Added10-Q 2026-08-06 vs 10-K 2025-11-25
Our data center projects may be subject to new or rapidly evolving regulatory frameworks, and we may face increased public scrutiny or negative publicity as a result of our data center strategy.
CLSKCleanSpark
CleanSpark is a data center developer, until recently focused exclusively on bitcoin mining. 10-K, Item 1
- Headquarters
- Henderson, NV
- CEO
- S. Matthew Schultz
- Next results
- around Nov 24, 2026
60 paragraphs in Risk Factors of the 10-K filed Nov 25, 2025 with nothing like them in the 10-K filed Dec 3, 2024. Quoted exactly. Paragraphs that were only edited are under 10-K change.
Compared with the Risk Factors in the latest 10-K of the other 31 Crypto companies: a paragraph with at least half its words the same at another company is called similar, and the companies are listed under it. A paragraph most of them have is marked boilerplate. No line means no other company has one like it. This counts text; it does not say how serious a risk is.
•our increasing focus on diversification into constructing and operating data centers for AI and HPC companies, as well as bitcoin mining, and the potential regulatory issues with entering into this new business;
Read in the 10-K ↗
•our bitcoin treasury function exposes us to speculative trading activities, dependence on financial intermediaries, lack of exchange protections in over-the-counter transactions and heightened counterparty and insolvency risks when using both U.S. and non-U.S. counterparties.
Read in the 10-K ↗
•the U.S. political and economic environment could materially impact our operations, including uncertainty surrounding potential regulatory and policy changes by the current presidential administration, such as the establishment of a strategic bitcoin reserve, laws and regulations pertaining to the digital asset markets, changes to mining difficulty or network rules, and new tariffs or trade restrictions on imported mining equipment;
•regulations and taxes that target energy could increase our cost and adversely affect our business; and
Similar paragraph at 1 of 31 other Crypto companies: MARA•regulatory developments surrounding AI and HPC may negatively impact our efforts to expand into AI and HPC hosting.
Similar paragraph at 1 of 31 other Crypto companies: CIFRRead in the 10-K ↗
•the capped call transactions entered into in connection with the 2030 Notes (as defined below) may affect the value of the 2030 Notes and the market price of our common stock;
Similar paragraph at 1 of 31 other Crypto companies: CIFR•we are subject to counterparty risk with respect to the capped call transactions, as the option counterparties are financial institutions whose default or insolvency could materially harm us;
Similar paragraph at 1 of 31 other Crypto companies: CIFR•the issuance, conversion, or exercise of convertible notes and other convertible securities, options, and warrants will dilute our stockholders’ ownership; and
•the accounting treatment for convertible debt securities such as the Notes, including recognition of higher non-cash interest expense, inclusion of shares in diluted earnings per share, and potential reclassification of the Notes as a current liability, may materially impact our reported results of operations and financial condition.
Read in the 10-K ↗
As we enter the HPC and AI services market, we face significant competition, which may adversely affect the occupancy and rental rates of our data centers. We now compete with numerous data center providers globally. Some of our competitors and potential competitors have significant advantages over us, including more ready access to capital which allows them to respond more quickly to new or changing opportunities. Our growth depends in part on external sources of capital which are outside of our control.
Similar paragraph at 1 of 31 other Crypto companies: MARAWe have an evolving business model and strategy, which includes an increasing focus on diversifying into constructing and operating data centers for AI and HPC companies, in addition to our bitcoin activities.
To remain current in a digital assets industry that is rapidly evolving, we expect the services and products associated with such activities to continue to evolve and accordingly, our business model may also need to evolve.
Similar paragraph at 1 of 31 other Crypto companies: CIFROur growth strategy includes exploring expansion and diversification of our revenue sources into new markets. For example, we are increasing our focus on diversifying into constructing and operating data centers for AI and HPC companies, including through our acquisition of properties and assets in Texas. We cannot offer any assurance that these or any other modifications will be successful or will not result in harm to the business, damage our reputation or limit our growth. Such modifications may increase the complexity of our business and place significant strain on our management, personnel, operations, systems, technical performance, financial resources and internal financial control and reporting functions. Moreover, we may not be able to manage growth effectively, which could damage our reputation, limit our growth and adversely affect our operating results. Further, we cannot provide any assurance that we will successfully identify all emerging trends and growth opportunities within the digital assets industry, the AI and HPC market or other markets we seek to expand into, and we may lose out on such opportunities. Additionally, any such changes to our business model or strategy could subject us to additional regulatory scrutiny and requirements, including licensing and permitting requirements. Any of the foregoing could have a material adverse effect on our business, prospects, financial condition and operating results.
Our expansion into AI and HPC may divert resources from our core bitcoin mining operations, limit our power capacity for mining, and introduce operational complexity.
While we intend to continue our bitcoin mining operations, the allocation of resources to support AI and HPC development may reduce the capital, personnel, infrastructure and power capacity available for our mining business. In particular, diverting future power capacity to AI and HPC workloads may limit our ability to deploy that power for mining, which is a highly competitive and capital-intensive industry. As a result, we may be unable to expand our deployed hash rate (EH/s) at the pace of our competitors, potentially diminishing our market share and profitability. Managing multiple distinct lines of business may increase operational complexity and place additional demands on our management, technical, and support teams, which could negatively affect our overall performance, strategic execution and profitability.
It may take significant time and expenditure to develop an AI and HPC hosting business through continued development at our facilities, and our efforts may not be successful.
Similar paragraph at 1 of 31 other Crypto companies: CIFRThe continued development of our facilities is subject to various factors beyond our control. There may be difficulties integrating new equipment into existing infrastructure, constraints on our ability to connect to or procure the expected electricity supply capacity at our facilities, defects in design, construction or installed equipment, diversion of management resources, insufficient funding or other resource constraints. Actual costs for development may exceed our planned budget. In particular, our strategy to expand and diversify into AI and HPC hosting may require retrofits, alterations or other customized solutions to enable an operating environment for AI and HPC tenants. Such changes may be cost-prohibitive, or the sites may be incapable of supporting such requirements. These alterations may also require collaboration with cooling experts, engineers and specialized vendors to ensure thermal management aligns with specific hardware requirements.
Similar paragraph at 1 of 31 other Crypto companies: CIFRWe intend to expand by acquiring and developing additional facilities, taking into account factors such as availability of electrical capacity and infrastructure and related costs, geographic location and the local regulatory environment. We may have difficulty finding sites that satisfy our requirements at a commercially viable price or within our timing requirements. Furthermore, there may be significant competition for suitable data center sites, and government regulators, including local permitting officials, may restrict our ability to establish data center operations in certain locations.
