted for bitcoin as an indefinite-lived intangible asset. Under this model, digital currency was not amortized, but assessed for impairment annually, or more frequently if events indicated a potential impairment. An impairment loss was recognized if the carrying amount exceeded fair value, determined using Level 1 inputs under ASC 820.

For impairment testing, the Company bypassed the optional qualitative assessment and monitored daily bitcoin price movements. The lowest intraday trading price was used to determine impairment at the single bitcoin level, with any excess of the carrying amount over the lowest daily trading price recorded as an impairment loss. Once impaired, the new cost basis was established, and subsequent reversals were prohibited. During the years ended December 31, 2023 and 2022, the Company recognized digital currency impairment losses of $3.0 million and $1.5 million, respectively.

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Statement of Cash Flows Treatment

~~Prior~~Following to the repayment of the Term Loans in July 2024 (see Note 910), the Company no longer converts bitcoin ~~sales~~into cash immediately. Prior to the repayments of the Term Loans in July 2024, proceeds from sales of digital assets were included in cash flows from operating activities, in the consolidated statements of cash flows as bitcoin was converted nearly immediately into cash ~~immediately~~ during that period. ~~Following~~Subsequently, ~~repayment~~proceeds offrom ~~the~~sales ~~Term~~of ~~Loans,~~digital ~~bitcoin~~assets ~~sales proceeds~~ are ~~now~~included ~~classified~~within ~~under~~ cash flows from investing activities, asin the ~~Company~~consolidated nostatements ~~longer~~of ~~converts~~cash flows as bitcoin ~~into~~has ~~cash~~not been converted nearly immediately ~~upon~~into ~~mining~~cash.

Concentrations

~~The~~During ~~Company~~2025, ~~has~~the ~~primarily~~Company contracted with ~~two~~one ~~suppliers~~supplier for the provision of bitcoin miners and, ~~one~~historically, ~~mining~~primarily ~~pool~~contracted ~~operator.~~with ~~The~~two ~~Company~~suppliers ~~does~~for ~~not~~the ~~believe~~provision ~~that~~of ~~these~~bitcoin ~~counterparties represent a significant performance risk~~miners. ~~Revenue~~In ~~did~~addition, ~~not~~the ~~exceed~~Company ~~10%~~primarily ~~for~~contracted ~~any~~with one ~~bitcoin~~mining ~~miner~~pool ~~hosting~~operator ~~customer~~ during the ~~year~~years ended December 31, ~~2024.~~2025, ~~Revenue from one bitcoin miner hosting customer represented 10.9% and 20.8% of consolidated revenue for the years ended December 31~~2024, ~~2023~~ and ~~2022, respectively~~2023. During the ~~years~~year ~~ended~~end December 31, ~~2024~~2025, ~~December 31,~~the ~~2023~~Company’s ~~and~~HPC ~~2022,~~lease ~~the~~revenue ~~Company~~was ~~only~~generated ~~operated~~from ~~bitcoin~~one ~~mining facilities~~customer. ~~While~~The ~~the~~ Company ~~may~~does ~~choose~~not tobelieve ~~mine~~that ~~other~~these ~~digital~~counterparties ~~currencies,~~represent ita ~~has~~significant noperformance ~~plans~~risk. toRevenue dofrom soone ~~currently.~~bitcoin Ifminer ~~the~~hosting ~~market~~customer ~~value~~represented 10.9% of ~~bitcoin~~consolidated ~~declines~~revenue ~~significantly,~~for the ~~consolidated~~year ~~financial~~ended ~~condition~~December 31, ~~and~~2023. ~~results~~During ~~of operations of~~ the ~~Company~~years ~~may~~ended beDecember 31, ~~adversely~~2025, ~~affected.~~2024,

~~Variable Interest Entities~~58

Variable interest entities (“VIE”) are legal entities in which equity investors do not have (i) sufficient equity at risk for the legal entity to finance its activities without additional subordinated financial support, or (ii) as a group, the power, through voting or similar rights, to direct the activities of the legal entity that most significantly impact the entity’s economic performance, or (iii) the obligation to absorb the expected losses of the legal entity or the right to receive expected residual returns of the legal entity. The Company would consolidate any VIE in which it has a controlling financial interest through being deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE has both of the following characteristics: (1) the power to direct the activities of the VIE that most significantly impact its economic performance; and (2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could be significant to the VIE. If both characteristics are met, the Company considers itself to be the primary beneficiary and therefore will consolidate that VIE into its consolidated financial statements.

The Company determines whether it is the primary beneficiary of a VIE upon initial involvement with a VIE and reassesses whether it is the primary beneficiary of a VIE on an ongoing basis. The determination of whether an entity is a VIE and whether the Company is the primary beneficiary of a VIE is based upon facts and circumstances for the VIE and requires significant judgments such as whether the entity is a VIE, whether the Company’s interest in a VIE is a variable interest, the determination of the activities that most significantly impact the economic performance of the entity, whether the Company controls those activities, and whether the Company has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE.

In 2021, the Company entered into a joint venture, Nautilus Cryptomine LLC (“Nautilus”), with an unrelated co-venturer to develop, construct and operate up to 300 MW of zero-carbon bitcoin mining in Pennsylvania (the “Joint Venture”). Due to the initial nature of the Joint Venture and the continued commitment for additional financing, the Company determined Nautilus was a VIE. While the Company had the ability to exercise significant influence over Nautilus, the Company determined that it did not have the power to direct the activities that most significantly impact the economic performance of Nautilus. Initially, the power to direct the activities of Nautilus that most significantly impact Nautilus’ economic performance were shared equally by both parties within the Joint Venture due to the requirement for both equity holders to approve many of the key operating decisions and when not equally shared, were predominantly under the control of the co-venturer, including through the co-venturer’s majority representation on the board of managers. As such, the Company determined that it was not the primary beneficiary of Nautilus and, therefore, had accounted for this entity under the equity method of accounting. Risks associated with the Company’s involvement with Nautilus included a commitment to potentially fund additional equity investments. In October 2024, the Company sold its entire 25% equity interest in the Joint Venture. See Note 11 for additional information.

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and 2023, the Company operations were predominately bitcoin mining. If the market value of bitcoin declines significantly, the consolidated financial condition and results of operations of the Company may be adversely affected.

Business Combinations

The Company includes the results of operations of the businesses it acquires as of the acquisition date. The Company allocates the purchase price of the acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over the fair values of identifiable assets and liabilities is recorded as goodwill. Contingent consideration is included within the purchase price and is recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is remeasured to fair value as of each reporting date until the contingency is resolved, and subsequent changes in fair value are recognized in earnings.

While the Company uses its best estimates and assumptions to accurately apply preliminary values to assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the consolidated statements of operations. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for assets acquired, liabilities assumed, and contingent consideration, where applicable. Although the Company believes the assumptions and estimates it has made have been reasonable and appropriate, they are based in part on historical experience and information obtained from management of the acquired companies and are inherently uncertain. Critical estimates include valuation of the contingent consideration transferred, and assets acquired and liabilities assumed. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.

Goodwill

The Company evaluates goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. The Company may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying value and if so, it performs a quantitative test.

