NOTE 13: PROPERTY, PLANT AND EQUIPMENT, NET

As of December 31, 2025 and December 31, 2024, property, plant and equipment (“PPE”) consisted of the following:

Assets not subject to depreciation

As of December 31, 2025, property, plant and equipment that are not yet placed into service amounted to $12,169 and are not yet subject to depreciation.

March 2025 Miner exchange

In March 2025, an exchange agreement (“March 2025 Swap Order”) was entered into to exchange Miners. The Company returned 4,160 Bitmain T21 Miners and purchased 3,660 Bitmain S21+ Miners. In consideration for the returned products, the Company received a credit of $9,484 which was applied against the purchase price of $11,858. In March 2025, the Company paid the net $2,374 in Bitcoin which can be redeemed on a quarterly basis (i.e., 29 Bitcoin Pledged). Refer to Note 10 for more details. As of December 31, 2025, all Miners on the March 2025 Swap Order were received.

Changes in the useful life, residual value and depreciation method

During the fourth quarter of 2025, the Company initiated a strategic transition from Bitcoin Mining operations to HPC/AI. This change in operations caused management to evaluate estimated useful lives of certain long-lived assets with a carrying value of $78,340. This constitutes a change in accounting estimate under ASC 250-10-45-17. Management revised the useful lives and residual value of affected assets to align with the decommissioning dates, which resulted in accelerated depreciation to ensure the carrying value is reduced to residual value by the end of each asset’s service period. This change in estimate was applied prospectively effective November 1, 2025. As a result, the Company recognized additional depreciation expense of $1,282 for the year ended December 31, 2025. The impact on basic and diluted loss per share was non-significant.

In addition, during the year end December 31, 2024, as part of the Company’s annual review of its estimates used to account for property, plant and equipment, the Company reassessed the depreciation method, the useful life and the residual values of all BVVE and accordingly, revised their specific useful life, residual value and depreciation methods. The Company modified the useful life of the Miners and Mining-related equipment from 5 to 3 years and the depreciation method from sum-of-years to the straight-line method as this method better reflected the pattern of consumption. The residual values of the Miners and Mining-related equipment remained nil. These modifications represent changes in accounting estimates and were applied prospectively, starting December 1, 2024, resulting in an additional depreciation expense of $2,061 during the year ended December 31, 2024. These changes in estimates result in a non-significant increase in basic and diluted loss per share.

Applicable to specific Miners - Changes in the useful life, residual value and depreciation method

During the year ended December 31, 2024, the Company revised its planned use of certain older Miners as they are expected to be replaced by newer equipment. The older Miners continued to be operated until replacement. As a result, the Company revised its accounting estimates for these assets, including reducing their remaining useful lives from five years to two years, updating estimated residual values to reflect expected proceeds upon disposition, and changing the depreciation method to straight-line to better reflect the pattern of consumption of economic benefits. These changes were accounted for prospectively as a change in estimate and resulted in higher depreciation expense of $58,163 for the year ended December 31, 2024. The Company determined that the carrying amounts of the older Miners remained recoverable and no impairment was recorded.