# Hut 8 Corp.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Hut 8 Corp.](/companies/hut.md) (CIK 1964789)
- Form: 10-Q
- Filed: 2025-05-08
- Accepted by EDGAR: May 8, 2025, 06:35 ET
- Period: 2025-03-31
- Accession: 0001558370-25-006845
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1964789/000155837025006845/hut-20250331x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1964789/000155837025006845/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $21.8m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $18.7m | us-gaap:CostOfRevenue |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$147.7m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $7.5m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | −$20.2m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$133.9m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$1.30 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$1.30 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 102,854,747 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$33.8m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-03-31 | $108.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $269.1m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $1.57bn | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $213.2m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $584.2m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-31 | $960.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 50,102 characters.

### MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

*The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and the related notes and the other financial information included elsewhere in this Quarterly Report and with our audited consolidated financial statements included in the Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual business, financial condition, and results of operations could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Quarterly Report and in the Annual Report, particularly under “Item 1A. Risk Factors.” See also “Cautionary Statement Regarding Forward-Looking Statements.” Our historical results are not necessarily indicative of the results that may be expected for any period in the future.*

### Business Overview

Hut 8 is an energy infrastructure platform that integrates power, digital infrastructure, and compute at scale to fuel next-generation, energy-intensive use cases such as Bitcoin Mining and HPC. We take a power-first, innovation-driven approach to developing, commercializing, and operating the critical infrastructure that underpins the breakthrough technologies of today and tomorrow.

### Q1 2025 Highlights

- *Launch of American Bitcoin.* At the end of Q1 2025, we launched American Bitcoin, a majority-owned subsidiary formed following the strategic contribution of substantially all of our ASIC miners to American Data Centers Inc. in exchange for a majority interest in American Data Centers Inc. In connection with the transaction, American Data Centers Inc. was subsequently renamed and relaunched as American Bitcoin Corp. (“American Bitcoin”). As of April 1, 2025, we are the exclusive provider of ASIC colocation and managed services to American Bitcoin through colocation and managed services agreements, respectively, and we provide day-to-day management services to American Bitcoin through a shared services agreement. American Bitcoin aims to become the world’s largest, most efficient pure-play Bitcoin miner while building a robust strategic Bitcoin reserve.
- *Miner Fleet Upgrade Progress.* We continued the deployment of new-generation ASIC miners across our facilities, which was completed in the first week of April 2025. These upgrades contributed to a significant increase in deployed hashrate and improvement in fleet efficiency. As of March 31, 2025, our deployed hashrate was 9.3 EH/s with a fleet efficiency of approximately 20 J/TH.
- *Expansion of AI Data Center Pipeline.* In February 2025, we secured 592 acres in Louisiana for our new River Bend campus, which is expected to support a 300 MW utility-scale power asset with 200 MW of dedicated IT load. This site is one of three included in our previously disclosed 430 MW AI data center development pipeline.

### Key Factors Affecting Our Performance

### Price of Bitcoin

Our business is heavily dependent on the price of Bitcoin, which has historically experienced significant volatility. We generate revenue from Bitcoin rewards that we earn through mining in our facilities. We have also acquired, and may in the future acquire, additional Bitcoin through at-market purchases to build our strategic reserve of Bitcoin. Under ASU 2023-08, *Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“*ASU 2023-08”), Bitcoin is revalued at fair value at the end of each reporting period, with changes in fair value recognized in net income. As a result, fluctuations in the price of Bitcoin may significantly impact our results of operations.

### Bitcoin network difficulty and hashrate

Our business is not only impacted by the volatility in Bitcoin prices, but also by increases in the competition for Bitcoin production. This increased competition is described as the network hashrate resulting from the growth in the overall quantity and quality of miners working to solve blocks on the Bitcoin blockchain, and the difficulty index associated with the secure hashing algorithm employed in solving the blocks. Increased difficulty reduces the mining proceeds of the equipment proportionally and eventually requires Bitcoin miners like us to upgrade their equipment to remain profitable and compete effectively with other miners. Conversely, a decline in network hashrate results in a decrease in difficulty, increasing mining proceeds and profitability.

### Block reward and halving

The current Bitcoin reward for solving a block is 3.125 Bitcoin. The Bitcoin network is programmed such that the Bitcoin block reward is halved every 210,000 blocks mined, or approximately every four years. This reduction in reward spreads out the release of Bitcoin over a long period of time as fewer Bitcoin are mined with each halving event. Bitcoin halving events impact the amount of Bitcoin we mine which, in turn, may have a potential impact on our results of operations. The last halving event occurred in April 2024, and the next halving event is expected to occur in 2028.

### Power Costs

Power is the foundation of our platform. We acquire, develop, and manage critical energy assets such as interconnects, powered land, and other electrical infrastructure to address the load demands of energy-intensive applications such as Bitcoin mining and HPC. We currently maintain a portfolio which has access to competitively priced electrical power based on the regions in which we operate. However, there is no guarantee that we will be able to procure additional power on similar terms, or at all. Market prices for power, capacity, and other ancillary services are unpredictable and tend to fluctuate substantially. See “Risk Factors—Risks Related to Our Business and Operations—We are subject to risks associated with our need for significant electrical power” in the Annual Report.

### Key Performance Indicators

In addition to our financial results, financial measures under generally accepted accounting principles in the United States of America (“GAAP”) financial measures, and non-GAAP financial measures, we use certain key performance indicators to evaluate our business, identify trends, and make strategic decisions.

The following table presents our key performance indicators for the three months ended March 31, 2025 and 2024.

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ Three Months Ended March 31, 2025 | ​ ​ | ​ ​ 2024 |
| --- | --- | ---: | --- | ---: |
| Cost to mine a Bitcoin (excluding hosted facilities)(1) | ​ | $58,757 | ​ | $20,419 |
| Cost to mine a Bitcoin(2) | ​ | $58,757 | ​ | $24,594 |
| Weighted average revenue per Bitcoin mined(3) | ​ | $92,224 | ​ | $51,769 |
| Number of Bitcoin mined(4) | ​ | ​ 167 | ​ | ​ 716 |
| Energy cost per MWh | ​ | $51.71 | ​ | $40.06 |
| Hosting cost per MWh | ​ | $— | ​ | $68.72 |
| Energy capacity under management (mining)(5) | ​ | ​ 665 MW | ​ | ​ 884 MW |
| Total energy capacity under management(6) | ​ | ​ 1,020 MW | ​ | ​ 1,239 MW |
| Number of Bitcoin in strategic reserve(7) | ​ | ​ 10,264 | ​ | ​ 9,102 |

(1) Cost to mine a Bitcoin (or weighted average cost to mine a Bitcoin) is calculated as the sum of total all-in electricity expense (excluding hosted facilities) divided by Bitcoin mined during the respective periods and includes our net share of the King Mountain JV.