If a quantitative test is required, the Company estimates the fair value of the reporting unit using discounted cash flows. The Company’s analyses require significant assumptions and judgments, including assumptions about future economic conditions, revenue growth, and operating margins, among other factors. Events or changes in circumstances considered in the qualitative analysis, many of which are subjective in nature, include: a significant negative trend in the Company’s industry or overall economic trends, a significant change in how the Company uses the acquired assets, a significant change in business strategy, a significant decrease in the market value of the asset, and a significant change in regulations or in the industry that could affect the value of the asset. The Company compares the carrying value of each reporting unit to its estimated fair value and if the fair value is determined to be less than the carrying value, the Company would recognize an impairment loss for the difference.

Equity Method of Accounting

Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an investee depends on an evaluation of several factors including, among others, representation on the investee company’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the investee company. Under the equity method of accounting, an investee company’s accounts are not reflected within the Company’s consolidated balance sheets and statements of operations; however, the Company’s share of the earnings or losses of the investee company is reflected in equity in net ~~income~~ (loss) income of investee, net of tax in the consolidated statements of operations. The Company’s carrying value in an equity method investee company is reflected in equity in net assets of investee in the consolidated balance sheets.

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Interest related to construction of assets at equity method investee companies is capitalized when the financial statement effect of capitalization is material, construction of the asset at the equity method investee has begun, the equity method investee has not commenced its principal operations and interest is being incurred. Interest capitalization ends at the earlier of the asset being substantially complete and ready for its intended use, the equity method investee commences principal operations or when interest costs are no longer being incurred.

Equity method investments are regularly reviewed to determine whether a significant event or change in circumstances has occurred that may impact the fair value of each investment. If the fair value of the investment has dropped below the carrying amount, management considers several factors when determining whether an other-than-temporary decline in market value has occurred, including the length of time and extent to which the market value has been below cost, the financial condition and near-term prospects of the issuer, the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value and other factors influencing the fair market value, such as general market conditions.

When the Company’s carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company’s consolidated financial statements unless the Company has guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized.

Variable Interest Entities

Abernathy Joint Venture

In 2025, the Company entered into the Abernathy Joint Venture. The Company determined the Abernathy Joint Venture is a VIE, and while the Company has the ability to exercise significant influence over the Abernathy Joint Venture, the Company determined that it did not have the power to direct the activities that most significantly impact its economic performance. As such, the Company determined that it was not the primary beneficiary of the Abernathy Joint Venture and, therefore, will account for this entity under the equity method of accounting. There is no basis difference between the carrying amount of our investment and our share of the underlying net assets. See Note 12 for additional information.

Nautilus Joint Venture

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Initially, the power to direct the activities of Nautilus that most significantly impact Nautilus’ economic performance were shared equally by both parties within the Nautilus Joint Venture due to the requirement for both equity holders to approve many of the key operating decisions and when not equally shared, were predominantly under the control of the co-venturer, including through the co-venturer’s majority representation on the board of managers. As such, the Company determined that it was not the primary beneficiary of Nautilus and, therefore, had accounted for this entity under the equity method of accounting. Risks associated with the Company’s involvement with Nautilus included a commitment to potentially fund additional equity investments. In October 2024, the Company sold its entire 25% equity interest in the Nautilus Joint Venture. See Note 12 for additional information.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets (generally 5 years for computer equipment and 4 years for miners). Leasehold improvements and electrical equipment are depreciated over the shorter of their estimated useful lives (25 years) or the lease term. Changes in depreciation and amortization, generally accelerated depreciation and variable amortization, are determined and recorded when estimates of the remaining useful lives or residual values of long-term assets change. Property, plant and equipment ~~includes~~included deposits, on miners amounting to approximately $~~53.9~~0 ~~million~~ and $3653.59 million as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively, ~~on purchases of such assets, including miners,~~ which would be included in property, plant and equipment upon receipt.

Interest related to construction of assets is capitalized when the financial statement effect of capitalization is material, construction of the asset has begun, and interest is being incurred. Interest capitalization ends at the earlier of the asset being substantially complete and ready for its intended use or when interest costs are no longer being incurred.

Impairment of Long-lived Assets

The Company reviews its long-lived assets, including property, plant and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset, or asset group, may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future cash flows expected to be generated by the asset. Any impairment loss recorded is measured as the amount by which the carrying value of the assets exceeds the fair value of the assets. During the years ended December 31, ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, the Company recorded no impairment charges for long-lived assets.

Leases

In accordance with ASC 842, at inception of a contract, the Company determines whether the contract is or contains a lease. If the Company is the lessee, the lease is classified as an operating or finance lease at the commencement date. Operating leases are included in operating lease right-of-use (“ROU”) asset, current portion of operating lease liability, and operating lease liability, net of current portion in the consolidated balance sheets. Finance leases are included in finance lease right-of-use asset, current portion of finance lease liabilities, and finance lease liabilities, net of current portion in the consolidated balance sheets. The Company does not recognize a ROU asset or lease liability for short-term leases having initial terms of 12 months or less and instead recognizes rent expense on a straight-line basis over the lease term. As of December 31, 2025, the Company had one short-term lease. The Company did not have any short-term leases as of December 31, 2024.

58In an arrangement that is determined to be or contain a lease, the Company includes both the lease and nonlease components as a single component and accounts for it as a lease when the Company would otherwise recognize the cost associated with both the lease and nonlease components in a similar fashion.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date, and subsequently remeasured upon changes to the underlying lease arrangement, based on the present value of lease payments over the lease term. If the rate implicit in the lease is not readily determinable, the Company generally uses an estimate of its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at the commencement date. The ROU asset also includes any lease prepayments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

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initial terms of 12 months or less and instead recognizes rent expense on a straight-line basis over the lease term. The Company does not have any short-term leases as of December 31, 2024 and 2023.

In an arrangement that is determined to be or contain a lease, the Company includes both the lease and nonlease components as a single component and accounts for it as a lease when the Company would otherwise recognize the cost associated with both the lease and nonlease components in a similar fashion.

Costs associated with operating lease ROU assets are recognized on a straight-line basis within operating expenses or selling, general and administrative, as appropriate, over the term of the lease. Variable lease costs are recognized as incurred and primarily consist of common area maintenance charges not included in the measurement of right-of-use assets and operating lease liabilities. Finance lease ROU assets are amortized within operating expenses or selling, general and administrative expenses, as appropriate, on a straight-line basis over the shorter of the estimated useful lives of the assets or, in the instance where title does not transfer at the end of the lease term, the lease term. The interest component of a finance lease is included in interest expense and recognized using the effective interest method over the lease term.

Debt Issuance Costs and Debt Discount

Debt issuance costs and debt discount are recorded as a direct reduction of the carrying amount of the debt and are amortized to interest expense using the effective interest method over the contractual term of the debt and in consideration of expected future principal payments including, when applicable, payments subject to an excess cash flow sweep (see Note 910). Debt issuance costs include incremental third-party costs directly related to debt issuance such as attorney and financial advisor fees. Debt discount includes upfront fees and proceeds allocated to other components included in the debt issuance. The allocation of proceeds between the debt instrument and any other components included in the debt issuance, including Common Stock or warrants to purchase Common Stock, is generally based on the relative fair value allocation method. All warrants granted by the Company as a component of debt transactions are classified as equity in the consolidated balance sheets as of December 31, ~~2024~~2025 and ~~2023~~2024.

