v3.26.1
Derivative Assets and Liabilities
 12 Months Ended
Dec. 31, 2025
Derivative Assets and Liabilities [Abstract]  
DERIVATIVE ASSETS AND LIABILITIES

NOTE 10: DERIVATIVE ASSETS AND LIABILITIES

 

Bitcoin option and selling contracts

 

The Company purchased Bitcoin option contracts that provide it with the right, but not the obligation, to sell digital assets at a fixed price. The Company also entered into contracts and earned premiums by agreeing to sell Bitcoin if the Bitcoin price reached specific targets.

 

Bitcoin redemption options and redemption obligations

 

Starting in November 2024, the Company entered into purchase orders of Miners with a supplier which allows the Company to pay for the Miners in cash, Bitcoin or a combination of both. In the event that the Company elects to pay using Bitcoin (Bitcoin Pledged, as defined in Note 8) either in full or partially, the Company has the option to redeem the Bitcoin Pledged at the price originally pledged in four quarterly installments (“Bitcoin Installments”) within 12 months after the redemption period starts. The redemption period starts when the Miners are shipped. If the Company elects not to redeem one of the Bitcoin Installments, the Company forfeits the right to redeem the remaining Bitcoin Installments. The right to redeem the Bitcoin (“Bitcoin Redemption Option”) meets the definition of an embedded derivative.

 

A redemption obligation was recognized for the remaining Bitcoin Redemption Options for which Miners have been shipped, reflecting the Company’s obligation to either redeem the Bitcoin Pledged for cash or use the Bitcoin Pledged for the purchase of the Miners. As of December 31, 2025, the redemption obligation was nil since the Company exercised its option to redeem 393 Bitcoin for $37,097 and forfeited its remaining options to redeem 41 Bitcoin totaling $4,352 during the year ended December 31, 2025. No redemption obligation was recognized as of December 31, 2024, as the Miners ordered, for which the deposit payment in Bitcoin was made, had not yet been shipped.

 

Capped call transactions

 

In October 2025, in connection with the Convertible Notes, the Company entered into capped call transactions, with a cap price of $11.88 per share (representing a 125% premium over the reference price). The capped call transactions do not meet the scope exception from derivative accounting, as they fail the equity classification requirements as the Company cannot settle these transactions by means other than cash and are therefore treated as a derivative asset, which are measured at fair value.

The following table summarizes the derivatives and reconciles the fair value measurement, which are classified within Level 2 of the fair value hierarchy:

 

   As of December 31,   As of December 31, 
   2025   2024 
   Capped call transactions   Bitcoin redemption options   Bitcoin option and selling contracts   Bitcoin redemption options   Bitcoin option and selling contracts 
                     
   Derivative Assets   Derivative Assets   Derivative Assets   Derivative Liabilities   Derivative Assets   Derivative Assets   Derivative Liabilities 
Balance as of January 1,   
—
    3,418    
—
    (128)   
—
    1,281    
—
 
Initial recognition   69,090    1,072    
—
    
—
    1,349    
—
    
—
 
Purchases   
—
    
—
    89,478    64,965    
—
    13,610    351 
Settlement   
—
    
—
    (73,659)   (99,256)   
—
    (30,762)   (358)
Remeasurement recognized in statement of operations   (63,890)   (4,490)   (13,532)   31,497    2,069    15,871    (121)
Balance as of period end   5,200    
—
    2,287    (2,922)   3,418    
—
    (128)
                                    
Total derivative assets   2,287                   3,418           
Total long-term derivative assets   5,200                   
—
           
Total derivative liabilities   (2,922)                  (128)          

 

The following gain (loss) on derivatives is recognized in the consolidated statements of operations:

 

   Year ended December 31, 
   2025   2024   2023 
Gain (loss) on Bitcoin options and selling contracts               
Unrealized change in fair value of outstanding contracts   1,323    (179)   409 
Realized gain (loss) on settled contracts   16,642    15,929    (361)
    17,965    15,750    48 
Gain (loss) on Bitcoin redemption options               
Unrealized change in fair value   (2,069)   2,069    
—
 
Realized loss on settled options   (2,421)   
—
    
—
 
    (4,490)   2,069    
—
 
Loss on Capped call transactions               
Unrealized change in fair value   (63,890)   
—
    
—
 
                
(Loss) gain on derivative assets and liabilities   (50,415)   17,819    48 

 

Refer to Note 22 for more details of derivative instruments.