Similar paragraph at 1 of 31 other Crypto companies: CIFRLeveraging sites that we have contractually secured may ultimately fail due to factors beyond our control. In addition, securing agreements to connect to power sources, and obtaining permits, approvals and/or licenses to construct and operate facilities, could be delayed in regulatory processes, may not be successful or may be cost prohibitive. Actions by government regulators, or the issuance of new regulations that restrict AI and HPC hosting or bitcoin mining operations, may reduce the availability of electricity, increase its cost, or otherwise adversely impact our business.
Similar paragraph at 1 of 31 other Crypto companies: CIFRDevelopment and construction delays, cost overruns, changes in market circumstances, environmental or community constraints, inability to continue finding suitable data center locations, and other factors may adversely affect our operations, expansion plans, financial position and financial performance. We will continue to review our expansion plans in light of evolving market conditions. Any such delays, and any failure to increase our total data center or hash rate capacity in the future, could adversely impact our business, financial condition, cash flows and results of operations.
Similar paragraph at 1 of 31 other Crypto companies: CIFRRead in the 10-K ↗
We face competition for acquisitions in the HPC, AI, and data center market. As mentioned, certain of our data center competitors have significant advantages over us, including greater access to capital which allows them to respond more quickly to new or changing opportunities. If we cannot continue to grow and expand our data center business through strategic acquisitions, our competitiveness may be affected along with our operating results, which could impact our financial condition and market price of our securities.
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Our business expansion into AI and HPC services may be capital intensive and could affect our liquidity, results of operations and financial condition.
Our expansion into HPC, data center and AI infrastructure development is expected to increase capital intensity and shift the timing of cash inflows relative to capital outlays. Developing and constructing data center campuses requires substantial up-front capital expenditures for land, substations, interconnection and specialized cooling systems, which may temporarily reduce liquidity.
Similar paragraph at 1 of 31 other Crypto companies: MARAThis business expansion introduces uncertainties that could impact our liquidity and capital resources. Increased capital expenditure requirements for new HPC, data center and AI infrastructure projects may accelerate cash deployment and increase short-term liquidity needs. The timing of cash inflows may shift, as hosting and leasing revenues generally materialize after construction completion and customer onboarding, resulting in a lag between capital investment and revenue realization. Although our bitcoin-backed liquidity and treasury activities provide flexibility, we may need to seek additional financing, through debt, equity, or infrastructure-oriented funding, to meet project-scale capital demands or to preserve bitcoin holdings during periods of market volatility.
Similar paragraph at 1 of 31 other Crypto companies: MARARead in the 10-K ↗
During periods of market stress and extreme volatility, we may be unable to timely liquidate or hedge our bitcoin or related positions, and exchange-driven liquidations or auto-deleveraging could materially and adversely affect our liquidity, results of operations and financial condition.
Similar paragraph at 1 of 31 other Crypto companies: MARAOur business model depends, in part, on our ability to sell bitcoin to fund operating expenses and capital investments and, as applicable, to manage risk through trading and hedging activities. In stressed markets, the ability to execute routine spot sales, reduce positions, or hedge exposure can be impaired by exchange outages, degraded market quality, fragmented liquidity, or exchange risk controls that activate in ways that limit trading. Periods of acute volatility can cause order books to thin rapidly as market makers withdraw, spreads widen, and prices dislocate across venues. At the same time, certain centralized exchanges may experience interface or API failures, throttling of order intake, rejection of “reduce-only” or risk-reducing orders, delayed deposits and withdrawals, and other infrastructure constraints. In these conditions, we may be unable to sell bitcoin or adjust hedges at intended sizes or prices—or at all—precisely when we need liquidity most.
Similar paragraph at 1 of 31 other Crypto companies: MARARecent market events highlight these risks. In October 2025, a widespread “flash crash” in digital asset markets reportedly resulted in more than $19 billion of leveraged positions being liquidated over a brief period, with significant price dislocations, liquidity gaps, exchange outages, and the activation of auto-deleveraging (“ADL”) mechanisms and insurance funds across multiple trading venues. Participants reported order rejections, forced liquidations at prices disconnected from prevailing market levels, and constraints that prevented risk-reducing trades. When exchanges deploy ADL or similar controls, profitable or hedged positions can be forcibly closed, sometimes at disadvantageous prices, and without the ability to hedge the resulting exposure. These dynamics can amplify volatility and further diminish the ability of market participants to obtain liquidity during stress.
Similar paragraph at 1 of 31 other Crypto companies: MARAIf we are unable to sell bitcoin, unwind positions, or establish or maintain hedges during such periods, our liquidity could be adversely affected and our exposure to further price movements could increase. Our reliance on third-party exchanges and intermediaries, the concentration of liquidity in a limited number of venues, and our use of both hot and cold wallets may further limit our ability to respond quickly to market stress. Any of the foregoing could materially and adversely affect our results of operations, cash flows and financial condition, including by increasing realized losses, delaying planned sales of bitcoin, or reducing our capacity to fund operating or capital needs.
Similar paragraph at 1 of 31 other Crypto companies: MARARead in the 10-K ↗
7 more
A failure or degradation of cloud service providers or other critical Internet infrastructure, including our own, could disrupt our operations and third‑party platforms we rely on, including digital asset exchanges and custodians, and could materially and adversely affect our business, results of operations, cash flows and financial condition.
Our operations depend on the reliable performance of third‑party cloud service providers and core Internet infrastructure. We, our counterparties and service providers (including mining pool operators, exchanges where we sell bitcoin, custodians, brokers, data vendors and payment processors) utilize cloud hosting, compute, networking, storage, messaging and identity services to deliver core functionality. Outages, service degradations, misconfigurations, software defects, capacity constraints, distributed denial‑of‑service attacks, domain name system (DNS) failures and other incidents at these third parties can interrupt (or materially impair) our ability to monitor and manage our sites, access wallets, transmit or settle transactions, receive mining pool payouts, execute sales or hedges, or otherwise conduct routine business activities. Even when our own systems remain available, dependencies on the availability and performance of exchanges, custodians and intermediaries, many of which are hosted on the same cloud platforms, can prevent or delay our ability to convert bitcoin to cash, move collateral, respond to market moves or satisfy time‑sensitive obligations.
Recent events illustrate this risk. In October 2025, a widespread outage at a major cloud provider’s U.S. East region disrupted thousands of applications globally, including financial and communications platforms. Several crypto trading venues and brokers publicly attributed platform disruptions to that cloud incident. During such events, order intake may be throttled, APIs and user interfaces may become intermittently unavailable, deposits and withdrawals may stall, and message backlogs can persist even after headline service restoration. These conditions can effectively lock participants out of venues, exacerbate price dislocations, and impede risk‑reducing actions. If we cannot timely sell bitcoin, adjust hedges, post collateral, or access custodial services due to third‑party cloud failures or exchange downtime, our liquidity could be adversely affected and our exposure to market volatility could increase.
