v3.25.2
FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities measured at fair value are classified and disclosed in one of the following categories based on the inputs used to derive the fair value:
Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 — Quoted prices in markets that are not active and financial instruments for which all significant inputs are observable, either directly or indirectly; or
Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable
The Company’s financial assets and liabilities subject to fair value measurement on a recurring basis and the level of inputs used for such measurements were as follows as of the dates indicated (in thousands):
Fair Value Measured as of June 30, 2025
Level 1Level 2Level 3Total
Assets included in:
Cash and cash equivalents
Money market securities$21,579 $- $- $21,579 
Restricted cash
Money market securities14,392 - - 14,392 
Bitcoin112,089 - - 112,089 
Accounts receivable1,575 - - 1,575 
Prepaid expenses and other current assets
 Bitmain Bitcoin Options
- 5,007 - 5,007 
Derivative asset- - 77,520 77,520 
$149,635 $5,007 $77,520 $232,162 
Fair Value Measured as of December 31, 2024
Level 1Level 2Level 3Total
Assets included in:   
Cash and cash equivalents   
Money market securities$4,314 $- $- $4,314 
Restricted cash
Money market securities14,392 - - 14,392 
Bitcoin92,651 - - 92,651 
Receivable for bitcoin collateral- 32,248 - 32,248 
Accounts receivable596 - - 596 
Derivative asset- - 85,670 85,670 
$111,953 $32,248 $85,670 $229,871 
Liabilities included in:  
Short-term borrowings
Bitcoin loan payable$7,330 $- $- $7,330 
$7,330 $- $- $7,330 
The Company’s financial assets and liabilities not subject to fair value measurement on a recurring basis and the level of inputs used for such measurements were as follows as of the dates indicated (in thousands):
June 30, 2025
Total carrying valueLevel 1Level 2Level 3Total
Liabilities included in:
Long-term borrowings
2030 Convertible Notes$167,113 $- $222,380 $- $222,380 
$167,113 $- $222,380 $- $222,380 
December 31, 2024
Total carrying valueLevel 1Level 2Level 3Total
Liabilities included in:
Long-term borrowings
2030 Convertible Notes$- $- $- $- $- 
$- $- $- $- $- 
The carrying values reported in the Company’s consolidated balance sheets for cash (excluding cash equivalents which are recorded at fair value on a recurring basis), accounts payable and accrued expenses and other current liabilities are reasonable estimates of their fair values due to the short-term nature of these items.
There were no transfers of financial instruments between Level 1, Level 2 and Level 3 during the periods presented.
Level 3 asset
The Company’s derivative asset, related to the Luminant Power Agreement, is divided between current and noncurrent assets, and was initially recorded on its consolidated balance sheets on the derivative asset’s effective date of July 1, 2022, with an offsetting amount recorded to change in fair value of derivative asset in costs and operating expenses on the consolidated statements of operations. Subsequent changes in fair value are also recorded to change in fair value of derivative asset. The Luminant Power Agreement was not designated as a hedging instrument. The estimated fair value of the Company’s derivative asset was derived from Level 2 and Level 3 inputs (i.e., unobservable inputs) due to a lack of
quoted prices for similar type assets and as such, is classified in Level 3 of the fair value hierarchy. Specifically, the discounted cash flow estimation models contain quoted spot and forward prices for electricity, as well as estimated usage rates consistent with the terms of the Luminant Power Agreement, the initial term of which is five years, and a remaining term of approximately 2.1 years. The valuations performed by the third-party valuation firm engaged by the Company utilized pre-tax discount rates of 5.33% and 5.96% as of June 30, 2025 and December 31, 2024, respectively, and include observable market inputs, but also include unobservable inputs based on qualitative judgment related to company-specific risk factors. Unrealized gains associated with the derivative asset within the Level 3 category include changes in fair value that were attributable to amendments to the Luminant Power Agreement, changes to the quoted forward electricity rates, as well as unobservable inputs (e.g., changes in estimated usage rates and discount rate assumptions).
The following table presents the changes in the estimated fair value of the derivative asset measured using significant unobservable inputs (Level 3) for the six months ended June 30, 2025 and 2024 (amounts in thousands):
Six Months Ended June 30,
20252024
Opening balance$85,670 $93,591 
Change in fair value(8,150)29,339 
Ending balance$77,520 $122,930 
Level 3 liability
The Company’s Private Placement Warrants (as defined in Note 16. Warrants) were its only liability classified within Level 3 of the fair value hierarchy because the fair value is based on significant inputs that are unobservable in the market. The valuation of the Private Placement Warrants used assumptions and estimates the Company believes would be made by a market participant in making the same valuation. As of March 31, 2024, all Private Placement Warrants were converted to Public Warrants, and as such no Private Placement Warrants were outstanding as of June 30, 2025.
The Company engaged a valuation firm to determine the fair value of the Private Placement Warrants using a Black-Scholes option-pricing model and the quoted price of Common Stock. The following table presents significant assumptions utilized in the valuations of the Private Placement Warrants as of the dates indicated:
December 31, 2023
Risk-free rate4.00%
Dividend yield rate0.00%
Volatility124.0%
Contractual term (in years)2.7
Exercise price$11.50
The following table presents changes in the estimated fair value of the Private Placement Warrants (amounts in thousands):
Balance as of December 31, 2024$— 
Change in fair value— 
Balance as of June 30, 2025$— 
Balance as of December 31, 2023$250 
Change in fair value(250)
Balance as of June 30, 2024$—