COVER
COVER | 12 Months Ended |
Dec. 31, 2023 | |
Cover [Abstract] | |
Document Type | S-1/A |
Entity Registrant Name | Core Scientific, Inc./tx |
Entity Incorporation, State or Country Code | DE |
Entity Primary SIC Number | 7370 |
Entity Tax Identification Number | 86-1243837 |
Entity Address, Address Line One | 838 Walker Road |
Entity Address, Address Line Two | Suite 21-2105 |
Entity Address, City or Town | Dover |
Entity Address, State or Province | DE |
Entity Address, Postal Zip Code | 19904 |
City Area Code | 512 |
Local Phone Number | 402-5233 |
Entity Filer Category | Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Central Index Key | 0001839341 |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 50,409 | $ 15,884 |
Restricted cash | 19,300 | 36,356 |
Digital assets | 2,284 | 724 |
Prepaid expenses and other current assets | 24,022 | 31,881 |
Total Current Assets | 97,016 | 85,102 |
Property, plant and equipment, net | 585,431 | 691,134 |
Operating lease, right-of-use asset | 7,844 | 20,430 |
Intangible assets, net | 2,247 | 1,704 |
Other noncurrent assets | 19,618 | 9,316 |
Total Assets | 712,156 | 807,686 |
Current Liabilities: | ||
Accounts payable | 154,751 | 53,641 |
Accrued expenses and other current liabilities | 179,636 | 17,952 |
Operating lease liabilities, current portion | 77 | 769 |
Finance lease liabilities, current portion | 19,771 | 0 |
Notes payable, current portion | 124,358 | 36,242 |
Total Current Liabilities | 488,423 | 186,789 |
Finance lease liabilities, net of current portion | 35,745 | 0 |
Operating lease liabilities, net of current portion | 1,512 | 720 |
Notes payable, net of current portion | 684,082 | 0 |
Other noncurrent liabilities | 0 | 2,210 |
Total liabilities not subject to compromise | 1,209,762 | 189,719 |
Liabilities subject to compromise | 99,335 | 1,027,313 |
Total Liabilities | 1,309,097 | 1,217,032 |
Commitments and contingencies (Note 10) | ||
Stockholders’ Deficit: | ||
Common stock; $0.00001 par value; 10,000,000 and 10,000,000 shares authorized at December 31, 2023 and 2022, respectively; 386,883 and 375,225 shares issued and outstanding at December 31, 2023 and 2022, respectively | 36 | 36 |
Additional paid-in capital | 1,823,260 | 1,764,368 |
Accumulated deficit | (2,420,237) | (2,173,750) |
Total Stockholders’ Deficit | (596,941) | (409,346) |
Total Liabilities and Stockholders’ Deficit | 712,156 | 807,686 |
Nonrelated Party | ||
Current Assets: | ||
Accounts receivable | 1,001 | 234 |
Current Liabilities: | ||
Deferred revenue | 9,830 | 77,689 |
Related Party | ||
Current Assets: | ||
Accounts receivable | 0 | 23 |
Current Liabilities: | ||
Deferred revenue | $ 0 | $ 496 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for credit loss | $ 0 | $ 8,724 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, shares issued (in shares) | 386,883 | 375,225 |
Common stock, shares outstanding (in shares) | 386,883 | 375,225 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue: | |||
Digital asset mining revenue | $ 390,333,000 | $ 397,796,000 | $ 216,925,000 |
Total revenue | 502,400,000 | 640,313,000 | 544,483,000 |
Total cost of revenue | 378,941,000 | 631,913,000 | 305,621,000 |
Gross profit | 123,459,000 | 8,400,000 | 238,862,000 |
Loss on legal settlement | 0 | 0 | (2,636,000) |
Gain from sales of digital assets | 3,893,000 | 44,298,000 | 4,814,000 |
Impairment of digital assets | (4,406,000) | (231,315,000) | (37,206,000) |
Change in fair value of derivative instruments | (3,918,000) | 0 | 0 |
Impairment of goodwill and other intangibles | 0 | (1,059,265,000) | 0 |
Impairment of property, plant and equipment | 0 | (590,673,000) | 0 |
Losses on exchange or disposal of property, plant and equipment | (1,956,000) | (28,025,000) | (118,000) |
Operating expenses: | |||
Research and development | 7,184,000 | 26,962,000 | 7,674,000 |
Sales and marketing | 7,019,000 | 12,731,000 | 4,062,000 |
General and administrative | 93,908,000 | 213,280,000 | 60,486,000 |
Total operating expenses | 108,111,000 | 252,973,000 | 72,222,000 |
Operating income (loss) | 8,961,000 | (2,109,553,000) | 131,494,000 |
Non-operating expenses, net: | |||
(Gain) loss on debt extinguishment | (20,065,000) | 287,000 | 8,016,000 |
