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Mar. 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CAPITAL STOCK | CAPITAL STOCK Preferred Stock During the three months ended March 31, 2026, our Board of Directors approved dividends totaling $3.7 million to holders of the Preferred Stock. There were no cumulative undeclared dividends of the Preferred Stock at March 31, 2026, and all declared dividends have been paid as of March 31, 2026. Common Stock In April 2024, we entered into the Sales Agreement with the Agents, in connection with an at-the-market offering. For the three months ended March 31, 2025, 3.3 million shares were sold pursuant to the Sales Agreement, for net proceeds of $5.2 million. In November 2025, we entered into the 2025 Sales Agreement with the 2025 Agents, in connection with the offer and sale from time to time by us of shares of our common stock, having an aggregate offering price of up to $200.0 million through the 2025 Agents. For the three months ended March 31, 2026, 3.9 million shares have been sold pursuant to the 2025 Sales Agreement for net proceeds of $34.1 million. Applied Digital/Base Electron Agreements In November 2025, we entered into a limited notice to proceed ("LNTP") with Applied Digital for a project to design and install four 300-megawatt natural gas-fired power plants consisting of boilers and associated steam turbines to deliver power for an AI factory. Effective February 26, 2026, we entered into a definitive written agreement in relation to the project with Base Electron, an IPP backed by Applied Digital. The total consideration in exchange for completion of this project is $2.4 billion, of which $2.0 billion is for variable charges and the remaining is a fixed fee. The variable charges are based on reimbursable costs incurred plus mark-up. The plant is targeted to begin operation in 2029. In connection with the entry into the LNTP, we issued to Applied Digital, in a private placement, (i) 0.5 million shares of common stock, par value $0.01 per share for a purchase price of $2.0 million and (ii) a warrant (the "Initial Warrant") exercisable to purchase 2.6 million shares of our common stock at an exercise price of $4.11, subject to registration rights. The LNTP also granted to Applied Digital an additional warrant (the "Additional Warrant") to purchase up to 7.86 million shares of our common stock, on the same terms as the Initial Warrant. As a result of the signing of the agreement with Base Electron, the Additional Warrant to purchase up to 7.86 million shares of our common stock is fully vested on the same terms as the Initial Warrant. Effective March 18, 2026, we entered into a Partial Assignment and Assumption Agreement with Applied Digital and Base Electron under which Applied Digital assigned 5.23 million shares of stock under the Initial Warrant and Additional Warrant (collectively the "Warrants") to Base Electron. The Warrants are classified as liability-based awards which require calculation of fair value for each reporting period until settled or expired. As of March 31, 2026 and December 31, 2025, we calculated the fair value of the Initial Warrant at $35.5 million and $8.3 million, respectively, and as of March 31, 2026, we calculated the fair value of the Additional Warrant at $107.3 million, each of which are recorded in Customer warrants on the Condensed Consolidated Balance Sheets. The increase in the fair value of the Warrants during the quarter was primarily driven by an increase in the Company’s stock price. As a result, we recorded expense of $70.2 million for the three months ended March 31, 2026 in Change in fair value of customer warrants in the Condensed Consolidated Statements of Operations. Since the Warrants were issued as part of the Base Electron project, a corresponding asset was calculated as of the grant date of each warrant and is amortized over the life of the agreement with Base Electron. As of March 31, 2026 and December 31, 2025, the asset balances were $71.5 million and $8.3 million, respectively, and recorded in Customer contract asset current and noncurrent in the Condensed Consolidated Balance Sheets. For the three months ended March 31, 2026, amortization expense of $1.1 million was recognized as a reduction to Revenues in the Condensed Consolidated Statements of Operations. We used the following assumptions to determine the fair value of the Warrants granted as of March 31, 2026 and December 31, 2025:
The fair value of the Warrants is categorized within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs, including expected volatility. In making these assumptions, we based risk-free rates on the corresponding U.S. Treasury spot rates for the remaining duration of the grant, which we convert to a continuously compounded rate. We based estimated volatility on the historical returns of our stock price and selected guideline companies over the remaining term of the grant.
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