Our concentration of critical functions with a limited number of cloud providers and Internet infrastructure vendors, and our reliance on third parties that themselves depend on the same providers, heighten correlated failure risk. Multi‑region or multi‑cloud failover strategies may not fully mitigate these risks due to service‑level limitations, data‑consistency constraints and operational complexity. Moreover, service level agreements typically limit remedies to credits and exclude consequential losses, and we may be unable to recover losses from affected providers or intermediaries. Any of the foregoing, alone or in combination with periods of market stress, could materially and adversely affect our business, results of operations, cash flows and financial condition, including by increasing realized losses, delaying planned sales of bitcoin, and constraining our ability to fund operating or capital needs.
Similar paragraph at 1 of 31 other Crypto companies: MARARead in the 10-K ↗
We established relationships to engage in derivative transactions that permit our bitcoin treasury function to trade in bitcoin and bitcoin related financial products; however, there can be no assurance that we will be able to maintain such relationships or establish such relationships. An inability to establish or maintain such relationships could limit our treasury activities, create losses, preclude us from engaging in certain transactions, financing, derivative intermediation and counterparty services and prevent us from trading at optimal rates and terms. Moreover, a disruption in the financing, derivative intermediation and counterparty services provided by any such relationships before we establish additional relationships could have a significant impact on our business due to our reliance on such counterparties.
Some of the markets in which we may effect transactions in bitcoin will not be “exchange-based”, including “over-the-counter” or “interdealer” markets (i.e., principal-to-principal contracts between us and third parties entered into privately, rather than on an exchange). As a result, we are not afforded the regulatory and financial protections of an exchange or its clearinghouse (or of the government regulator that oversees such exchange and clearinghouse), and in privately negotiated transactions, the risk of the negotiated price deviating materially from fair value is substantial. This exposes us to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the contract (whether or not bona fide) or because of a credit or liquidity problem, thus causing us to suffer a loss. Such “counterparty risk” is accentuated for contracts with longer maturities where events may intervene to prevent settlement, or where we have concentrated our transactions with a single or small group of counterparties. Furthermore, there is a risk that any of our counterparties could become insolvent and/or the subject of insolvency proceedings. If one or more of our counterparties were to become insolvent or the subject of insolvency proceedings, there exists the risk that the recovery of bitcoin from our counterparties, including but not limited to, broker-dealers, will be delayed or be of a value less than the value of the bitcoin originally entrusted to such counterparty.
We may use counterparties located in jurisdictions outside the United States. Such counterparties are subject to the laws and regulations in non-U.S. jurisdictions that are designed to protect their customers in the event of their insolvency. However, the practical effect of these laws and their application to our assets are subject to substantial limitations and uncertainties. Because of the large number of entities and jurisdictions involved and the range of possible factual scenarios involving the insolvency of a counterparty, it is impossible to generalize about the effect of their insolvency on us and our assets.
Read in the 10-K ↗
If the SEC or other regulators determine that bitcoin or other digital assets we hold qualify as securities, we may be required to register as an investment company under the Investment Company Act of 1940, as amended. This classification would subject us to additional periodic reporting, disclosure requirements, and regulatory compliance obligations, significantly increasing our operational costs. Furthermore, state regulators may conclude that digital assets are securities under state laws, requiring us to comply with state-specific securities regulations. States like California have stricter definitions of “investment contracts” than the SEC, increasing the risk of additional regulatory scrutiny.
Similar paragraph at 1 of 31 other Crypto companies: FWDIRead in the 10-K ↗
The U.S. political and economic environment could materially impact our business operations and financial performance, and uncertainty surrounding the potential legal, regulatory and policy changes by the current U.S. presidential administration may directly affect us and the global economy.
Similar paragraph at 1 of 31 other Crypto companies: MARAThe political and economic environment in the U.S. and elsewhere has resulted in, and may continue to result in, uncertainty. Changing regulatory policies because of the evolving political environment or otherwise could pose challenges to our business model and materially and adversely affect our business, financial condition and results of operations. For example, in March 2025, the U.S. federal government established a strategic bitcoin reserve, which could significantly affect bitcoin prices through large-scale purchasing programs, potentially creating increased price volatility or artificial price suppression that could make our mining operations less profitable or unprofitable.
Furthermore, the government might exercise greater influence over the bitcoin network, which could affect mining difficulty rates, transaction processing, or other technical aspects of the network in ways that could adversely impact our operations. These changes could affect market sentiment and institutional adoption of bitcoin in unpredictable ways that could impact bitcoin’s value. For example, the Digital Asset Market Clarity Act of 2025 (the “CLARITY Act”) was passed by the U.S. House of Representatives in July 2025, which would, if enacted, regulate digital asset markets and digital asset trading platforms in the United States. In addition, also in July 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 became the first federal law specifically regulating the issuance, custody and other stablecoin-related matters in the United States. It is difficult to predict whether, or when, the CLARITY Act or another bill that would regulate digital asset markets and digital asset trading platforms may become law or whether any new law will lead to Congress granting additional authorities to the SEC or other regulators, what the nature of such additional authorities might be, how additional legislation and/or regulatory oversight might impact the ability of digital asset markets to function or how any new regulations or changes to existing regulations might impact the value of digital assets generally and bitcoin specifically. The consequences of increased federal regulation of digital assets and digital asset activities could have a material adverse effect on our business and operations.
Our ability to conduct business can also be significantly impacted by changes in tariffs, customs policies, changes in or repeals of trade agreements and the imposition of other trade restrictions or retaliatory actions imposed by various governments. For example, during the first quarter of 2025, the United States introduced trade policy actions that have increased import tariffs across a wide range of countries at various rates, including from certain jurisdictions from which we import mining equipment, or from which components of our mining equipment are manufactured. Such tariffs, if continued, will affect shipments from such jurisdictions.
The timeline, structure, and scope of any potential regulatory policies are uncertain, making it difficult for us to plan for or mitigate these risks effectively. In addition, we cannot predict what further action may be taken with respect to tariffs or trade relations between the U.S. and other governments. Any such changes could fundamentally alter the competitive and regulatory landscape in which we operate, and political tensions as a result of trade policies could reduce trade volume, investment, technological exchange, and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets, all of which potentially having a material adverse effect on our business, financial condition, and results of operation. The price of bitcoin has historically been volatile and is impacted by a variety of factors, including political, economic, regulatory or other conditions.
Regulations and taxes that target energy could increase our costs and adversely affect our business.