Debt Modification

The Company evaluates amendments to its debt instruments in accordance with ASC 470-50, Debt Modifications and Extinguishments. This evaluation includes comparing (1) if applicable, the change in fair value of an embedded conversion option to that of the carrying amount of the debt immediately prior to amendment and (2) the net present value of future cash flows of the amended debt to that of the original debt to determine, in each case, if a change greater than 10% occurred. In instances where the net present value of future cash flows or the fair value of an embedded conversion option, if any, changed more than 10%, the Company applies extinguishment accounting. In instances where the net present value of future cash flows and the fair value of an embedded conversion option, if any, changed less than 10%, the Company accounts for the amendment to the debt as a debt modification. For debt that has been amended more than once in a twelve-month period, the debt terms that existed just prior to the earliest amendment occurring in the prior twelve months are applied to the 10% test, provided modification accounting was previously applied. Gains and losses on debt amendments that are considered extinguishments are recognized in current earnings. Debt amendments that are considered debt modifications are accounted for prospectively through yield adjustments, based on the revised terms. Legal fees and other costs incurred with third parties that are directly related to debt modifications are expensed as incurred and generally are included in interest expense in the consolidated statements of operations. Amounts paid by the Company to the lenders, including upfront fees and the fair value of warrants issued, are included in future cash flows for accounting treatment determination and, if debt modification is applicable, are also included in the determination of yield adjustment.

59Convertible Instruments

The Company accounts for its issuance of convertible debt and convertible equity instruments in accordance with applicable U.S. GAAP. In connection with that accounting, the Company assesses the various terms and features of the agreement in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging Activities (“ASC 815”). ASC 480 requires liability accounting for certain financial instruments, including shares that embody an unconditional obligation to transfer a variable number of shares, provided that the monetary value of the obligation is based solely or predominantly on one of the following three characteristics: (1) a fixed monetary amount known at inception, (2) variations in something other than the fair value of the issuer’s equity shares or (3) variations in the fair value of the issuer’s equity shares, but the monetary value to the counterparty moves in the opposite direction as the value of the issuer’s shares. In accordance with ASC 815, the Company assesses the various terms and features of the agreement to determine whether or not they contain embedded derivative instruments that are required under ASC 815 to be accounted for separately from the host contract and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in the current period’s operating results.

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~~Convertible Instruments~~Derivatives

The Company ~~accounts~~does ~~for~~not ~~its~~apply ~~issuance~~hedge ~~of convertible debt and convertible equity instruments in accordance with applicable U.S. GAAP. In connection with that~~ accounting, ~~the~~to ~~Company~~its assesses the various terms and features of the agreement in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging Activities (“ASC 815”)derivatives. ~~ASC 480 requires liability accounting for certain financial instruments~~Rather, ~~including~~changes shares that embody an unconditional obligation to transfer a variable number of shares, provided that the monetary value of the obligation is based solely or predominantly on one of the following three characteristics: (1) a fixed monetary amount known at inception, (2) variations in ~~something other than~~ the fair ~~value~~values of ~~the~~derivatives ~~issuer’s~~for ~~equity~~a ~~shares~~particular orperiod ~~(3)~~are ~~variations~~recognized in the ~~fair~~consolidated ~~value~~statements of ~~the~~operations. ~~issuer’s~~The ~~equity~~Company ~~shares,~~evaluates ~~but~~its ~~the~~contracts ~~monetary value~~ to ~~the~~determine ~~counterparty~~if ~~moves~~they inmeet the ~~opposite~~definition ~~direction as the value~~ of ~~the~~a ~~issuer’s~~derivative ~~shares~~instrument. InIf ~~accordance~~a ~~with~~contract ~~ASC~~meets ~~815~~the definition, the Company ~~assesses~~evaluates ~~the various terms and features of the agreement to determine~~ whether orit ~~not~~qualifies ~~they contain embedded derivative instruments that are required under ASC 815 to be accounted~~ for ~~separately from~~ the ~~host~~normal ~~contract~~purchases and ~~recorded~~normal onsales ~~the~~exemption ~~balance~~and ~~sheet~~may atelect ~~fair~~the ~~value.~~exemption ~~The fair value of derivative liabilities,~~ if ~~any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in~~ the ~~current~~criteria ~~period’s~~is ~~operating results~~met.

Warrants

The Company applies ASC 480 and ASC 815 to assist in the determination of whether warrants issued for the purchase of Common Stock should be classified as liabilities or equity. Warrants that are determined to require liability classification are measured at fair value upon issuance and are subsequently remeasured to their then fair value at each subsequent reporting period with changes in fair value recorded in current earnings. Warrants that are determined to require equity classification are measured at fair value upon issuance and are not subsequently remeasured unless they are required to be reclassified. As of December 31, ~~2024~~2025, ~~all~~the Company had recorded warrant liabilities of $844.7 million relating to the warrants issued in connection with the Google Backstop (see Note 8). All other outstanding warrants granted by the Company ~~were~~have been classified as equity.

Stock Issuance Costs

Stock issuance costs are recorded as a reduction to issuance proceeds. Stock issuance costs incurred prior to the closing of the related issuances, including under shelf registration statements, are recorded in other assets in the consolidated balance sheets if the closing of the related issuance is deemed probable.

Stock-based Compensation

The Company periodically issues restricted stock units (“RSU”) and restricted stock to employees and non-employees in non-capital raising transactions for services. In accordance with ASC 718, Compensation – Stock Compensation (“ASC 718”), the Company measures stock-based compensation cost at the grant date, based on the estimated fair value of the award. For RSUs with time-based vesting, the fair value is determined by the Company’s stock price on the date of grant. For RSUs with vesting based on market conditions (“PSUs”), the effect of the market condition is considered in the determination of fair value on the grant date using a Monte Carlo simulation model. As of December 31, ~~2024~~2025, the Company has not issued stock options.

Expense for RSUs is recognized on a straight-line basis over the employee’s or non-employee’s requisite service period, including the derived service period for RSUs with market conditions. Expense for restricted stock is recognized on the date of grant as the awards are fully vested on the grant date. Stock-based compensation for PSUs is recorded over the derived service period unless the market condition is satisfied in advance of the derived service period, in which case a cumulative catch-up is recognized as of the date of achievement. Stock-based compensation for PSUs is recorded regardless of whether the market conditions are met unless the service conditions are not met. The Company accounts for forfeitures as they occur. The Company recognizes excess tax benefits or deficiencies on vesting or settlement of awards as discrete items within income tax benefit or provision within net loss and the related cash flows are classified within operating activities.

Other Income

Other income consists primarily of interest income on bank deposits.