(2) Cost to mine a Bitcoin (or weighted average cost to mine a Bitcoin) is calculated as the sum of total all-in electricity expense and hosting expense divided by Bitcoin mined during the respective periods and includes our net share of the King Mountain JV.

(3) Weighted average revenue per Bitcoin mined is calculated as the sum of total self-mining revenue divided by Bitcoin mined during the respective periods and includes our net share of the King Mountain JV. For the quarter ended March 31, 2024, the weighted average revenue per Bitcoin mined includes one month of activity from discontinued operations at our Drumheller site.

(4) Bitcoin mined includes our net share of the King Mountain JV and excludes discontinued operations from our Drumheller site. Bitcoin mined excluding our net share of the King Mountain JV was 135 and 592 for the three months ended March 31, 2025 and 2024, respectively.

(5) Energy capacity under management (mining) represents the total power capacity related to Bitcoin Mining infrastructure, including self-mining sites, ASIC Colocation agreements, and Managed Services agreements.

(6) Total energy capacity under management includes (i) energy capacity under management (mining) and (ii) all energy-related assets including Power Generation, CPU Colocation infrastructure, and non-operational sites.

(7) Number of Bitcoin in strategic reserve includes Bitcoin held in custody, pledged as collateral, or pledged for a miner purchase under an agreement with BITMAIN.

### Cost to mine a Bitcoin

Our profitability in self-mining is heavily dependent upon our cost to mine a Bitcoin, calculated as all-in electricity and hosting costs divided by Bitcoin mined during the respective periods and includes our net share of a 50/50 joint venture for a site with a facility in McCamey, Texas (the “King Mountain JV”). Our management reviews the cost to mine a Bitcoin excluding hosted facilities and inclusive of hosted facilities in order to assess performance under both cost structures. As of March 31, 2025, we had no Bitcoin operations in hosted facilities.

Our cost to mine a Bitcoin (excluding hosted facilities) for the three months ended March 31, 2025 was $58,757 compared to $20,419 for the three months ended March 31, 2024. The increase was primarily due to the halving event in April 2024, in addition to an increase in average network difficulty during the period (111.2T for the three months ended March 31, 2025 compared to 77.4T for the three months ended March 31, 2024). Additionally, the energy cost per MWh increased due to fixed costs incurred while new sites underwent a fleet upgrade during February and March of 2025.

Inclusive of hosted facilities, our cost to mine a Bitcoin for the three months ended March 31, 2025 was $58,757 compared to $24,594 for the three months ended March 31, 2024. As of April 30, 2024, we were no longer self-mining at hosted facilities, and we did not incur hosting costs during the three months ended March 31, 2025, so our cost to mine a Bitcoin for the three months ended March 31, 2025 consisted solely of energy costs, which increased compared to the prior period primarily as a result of the halving event in April, increased average network difficulty, and increased fixed costs incurred as a result of our fleet upgrade.

### Energy and hosting cost per MWh

In addition to the cost to mine a Bitcoin, our management reviews the energy cost per MWh at facilities we own and the hosting cost per MWh at hosted facilities to better understand cost efficiency, operational performance, and identify opportunities for overall profitability improvements. Energy cost per MWh is calculated by dividing our total energy expense by the total MWh utilized at owned facilities during the respective periods and includes our net share of the King Mountain JV. Hosting cost per MWh is calculated by dividing our total hosting expense by the total MWh utilized at hosted facilities during the respective periods.

Energy cost per MWh for the three months ended March 31, 2025 was $51.71 compared to $40.06 for the three months ended March 31, 2024. The increase was primarily due to fixed transmission and distribution charges at our Medicine Hat site that continued during downtime while fleet upgrades occurred, as well as higher seasonal pricing at our sites located in Texas.

Hosting cost per MWh for the three months ended March 31, 2025 was nil compared to $68.72 for the three months ended March 31, 2024. The decrease was due to us no longer self-mining at hosted facilities as of April 30, 2024.

### Number of Bitcoin in strategic reserve

Number of Bitcoin in strategic reserve represents the number of Bitcoin we own as of each reporting period end date, which is the aggregate number of our Bitcoin held in custody, pledged as collateral, or pledged for a miner purchase. We have the ability to leverage our Bitcoin in strategic reserve as a flexible financial asset to fund growth initiatives, optimize our balance sheet, and capitalize on emerging market opportunities. Our management uses this metric to assess the value of our Bitcoin in strategic reserve and determine when and how to deploy said reserve, including whether to continue to hold the Bitcoin. As of March 31, 2025, we had 10,264 Bitcoin in strategic reserve compared to 9,102 Bitcoin held in strategic reserve as of March 31, 2024. The increase was attributable to additional Bitcoin mined over the year as well as an at-market purchase of Bitcoin in December 2024.

### Number of Bitcoin mined

Number of Bitcoin mined represents the number of Bitcoin produced by our Compute segment during the respective period. Management views this metric as a direct driver of Compute revenue for the respective periods.

Number of Bitcoin mined for the three months ended March 31, 2025 and March 31, 2024 was 167 and 716, respectively. The decrease in number of Bitcoin mined was mainly due to reduced mining activity due to our planned fleet upgrade as well as an increase in network difficulty, including as a result of the halving event in April 2024.

### Energy capacity under management

Energy capacity under management comprises energy capacity under management (mining) and all other energy-related assets including Power Generation, CPU Colocation infrastructure, and non-operational sites. Energy capacity under management (mining) represents the total power capacity related to Bitcoin mining infrastructure, including self-mining sites, ASIC Colocation agreements, and Managed Services agreements. Management reviews these metrics to assess total energy capacity utilization across our operations to drive an efficient allocation of resources.

Energy capacity under management for the three months ended March 31, 2025 was 1,020 MW compared to 1,239 MW for the three months ended March 31, 2024. The decrease was due the conclusion of operations at two Managed Service sites, Kearney and Granbury, which consisted of 100 MW and 300 MW, respectively, and the loss of our Managed Services contract with Ionic for four sites that consisted of 87 MW, partially offset by the addition of our Vega site, a 205 MW facility that is currently under development, and Salt Creek, a 63 MW site.

### Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, we rely on Adjusted EBITDA to evaluate our business, measure our performance, and make strategic decisions. Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as net (loss) income, adjusted for impacts of interest expense, income tax provision or benefit, depreciation and amortization, our share of unconsolidated joint venture depreciation and amortization, foreign exchange gain or loss, gain or loss on sale of property and equipment, the removal of non-recurring transactions, asset contribution costs, gain on derivatives, gain on other financial liability, loss from discontinued operations, net loss attributable to non-controlling interests before taxes, and stock-based compensation expense in the period presented. You are encouraged to evaluate each of these adjustments and the reasons our Board and management team consider them appropriate for supplemental analysis.

Our board of directors and management team use Adjusted EBITDA to assess our financial performance because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense and income), asset base (such as depreciation and amortization), and other items (such as non-recurring transactions mentioned above) that impact the comparability of financial results from period to period.

Net income (loss) is the GAAP measure most directly comparable to Adjusted EBITDA. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in such presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. There can be no assurance that we will not modify the presentation of Adjusted EBITDA in the future, and any such modification may be material. Adjusted EBITDA has important limitations as an analytical tool and you should not consider Adjusted EBITDA in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA may be defined differently by other companies in our industry, our definition of this non-GAAP financial measure may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.

For a reconciliation to our most directly comparable financial measure calculated and presented in accordance with GAAP, please see “—Results of Operations” below.

### Business Segments

We have four reportable business segments: Power, Digital Infrastructure, Compute, and Other.

### Power

The Power business segment consists of Power Generation and Managed Services.

#### Power Generation

We generate revenue from our 80.1% interest in a joint venture between us and Macquarie, which provides capacity and energy to the electrical grid through four natural gas power plants in Ontario, Canada that were acquired in February 2024 (the “Far North JV”). The power generation facilities are connected to the Independent Electricity System Operator, which operates Ontario’s power grid, and primarily generate revenue from capacity and electricity sales. Revenue generated from capacity and electricity sales is variable and depends on several factors, including generation capacity in the market, the supply and demand for electricity, and the prevailing price of natural gas.

#### Managed Services

Our Managed Services business provides institutional partners with an end-to-end partnership model for energy infrastructure development, including:

- *Project inception*: site design, procurement, and construction management;
- *Project operationalization*: software automation, process design, personnel hiring, and team training;
- *Revenue management*: utilities contracts, hosting operations, and customer management;
- *Project optimization*: energy portfolio optimization and strategic initiatives; and/or
- *Compliance and reporting*: finance, accounting, and safety.

Cash flows are generated through a fee structure that is typically fixed based on power capacity under management, with reimbursement of passthrough costs. In addition to the fixed fee, under certain agreements, further cash flows may be driven from incentive bonuses and certain energy management services.

As of March 31, 2025, we managed 280 MW of energy capacity under this program at one site in the United States owned by the King Mountain JV.

Starting April 1, 2025, we operated as the exclusive provider of managed services to American Bitcoin, our majority owned subsidiary.

### Digital Infrastructure

The Digital Infrastructure business segment consists of CPU Colocation and ASIC Colocation services.

#### CPU Colocation

Our CPU Colocation business spans five locations in Canada (Mississauga, Ontario; Vaughan, Ontario; Kelowna, British Columbia; and two locations in Vancouver, British Columbia) with a total energy capacity of 3 MW and more than 36,000 square feet of geo-diverse data center space powered by predominantly emission-free energy sources. Our infrastructure is designed to support a variety of compute, storage, and network workloads across traditional enterprise, B2B, machine learning, visual effects, and AI. This segment serves computing needs unrelated to Bitcoin Mining. These data centers are geo-diverse and carrier neutral with network diversity and redundancy from multiple telecommunications providers.

Our CPU Colocation business is based on a fixed-fee model. Customers pay a fixed recurring monthly fee based on a set amount of resources assigned.

#### ASIC Colocation

Under our ASIC Colocation business, we enter into contracts to host and operate mining equipment on behalf of third parties within our facilities. These services include the provision, if applicable, and hosting of mining equipment as well as the monitoring, troubleshooting, repair, and maintenance of such equipment. Revenues from ASIC Colocation services are generated through fees that may be fixed or based on profit-sharing arrangements, often with reimbursement for certain pass-through costs such as electricity.

During the fourth quarter of 2024, our agreement with Ionic Digital Inc. (“Ionic”) to host approximately 8,500 miners (0.8 EH/s) at our Alpha site was terminated. As a result, we ceased providing ASIC Colocation services at Alpha and utilize the site solely for self-mining purposes.

Looking ahead, we have secured a new ASIC Colocation contract with BITMAIN. The agreement features a fixed hosting fee with an option for us to purchase all or a portion of the hosted machines in up to three tranches at a fixed price within six months of energization of the relevant tranches. In July 2024, we entered into a power purchase agreement and other definitive agreements for our Vega site in the Texas Panhandle with exclusive access to 205 MW of immediately available power capacity and land. The data center construction at Vega is expected to be completed in the second quarter of 2025.

Starting April 1, 2025, we operated as the exclusive provider of ASIC colocation services to American Bitcoin, our majority owned subsidiary.

### Compute

The Compute business segment consists of Bitcoin Mining, GPU-as-a-Service, and Data Center Cloud operations.

#### Bitcoin Mining

Currently, one of our largest revenue streams is derived from Bitcoin Mining (also referred to as self-mining).

Our Bitcoin Mining business spanned four sites as of March 31, 2025:

- three sites with facilities we own and/or lease, and operate: (1) Alpha (Niagara Falls, New York), (2) Medicine Hat (Medicine Hat, Alberta), and (3) Salt Creek (Orla, Texas); and
- one site that we own 50% of through a joint venture, King Mountain (McCamey, Texas).

Until April 30, 2024, we also had Bitcoin Mining operations at Kearney and Granbury. We also own a Bitcoin Mining site in Drumheller, Alberta, which has been non-operational since March 2024. The closure was due to the profitability of Drumheller being significantly negatively impacted by several factors, including elevated energy costs and underlying voltage issues. We will consider re-energizing Drumheller if market conditions improve.