Bitcoin mining and data center operation require significant energy consumption, and our operations could be negatively impacted by government regulations or taxes specifically targeting energy usage in digital asset mining. Federal, state or local authorities may impose restrictions on energy consumption, mandate the use of renewable energy sources or implement higher electricity rates for mining or data center operations, increasing our operating costs. Additionally, governments may introduce taxes on energy usage or carbon emissions that disproportionately affect bitcoin miners, further reducing our profitability. If regulatory or tax burdens make mining economically unviable in certain jurisdictions, we may be forced to relocate operations, secure alternative power sources at higher costs or scale back our business activities, all of which could materially and adversely affect our business, financial condition, and results of operations.
Similar paragraph at 1 of 31 other Crypto companies: MARARegulatory developments surrounding AI and HPC may negatively impact our efforts to expand into AI and HPC hosting.
Similar paragraph at 1 of 31 other Crypto companies: CIFRThe regulatory landscape surrounding HPC, AI and bitcoin mining operations is evolving rapidly, and we anticipate increased scrutiny and potential regulation in the near and long term. These developments may affect our business and operations in ways that are difficult to predict.
Similar paragraph at 1 of 31 other Crypto companies: CIFRThere are growing concerns about the ethical implications and potential misuse of the growing AI technologies and the AI landscape is facing challenges and uncertainties. The development of more advanced AI systems, such as large language models and generative AI, has raised concerns about potential misuse, bias, and the displacement of human workers. Governments and regulatory bodies are considering measures to ensure responsible development and deployment of AI systems, including guidelines for transparency, accountability, and fairness. For example, the July 23, 2025 Executive Order on Preventing “Woke AI” directs federal agencies to procure only large language models that adhere to truth-seeking and ideological neutrality principles, which could shape public-sector AI standards and influence compliance considerations for AI and HPC hosting providers supporting government workloads. In addition, the White House’s July 2025 America’s AI Action Plan emphasizes streamlined permitting for data centers, grid expansion, and stronger export controls and security guardrails across the AI compute stack, potentially accelerating demand for AI and HPC capacity while also imposing additional constraints on infrastructure development. In recent years, crypto mining has received increased attention from regulators with respect to technical and financial aspects of this industry. We expect that regulatory efforts in this area will continue to evolve and potentially affect our business. In addition, data center construction has recently encountered organized opposition from environmental and anti-growth groups which has resulted in a stricter regulatory environment.
Similar paragraph at 1 of 31 other Crypto companies: CIFRAs a company looking to potentially operate at the intersection of HPC, AI, and bitcoin mining, we are committed to maintaining a proactive and adaptive approach to regulatory compliance. We continue to monitor legislative and regulatory developments closely and engage in dialogue with relevant stakeholders to ensure our business practices align with the evolving legal and regulatory framework. However, there can be no assurance that our business will not be adversely impacted by future developments.
Similar paragraph at 1 of 31 other Crypto companies: CIFRRead in the 10-K ↗
We have issued, and may continue to issue, convertible securities, options, and warrants to officers, directors, and certain stockholders. Additionally, we have issued the Notes to certain institutional investors. 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.
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In December 2024, we issued $650,000,000 aggregate principal amount of our 2030 Notes, including the exercise in full by the initial purchasers of the 2030 Notes of their option to purchase up to an additional $100,000,000 principal amount of the 2030 Notes. In connection with the issuance of the existing notes, we entered into privately negotiated capped call transactions (the “2030 Capped Calls”) with certain financial institutions at an aggregate cost of approximately $90,350,000.
In November 2025, we issued $1,150,000,000 aggregate principal amount of our 0% convertible senior notes due 2032 (the “2032 Notes”).
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The capped call transactions may affect the value of the 2030 Notes and the market price of our common stock.
Similar paragraph at 10 of 31 other Crypto companies: CIFR, EXOD, GEMI, GLXY, GME, HSDT, NAKA, SBET and 2 moreIn connection with the issuance of our $650,000,000 aggregate principal amount of 0% convertible senior notes due 2030 (the “2030 Notes”), we entered into privately negotiated capped call transactions with certain financial institutions (collectively, the “option counterparties”). The capped call transactions are generally expected to reduce the potential dilution to our common stock upon any conversion of the 2030 Notes or offset any cash payments we are required to make in excess of the principal amount of converted 2030 Notes, with such reduction or offset subject to a cap.
Similar paragraph at 1 of 31 other Crypto companies: CIFRIn connection with establishing their initial hedges of the capped call transactions, the option counterparties entered into various derivative transactions with respect to our common stock and/or purchased shares of our common stock concurrently with, or shortly after, the pricing of the 2030 Notes. They may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling shares of our common stock or other securities of ours in secondary market transactions prior to the maturity of the 2030 Notes, and they are likely to do so during any “observation period” related to a conversion of 2030 Notes or, to the extent we exercise the relevant election under the capped call transactions, following any repurchase or redemption of the 2030 Notes, in each case as described in the Indenture, dated as of December 17, 2024, by and between the Company and U.S. Bank Trust Company, National Association, as trustee. This activity could also cause or avoid an increase or a decrease in the market price of our common stock or the 2030 Notes.
We are subject to counterparty risk with respect to the capped call transactions.
Similar paragraph at 1 of 31 other Crypto companies: CIFRThe option counterparties are financial institutions, and we will be subject to the risk that any or all of them might default under the capped call transactions. Our exposure to the credit risk of the option counterparties will not be secured by any collateral. Past global economic conditions have resulted in the actual or perceived failure or financial difficulties of many financial institutions and could adversely affect the option counterparties’ performance under the capped call transactions. If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the capped call transactions with such option counterparty. Our exposure will depend on many factors but, generally, an increase in our exposure will be correlated to an increase in the market price and in the volatility of our common stock. In addition, upon a default by an option counterparty, we may suffer more dilution, the effect of which would not be compensated for, than we currently anticipate with respect to our common stock. We can provide no assurance as to the financial stability or viability of the option counterparties.
Similar paragraph at 1 of 31 other Crypto companies: CIFRThe accounting treatment for convertible debt securities that may be settled in cash and/or shares, such as the Notes, may have a material effect on our reported financial results.
Similar paragraph at 1 of 31 other Crypto companies: XXIThe accounting method for reflecting each of the Notes on our balance sheet, accruing interest expense for each of the Notes and reflecting the underlying shares of our common stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition.
In accordance with ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), we expect that each of the 2030 Notes and 2032 Notes will be reflected as a liability on our balance sheet, with the initial carrying amount equal to the principal amount of the Notes, as applicable, net of issuance costs. The issuance costs are amortized into interest expense over the term of the Notes, as applicable. As a result of this amortization, the interest expense recognized for each of the Notes for accounting purposes will be greater than the cash interest payments paid on the Notes, as applicable, which will result in lower reported income.