60Income Taxes

The Company accounts for income taxes pursuant to the provision of ASC 740, Accounting for Income Taxes (“ASC 740”), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred tax asset will not be realized. The Company follows the provision of ASC 740 related to accounting for uncertain income tax positions. When tax returns are filed, it is more likely than not that some positions taken would be sustained upon

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~~Income~~examination ~~Taxes~~by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with the tax positions taken that exceeds the amount measured as described above are reflected as a liability for uncertain tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

The Company’s ~~accounts~~policy ~~for~~is ~~income taxes pursuant~~ to ~~the~~recognize ~~provision~~interest ~~of ASC 740, Accounting for Income Taxes (“ASC 740”), which requires, among other things, an asset~~ and ~~liability~~penalties approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred tax asset will not be realized. The Company follows the provision of ASC 740 related to accounting for uncertain income tax positions. When tax returns are filed, it is more likely than not that some positions taken would be ~~sustained~~assessed ~~upon~~in ~~examination~~relation ~~by the taxing authorities, while others are subject~~ to ~~uncertainty about~~ the ~~merits~~settlement ofvalue ~~the position taken or the amount~~ of ~~the~~unrecognized ~~position that would be ultimately sustained. In accordance with the guidance of ASC 740, the benefit of a~~ tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. The tax benefits ~~recognized~~as ~~in the consolidated financial statements from such positions are then measured based on the largest benefit that has~~ a ~~greater~~component ~~than 50% likelihood~~ of ~~being~~income ~~realized~~tax ~~upon settlement with the applicable taxing authority~~expense. The ~~portion~~Company ofdid ~~the~~not ~~benefits~~record ~~associated~~any ~~with~~interest ~~the~~or ~~tax~~penalties ~~positions taken that exceeds the amount measured as described above are reflected as a liability~~ for ~~uncertain tax benefits in~~ the ~~accompanying~~years ~~balance~~ended ~~sheets~~December 31, ~~along~~2025, ~~with~~2024 ~~any associated interest~~ and ~~penalties that would be payable to the taxing authorities upon examination~~2023.

The Company’s policy is to recognize interest and penalties that would be assessed in relation to the settlement value of unrecognized tax benefits as a component of income tax expense. The Company did not accrue either interest or penalties for the years ended December 31, 2024, 2023 and 2022.

Loss per Share

The Company computes earnings (loss) per share using the two-class method required for participating securities. The two-class method requires income available to common stockholders for the period to be allocated between Common Stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

Basic loss per share of Common Stock is ~~computed~~calculated by dividing the Company’s net loss by the weighted average number of shares of Common Stock outstanding during the period. Convertible preferred stock, ~~which~~is ~~are~~considered a participating ~~securities~~security because ~~they~~it ~~share~~shares inon a pro rata basis in any dividends declared on Common Stock. ~~but~~However, ~~because~~since ~~they~~it dodoes not ~~have~~participate ~~the obligation to share~~ in the ~~loss of the~~ Company’s losses, ~~are~~it is excluded from the ~~calculation~~computation of basic net loss per share. Diluted loss per share reflects the ~~effect~~potential ondilution ~~weighted~~that ~~average~~could ~~shares~~occur ~~outstanding of the number of additional shares outstanding~~ if ~~potentially~~other ~~dilutive~~ instruments, ~~if any,~~ were converted into Common Stock, using the treasury stock method or asif-converted method, as ~~appropriate~~applicable. ~~The~~However, ~~computation~~for ofperiods ~~diluted~~in ~~loss~~which ~~per~~the ~~share~~Company ~~does~~reports ~~not~~a ~~include~~net loss, all potentially dilutive instruments inare excluded from the ~~weighted~~calculation ~~average~~of ~~shares~~diluted ~~outstanding~~loss per share, as ~~they~~their inclusion would be anti-dilutive. Subsequent to December 31, 2023, the Company determined that its preferred stock dividends would be excluded as a reduction to net loss on the Company’s consolidated statements of operations, and accordingly be excluded from the Company’s computation of basic loss per common share. ~~The~~Previously, the Company had ~~previously~~ included dividends ~~on its preferred stock~~ in ~~its~~this ~~computation of basic loss per common share~~calculation. The Company’s dilutive instruments or participating securities as of December 31, 2024 include convertible preferred stock, Common Stock warrants, convertible notes, and RSUs issued for services. The Company’s dilutive instruments or participating securities as of December 31, 2023 included convertible preferred stock, convertible promissory notes, Common Stock warrants and RSUs issued for services. If the entire liquidation preference of the Convertible Preferred Stock (as defined in Note 14) was converted at its conversion price as of December 31, 2024, the Company would issue approximately 1.3 million shares of Common Stock. As of December 31, 2024, Common Stock warrants outstanding were 17,266,733 with a weighted average strike price of $1.38 and total RSUs outstanding were 4,312,764.

The Company’s dilutive instruments or participating securities as of December 31, 2025 included Common Stock warrants, convertible notes, and RSUs issued for services. The Company’s dilutive instruments or participating securities as of December 31, 2024 included convertible preferred stock, Common Stock warrants, convertible notes, and RSUs issued for services. As of December 31, 2025, Common Stock warrants outstanding were 84,568,084 with a weighted average strike price of $0.21 and total RSUs outstanding were 15,588,545.

Segment Reporting

~~During~~The ~~the~~Company ~~years~~has ~~ended~~two ~~December 31,~~operating ~~2024,~~segments: ~~2023~~“Digital ~~and~~Asset ~~2022~~Mining,” ~~the~~consisting ~~Company~~of ~~was engaged in digital currency mining by~~ providing hash computation services to a mining pool operator and ~~providing~~“HPC ~~bitcoin~~Leasing,” ~~miner~~consisting ~~hosting~~of providing high-density colocation services to third parties for HPC operations and all operations are domiciled in the United States of America. The reportable segments are identified based on the types of services performed. The Company’s HPC Leasing operations ~~are~~met ~~evaluated~~the ~~regularly~~criteria byto be considered a new segment during the ~~chief~~third quarter of 2025. The Digital Asset Mining segment generates revenue from operating ~~decision~~owned ~~maker,~~digital infrastructure and computer equipment as part of a pool of users that process transactions conducted on one or ~~decision–making~~more ~~group (“CODM”),~~blockchain innetworks. ~~deciding~~In ~~how~~exchange tofor ~~allocate~~these ~~resources~~services, ~~and~~the inCompany ~~assessing~~receives ~~performance~~digital assets. The ~~Company’s~~HPC ~~CODM~~Leasing issegment ~~composed~~generates ofrevenue ~~the~~through ~~chief~~lease ~~executive~~agreements ~~officer,~~providing ~~chief~~the ~~technology~~right ~~officer~~to use datacenter space and ~~chief~~providing ~~strategy~~power ~~officer.~~delivery, physical security, and maintenance services.