We receive Bitcoin rewards from our mining activity through third-party mining pool operators, which allow miners to combine their processing power, increasing their chances of solving a block and getting paid by the network. We provide computing power to mining pools, which use this computing power to operate nodes and validate blocks on the blockchain. The pools then distribute our pro-rata share of Bitcoin mined to us based on the computing power we contribute.

During the quarter ended March 31, 2025, our mining activity was reduced due to a planned fleet upgrade, which was completed on April 4, 2025. We expect that the fleet upgrade to higher efficiency Antminer S21+ miners will result in improved Bitcoin Mining operations in subsequent quarters.

On March 31, 2025, we launched American Bitcoin. Going forward, all Bitcoin Mining operations previously reported under our Compute segment will remain under this segment but operate through the American Bitcoin brand.

#### GPU-as-a-Service

Our GPU assets are deployed under our wholly owned subsidiary, Highrise AI, Inc., at a third-party colocation site near Chicago, Illinois. This segment generates recurring revenue through payments made by the provider to us based on fixed infrastructure payments and a revenue share tied to GPU utilization.

#### Data Center Cloud

Our Data Center Cloud services support both public and private cloud deployments, managed backup, business continuity and disaster recovery services, and high-performance, high-capacity storage solutions. We employ a consumption-based fee structure where customers commit to a baseline level of compute, storage, network, or power usage as defined in their service agreements. Any usage beyond this baseline is typically billed incrementally, so costs are aligned with actual resource consumption and customers are afforded flexibility as their needs evolve.

### Other

#### Equipment Sales and Repairs

We may sell mining equipment when profitable opportunities arise (e.g., if market prices exceed our procurement cost). We may also repair miners for third parties in exchange for a fee, as we have a fully equipped, MicroBT-certified repair center space at our Medicine Hat site.

### Results of Operations

### Three Months Ended March 31, 2025 and 2024

| ​ ​ ​ (in USD thousands) Revenue: | ​ ​ ​ ​ | ​ ​ Three Months Ended March 31, 2025 ​ ​ | ​ ​ | ​ ​ 2024 ​ ​ | ​ ​ ​ | ​ ​ ​ ​ ​ Increase ​ (Decrease) ​ ​ |
| --- | --- | --- | --- | --- | --- | --- |
| Power | ​ | $4,380 | ​ | $9,938 | ​ | $(5,558) |
| Digital Infrastructure | ​ | ​ 1,317 | ​ | ​ 5,844 | ​ | ​ (4,527) |
| Compute | ​ | ​ 16,118 |  | ​ 32,138 | ​ | ​ (16,020) |
| Other | ​ | ​ — | ​ | ​ 3,821 | ​ | ​ (3,821) |
| **Total revenue** | **​** | 21,815 |  | **​** 51,741 | ​ | ​ (29,926) |
| ​ | **​** | **​** **​** | **​** | **​** **​** | **​** | ​ **​** |
| **Cost of revenue (exclusive of depreciation and amortization shown below):** | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Cost of revenue – Power | ​ | ​ 3,628 | ​ | ​ 3,633 | ​ | ​ (5) |
| Cost of revenue – Digital Infrastructure | ​ | ​ 1,559 | ​ | ​ 4,629 | ​ | ​ (3,070) |
| Cost of revenue – Compute | ​ | ​ 13,472 | ​ | ​ 17,686 | ​ | ​ (4,214) |
| Cost of revenue – Other | ​ | ​ — | ​ | ​ 2,199 | ​ | ​ (2,199) |
| Total cost of revenue | ​ | ​ 18,659 | ​ | ​ 28,147 | ​ | ​ (9,488) |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Operating expenses (income):** | ​ | ​ | ​ | ​ ​ | ​ | ​ ​ |
| Depreciation and amortization | ​ | ​ 14,899 | ​ | ​ 11,472 | ​ | ​ 3,427 |
| General and administrative expenses | ​ | ​ 21,059 | ​ | ​ 19,999 | ​ | ​ 1,060 |
| Losses (gains) on digital assets | ​ | ​ 112,394 |  | ​ (274,574) | ​ | ​ 386,968 |
| Loss (gain) on sale of property and equipment | ​ | ​ 2,454 |  | ​ (190) | ​ | ​ 2,644 |
| Total operating expenses (income) | ​ | ​ 150,806 | ​ | ​ (243,293) | ​ | ​ 394,099 |
| **Operating (loss) income** | ​ | ​ (147,650) | ​ | ​ 266,887 | ​ | ​ (414,537) |
| ​ | **​** | **​** ​ | **​** | ​ **​** | ​ | **​** ​ |
| **Other income (expense):** | **​** | **​** | **​** | **​** **​** | **​** | ​ **​** |
| Foreign exchange gain (loss) | ​ | ​ 9 | ​ | ​ (2,399) | ​ | ​ 2,408 |
| Interest expense | ​ | ​ (7,469) | ​ | ​ (6,281) | ​ | ​ (1,188) |
| Asset contribution costs | ​ | ​ (22,780) | ​ | ​ — | ​ | ​ (22,780) |
| Gain on derivatives | ​ | ​ 20,862 | ​ | ​ — | ​ | ​ 20,862 |
| Gain on other financial liability | ​ | ​ 1,139 | ​ | ​ — | ​ | ​ 1,139 |
| Equity in earnings of unconsolidated joint venture | ​ | 1,365 |  | ​ 4,522 | ​ | ​ (3,157) |
| Total other expense | **​** | (6,874) |  | **​** (4,158) | ​ | ​ (2,716) |
| ​ | **​** | **​** | **​** | **​** **​** | **​** | ​ **​** |
| **(Loss) income from continuing operations before taxes** | ​ | ​ (154,524) | ​ | ​ 262,729 | ​ | ​ (417,253) |
| ​ | **​** | **​** **​** | **​** | **​** **​** | **​** | **​** **​** |
| Income tax benefit (provision) | ​ | ​ 20,205 | ​ | ​ (4,396) | ​ | ​ 24,601 |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Net (loss) income from continuing operations** | ​ | $(134,319) | ​ | $258,333 | ​ | $(392,652) |
| **​** | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Loss from discontinued operations (net of income tax of nil and nil, respectively)** | ​ | ​ — | ​ | ​ (7,626) | ​ | ​ 7,626 |
| **​** | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Net (loss) income** | ​ | ​ (134,319) | ​ | ​ 250,707 | ​ | ​ (385,026) |
| **​** | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Less: Net loss attributable to non-controlling interests | ​ | ​ 430 | ​ | ​ 169 | ​ | ​ 261 |
| **Net (loss) income attributable to Hut 8 Corp.** | ​ | $(133,889) | ​ | $250,876 | ​ | $(384,765) |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Net (loss) income** | ​ | $(134,319) | ​ | $250,707 | ​ | $(385,026) |
| Other comprehensive (loss) income: | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Foreign currency translation adjustments | ​ | ​ 1,187 | ​ | ​ (11,074) | ​ | ​ 12,261 |
| **Total comprehensive (loss) income** | ​ | ​ (133,132) | ​ | ​ 239,633 | ​ | ​ (372,765) |
| Less: Comprehensive loss attributable to non-controlling interest | ​ | ​ 431 | ​ | ​ 134 | ​ | ​ 297 |
| **Comprehensive (loss) income attributable to Hut 8 Corp.** | ​ | $(132,701) | ​ | $239,767 | ​ | $(372,468) |