Similar paragraph at 1 of 31 other Crypto companies: CIFRIn addition, we expect that the shares underlying each of the Notes are reflected in our diluted earnings per share using the “if converted” method, in accordance with ASU 2020-06. Under that method, diluted earnings per share would generally be calculated assuming that all the 2030 Notes were converted solely into shares of common stock at the beginning of the reporting period, unless the result would be anti-dilutive. The application of the if-converted method may reduce our reported diluted earnings per share, and accounting standards may change in the future in a manner that may adversely affect our diluted earnings per share.
Similar paragraph at 1 of 31 other Crypto companies: XXIFurthermore, if any of the conditions to the convertibility of the Notes are satisfied, then we may be required under applicable accounting standards to reclassify the liability carrying value of the Notes, as appliable, as a current, rather than a long-term, liability. This reclassification could be required even if no holders convert their Notes and could materially reduce our reported working capital.
Read in the 10-K ↗
New in the latest 10-Q
39 paragraphs in the 10-Q filed Aug 6, 2026 with nothing like them in the 10-Q filed May 11, 2026 (at least half the words must differ; new numbers alone do not count). Quoted exactly, grouped by the item heading above them. This is text that changed, not a judgement of how serious it is.
10-Q
• our ability to timely achieve the Sandersville Lease milestones for, among other things, obtaining financing for and completing the construction of the Sandersville data center project and any future data center projects we may undertake, which will depend on a number of factors, including dependence on the performance of a third party to lead the construction of the Sandersville project, the ability to obtain the necessary equipment in a timely and cost-effective manner and our ability to obtain necessary regulatory approvals and electrical power;
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• risks related to the significant additional indebtedness that we expect to incur for purposes of funding the Sandersville project and any future data center projects we may undertake;
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• our dependence on the ongoing supply of electrical power to the Sandersville project and any future data center projects after the completion of construction and interruptions thereof;
Read in the 10-Q ↗
• the risk that expectations of future revenue and net operating income growth which we expect to result from undertaking data center projects, including the Sandersville Lease, may not be realized; and
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Financial statements and notes
Provided below is the (loss) income per share calculation for the three and nine months ended June 30, 2026 and 2025: For the three months ended June 30, For the nine months ended June 30, ($ in thousands, except share and per share amounts) 2026 2025 2026 2025 ─────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── Numerator Net (loss) income attributable to common shareholders - Basic $ (239,842) $ 251,787 $ (1,026,896) $ 354,645 Non-cash interest expense on convertible notes - 693 - 1,506 Net (loss) income attributable to common shareholders - Dilutive (239,842) 252,480 (1,026,896) 356,151 Denominator Weighted-average common shares outstanding - Basic 268,426,611 280,997,649 272,626,480 282,147,349 Dilutive impact of stock options and other share-based awards - 666,010 - 625,839 Dilutive impact of convertible notes - 43,930,792 - 31,379,137 Weighted-average common shares outstanding - Dilutive 268,426,611 325,594,451 272,626,480 314,152,325 (Loss) income per common share attributable to common shareholders Basic $ (0.89) $ 0.90 $ (3.77) $ 1.26 Diluted $ (0.89) $ 0.78 $ (3.77) $ 1.13 Convertible senior notes are reflected in diluted earnings per share using the if-converted method when doing so is dilutive, meaning the additional shares and related interest add-back reduce earnings per share; otherwise, they are excluded as antidilutive. The un-weighted number of shares excluded from diluted earnings per share for the three and nine months ended June 30, 2026 and 2025 are noted in the table below. Such shares were excluded as their assumed conversion would have been antidilutive or, for preferred stock, because the change-in-control conversion contingency was not satisfied. For the three months ended June 30, For the nine months ended June 30, 2026 2025 2026 2025 ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── Convertible notes 103,941,450 - 103,941,450 - Series A preferred stock conversion 5,250,000 5,250,000 5,250,000 5,250,000 Anti-dilutive warrants 1,604,559 1,586,999 1,604,559 1,586,999 Anti-dilutive stock options 1,931,334 1,806,985 1,931,334 1,586,999 Anti-dilutive restricted stock awards 25,910,723 142,694 25,910,723 142,694 Total anti-dilutive securities 138,638,066 8,786,678 138,638,066 8,566,692 Fair value measurement of financial instruments, derivative assets and contingent consideration Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable.
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The bitcoin derivative - Bitmain contracts outstanding as of September 30, 2025, which were classified within Level 3 of the fair value hierarchy, expired during the nine months ended June 30, 2026. The DAM derivative instruments outstanding as of March 31, 2026, which were classified within Level 3 of the fair value hierarchy, were settled or expired during the three months ended June 30, 2026. The bitcoin derivative - Bitmain contracts and DAM derivative instruments outstanding as of June 30, 2026 were separate from the respective Level 3 instruments described above and are classified within Level 2 based on the observability of the significant inputs used in their current period valuation. Accordingly, the different hierarchy classifications presented at the two presented balance sheet dates did not represent transfers of instruments between levels of the fair value hierarchy.
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In April 2026, the Company invested a total of $44,089 in two nonconsolidated entities in which it holds minority ownership interests. These investments are included in Other long-term assets in the Condensed Consolidated Balance Sheets, and the related cash outflows are presented as Investments in other entities within investing activities in the Condensed Consolidated Statements of Cash Flows.
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The following table summarizes the activity for all PSUs and MPSUs during the nine months ended June 30, 2026:
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General PSUs LTIP PSUs and MPSUs STPA PSUs and MPSUs Total Aggregate Intrinsic Value
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16. SUBSEQUENT EVENTS On July 10, 2026, the Company entered into a 20-year triple-net infrastructure lease agreement (the “Sandersville Lease”), with two five-year extension options, with a leading global technology company for 175 MW of critical information technology load at newly acquired land located adjacent to the Company’s Sandersville, Georgia campus (the “Sandersville AI Campus”). Concurrently, the Company also entered into a construction agreement to commence the development and construction of the designed AI data center infrastructure. The Company will continue to utilize the current Sandersville site for bitcoin mining until the lease commencement date, at which time the power will be diverted to the Sandersville AI Campus and bitcoin mining activity will cease. The Company is evaluating the impact to the legacy bitcoin mining infrastructure, which could include a decommissioning and end of life. Because the Sandersville Lease and the related change in the intended use of the site occurred after June 30, 2026, the accompanying Condensed Consolidated Financial Statements have not been adjusted for this subsequent event. The Company is currently evaluating the recoverability, remaining useful lives, and potential impairment of property and equipment related to bitcoin mining at the Sandersville site and, as of the date of this Quarterly Report on Form 10-Q, cannot reasonably estimate the financial effect of any resulting impairment charge or other related accounting impacts. Any resulting fiscal 2026 accounting effects will be recognized in the period in which the applicable recognition criteria are met and reflected in the Company’s Annual Report on Form 10-K for the fiscal year ending September 30, 2026.