61The Company’s operations are evaluated regularly by the chief operating decision maker, or decision–making group (“CODM”), which is composed of the Chief Executive Officer, Chief Technology Officer and Chief Strategy Officer, to assess performance and allocate resources. The CODM uses segment profit (loss) to evaluate performance and allocate resources. Segment profit (loss) is used to evaluate actual results against expectations, which are based on comparable prior results, and current budget. Segment profit (loss) is also used in deciding how profits and cash flows will be reinvested or

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~~The~~otherwise ~~CODM~~deployed. isNo ~~regularly~~asset information for reportable segments is provided ~~with~~to ~~only~~the CODM as the ~~consolidated~~CODM ~~expenses~~does asnot ~~presented~~evaluate inperformance ~~the~~or ~~consolidated~~allocate ~~statements~~resources ofbased ~~operations~~on ~~and~~segment ~~the~~asset ~~Company~~or ~~has~~liability ~~determined~~information; ~~that~~accordingly, the ~~expenses~~Company ~~presented~~has innot ~~the~~presented ~~consolidated~~a ~~statements~~measure of ~~operations~~assets ~~represent~~by ~~significant~~ segment ~~expenses~~. The ~~CODM~~segments’ ~~reviews~~accounting ~~financial~~policies ~~performance~~are ~~and~~the ~~allocates~~same ~~resources~~as atthose adescribed ~~consolidated~~in ~~level~~the onsummary aof ~~recurring~~significant ~~basis,~~accounting ~~such~~policies. ~~that~~The ~~the~~ Company ~~has~~excludes ~~one~~certain operating expenses and ~~one~~other ~~reportable~~expenses ~~segment.~~from the allocations to operating segments.

~~The~~Prior ~~CODM~~to ~~manages~~the ~~its~~third ~~one~~quarter ~~reportable~~of ~~segment~~2025, onthe aCompany ~~consolidated~~had ~~basis~~one ~~using~~segment, ~~consolidated~~Digital ~~net~~Asset ~~loss~~Mining, ~~which~~such ~~was~~that ~~$72.4~~the ~~million,~~CODM ~~$73.4~~was ~~million~~regularly ~~and~~provided ~~$90.8~~only ~~million~~with ~~for~~consolidated ~~the~~expense ~~years~~data, ~~ended~~as ~~December 31,~~presented ~~2024,~~in ~~2023~~the ~~and~~consolidated ~~2022,~~statements ~~respectively~~of operations. The CODM ~~reviews~~managed ~~the~~this ~~measure~~segment ofusing consolidated net loss toas ~~evaluate~~ the ~~Company’s~~primary ~~operating~~measure ~~results and the effectiveness~~ of ~~business~~performance. ~~strategies~~In ~~and~~the ~~internally~~third asquarter aof ~~benchmark~~2025, ~~to compare~~ the Company’s ~~performance~~changed ~~to its competitors. As~~ the ~~Company~~composition ~~discloses~~of aits ~~single~~ reportable ~~segment~~segments and, ~~total~~accordingly, ~~revenue~~has isrecast ~~reported~~its ~~in the consolidated statements of operations,~~ segment ~~assets~~information ~~are~~for ~~reported in~~ the ~~consolidated~~year ~~balance~~ended ~~sheets~~December 31, ~~and~~2024 ~~capital~~(see ~~expenditures~~Note ~~are reported in the consolidated statements of cash flows~~19).

The table below provides other segment disclosures for the years ended December 31, 2024, 2023 and 2022:

	Year Ended December 31,
	2024		2023		2022
Interest income(a)	$	3,927	$	192	$	—

(a) Interest income is included in other income in the consolidated statements of operations.

Held for Sale and Discontinued Operations Classification

The Company classifies a business as held for sale in the period in which management commits to a plan to sell the business, the business is available for immediate sale in its present condition, an active program to complete the plan to sell the business is initiated, the sale of the business within one year is probable and the business is being marketed at a reasonable price in relation to its fair value.

Newly acquired businesses that meet the held-for-sale classification criteria upon acquisition are reported as discontinued operations. Upon a business’ classification as held for sale, net assets are measured for impairment. An impairment loss is recorded for long-lived assets held for sale when the carrying amount of the asset exceeds its fair value less cost to sell. Other assets and liabilities are generally measured for impairment by comparing their carrying values to their respective fair values. A long-lived asset is not depreciated or amortized while it is classified as held for sale.

Recent Accounting Standards

In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 was issued (1) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) to amend a related illustrative example and (3) to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The amendments in this update are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2022-03 effective January 1, 2024.Adopted

In ~~November~~December 2023, the FASB issued ASU No. 2023-0709, ~~Segment~~Income ~~Reporting~~Taxes (Topic ~~280~~740): Improvements to ~~Reportable~~Income ~~Segment~~Tax Disclosures (“ASU 2023-0709”),. ~~which~~ASU ~~updates~~2023-09 ~~reportable~~expands ~~segment~~existing ~~disclosure~~income ~~requirements~~tax ~~primarily through enhanced~~ disclosures ~~about~~for ~~significant~~rate ~~segment~~reconciliations ~~expenses~~by ~~that~~requiring ~~are~~disclosure ~~regularly~~of ~~provided~~certain tospecific ~~the~~categories ~~CODM~~and asadditional ~~well~~reconciling ~~as other segment~~ items. ~~ASU~~that ~~2023-07~~meet ~~also~~the ~~requires~~quantitative ~~(i)~~threshold ~~disclosure~~and ofexpands ~~the~~disclosures ~~title~~for ~~and~~income ~~position~~taxes ofpaid ~~the~~by ~~CODM,~~requiring ~~and~~disaggregation ~~(ii)~~by ~~that~~certain ajurisdictions, ~~public~~amount ~~entity~~of ~~that~~income ~~has~~taxes aseparated ~~single~~by ~~reportable~~federal ~~segment~~and ~~provide~~individual ~~all~~jurisdiction, ~~disclosures~~and ~~required by~~ the ~~amendments~~amount inof ~~this~~income ~~ASU~~(loss) ~~and~~from ~~all~~continuing ~~existing~~operations ~~segment~~before ~~disclosures~~income intax ~~Topic~~expense ~~280, and~~ (~~iii~~benefit) ~~inclusion~~disaggregated ofbetween ~~all~~federal, ~~annual~~state, ~~disclosures~~and ~~in interim periods~~foreign. The amendments in this update are effective for fiscal years beginning after December 15, ~~2023~~2024, ~~and~~with ~~interim~~early ~~periods~~adoption ~~within fiscal years beginning after December 15, 2024~~permitted. The ~~Company~~adoption ~~adopted~~of ~~ASU~~this ~~2023-07~~new ~~effective~~standard ~~December~~did ~~31,~~not ~~2024~~have ~~and~~a ~~applied~~material itimpact ~~retrospectively~~on toour ~~all~~consolidated ~~periods presented in the~~ financial statements.

In ~~December~~August 2023, the FASB issued an ASU ~~No.~~ 2023-0805, ~~Intangibles—Goodwill~~Business ~~and~~Combinations ~~Other—Crypto~~- ~~Assets~~Joint Venture Formations (Subtopic ~~350~~805-60): ~~Accounting~~Recognition ~~for~~and Initial Measurement, that requires a joint venture, upon formation, to measure its assets and ~~Disclosure~~liabilities ofat ~~Crypto~~fair ~~Assets~~value in its standalone financial statements. ~~ASU~~A ~~2023-08~~joint ~~was~~venture ~~issued~~must torecognize ~~improve~~the difference between the ~~accounting~~fair ~~for~~value of its equity and ~~disclosure~~the fair value of ~~crypto~~its identifiable assets byand ~~requiring~~liabilities ~~entities~~as togoodwill ~~subsequently~~(or ~~measure~~an ~~crypto~~equity adjustment, if negative) using the business combination accounting guidance regardless of whether the net assets atmeet ~~fair~~the ~~value~~definition ~~with~~of ~~changes~~a ~~recognized~~business. The adoption of this new standard did not have a material impact on our consolidated financial statements.