Adjusted EBITDA reconciliation:

| ​ ​ ​ (in USD thousands) | ​ ​ ​ | ​ ​ Three Months Ended March 31, 2025 | ​ | ​ ​ 2024 | ​ ​ | ​ ​ ​ ​ Increase (Decrease) |
| --- | --- | --- | --- | --- | --- | --- |
| **Net (loss) income** | **​** | $(134,319) | ​ | $250,707 | ​ | $(385,026) |
| Interest expense | ​ | 7,469 | ​ | ​ 6,281 | ​ | ​ 1,188 |
| Income tax (benefit) provision | ​ | (20,205) | ​ | ​ 4,396 | ​ | ​ (24,601) |
| Depreciation and amortization | ​ | 14,899 | ​ | ​ 11,472 | ​ | ​ 3,427 |
| Share of unconsolidated joint venture depreciation and amortization (1) | ​ | 5,485 | ​ | ​ 5,349 | ​ | ​ 136 |
| Foreign exchange (gain) loss | ​ | ​ (9) | ​ | ​ 2,399 | ​ | ​ (2,408) |
| Losses (gains) on sale of property and equipment | ​ | ​ 2,454 | ​ | ​ (190) | ​ | ​ 2,644 |
| Gain on derivatives | ​ | ​ (20,862) | ​ | ​ — | ​ | ​ (20,862) |
| Gain on other financial liability | ​ | ​ (1,139) | ​ | ​ — | ​ | ​ (1,139) |
| Non-recurring transactions (2) | ​ | ​ 1,485 | ​ | ​ 4,300 | ​ | ​ (2,815) |
| Asset contribution costs | ​ | ​ 22,780 | ​ | ​ — | ​ | ​ 22,780 |
| Loss from discontinued operations (net of income tax of nil and nil, respectively) | ​ | ​ — | ​ | ​ 7,626 | ​ | ​ (7,626) |
| Net loss attributable to non-controlling interests before taxes | ​ | ​ 473 | ​ | ​ 169 | ​ | ​ 304 |
| Stock-based compensation expense | ​ | 3,793 | ​ | ​ 4,474 | ​ | ​ (681) |
| **Adjusted EBITDA** | **​** | $(117,696) | ​ | $296,983 | ​ | $(414,679) |

(1) Net of the accretion of fair value differences of depreciable and amortizable assets included in equity in earnings of unconsolidated joint venture in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income in accordance with ASC 323. See Note 9. *Investments in unconsolidated joint venture* of our Unaudited Condensed Consolidated Financial Statements for further detail.

(2) Non-recurring transactions for the three months ended March 31, 2025 represent approximately $1.5 million related to restructuring and American Bitcoin related transaction costs. Non-recurring transactions for the three months ended March 31, 2024 represent approximately $1.4 million of transaction costs related to the Far North JV acquisition and $2.9 million related to restructuring cost.

### Revenue

Total revenue was $21.8 million and $51.7 million for the three months ended March 31, 2025, and 2024, respectively, and consisted of Power, Digital Infrastructure, Compute, and Other.

#### Power

Power revenue was $4.4 million and $9.9 million for the three months ended March 31, 2025 and 2024, respectively. This $5.5 million decrease was primarily driven by an $8.2 million decrease in Managed Services revenue and cost reimbursements due to the termination of the Ionic managed services agreement in December 2024. This decrease was partially offset by a $2.7 million increase in electricity sales through the Far North JV reflecting a full quarter of activity in 2025, compared to a partial quarter of activity in the prior year period as the acquisition closed in February 2024.

#### Digital Infrastructure

Digital Infrastructure revenue was $1.3 million and $5.8 million for the three months ended March 31, 2025 and 2024, respectively. This $4.5 million decrease was primarily driven by a $4.3 million decrease in ASIC Colocation revenue as a result of the termination of our colocation agreement with Ionic during the fourth quarter of 2024 and a $0.2 million decrease in CPU Colocation revenue due to customer churn.

#### Compute

Compute revenue was $16.1 million and $32.1 million for the three months ended March 31, 2025 and 2024, respectively. This $16.0 million decrease was primarily driven by a $18.0 million decrease in Bitcoin Mining revenue, largely due to a decrease in Bitcoin mined. The decrease in Bitcoin mined was due to reduced uptime at our Medicine Hat and Salt Creek sites in order to complete our fleet upgrade, which not only involved the installation of higher-efficiency machines, but also targeted infrastructure upgrades at our sites to support higher rack-level power density. The decrease was also due to an increase in network difficulty and the halving event in April 2024 (we mined 135 Bitcoin during the three months ended March 31, 2025 versus 592 Bitcoin mined during the three months ended March 31, 2024), partially offset by an increase in the average revenue per Bitcoin mined from $51,769 to $92,224. The decrease was also driven by a $0.2 million decrease in revenue from our Data Center Cloud operations. These decreases were offset by a $2.2 million increase in revenue from our GPU-as-a-Service offering, which launched in September 2024.

#### Other

Other revenue was nil and $3.8 million for the three months ended March 31, 2025 and 2024, respectively. This $3.8 million decrease was due to nil equipment sales during the three months ended March 31, 2025.

### Cost of Revenue

Total cost of revenue was $18.7 million and $28.1 million for the three months ended March 31, 2025 and 2024, respectively, and consisted of Power, Digital Infrastructure, Compute, and Other.

