Note 6. Digital assets

The following table presents the changes in the carrying amount of digital assets as of June 30, 2024 and June 30, 2025:

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The Company’s digital assets are either held in segregated custody accounts for the benefit of the Company, held in segregated custody accounts under the Company’s ownership and pledged as collateral under a borrowing arrangement or in connection with covered call options sold, or held by BITMAIN for the Bitcoin pledged in connection with the BITMAIN Purchase Agreement (as defined below) for miner purchases from them. The details of the digital assets are as follows:

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In November 2024, the Company entered into a purchase agreement with Bitmain Technologies Delaware Limited (together with its affiliates, “BITMAIN”) to purchase approximately 30,000 BITMAIN Antminer S21+ ASIC miners (as amended, the “BITMAIN Purchase Agreement”). In December 2024, in connection with the BITMAIN Purchase Agreement, the Company completed its Bitcoin pledge by depositing 968 Bitcoin into a segregated wallet with BITMAIN, which was originally subject to a three-month redemption right from the shipment date of the purchased ASIC miners, whereby the Company has the option to repurchase, with cash, the pledged Bitcoin at a mutually agreed upon fixed price. If the Company does not exercise this right within the redemption period, BITMAIN will retain full ownership of the pledged Bitcoin as consideration for the purchased ASIC miners. During the six months ended June 30, 2025, the Company amended the redemption period to end during the quarter ending September 30, 2025. In August 2025, the Company amended the redemption period to end during the quarter ending December 31, 2025.

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As of June 30, 2025, the Company had pledged 968 Bitcoin with a fair value of $103.7 million, classified as Digital assets – pledged for miner purchase under current assets on its Unaudited Condensed Consolidated Balance Sheets. A corresponding liability of $100.9 million was recorded under Miner purchase liability under current liabilities on the Company’s Unaudited Condensed Consolidated Balance Sheets, reflecting its obligation to either redeem the pledged Bitcoin for cash or put it towards the purchase of ASIC miners by not redeeming the pledged Bitcoin at the end of the redemption period.

In accordance with FASB ASC Topic 610-20, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets, the Company assessed the transfer of nonfinancial assets, Bitcoin, under FASB ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Specifically, the Company noted that the Bitcoin pledged to BITMAIN under the BITMAIN Purchase Agreement constitutes a repurchase agreement under ASC 606. As a result, the Bitcoin was not derecognized upon transfer as the Company retains a repurchase option.

Due to the redemption right and the Company’s continued economic exposure to the Bitcoin, the pledged Bitcoin is separately classified as Digital assets – pledged for miner purchase on the Unaudited Condensed Consolidated Balance Sheets, which represents restricted Bitcoin.

The Company recorded a Bitcoin redemption right derivative asset with an initial fair value of $15.1 million. See Note 11. Derivatives for further information on this derivative asset.

During the period from July 1, 2025 to August 6, 2025, the Company’s majority owned subsidiary, American Bitcoin, purchased approximately 1,726 Bitcoin for $205.6 million, at a weighted average price of approximately $119,120 per Bitcoin, to further expand its strategic Bitcoin reserve.

In August 2025, the Company’s majority owned subsidiary, American Bitcoin, entered into an On-Rack Sales and Purchase Agreement (the “ABTC BITMAIN Purchase Agreement”) with Bitmain Technologies Georgia Limited (“BITMAIN Georgia”) to purchase up to approximately 17,280 BITMAIN Antminer U3S21EXPH ASIC miners (collectively, the “BITMAIN Miners”) in one or more tranches, representing a total of approximately 14.86 exahash per second (“EH/s”), for a total purchase price of up to approximately $319.5 million (subject to adjustments, offsets and costs as set forth in the ABTC BITMAIN Purchase Agreement). Concurrently with the signing of the ABTC BITMAIN Purchase Agreement, American Bitcoin purchased 16,299 BITMAIN Miners, representing a total of approximately 14.02 EH/s, for a total purchase price of approximately $314.0 million, which was reduced by the application of a deposit and certain expenses of approximately $46.0 million previously paid to BITMAIN Georgia, through the pledge of approximately 2,234 Bitcoin at a mutually agreed upon fixed price. The remaining BITMAIN Miners must be purchased by American Bitcoin within two months of entering into the ABTC BITMAIN Purchase Agreement by paying cash and/or pledging additional Bitcoin. The Bitcoin pledged under the ABTC BITMAIN Purchase Agreement has a redemption period of 24 months from each pledge date.