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We continue to evaluate existing properties for potential conversion or dual-use development to support AI and HPC tenants and are advancing design and permitting activities for greenfield data-center sites.
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On July 10, 2026, we entered into the Sandersville Lease which is a 20-year triple-net infrastructure lease agreement with two five-year extension options, with a global technology company (the “Tenant”) for 175 MW of critical information technology load at our Sandersville, Georgia campus. Under the Sandersville Lease, the Tenant will deploy production-grade infrastructure at Sandersville dedicated to a range of computing workloads. The Sandersville Lease is a triple net lease, meaning that the Tenant is responsible for all costs, charges, indemnities and expenses of every kind and nature associated with the leased premises. In connection with the transaction, the Tenant also executed a letter of intent and exclusivity arrangement covering our entire Texas portfolio of 718 acres with up to 885 MW of secured and planned power capacity.
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Following the execution of the Sandersville Lease, management began planning the transition of the power capacity currently supporting bitcoin mining operations at the site exclusively to data center use and expects to fully decommission the existing bitcoin mining operations at the site during fiscal year 2028. For a discussion of risks associated with the Sandersville Lease and our AI and HPC strategy, please refer to “Risk Factors - Risks Related to Our Data Center Strategy.”
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Risk Factors
Our data center projects may be subject to new or rapidly evolving regulatory frameworks, and we may face increased public scrutiny or negative publicity as a result of our data center strategy.
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Data centers are increasingly scrutinized by federal, state, and local authorities, and have been subject to environmental activists and negative public perception, due to concerns regarding energy consumption, land use, carbon emissions, water usage, environmental impacts, data-sovereignty considerations and national-security-related issues. Regulators may impose new permitting requirements, energy-efficiency standards, carbon-reduction mandates, sustainability reporting rules, or operational restrictions specific to data centers, AI infrastructure, or high-density compute environments. For example, on July 14, 2026, New York State Governor Kathy Hochul signed an executive order barring the construction of new hyperscale data centers using 50 megawatts or more of power for up to one year in the state of New York. We are evaluating the scope and enforceability of the August 3, 2026 letter written by Texas Governor Greg Abbott to the Electric Reliability Council of Texas and the Public Utility Commission of Texas, which directed a comprehensive verification and audit of all data centers advancing through the interconnection process within the state before they are approved to move forward, and the earlier July temporary data center and battery energy storage system moratorium imposed by Austin County. Such governmental actions and regulations, at the federal level or by state and local governments in the States of Texas and Georgia, where our properties are located, could increase our capital expenditures, delay development timelines, limit expansion opportunities, limit projects from moving forward through commercialization, or require costly modifications to existing infrastructure. Any restrictions or new policy initiatives targeting large-scale compute operations, including those supporting AI/HPC workloads, could limit our opportunities to acquire additional properties and restrict our ability to build out our data center operations on any of our existing or future properties, which may adversely affect our data center business or limit the economic viability of our strategic diversification initiatives. Given the evolving nature of digital asset and data-center regulation, and the difficulty of predicting the outcomes of ongoing or future governmental actions, we cannot assure you that future regulatory or legislative developments will not have a material adverse effect on our business, prospects, financial condition, or operations. Even in the absence of new regulations or legislation, increased public scrutiny or negative publicity regarding the development and environmental impact of HPC data centers could harm our reputation, which may adversely affect our business, financial condition and results of operations.
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We may not realize the anticipated benefits of our HPC and AI data center strategy.
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Our data center strategy is in its early stages, and the success of our data center business is uncertain and may not develop as anticipated. The performance of our data center business may be affected by various factors, including the availability, reliability, and timing of power supply; increased community scrutiny of data center resource use, including land, water, and power, resulting in stricter requirements from permitting authorities; supply chain disruptions, including constraints in local labor availability; changes in tariff policies or the adoption of more restrictive trade regulations; and our ability to retain and continue to develop the specialized expertise required to operate and scale a data center business. If any of these challenges arise, or if we are otherwise unable to successfully implement or execute our data center strategy, our business, prospects, financial condition, and results of operations would be materially and adversely affected.
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To date, we have only secured one infrastructure lease agreement with a data center customer (the “Tenant”) at our Sandersville, Georgia, campus (the “Sandersville Lease”). For our data center strategy to be successful, we will need to enter into additional infrastructure lease agreements in a timely and cost-effective manner. Further, we may need to acquire additional power capacity and properties. It is uncertain whether we will be able to attract and retain additional data center customers - including hyperscalers, cloud service providers, and AI and HPC companies - to support the development and commercialization of data centers on our properties. If we are unable to secure and retain additional customers, we may be unable to monetize our current and future properties, and the anticipated benefits of our initiative may not materialize, which may materially and adversely impair our results of operations.
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Building out our HPC and AI data center operations could draw resources and power away from bitcoin mining and add operational complexity.
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Our strategic expansion into data center development may divert capital, personnel, infrastructure and other resources away from our existing bitcoin mining business. In particular, allocating power capacity to data center workloads may reduce the power available for bitcoin mining, which is a highly competitive and capital-intensive industry. Reduced power availability for mining could limit our ability to deploy additional hash rate at the pace of our competitors, potentially diminishing our market position and profitability. Operating multiple distinct business lines may also increase operational complexity and place additional demands on our management, technical teams, and support personnel. Managing these potentially competing priorities may strain our resources, increase the risk of operational inefficiencies, and negatively affect our overall performance, strategic execution, and financial results. Any such developments could materially and adversely affect our business, prospects, financial condition, and results of operations.
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Our existing contract with the Tenant and any future contracts with HPC data center customers could subject us to significant liability.
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We have entered into the Sandersville Lease with the Tenant, and aim to enter into additional, similar agreements with other tenants, pursuant to which we provide data center space, power, environmental controls, physical security and connectivity products to our HPC data center 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.
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We may enter into lease agreements, such as the Sandersville Lease, for HPC data center facilities prior to their development. 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.
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Additionally, a customer’s decision to lease space and power at our facilities 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, in the future 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.
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We may be unable to timely achieve the financing, construction and delivery milestones required under the Sandersville Lease, which could result in rent abatements or termination of the Sandersville Lease.
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The Sandersville Lease requires us to satisfy specified financing, construction and delivery milestones, as well as other covenants and conditions. Although deliveries under the Sandersville Lease are expected to begin in the fourth quarter of 2027, our ability to meet that schedule depends on numerous factors, many of which are outside our control, including our ability to obtain financing for and complete the construction of the Sandersville data center project on time.