#### Power

Power cost of revenue was $3.6 million for each of the three months ended March 31, 2025 and 2024. The cost of revenue was consistent, primarily due to a $1.9 million increase in cost of revenue related to the Far North JV, which was acquired in February 2024, offset by the decrease in our Managed Services related operating costs of $1.9 million due to the termination of our Ionic managed services agreement in December 2024.

#### Digital Infrastructure

Digital Infrastructure cost of revenue was $1.6 million and $4.6 million for the three months ended March 31, 2025 and 2024, respectively. This $3.0 million decrease was primarily driven by a $3.3 million decrease in ASIC Colocation cost of revenue as a result of the termination of our colocation agreement with Ionic during the fourth quarter of 2024, partially offset by a $0.3 million increase in the cost of revenue related to CPU Colocation operations due to higher electricity and connectivity costs.

#### Compute

Compute cost of revenue was $13.5 million and $17.7 million for the three months ended March 31, 2025 and 2024, respectively. This $4.2 million decrease was primarily driven by a $10.3 million decrease in the cost of revenue related to Bitcoin Mining primarily due to the termination of the third-party hosting agreement at Kearney and Granbury. This decrease was partially offset by a $0.8 million increase in costs related to our new GPU-as-a-Service offering, launched in September 2024 and a $5.3 million increase in power, site maintenance, and personnel costs due to the development and energization of our Salt Creek site, which became operational during April 2024.

#### Other

Other cost of revenue was nil and $2.2 million for the three months ended March 31, 2025 and 2024, respectively. This $2.2 million decrease was a result of nil equipment sold for the three months ended March 31, 2025.

### Depreciation and Amortization

Depreciation and amortization expense was $15.0 million and $11.5 million for the three months ended March 31, 2025 and 2024, respectively. This $3.5 million increase was primarily driven by $1.3 million of higher depreciation related to the Far North JV transaction, which was completed in February 2024, and $2.2 million of depreciation from the acquired assets related to GPU-as-a-Service operations launched in September 2024.

### General and Administrative Expenses

General and administrative expenses were $21.1 million and $20.0 million for the three months ended March 31, 2025 and 2024, respectively. This $1.1 million increase was primarily driven by a $3.4 million increase in salary and benefits due to an increased number of employees to support our growth, a $1.3 million increase in transaction costs related to the American Bitcoin transaction, and a $1.1 million increase in professional fees primarily due to legal and tax expenses incurred to support executing our growth plans. These increases were offset by a $2.6 million decrease in restructuring expenses, a $1.4 million decrease in Far North JV acquisition costs, and a $0.7 million decrease in costs related to stock-based payments.

### Losses (gains) on digital assets

Losses on digital assets were $112.4 million for the three months ended March 31, 2025, compared to gains on digital assets of $274.6 million for the three months ended March 31, 2024. The losses were due to the decrease in Bitcoin price from approximately $93,354 as of December 31, 2024 compared to approximately $82,534 as of March 31, 2025. In contrast, the price of Bitcoin as of December 31, 2023 of approximately $42,288 increased to approximately $71,289 as of March 31, 2024.

### Other expense

Other expense was $6.9 million for the three months ended March 31, 2025, compared to other expense of $4.2 million for the three months ended March 31, 2024. This $2.7 million increase was primarily driven by $22.8 million in asset contribution costs related to non-controlling interest portion of American Bitcoin, a $1.2 million increase in interest expense due to an increase in the amount of average borrowing in 2025, and a $3.2 million decrease in equity in earnings of King Mountain JV due to the impact of the halving event in April 2024 on Bitcoin Mining revenue. This was slightly offset by $20.9 million gain on derivatives related to our Bitcoin redemption option and call options, and a $2.4 million increase in foreign exchange gain due to a decline in the Canadian dollar to U.S. dollar exchange rate related to our net U.S. dollar denominated liability position in our Canadian dollar functional currency subsidiaries.

### Income tax

Our income tax benefit was $20.2 million and our income tax provision was $4.4 million for the three months ended March 31, 2025 and 2024, respectively. This $24.6 million decrease was primarily due to deferred taxes related to the loss on digital assets and valuation allowance for the three months ended March 31, 2025.

### King Mountain JV

The King Mountain JV is a 50/50 joint venture with one of the world’s largest renewable energy producers. The King Mountain JV has 280 MW of self-mining and hosting operations located behind-the-meter at a wind farm in McCamey, Texas.

As of March 31, 2025, the King Mountain JV owned approximately 18,000 miners for self-mining (about 1.8EH/s) and hosted approximately 68,200 miners (about 7.7 EH/s) for a single hosting customer at its wholly-owned King Mountain site, which has a total capacity of 280 MW.

We account for the King Mountain JV using the equity method of accounting, resulting in reporting the King Mountain JV as an unconsolidated joint venture. Additionally, our 50% portion of any distributions from the King Mountain JV are used to pay down the TZRC Secured Promissory Note. See Note 9. *Investment in unconsolidated joint venture* and Note 10. *Loans, notes payable, and other financial liabilities* to the consolidated financial statements found elsewhere in this Quarterly Report for additional information on the King Mountain JV and TZRC Secured Promissory Note.

Below are the condensed consolidated income statements for the King Mountain JV for the three months ended March 31, 2025 and March 31, 2024.

*Condensed Consolidated Income Statement*

| ​ ​ ​ (in USD thousands) | ​ ​ ​ | ​ ​ Three Months Ended March 31, 2025 | ​ ​ | ​ ​ 2024 |
| --- | --- | --- | --- | --- |
| Total revenue, net | ​ | $33,913 | ​ | $41,194 |
| Gross profit | ​ | ​ 14,833 | ​ | ​ 21,595 |
| Net (loss) income | ​ | ​ (756) | ​ | ​ 5,558 |
| Net (loss) income attributable to investee | ​ | ​ (378) | ​ | ​ 2,779 |

Our Board and management team also evaluate Adjusted EBITDA for the King Mountain JV, which is a non-GAAP financial measure. We define Adjusted EBITDA as net income (loss) before depreciation and amortization and interest income. We use Adjusted EBITDA to assess the King Mountain JV’s financial performance because it allows us to compare the operating performance on a consistent basis across periods by removing the effects of the King Mountain JV’s capital structure.