Interest expense, net | 86,238,000 | 96,826,000 | 44,354,000 |
Fair value adjustment on convertible notes | 0 | 186,853,000 | 16,047,000 |
Fair value adjustment on derivative warrant liabilities | 0 | (37,937,000) | 0 |
Reorganization items, net | 191,122,000 | (197,405,000) | 0 |
Other non-operating (income) expenses, net | (2,530,000) | 5,232,000 | 2,000 |
Total non-operating expense, net | 254,765,000 | 53,856,000 | 68,419,000 |
(Loss) income before income taxes | (245,804,000) | (2,163,409,000) | 63,075,000 |
Income tax expense (benefit) | 683,000 | (17,091,000) | 15,763,000 |
Net (loss) income | $ (246,487,000) | $ (2,146,318,000) | $ 47,312,000 |
Net (loss) income per share (Note 14): | |||
Basic (in dollars per share) | $ (0.65) | $ (6.30) | $ 0.23 |
Diluted (in dollars per share) | $ (0.65) | $ (6.30) | $ 0.20 |
Weighted average shares outstanding: | |||
Basic (in shares) | 379,863 | 340,647 | 207,263 |
Diluted (in shares) | 379,863 | 340,647 | 233,305 |
Hosting Service | |||
Revenue: | |||
Total cost of revenue | $ 87,245,000 | $ 169,717,000 | $ 77,678,000 |
Hosting Service | Nonrelated Party | |||
Revenue: | |||
Revenue from customers and related parties | 102,005,000 | 130,234,000 | 62,350,000 |
Hosting Service | Related Party | |||
Revenue: | |||
Revenue from customers and related parties | 10,062,000 | 29,454,000 | 16,973,000 |
Equipment Sales | |||
Revenue: | |||
Total cost of revenue | 0 | 67,114,000 | 177,785,000 |
Equipment Sales | Nonrelated Party | |||
Revenue: | |||
Revenue from customers and related parties | 0 | 11,391,000 | 138,376,000 |
Equipment Sales | Related Party | |||
Revenue: | |||
Revenue from customers and related parties | 0 | 71,438,000 | 109,859,000 |
Digital asset mining revenue | |||
Revenue: | |||
Digital asset mining revenue | 390,333,000 | 397,796,000 | 216,925,000 |
Total cost of revenue | $ 291,696,000 | $ 395,082,000 | $ 50,158,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Other Comprehensive Income [Abstract] | |||
Net (loss) income | $ (246,487) | $ (2,146,318) | $ 47,312 |
Other comprehensive income (loss), net of income taxes: | |||
Change in fair value attributable to instrument-specific credit risk of convertible notes measured at fair value under the fair value option, net of tax effect of $— , $— and $— | 0 | 83,579 | (10,966) |
Release to Reorganization items, net of accumulated fair value attributable to instrument-specific credit risk of convertible notes measured at fair value under the fair value option, net of tax effect of $—, $— and $— | 0 | (72,613) | 0 |
Total other comprehensive income (loss), net of income taxes | 0 | 10,966 | (10,966) |
Comprehensive (loss) income | $ (246,487) | $ (2,135,352) | $ 36,346 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive (Loss) Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Other Comprehensive Income [Abstract] | |||
Change in fair value attributable to instrument-specific credit risk of convertible notes measured at fair value under the fair value option, tax effect | $ 0 | $ 0 | $ 0 |
Release to Reorganization items, net of accumulated fair value attributable to instrument-specific credit risk of convertible notes measured at fair value under the fair value option, tax effect | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Contingently Redeemable Convertible Preferred Stock and Stockholders’ (Deficit) Equity - USD ($) shares in Thousands, $ in Thousands | Total | Contingently Redeemable Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Dec. 31, 2020 | 10,826 | |||||
Beginning balance at Dec. 31, 2020 | $ 44,476 | |||||
Ending balances (in shares) at Dec. 31, 2021 | 10,826 | |||||
Ending balance at Dec. 31, 2021 | $ 44,476 | |||||
Beginning balance (in shares) at Dec. 31, 2020 | 157,786 | |||||
Beginning balance at Dec. 31, 2020 | $ 89,224 | $ 16 | $ 163,952 | $ (74,744) | $ 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | 47,312 | 47,312 | ||||
Other comprehensive loss, net of income taxes | (10,966) | (10,966) | ||||
Stock-based compensation (in shares) | 40 | |||||
Stock-based compensation | 38,937 | 38,937 | ||||
Exercise of stock options (in shares) | 14 | |||||
Exercise of stock options | 7 | 7 | ||||
Issuances of common stock- business combination (in shares) | 113,456 | |||||