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Completion of the Sandersville project requires substantial specialized equipment, which may not be obtained on a timely basis. Supply chain constraints, long lead times, price increases and competition from other developers and operators, many of which may have greater resources than we do, could impair our ability to procure equipment when needed and on acceptable terms. Any inability to obtain required equipment on a timely and cost-effective basis could delay construction, increase our costs, jeopardize our ability to satisfy our milestones under the Sandersville Lease, and adversely affect the returns we expect from the project.
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The completion of the Sandersville data center project also depends on obtaining necessary regulatory approvals and on the availability of adequate electrical power. Delays or failures in obtaining required approvals, or a lack of sufficient power capacity, could delay or prevent completion of the project and cause us to miss our milestones under the Sandersville Lease. In addition, following the completion of construction, the project depends on the ongoing supply of electrical power, and any interruptions in that supply could disrupt the Tenant’s operations, expose us to liability or reduced revenue, and adversely affect our relationship with the Tenant. Although the Sandersville campus was selected in part for its access to reliable, low-cost power, there can be no assurance that adequate power will remain available on acceptable terms or without interruption throughout the term of the Sandersville Lease.
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Further, we are dependent on a third party to lead the development of the Sandersville project, and we are subject to risks related to the performance of such third party and the third party’s personnel and suppliers. If the third party or its personnel or suppliers fail to perform their obligations in a timely and satisfactory manner, or at all, we may experience delays or cost overruns and may be unable to satisfy our construction and delivery milestones under the Sandersville Lease. Our reliance on a third party for a project of this scale and complexity reduces our direct control over the timing, quality and cost of the work, and any deficiency in the third party’s performance could have a material adverse effect on our business, financial condition and results of operations.
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If we fail to timely satisfy applicable milestones due to any of the risks and uncertainties discussed above, the consequences could include rent abatements and/or termination of the Sandersville Lease. Any such rent abatement would reduce the revenue we expect to derive from the project, and a termination of the Sandersville Lease would deprive us of the substantial contracted revenue on which our development plans and financing arrangements are premised, either of which could have a material adverse effect on our business, financial condition, results of operations and our ability to service our existing indebtedness.
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We will need to raise substantial additional capital to fund the development of the Sandersville project, and such capital may not be available on favorable terms or at all.
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We will need to raise substantial additional capital to fund the significant capital expenditures we expect to incur to develop and construct data center infrastructure at the Sandersville Campus in accordance with specified delivery milestones. Our ability to raise such capital depends on conditions in the capital and credit markets, our financial performance and other factors, many of which are beyond our control, and additional financing may not be available to us on acceptable terms, or at all. If we are unable to raise the capital necessary to fund the project on a timely basis, we may be unable to satisfy our construction and delivery milestones under the Sandersville Lease, which could result in rent abatements or termination of the Sandersville Lease and could materially and adversely affect our business and financial condition.
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We expect to seek substantial debt financing at the parent and/or subsidiary level, which could also include additional equity or equity-linked financing, in connection with the Sandersville Lease and future data center projects, and incurring any such indebtedness may increase our leverage and debt service obligations, and may also contain covenants that restrict our operating and financial flexibility. A high level of indebtedness could make it more difficult for us to satisfy our obligations under our existing and future indebtedness, limit our ability to obtain additional financing, and increase our vulnerability to adverse economic and industry conditions. There can be no assurance that we will generate sufficient cash flow, including from the contracted revenue under the Sandersville Lease, to service such indebtedness.
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Even if we are able to raise sufficient capital to fund the development of the Sandersville project and any other data center initiatives, we must carefully evaluate and effectively manage capital expenditures and operating results. However, we may be unable to accurately project our future capital needs or sufficiently allocate resources to address such needs. If we underestimate these capital requirements, we may not be able to complete development of the Sandersville project or any future data center project, both of which would materially and adversely impair our results of operations.
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Changes in AI and HPC infrastructure needs could reduce the demand for, and value of, the Sandersville project.
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Our expectations regarding the Sandersville project are based in part on current trends in AI and HPC infrastructure demand. The market for data center infrastructure supporting AI and HPC workloads is rapidly evolving, and changes to AI and HPC infrastructure needs, including changes in technology, computing architectures, customer requirements and industry demand, could adversely affect the value of the project and the demand for the infrastructure we are developing. If the demand for AI and HPC data center capacity does not develop as we expect, or declines, the assumptions underlying the Sandersville Lease and our broader land-and-power strategy may prove incorrect, which could adversely affect our results of operations and prospects.
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Our expectations regarding future revenue and net operating income from the Sandersville project may not be realized.
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Our estimates regarding the future revenue and net operating income generated by Sandersville Lease are based on numerous assumptions regarding timing, costs, financing, the performance of a third party, power availability, the exercise of extension options and other matters, including the risks and uncertainties discussed above, many of which are beyond our control. Further, the extension options of the Sandersville Lease are exercisable at the Tenant’s discretion, and if the Tenant elects not to exercise them, we would not realize the incremental contracted revenue associated with the extension periods, and our long-term returns from the project would be correspondingly reduced. As such, there is no certainty that our expectations of future revenue and net operating income growth will be realized. Actual results may differ materially from our estimates, and investors should not place undue reliance on them. If the anticipated revenue and net operating income from the Sandersville project are not realized, our ability to service and repay our existing and future indebtedness could be adversely affected.
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Item 4
Item 5. Other Information Rule 10b5-1 Plans During the three months ended June 30, 2026, each of the Company’s officers, as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended, adopted a separate written trading arrangement intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act, and the Company’s policies regarding transactions in Company securities. Each trading arrangement will remain in effect through the listed date, unless earlier terminated in accordance with its terms or all shares authorized for sale under the applicable arrangement have been sold. The aggregate number of shares of the Company’s common stock that may be sold pursuant to each arrangement is set forth below. A significant majority of the shares authorized for sale under these arrangements are intended to be sold to satisfy tax withholding obligations arising in connection with the vesting or settlement of equity awards, consistent with the Company’s insider trading policy. Name Title Action Adoption Date Aggregate shares authorized for sale Expiration Date S. Matthew Schultz Chairman and Chief Executive Officer Adoption May 13, 2026 665,838 May 15, 2027 Gary A. Vecchiarelli President and Chief Financial Officer Adoption May 13, 2026 239,187 May 15, 2027 Scott E. Garrison Chief Development Officer and Executive Vice President Adoption May 13, 2026 266,034 May 15, 2027 Taylor Monnig Chief Technology Officer and Chief Operating Officer Adoption May 13, 2026 163,862 December 8, 2026 Brian Carson Chief Accounting Officer Adoption May 13, 2026 80,024 March 24, 2027 ─────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
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The 10-Q's risk factors against the 10-K
Item 1A of the 10-Q filed Aug 6, 2026 against Item 1A of the 10-K filed Nov 25, 2025.