Net income (loss) is the GAAP measure most directly comparable to Adjusted EBITDA. This non-GAAP financial measure should not be considered as an alternative to the most directly comparable GAAP financial measure. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in such presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. There can be no assurance that we will not modify the presentation of Adjusted EBITDA in the future, and any such modification may be material. Adjusted EBITDA has important limitations as an analytical tool, and you should not consider Adjusted EBITDA in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA may be defined differently by other companies in our industry, our definition of this non-GAAP financial measure may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.

| ​ ​ ​ (in USD thousands) | ​ ​ Three Months Ended March 31, 2025 | ​ ​ | ​ ​ 2024 |
| --- | ---: | --- | ---: |
| Net (loss) income | $(756) | ​ | $5,558 |
| Depreciation and amortization | 15,706 |  | 15,433 |
| Interest income | ​ (975) | ​ | ​ (475) |
| Adjusted EBITDA | $13,975 | ​ | $20,516 |

### Liquidity and Capital Resources

Our primary sources of liquidity include our cash and cash equivalents, debt facilities, strategic Bitcoin reserve, equity sales, and the cash flows generated from operations. Historically, our primary cash needs have been for working capital to support equipment financing, including the purchase of additional Bitcoin miners, growth initiatives, including infrastructure purchases, development opportunities, and acquisitions.

On December 4, 2024, we entered into a Controlled Equity Offering Sales Agreement establishing an at-the-market offering, allowing us to offer and sell up to $500.0 million of our common stock from time to time (the “2024 ATM”). Concurrently, we launched a $250.0 million stock repurchase program enabling us to repurchase up to 4,683,936 shares of our common stock (representing 5.0% of our issued and outstanding common stock as of December 4, 2024) within twelve months of launch.

During the three months ended March 31, 2025, we issued and sold 4,205,019 shares of our common stock under the 2024 ATM for gross proceeds of $113.1 million, incurred issuance costs of $1.1 million, and repurchased nil shares of our common stock under the stock repurchase program.

Our ability to meet our anticipated cash requirements will depend on various factors including our ability to maintain our existing business, enter into new lines of business, provide new offerings, compete with existing and new competitors in existing and new markets and offerings, acquire new businesses or pursue strategic transactions, and respond to global and domestic economic, geopolitical, social conditions and their impact on demand for our offerings.

We believe that cash flows generated from operating activities, our strategic Bitcoin reserve, and the 2024 ATM will meet our anticipated cash requirements in the short-term. On a long-term basis, we plan to rely on access to the capital markets for any long-term funding not provided by operating cash flows, cash on hand, and our strategic Bitcoin reserve.

### Cash Flows

The following table summarizes our cash flows for the periods indicated:

| ​ ​ ​ (in USD thousands) | ​ ​ | ​ ​ Three Months Ended March 31, 2025 | ​ ​ | ​ ​ 2024 |
| --- | --- | ---: | --- | ---: |
| Cash flows used in operating activities | ​ | $(33,849) | ​ | $(26,343) |
| Cash flows (used in) provided by investing activities | ​ | $(58,236) | ​ | $23,325 |
| Cash flows provided by (used in) financing activities | ​ | $115,519 | ​ | $(14,647) |

#### Operating Activities

Net cash used in operating activities was $33.8 million for the three months ended March 31, 2025, resulting from a net loss of $134.3 million, offset by the deduction of non-cash adjustments of $107.8 million and unfavorable changes in assets and liabilities of $7.3 million. Net cash used in operating activities was $26.3 million for the three months ended March 31, 2024, resulting from net income of $252.7 million, offset by non-cash adjustments of $268.9 million and unfavorable changes in assets and liabilities of $10.1 million.

#### Investing Activities

Net cash used in investing activities totaled $58.2 million for the three months ended March 31, 2025, primarily consisting of $63.3 million in property and equipment purchases, and $0.9 million related to other intangibles purchases. These outflows were partially offset by $3.4 million in proceeds from Bitcoin sales, and $2.6 million in proceeds from the sale of property and equipment. Net cash provided by investing activities totaled $23.3 million for the three months ended March 31, 2024, primarily consisting of $37.9 million in proceeds from Bitcoin sales, $4.2 million in proceeds from the sale of property and equipment, and $1.0 million in cash added as part of the Far North JV acquisition. These inflows were partially offset by $13.5 million in the property and equipment purchases and $6.4 million cash payment in exchange for shares in Ionic.

#### Financing Activities

Net cash provided by financing activities was $115.5 million for the three months ended March 31, 2025, primarily consisting of $112.0 million in net proceeds from the issuance of common stock through our 2024 ATM and $3.5 million in proceeds from funding in relation to our GPU-as-a-Service business segment. Net cash used in financing activities was $14.6 million for the three months ended March 31, 2024, primarily consisting of $29.4 million in loan repayments, offset by $14.8 million in proceeds from a loan drawdown.

### Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our Unaudited Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these Unaudited Condensed Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. We evaluate our estimates and assumptions on an ongoing basis and base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for the judgments we make about the carrying value of assets and liabilities that are not readily apparent from other sources. Because these estimates can vary depending on the situation, actual results may differ from these estimates. Making estimates and judgments about future events is inherently unpredictable and is subject to significant uncertainties, some of which are beyond our control. Should any of these estimates and assumptions change or prove to have been incorrect, it could have a material impact on our results of operations, financial position, and statement of cash flows.

There have been no material changes to our critical accounting policies and estimates disclosed in the Annual Report other than as described in Note 2. *Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements* in our Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

### Use of Estimates

The preparation of financial statements in conformity with GAAP 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. The most significant accounting estimates inherent in the preparation of our financial statements include estimates associated with revenue recognition, determining the useful lives and recoverability of long-lived assets, impairment analysis of finite-lived intangibles and digital assets, and current and deferred income tax assets (including the associated valuation allowance) and liabilities.

## Market risk

As filed, 3,819 characters.

### Market Price Risk of Bitcoin

We hold a significant amount of Bitcoin; therefore, we are exposed to the impact of market price changes in Bitcoin. As of March 31, 2025, we held 10,264 Bitcoin. The fair value of a single Bitcoin was approximately $82,534 as of March 31, 2025; therefore, the fair value of our Bitcoin holdings as of March 31, 2025 was approximately $847.2 million. Declines in the fair market value of Bitcoin will impact the cash value that would be realized if we were to sell our Bitcoin for cash, therefore having a negative impact on our liquidity.

### Custodian Risk

Our Bitcoin is held with third-party custodians, Coinbase Custody, NYDIG, and BitGo, which we select based on various factors, including their financial strength and industry reputation. Custodian risk refers to the potential loss, theft, or misappropriation of our Bitcoin assets due to operational failures, cybersecurity breaches, or financial difficulties experienced by these third parties. Although we periodically monitor the financial health, insurance coverage, and security measures of our custodians, reliance on such third parties inherently exposes us to risks that we cannot fully mitigate.