Issuances of common stock - business combination | 1,173,764 | $ 11 | 1,173,753 | |||
Issuances of common stock- legal settlements (in shares) | 240 | |||||
Issuances of common stock - legal settlements | 2,436 | 2,436 | ||||
Exercise of warrants and stock options (in shares) | 40 | |||||
Exercise of warrants and stock options | 496 | 496 | ||||
Ending balance (in shares) at Dec. 31, 2021 | 271,576 | |||||
Ending balance at Dec. 31, 2021 | 1,341,210 | $ 27 | 1,379,581 | (27,432) | (10,966) | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Conversion of contingently redeemable preferred stock to common stock (in shares) | (10,826) | |||||
Conversion of contingently redeemable preferred stock to common stock | $ (44,476) | |||||
Ending balances (in shares) at Dec. 31, 2022 | 0 | |||||
Ending balance at Dec. 31, 2022 | $ 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (2,146,318) | (2,146,318) | ||||
Other comprehensive loss, net of income taxes | 10,966 | 10,966 | ||||
Stock-based compensation | 182,894 | 182,894 | ||||
Exercise of stock options (in shares) | 1,321 | |||||
Exercise of stock options | 3,846 | 3,846 | ||||
Restricted stock awards issued, net of shares withheld for tax withholding obligations (in shares) | 43,762 | |||||
Restricted stock awards issued, net of shares withheld for tax withholding obligations | (31,646) | $ 4 | (31,650) | |||
Restricted stock awards forfeited (in shares) | (2,456) | |||||
Exercise of convertible notes (in shares) | 197 | |||||
Exercise of convertible notes | 1,574 | 1,574 | ||||
Cashless exercise of warrants (in shares) | 3,001 | |||||
Issuances of common stock - equity line of credit (in shares) | 13,355 | |||||
Issuances of common stock - equity line of credit | 21,201 | $ 1 | 21,200 | |||
Conversion of contingently redeemable preferred stock to common stock (in shares) | 10,826 | |||||
Conversion of contingently redeemable preferred stock to common stock | 44,476 | $ 1 | 44,475 | |||
Issuances of common stock- Merger with XPDI (in shares) | 30,778 | |||||
Issuances of common stock - Merger with XPDI | 163,459 | $ 3 | 163,456 | |||
Issuances of common stock - financing transaction fees (in shares) | 1,285 | |||||
Issuances of common stock - financing transaction fees | 2,960 | 2,960 | ||||
Issuances of common stock- vendor settlement (in shares) | 1,580 | |||||
Issuances of common stock - vendor settlement | 12,674 | 12,674 | ||||
Costs attributable to issuance of common stock and equity instruments - Merger with XPDI | $ (16,642) | (16,642) | ||||
Ending balance (in shares) at Dec. 31, 2022 | 375,225 | 375,225 | ||||
Ending balance at Dec. 31, 2022 | $ (409,346) | $ 36 | 1,764,368 | (2,173,750) | 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (246,487) | (246,487) | ||||
Other comprehensive loss, net of income taxes | 0 | |||||
Stock-based compensation | $ 58,892 | 58,892 | ||||
Exercise of stock options (in shares) | 3 | 3 | ||||
Restricted stock awards issued, net of shares withheld for tax withholding obligations (in shares) | 12,046 | |||||
Restricted stock awards forfeited (in shares) | (391) | |||||
Ending balance (in shares) at Dec. 31, 2023 | 386,883 | 386,883 | ||||
Ending balance at Dec. 31, 2023 | $ (596,941) | $ 36 | $ 1,823,260 | $ (2,420,237) | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from Operating Activities: | |||
Net loss | $ (246,487) | $ (2,146,318) | $ 47,312 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 96,003 | 225,259 | 33,362 |
Amortization of operating lease right-of-use assets | 442 | 834 | 0 |
Stock-based compensation | 58,892 | 182,894 | 38,937 |
Digital asset mining income | (390,333) | (397,796) | (216,925) |
Deferred income taxes | 0 | (18,521) | 9,528 |
Loss on legal settlements | 0 | 0 | 2,636 |
Gain on sale of intangible assets | 0 | (5,904) | 0 |
Gain (loss) on debt extinguishment | (20,065) | 287 | 8,016 |
Gain (loss) on issuance of notes payable through settlements | 8,515 | 0 | 0 |
Fair value adjustment on derivative warrant liabilities | 0 | (37,937) | 0 |
Fair value adjustment on convertible notes | 0 | 186,853 | 31,217 |
Fair value adjustment on other liabilities | 0 | 9,498 | 0 |
Equity line of credit expenses | 0 | 1,668 | 0 |
