Note 5. Fixed Assets and Intangible Assets, net

As of December 31, 2025 and 2024, there were approximately 7,200 and 5,840 mining machines, respectively, at various hosting sites. The Company’s depreciation expense recognized for the years ended December 31, 2025 and 2024 was approximately $7.9 million and $7.8 million, respectively.

We purchased 270 S21+ Bitmain machines in December 2024 for an aggregate purchase price of approximately $1.0 million, net of coupons and credits. The machines were delivered in April 2025 and were subsequently sold for approximately $1.0 million in May 2025.

Impairment loss and loss on disposal

Due to the sharp decrease in Bitcoin price during the fourth quarter of the year ended December 31, 2025 management performed a recoverability test to compare the carrying amount of mining machines to the undiscounted future cash flows expected to be generated by the assets. The test concluded it was more likely than not that impairment was present therefore a fair value assessment was performed using a sales comparable approach. Based on the fair value assessment, an impairment loss of $5.3 million was determined as the amount by which the carrying amount of the mining machines exceeded their fair value. Additionally, during the fourth quarter of the year ended December 31, 2025, 729 S19 miners in storage were deemed inoperable and an impairment charge of $63 thousand was recorded.

In order to accommodate a shipment of S21 mining machines in April 2024, management identified 365 mining machines at a Core hosting facility that would require relocation. As part of its impairment testing management considered the possible cashflows and probabilities associated with the relocation and continued use of 365 mining machines at a separate hosting facility location and the potential sale of such assets to a third party. Based on the assessment performed, management concluded a sale was probable and an impairment of $1.2 million on the mining machines was recorded as of March 31, 2024, which was calculated as the net carrying value of the 365 mining machines of $1.3 million less the sales price of $79 thousand.

An impairment loss of $5.4 million and $1.4 million was recorded on our consolidated statements of operations as “Impairment loss on mining equipment” for the year ended December 31, 2025 and 2024, respectively.

Approximately $502 thousand and $136 thousand of loss related to the write-off of mining machines was recorded within “Loss on disposal of assets” in the consolidated statements of operations during the years ended December 31, 2025 and 2024, respectively.

Intangible assets

During the year ended December 31, 2025, as part of the Mississippi Site acquisition the Company acquired interconnection rights with a fair value of approximately $1.1 million. During the year ended December 31, 2024, as part of the Arthur acquisition the Company acquired certain power purchase contracts and interconnection rights with a fair value of approximately $5.5 million. Refer to Note 3.