Note 9. Investments in unconsolidated joint venture

On November 25, 2022, a subsidiary of the Company acquired a 50% membership interest in TZRC LLC (“TZRC”), an early stage operator of vertically integrated digital asset mining and power facilities (the “Acquired Interests”). The transaction closed on December 6, 2022.

The consideration paid by the Company’s subsidiary for the acquisition of the Acquired Interests consisted of $10.0 million of cash and the assumption of a senior secured promissory note (the “TZRC Secured Promissory Note”) with a fair value estimate as of the transaction date of approximately $95.1 million. See Note 10. Loans, notes payable, and other financial liabilities for a discussion of the TZRC Secured Promissory Note.

TZRC is a two-member operating joint venture where both members jointly control the essential areas of the entity’s business. The purpose of TZRC is to develop, construct, install, own, finance, rent, and operate one or more modular data centers located on or near renewable power sources for purposes of digital asset mining. The entity self-mines and provides hosting services. The Company assumed the role of property manager under a property management agreement (“PMA”) to provide day-to-day management and oversight services of TZRC’s data center facilities. The service contract has a term of 10 years and is automatically renewed for successive one-year terms unless either party provides written notice of non-renewal. As property manager, the Company is entitled to approximately $1.5 million per year, subject to downward adjustment based on capacity utilization of TZRC’s data centers. In addition, the PMA allows pass through costs on behalf of the Company, such as payroll and other incidental costs. Pass through costs for the three months ended June 30, 2025 and June 30, 2024 were approximately $0.8 million and $0.6 million, respectively. Pass through costs for the six months ended June 30, 2025 and June 30, 2024 were approximately $1.4 million and $1.0 million, respectively.

The Company accounts for its indirect 50% interest in TZRC using the equity method of accounting. For the three months ended June 30, 2025 and June 30, 2024, the Company recorded its ownership percentage of income of TZRC within Equity in earnings of unconsolidated joint venture in the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for $0.7 million of net loss and $0.7 million of net income, respectively. For the six months ended June 30, 2025 and June 30, 2024, the Company recorded $1.1 million of net loss and $3.5 million of net income, respectively. The carrying value of the Company’s investment in TZRC was $84.4 million and $82.0 million as of June 30, 2025 and December 31, 2024, respectively, and is included in the Company’s Unaudited Condensed Consolidated Balance Sheets.

A summarized consolidated income statement for TZRC during the three and six months ended June 30, 2025 and June 30, 2024 are as follows:

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A summarized consolidated balance sheet for TZRC as of June 30, 2025 and December 31, 2024 follows:

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