A 10-Q repeats only the risks that changed, so a 10-K paragraph that is missing from it is not counted as removed.
Added is a paragraph with nothing like it in the 10-K, Reworded a sentence that is in both with several words changed,
Quiet changes a sentence in both where one to four words changed and one is a hedge or a modal
(cut words struck through, new words highlighted and underlined).
Text on the page, not a score; each links to the filing at sec.gov.
What the 10-Q itself says about its risk factors:
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In addition to the other information set forth in this report, you should carefully consider the factors discussed in the “Risk Factors” section contained in our Form 10-K, together with the cautionary statement under the caption “Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q. These described risks are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
Added10-Q 2026-08-06 vs 10-K 2025-11-25
Data centers are increasingly scrutinized by federal, state, and local authorities, and have been subject to environmental activists and negative public perception, due to concerns regarding energy consumption, land use, carbon emissions, water usage, environmental impacts, data-sovereignty considerations and national-security-related issues. Regulators may impose new permitting requirements, energy-efficiency standards, carbon-reduction mandates, sustainability reporting rules, or operational restrictions specific to data centers, AI infrastructure, or high-density compute environments. For example, on July 14, 2026, New York State Governor Kathy Hochul signed an executive order barring the construction of new hyperscale data centers using 50 megawatts or more of power for up to one year in the state of New York. We are evaluating the scope and enforceability of the August 3, 2026 letter written by Texas Governor Greg Abbott to the Electric Reliability Council of Texas and the Public Utility Commission of Texas, which directed a comprehensive verification and audit of all data centers advancing through the interconnection process within the state before they are approved to move forward, and the earlier July temporary data center and battery energy storage system moratorium imposed by Austin County. Such governmental actions and regulations, at the federal level or by state and local governments in the States of Texas and Georgia, where our properties are located, could increase our capital expenditures, delay development timelines, limit expansion opportunities, limit projects from moving forward through commercialization, or require costly modifications to existing infrastructure. Any restrictions or new policy initiatives targeting large-scale compute operations, including those supporting AI/HPC workloads, could limit our opportunities to acquire additional properties and restrict our ability to build out our data center operations on any of our existing or future properties, which may adversely affect our data center business or limit the economic viability of our strategic diversification initiatives. Given the evolving nature of digital asset and data-center regulation, and the difficulty of predicting the outcomes of ongoing or future governmental actions, we cannot assure you that future regulatory or legislative developments will not have a material adverse effect on our business, prospects, financial condition, or operations. Even in the absence of new regulations or legislation, increased public scrutiny or negative publicity regarding the development and environmental impact of HPC data centers could harm our reputation, which may adversely affect our business, financial condition and results of operations.
Added10-Q 2026-08-06 vs 10-K 2025-11-25
We may not realize the anticipated benefits of our HPC and AI data center strategy.
Added10-Q 2026-08-06 vs 10-K 2025-11-25
Our data center strategy is in its early stages, and the success of our data center business is uncertain and may not develop as anticipated. The performance of our data center business may be affected by various factors, including the availability, reliability, and timing of power supply; increased community scrutiny of data center resource use, including land, water, and power, resulting in stricter requirements from permitting authorities; supply chain disruptions, including constraints in local labor availability; changes in tariff policies or the adoption of more restrictive trade regulations; and our ability to retain and continue to develop the specialized expertise required to operate and scale a data center business. If any of these challenges arise, or if we are otherwise unable to successfully implement or execute our data center strategy, our business, prospects, financial condition, and results of operations would be materially and adversely affected.
Added10-Q 2026-08-06 vs 10-K 2025-11-25
To date, we have only secured one infrastructure lease agreement with a data center customer (the “Tenant”) at our Sandersville, Georgia, campus (the “Sandersville Lease”). For our data center strategy to be successful, we will need to enter into additional infrastructure lease agreements in a timely and cost-effective manner. Further, we may need to acquire additional power capacity and properties. It is uncertain whether we will be able to attract and retain additional data center customers - including hyperscalers, cloud service providers, and AI and HPC companies - to support the development and commercialization of data centers on our properties. If we are unable to secure and retain additional customers, we may be unable to monetize our current and future properties, and the anticipated benefits of our initiative may not materialize, which may materially and adversely impair our results of operations.
Added10-Q 2026-08-06 vs 10-K 2025-11-25
Our existing contract with the Tenant and any future contracts with HPC data center customers could subject us to significant liability.
Added10-Q 2026-08-06 vs 10-K 2025-11-25
We have entered into the Sandersville Lease with the Tenant, and aim to enter into additional, similar agreements with other tenants, pursuant to which we provide data center space, power, environmental controls, physical security and connectivity products to our HPC data center 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.
Added10-Q 2026-08-06 vs 10-K 2025-11-25
We may enter into lease agreements, such as the Sandersville Lease, for HPC data center facilities prior to their development. 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.
Added10-Q 2026-08-06 vs 10-K 2025-11-25
Additionally, a customer’s decision to lease space and power at our facilities 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, in the future 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.
Added10-Q 2026-08-06 vs 10-K 2025-11-25
We may be unable to timely achieve the financing, construction and delivery milestones required under the Sandersville Lease, which could result in rent abatements or termination of the Sandersville Lease.
Added10-Q 2026-08-06 vs 10-K 2025-11-25
The Sandersville Lease requires us to satisfy specified financing, construction and delivery milestones, as well as other covenants and conditions. Although deliveries under the Sandersville Lease are expected to begin in the fourth quarter of 2027, our ability to meet that schedule depends on numerous factors, many of which are outside our control, including our ability to obtain financing for and complete the construction of the Sandersville data center project on time.
Added10-Q 2026-08-06 vs 10-K 2025-11-25
Completion of the Sandersville project requires substantial specialized equipment, which may not be obtained on a timely basis. Supply chain constraints, long lead times, price increases and competition from other developers and operators, many of which may have greater resources than we do, could impair our ability to procure equipment when needed and on acceptable terms. Any inability to obtain required equipment on a timely and cost-effective basis could delay construction, increase our costs, jeopardize our ability to satisfy our milestones under the Sandersville Lease, and adversely affect the returns we expect from the project.
Reworded10-Q 2026-08-06 vs 10-K 2025-11-25
Reworded10-Q 2026-08-06 vs 10-K 2025-11-25
Reworded10-Q 2026-08-06 vs 10-K 2025-11-25
In particular, diverting future allocating power capacity to AI and HPC data center workloads may limit our ability to deploy that reduce the power available for bitcoin mining, which is a highly competitive and capital-intensive industry.
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