### Credit Risk

Credit risk arises from our practice of pledging Bitcoin as collateral in transactions with counterparties. We mitigate this risk by engaging with counterparties that we believe possess strong creditworthiness based on their size, credit quality, and reputation, among other factors. During the three months ended March 31, 2025, we have not incurred any material loss from such transactions. However, there remains a risk that a counterparty could default on its obligations to us, which might result in a material loss. We continually assess the credit risk associated with our counterparties and, if necessary, recognize a loss provision or write-down. Credit risk also arises from us placing our cash and demand deposits in financial institutions. Although we strive to limit our exposure by placing cash and demand deposits with financial institutions with a high credit standing, there can be no assurances that we are able to mitigate our credit risk.

### Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

We have two loans that maintain a variable interest rate. The first is the TZRC Secured Promissory Note, which includes a maximum interest rate of 15.25%. The second is the Coinbase credit facility, which bears interest at a rate of 5.0% plus the greater of (i) the US Federal Funds Target Rate – Upper Bound and (ii) 3.25%. As a result, changes in market interest rates could affect our operations over certain periods and may also impact our ability to finance projects. For more information regarding the TZRC Secured Promissory Note and Coinbase credit facility, see Note 10. *Loans, notes payable, and other financial liabilities* to the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

In addition, our exposure to interest rate risk relates to our ability to earn interest income on cash balances at variable rates. Changes in short term interest rates are not expected to have a significant effect on the fair value of our cash account.

### Tariff Risk

Changes in government and economic policies, incentives, or tariffs may also have an impact on equipment that we import. While the final scope and application of recently announced changes in U.S trade policy remain uncertain at this time, higher tariffs on imports and subsequent retaliatory tariffs could adversely impact our ability to import equipment at levels that are cost effective. We plan to continue to adjust accordingly to such developments.

## Controls and procedures

As filed, 6,028 characters.

### Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), designed to ensure that information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized, and reported within the specified time periods. Our disclosure controls and procedures are also designed to ensure that information required to be disclosed in the reports that we file and submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to enable timely decisions regarding required disclosure.

As of the end of the period covered by this report, our Chief Executive Officer and Chief Financial Officer, with the participation of our management, have concluded that our disclosure controls and procedures were not effective as of March 31, 2025 due to the identification of material weaknesses in our internal control over financial reporting, as further described in Item 9A of our Annual Report and below.

Our management, including our Chief Executive Officer and Chief Financial Officer, recognize that any system of disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance rather than absolute assurance of achieving its objectives. The design of a control system must reflect resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation can provide absolute assurance that all control issues or instances of fraud, if any, will be detected. These inherent limitations include the possibility of faulty judgments, errors or mistakes, and the potential for controls to be circumvented by individual acts, collusion among employees, or management override. Moreover, the design of any control system is based on certain assumptions regarding future events, and there is no guarantee that any design will succeed under all potential future conditions. Over time, controls may become inadequate due to changes in conditions or deterioration in compliance with policies or procedures. Consequently, misstatements due to error or fraud may occur and not be detected.

### Material Weaknesses in Internal Control and Plan for Remediation

Based on our evaluation, management previously identified the following material weaknesses in internal control over financial reporting that remained open as of December 31, 2024:

- our control pertaining to the review was not operating effectively as it relates to the calculation of the deferred tax provision for Bitcoin held in an international jurisdiction; and
- our control pertaining to the review of a complex accounting transaction related to our BITMAIN miner purchase agreement was not operating effectively.

These material weaknesses did not result in a material misstatement to our previously issued Consolidated Financial Statements, nor in the Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report.

### Remediation

Our board of directors and management take internal control over financial reporting and the integrity of our financial statements seriously. Management continues to work to improve our controls related to the material weaknesses described above. Management will continue to implement measures to remediate the material weaknesses, such that these controls are designed, implemented, and operating effectively. In order to achieve the timely implementation of the above, management has commenced the following actions and will continue to assess additional opportunities for remediation on an ongoing basis:

- replaced our existing third-party advisor who prepared and supported our review of the deferred taxes calculation with an advisor who has additional expertise in calculating deferred income taxes in the international jurisdictions in which we operate;
- replaced our existing third-party advisor who supported our review of the BITMAIN miner purchase agreement with an advisor who has additional expertise in Bitcoin-related transactions; and
- continue developing and implementing enhanced controls related to the review of certain of our third-party advisors with respect to their review of certain complex transactions.

While these remedial actions are designed to correct the material weaknesses, changes to internal control over financial reporting require operation for a sufficient period of time in order for management to evaluate and test the operating effectiveness. Management will continue to monitor and evaluate the effectiveness of the change for a sufficient period of time prior to concluding that these controls are designed and operating effectively, at which time, the material weaknesses can be considered remediated.

### Changes in Internal Control Over Financial Reporting

Other than the remediation efforts that are in process, there were no changes in our internal control over financial reporting that occurred during the three months ended March 31, 2025 that materially affected, or that are reasonably likely to materially affect our internal control over financial reporting.

The material weaknesses cannot be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. Therefore, to remediate our existing material weaknesses, we require additional time to complete the implementation and testing of our remediation plans and demonstrate the effectiveness of our remediation efforts.

There were no changes in our internal control over financial reporting that occurred during the three months ended March 31, 2025 that materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 1,288 characters.

As of the date of this Quarterly Report, there have been no material changes from the risk factors set forth in Part I, Item IA of the Annual Report. We are subject to various risks and uncertainties that could materially adversely affect our business, financial condition, results of operations, and the trading price of our common stock. You should carefully read and consider the risks and uncertainties included in the Annual Report, together with all of the other information in the Annual Report and this Quarterly Report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, and other documents that we file with the SEC. The risks and uncertainties described in these reports may not be the only ones we face. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business, financial condition, or results of operations. The factors discussed in these reports, among others, could cause our actual results to differ materially from historical results and those expressed in forward-looking statements made by us or on our behalf in filings with the SEC, press releases, communications with investors, and oral statements.

Filed May 8, 2025.
Source: SEC EDGAR, the filing index for accession 0001558370-25-006845. Last ingested by Listed: Nov 4, 2026, 07:17 ET. No prices; not investment advice.