62Issued — Not Yet Adopted

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (ASU 2025-11), which clarifies interim disclosure requirements and the applicability of Topic 270. The amendments are effective for annual periods beginning after December 15, 2027. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Company is currently evaluating the impact of this standard will have on the Company’s disclosures in the consolidated financial statements.

In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Scope Clarification and Accounting for Certain Contracts and Customer Share-Based Consideration (“ASU 2025-07”), which narrows the types of contracts subject to derivative accounting by excluding those whose payouts depend solely on an entity’s own operational metrics, rather than market-based variables, and clarifies that

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inshare-based ~~net~~or ~~income~~warrant ~~each~~consideration ~~reporting~~received ~~period.~~from ~~This~~a ~~ASU~~customer ~~also~~is ~~requires~~accounted ~~that~~for ~~entities~~under ~~present~~Topic ~~(1)~~606 ~~crypto~~until ~~assets measured at fair value separately from other intangible assets in~~ the ~~balance~~right ~~sheet,~~to ~~and~~retain ~~(2) changes from~~ the ~~remeasurement~~instrument ofis ~~crypto~~unconditional, ~~assets~~after ~~separately~~which ~~from~~ the ~~changes~~guidance in ~~carrying~~Topic ~~amounts~~815 ofand ~~other~~321 ~~intangible assets in the income statement~~applies. ~~Additionally,~~The ~~ASU~~amendments ~~2023-08~~are ~~requires~~effective ~~that~~for ~~entities~~annual ~~present~~periods ~~cash~~beginning ~~receipts~~after ~~arising~~December ~~from~~15, ~~crypto~~2026, ~~assets~~with ~~that~~early ~~are~~adoption ~~received~~permitted, asand ~~noncash~~may ~~consideration~~be inapplied ~~the~~prospectively ~~ordinary~~or ~~course~~on ofa ~~business~~modified ~~and~~retrospective ~~are~~basis ~~converted~~with ~~nearly~~an ~~immediately~~option ~~into~~to ~~cash~~elect asor ~~operating~~revoke ~~activities.~~the ~~The~~fair ~~amendments~~value inoption ~~this update are effective~~ for ~~fiscal~~certain ~~years~~instruments ~~beginning~~upon ~~after~~transition. ~~December~~The ~~15,~~Company ~~2024,~~is ~~including~~currently ~~interim~~evaluating ~~periods~~the ~~within~~impact ~~those~~this ~~fiscal~~standard ~~years.~~will ~~Early~~have ~~adoption~~on isthe ~~permitted. The~~ Company’s ~~early~~accounting ~~adopted~~and ~~ASU~~related ~~2023-08~~disclosures ~~effective~~in ~~January~~the 1,consolidated ~~2024~~financial statements.

In ~~December~~May ~~2023~~2025, the FASB also issued ASU ~~No. 2023~~2025-0904, ~~Income~~Compensation—Stock ~~Taxes~~Compensation (Topic ~~740~~718): ~~Improvements~~and toRevenue ~~Income~~from ~~Tax~~Contracts ~~Disclosures~~with Customers (~~“ASU~~Topic ~~2023-09”~~606).: ~~ASU~~Clarifications ~~2023~~to Share-09Based ~~expands~~Consideration ~~existing~~Payable ~~income~~to ~~tax~~a ~~disclosures~~Customer, ~~for~~to ~~rate~~address ~~reconciliations~~diversity byin ~~requiring~~practice ~~disclosure~~and ofimprove ~~certain~~the ~~specific~~operability ~~categories~~of ~~and~~accounting ~~additional~~for ~~reconciling~~share-based ~~items~~consideration ~~that~~granted ~~meet~~to ~~the~~customers. ~~quantitative~~The ~~threshold~~amendments ~~and~~clarify ~~expands~~how ~~disclosures~~to ~~for~~distinguish ~~income~~between ~~taxes~~service ~~paid~~and byperformance ~~requiring~~conditions ~~disaggregation~~for byvesting, ~~certain~~require ~~jurisdictions~~entities ,to ~~amount~~estimate offorfeitures ~~income~~for ~~taxes~~all ~~separated~~share-based byconsideration ~~federal~~payable ~~and~~to ~~individual jurisdiction~~customers, and ~~the~~specify ~~amount~~that ofvariable ~~income~~consideration ~~(loss)~~guidance ~~from~~in ~~continuing~~ASC ~~operations~~606 ~~before~~does ~~income~~not ~~tax~~apply ~~expense~~when ~~(benefit)~~measuring ~~disaggregated~~such ~~between federal, state, and foreign~~awards. The ~~amendments~~guidance inis ~~this update are~~ effective for fiscal years beginning after December 15, ~~2024~~2026, with early adoption permitted. The Company is currently evaluating the impact ofthis ~~adopting~~standard will have on the ~~standard.~~Company’s accounting and related disclosures in the consolidated financial statements

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which amends existing guidance to allow entities to apply the same principles used in other business combinations when determining the accounting acquirer in a transaction involving a variable interest entity (VIE) that is a business and where consideration is primarily in the form of equity interests. This update addresses comparability concerns and provides for more consistent application of acquisition accounting principles. The amendments are effective for annual periods beginning after December 15, 2026, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact this standard will have on the Company’s accounting and related disclosures in the consolidated financial statements.

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”) which requires disaggregated disclosure of income statement expenses for public business entities. Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This guidance applies to all public business entities and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The requirements will be applied prospectively with the option for retrospective application. The Company is currently reviewing this ASU to determine the impact on its disclosures within the footnotes to its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-04, Induced Conversions of Convertible Debt Instruments (Topic 470) (“ASU 2024-04”). ASU 2024-04 clarifies the assessment of whether a transaction should be accounted for as an induced conversion or extinguishment of convertible debt when changes are made to conversion features as part of an offer to settle the instrument. ASU 2024-04 is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. The Company is currently evaluating the impact this new standard will have on the Company’s accounting and related disclosures in the consolidated financial statements.

NOTE 3 – BUSINESS ~~COMBINATION,~~COMBINATIONS ~~ASSETS HELD FOR SALE~~ AND DISCONTINUED OPERATIONS

Beowulf E&D

On the Acquisition Date, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Beowulf E&D Holdings Inc., a related party due to control by a member of the Company’s management (the “Seller”), pursuant to which, among other things, the Company acquired 100% of the issued and outstanding membership interests of Beowulf E&D. The Purchase Agreement and the transaction were negotiated and approved by a special independent committee of the Company’s Board of Directors comprised entirely of independent directors. The transaction was accounted for as a business combination between entities not under common control, the purpose of which was to acquire a business comprised of 94 employees with deep experience in the development and operation of power generation assets and related electrical infrastructure. Integrating this capability directly into TeraWulf supports the Company’s long-term growth strategy, especially as power generation becomes increasingly integral to HPC operations.

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Pursuant to the Purchase Agreement, in full consideration of the acquisition of Beowulf E&D, the Company agreed to pay the Seller:

•On the Acquisition Date (i) $3.0 million in cash and (ii) 5.0 million shares of Common Stock.

•Upon the date on which the Company closes the breakers to the busway which energizes the data hall for the CB-1 Project (the “CB-1 Earnout Milestone”), (i) $6.0 million in cash and (ii) Common Stock valued at $6.5 million calculated on the basis of a 60-day trailing volume weighted average price (“VWAP”) as of the date the CB-1 Earnout Milestone is achieved.

•Upon the execution by the Company of definitive documentation for a project financing of the CB-1 Project and the CB-2 Project (the “Project Financing Closing”), Common Stock valued at $6.5 million, calculated on the basis of a 60-day trailing VWAP as of the date the Project Financing Closing is achieved.

•Upon the execution by the Company of a datacenter lease for the CB-3 Project (the “CB-3 Earnout Milestone”), $13.0 million in cash.

Prior to the transaction, Beowulf E&D also performed certain administrative services to certain affiliates of the Seller. Concurrent with Purchase Agreement, the Company entered into a transition services agreement (the “TSA”) through which the Company, along with Beowulf E&D, agreed to provide to certain affiliates of the Seller, who are related parties of the Company due to control by a member of the Company’s management, certain transition services including, but not limited to, services related to tax and accounting, human resources and payroll, information technology, legal, and other general services for a period of two years, unless terminated early in accordance with the provisions of the TSA. In consideration for the services, the Seller affiliates agreed to pay the Company a quarterly fee of $100 as well as reimbursement for third-party expenses incurred in the performance of the services. The Company determined that the TSA is not separate from the business combination and represented additional consideration transferred in the business combination. Accordingly, the Company recorded a liability at fair value at the Acquisition Date of $1.3 million to be amortized over the two-year term of the TSA. The Company had a $0.9 million liability related to the future services to be provided under the TSA included in other liabilities in the consolidated balance sheet as of December 31, 2025.

The following table summarizes the Acquisition Date fair value of the aggregate consideration paid for Beowulf E&D pursuant to the Purchase Agreement (in thousands):


Cash consideration(1)	$	3,000
Equity instruments: 5,000,000 shares of Common Stock(2)	19,550
Contingent consideration: CB-1 Earnout Milestone(3)	12,500
Contingent consideration: Project Financing Closing(4)	3,500
Contingent consideration: CB-3 Earnout Milestone(5)	12,400
Consideration related to TSA(6)	1,300
Settlement of preexisting relationships in business acquisition(7)	2,315
	$	54,565

(1) The cash paid at close represents the gross contractual amount paid. Net cash paid, which accounts for the cash acquired of $0.3 million, was $2.7 million million and is reflected as an investing activity in the consolidated statement of cash flows for the year ended December 31, 2025.

(2) The fair value of the Common Stock issued as part of the consideration paid for Beowulf E&D was determined on the basis of the closing market price of Common Stock on the Acquisition Date.

(3) The fair value of the CB-1 Earnout Milestone was estimated using a Monte Carlo and Geometric Brownian Motion (GBM) simulation in a risk-neutral framework and measured based on significant inputs not observable in the market which ASC 820 refers to as Level 3 inputs. Key assumptions include the expected timing and probability of achieving the CB-1 Earnout Milestone and future stock price volatility.

(4) The fair value of the Project Financing Closing was estimated using a GBM simulation in a risk-neutral framework and measured based on significant inputs not observable in the market which ASC 820 refers to as Level 3 inputs. Key assumptions include the expected timing and probability of achieving the Project Financing Closing and future stock price volatility.

(5) The fair value of the CB-3 Earnout Milestone was estimated using a discounted cash flow method and measured based on significant inputs not observable in the market which ASC 820 refers to as Level 3 inputs. Key assumptions include the expected timing and probability of achieving the CB-3 Earnout Milestone.

(6) The fair value of the TSA liability was estimated using the differential cash flow method, assessing the differential in compensation for the services provided based on contractual TSA rates relative to compensation at “market” rates.

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(7) The Company determined the acquisition of Beowulf E&D in effect settled the preexisting relationships between the Company and Beowulf E&D and increased the consideration transferred by $2.3 million reflecting the effective termination of the Services Agreement and the related net receivables due to the Company from Beowulf E&D as of the Acquisition Date. The Services Agreement was determined to be comparable when compared with pricing for current market transactions for the same or similar items.

During the year ended December 31, 2025, (i) the CB-1 Earnout Milestone was achieved and the Company paid $6.0 million in cash and issued 1.8 million shares of Common Stock to the Seller, (ii) the CB-3 Earnout Milestone was achieved and the Company paid $13.0 million in cash to the Seller and (iii) the Project Financing Closing was achieved and the Company issued 1.2 million shares of Common Stock to the Seller. The Company recognized the difference between the carrying value of the contingent consideration liabilities and the fair value of consideration transferred upon achievement of the respective earnout milestones of $10.4 million in change in fair value of consideration in the consolidated statement of operations for the year ended December 31, 2025.

The Company recorded the assets acquired and liabilities assumed at their estimated acquisition-date fair values, with the difference between the fair value of the net assets acquired and the purchase consideration reflected in goodwill. The total purchase price of $54.6 million was allocated using information available to the Company at the time of acquisition. The purchase price allocation was based on preliminary valuations and subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available, including certain tax matters, during the measurement period (up to one year from the Acquisition Date).

In connection with the acquisition, the Company recorded goodwill of $55.5 million which is primarily a result of the value of Beowulf E&D’s specialized assembled workforce acquired and expected synergies of combining operations. The Company determined that all of the goodwill is expected to be deductible for tax purposes.

The following table summarizes the preliminary allocation of the purchase price as of the Acquisition Date (in thousands):


Cash and cash equivalents	$	269
Prepaid expenses	117
Other receivables	55
Other current assets	7
Property, plant and equipment, net	1,087
Goodwill	55,457
Operating lease right-of-use asset	8,101
Other assets	74
Accounts payable	(320)
Accrued compensation	(1,384)
Other accrued liabilities	(437)
Current portion of operating lease liability	(580)
Operating lease liability, net of current portion	(7,881)
	$	54,565

The operating lease right-of-use asset includes a $(0.4) million adjustment to reflect unfavorable terms of a lease when compared to market terms.

During the year ended December 31, 2025, there were no measurement period adjustments identified and recorded. As of the date these consolidated financial statements were issued, the purchase accounting related to this acquisition was incomplete as the valuation of certain working capital balances, deferred taxes and contingent consideration were not yet finalized. The Company has reflected the provisional amounts in these consolidated financial statements. As such, the above balances may be adjusted in a future period as the valuation is finalized and these adjustments may be material to the consolidated financial statements.

The Purchase Agreement also includes customary change of control provisions which provide for accelerated vesting of the earnout consideration in the event of a change of control as well as certain governance rights and additional cash payments.

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The Company further agreed to form an eligible employee trust administered by a third-party trustee for the benefit of certain individuals that were employed by or provided services to the acquired Beowulf E&D companies or its affiliates, and to fund the trust annually with an amount equal to 2% of the Company’s annual capital expenditures, calculated in accordance with U.S. GAAP, for the development and build out the Company’s HPC datacenters, as determined in good faith by the Company’s Board of Directors.

The Company determined the eligible employee trust is a VIE and that the Company is the primary beneficiary of the trust as the Company has the power to direct the activities that most significantly impact the economic performance of the trust and the obligation to absorb losses or the right to receive benefits of the trust that could potentially be significant.

The Company incurred acquisition-related costs of $1.5 million which are included in selling, general and administrative expenses in the consolidated statement of operations for the year ended December 31, 2025.

Results of operations of the business acquired have been included in the Company’s consolidated financial statements subsequent to the Acquisition Date, which included no revenue, $7.0 million in selling, general and administrative expenses and $0.8 million, in selling, general and administrative expenses – related party in the consolidated statement of operations for the year ended December 31, 2025.

During the year ended December 31, 2025, prior to the Acquisition Date, and for the years ended December 31, 2024 and 2023, substantially all of Beowulf E&D’s revenues were earned pursuant to the services it provided to the Company under the Services Agreement, which would be considered intercompany and eliminate on a pro forma basis. Additionally, the expenses incurred by Beowulf E&D in providing the services to the Company per the Services Agreement prior to the Acquisition Date are reflected in the fees previously paid by the Company, such that Beowulf E&D’s pro forma expenses, prior to the Acquisition Date, are included in selling, general and administrative expenses – related party and operating expenses – related party in the consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023 (see Note 18).

Accordingly, the Company determined its consolidated financial statements for the years ended December 31, 2025, 2024 and 2023, in all material respects, reflect on a pro forma basis what the Company’s revenues and earnings would have been if the business acquisition had occurred at the beginning of the prior year.

RM 101

In December 2021, the Company completed the Merger with RM 101 pursuant to which, among other things, the Company effectively acquired RM 101 and became a publicly traded company on the Nasdaq. The consideration in the Merger included, among other things, contractual contingent value rights (“CVR”) per a Contingent Value Rights Agreement (the “CVR Agreement”). Pursuant to the CVR Agreement, each shareholder of RM 101 as of immediately prior to the Merger, received one non-transferable CVR for each outstanding share of common stock of RM 101 then held. The holders of the CVRs were entitled to receive 95% of the Net Proceeds (as defined in the CVR Agreement), if any, from the sale, transfer, disposition, spin-off, or license of all or any part of the pre-merger business of RM 101.

InAs ~~August~~of ~~2022~~December 31, RM2023, ~~101~~all ~~sold~~net aassets ~~certain~~held ~~property~~ for ~~net~~ sale ~~proceeds~~had ofbeen ~~$13~~sold.2 ~~million with certain indemnifications that expired in February and August 2023.~~ During the year ended December 31, 2023, the Company made payments of the CVR liability related to proceeds from sales of net assets held for sale of $11.0 million such that as of December 31, 2023, the Company had made all of the aggregate required distributions of proceeds to the CVR Holders and the CVR Agreement was deemed terminated.

Upon acquisition, the RM 101 business met the assets held-for-sale and discontinued operations criteria and was reflected as discontinued operations held for sale in these consolidated financial statements. During the year ended December 31, 2022, the Company determined that certain changes in circumstances indicated that the then carrying amount of RM 101’s long-lived assets may not have been recoverable and recognized an impairment loss in loss on discontinued operations, net of tax of $4.5 million to write down the related carrying amounts to their fair values less estimated cost to sell. All net assets held for sale had been sold as of December 31, 2022. 69

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The Company recorded no loss from discontinued operations, net of tax for the ~~year~~years ended December 31, 2025 and 2024. The loss from discontinued operations, net of tax for the year ended December 31, 2023 presented in the consolidated statements of operations includes the following results of RM 101 (in thousands):

	Year Ended December 31,
	Year Ended December 31, 2023
	2023		2022
Selling, general and administrative expenses	$	88
Net sales	$	—	$	10,843
Loss from discontinued operations before other income	(88)
Cost of goods sold	—		8,129
Other income	23
Gross profit	—		2,714
Loss from discontinued operations before income tax	(65)
Selling, general and administrative expenses	88		3,451
Income tax expense	—
Research and development expenses	—		437
Loss from discontinued operations, net of tax	$	(65)
Impairment on remeasurement or classification as held for sale	—		4,541
Loss on sale of net assets held for sale	—		239
Loss from discontinued operations before other income	(88)		(5,954)
Interest expense	—		(12)
Other income	23		23
Loss from discontinued operations before income tax	(65)		(5,943)
Income tax expense	—		(14)
Loss from discontinued operations, net of tax	$	(65)	$	(5,957)

Loss from discontinued operations, net of tax in the consolidated statements of operations also included a (loss) ~~gain~~ on CVR remeasurement of $(0.1) million ~~and $1.1 million~~ for the ~~years~~year ended December 31, 2023 ~~and 2022, respectively~~.

NOTE 4 – FAIR VALUE MEASUREMENTS

Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

As a basis for considering such assumptions, a three-level fair value hierarchy prioritizing the inputs to valuation techniques is used to measure fair value. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The levels are as follows:

(Level 1) observable inputs such as quoted prices in active markets for identical assets or liabilities;

(Level 2) observable inputs for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable either directly or indirectly from market data; and

(Level 3) unobservable inputs for which there is little or no market data, which require the Company to develop its own assumptions.

64The following tables present the Company’s financial instruments that are measured and recorded at fair value on the Company’s consolidated balance sheets on a recurring basis, segregated by hierarchy fair value levels as of December 31, 2025 and 2024 (in thousands):


	Fair Value Measured as of December 31, 2025
	Carrying Value		Level 1		Level 2		Level 3
Digital assets	$	270	$	270	$	—	$	—
Warrant liabilities	844,698		—		—		844,698
	$	844,968	$	270	$	—	$	844,698


	Fair Value Measured as of December 31, 2024
	Carrying Value		Level 1		Level 2		Level 3
Digital assets	$	476	$	476	$	—	$	—
	$	476	$	476	$	—	$	—

Table of Contents

TERAWULF INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~The~~Other ~~following~~Fair ~~tables~~Value present the Company’s financial instruments that are measured and recorded at fair value on the Company’s consolidated balance sheets on a recurring basis, segregated by hierarchy fair value levels as of December 31, 2024 and 2023 (in thousands):Measurements

	Fair Value Measured as of December 31, 2024
	Carrying Value		Level 1		Level 2		Level 3		Remeasurement Loss
Digital currency	$	476	$	476	$	—	$	—	$	—
	$	476	$	476	$	—	$	—	$	—

The Company has determined the fair value of the 2030 Convertible, Notes, 2031 Convertible Notes, 2032 Convertible Notes, and 2030 Secured Notes to be approximately $814.5 million, $1,180.3 million, $896.6 million, and $3,300.7 million, respectively, as of December 31, 2025 (see Note 10) using Level 1 inputs. The carrying values of cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses, other receivables, other current assets, accounts payable, accrued construction liabilities, accrued compensation, accrued interest, accrued lessor costs, other acc

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