Amortization of debt discount and debt issuance costs | 752 | 7,135 | 1,374 |
Losses on disposals of property, plant and equipment | 1,956 | 28,025 | 118 |
Impairment of digital assets | 4,406 | 231,315 | 37,206 |
Impairment of goodwill, other intangibles and property, plant and equipment | 0 | 1,649,938 | 0 |
Allowance for doubtful accounts | 0 | 9,004 | 0 |
Reorganization | 0 | (199,707) | 0 |
Changes in working capital components: | |||
Accounts receivable, net | (767) | (7,856) | (7,421) |
Accounts receivable from related parties | 23 | 277 | 16 |
Digital assets | 384,366 | 400,055 | 24,011 |
Deposits for equipment for sales to customers | (2,403) | 50,174 | (244,399) |
Prepaid expenses and other current assets | (18,351) | 51,818 | (34,076) |
Accounts payable | 118,596 | 26,713 | (21,991) |
Accrued expenses and other current liabilities | 130,382 | 17,229 | 56,200 |
Deferred revenue | (47,807) | 16,483 | 184,340 |
Deferred revenue from related parties | 0 | (72,449) | 0 |
Other noncurrent assets and liabilities, net | (13,006) | (3,784) | (6,196) |
Net cash provided by (used in) operating activities | 65,114 | 205,187 | (56,735) |
Cash flows from Investing Activities: | |||
Purchases of property, plant and equipment | (16,161) | (383,980) | 0 |
Proceeds from sale of Cedarvale | 13,998 | 0 | 0 |
Cash paid in acquisitions | 0 | 0 | (365,210) |
Deposits (credits) for self-mining equipment | 0 | (217,677) | 704 |
Proceeds from sales of coupons | 0 | 10,850 | (59,275) |
Investments in internally developed software | (833) | 0 | 0 |
Other | 0 | 29 | (59) |
Net cash used in investing activities | (2,996) | (590,778) | (423,840) |
Cash flows from Financing Activities: | |||
Proceeds from exercise of stock options and warrants | 0 | 25,049 | 513 |
Proceeds from the XPDI merger, net of transaction costs | 0 | 195,010 | 0 |
Proceeds from debt, net of issuance costs | 0 | 261,349 | 670,750 |
Repurchase of common shares to pay employee withholding taxes | 0 | (31,646) | 0 |
Principal repayments of finance leases | (3,658) | (30,319) | (7,768) |
Payment for transaction costs | 0 | 0 | (10,682) |
Principal payments on debt | (40,991) | (113,290) | (49,281) |
Net cash (used in) provided by financing activities | (44,649) | 306,153 | 603,532 |
(Decrease) increase in cash, cash equivalents, and restricted cash | 17,469 | (79,438) | 122,957 |
Cash, cash equivalents and restricted cash—beginning of period | 52,240 | 131,678 | 8,721 |
Cash, cash equivalents and restricted cash—end of period | 69,709 | 52,240 | 131,678 |
Supplemental disclosure of other cash flow information: | |||
Cash paid for interest | 4,708 | 86,010 | 38,180 |
Income tax payments | (370) | 5,756 | 9,619 |
Cash paid for reorganization items, net | 86,539 | 0 | 0 |
Supplemental disclosure of noncash investing and financing activities: | |||
Property, plant and equipment obtained in exchange transaction | 0 | 62,338 | 0 |
Noncash consideration paid for acquisitions | 0 | 0 | 1,138,838 |
Change in accrued capital expenditures | 2,731 | 69,286 | 9,002 |
Increase in notes payable for acquisition of property, plant and equipment | 0 | 0 | 0 |
Decrease in notes payable in exchange for equipment | (38,610) | 0 | 6,842 |
Cashless exercise of warrants | 0 | 3,001 | 0 |
Property, plant and equipment acquired under finance leases | 0 | 0 | 93,956 |
Payment-in-kind interest | 0 | 31,382 | 7,274 |
Decrease in equipment related to debt extinguishment | 17,849 | 0 | 0 |
Property, plant and equipment disposed of through settlements | 6,301 | 0 | 0 |
Purchase of insurance policies financed by short-term note payable | 5,011 | 0 | 0 |
Issuance of notes payable through settlements | 38,547 | 0 | 0 |
Reconciliation of cash, cash equivalents, and restricted cash within the consolidated balance sheets to the amounts shown in the consolidated statements of cash flows above: | |||
Cash and cash equivalents | 50,409 | 15,884 | 117,871 |
Restricted cash | 19,300 | 36,356 | 13,807 |
Total cash, cash equivalents and restricted cash | $ 69,709 | $ 52,240 | $ 131,678 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS MineCo Holdings, Inc. was incorporated on December 13, 2017, in the State of Delaware and changed its name to Core Scientific, Inc. (“Legacy Core”) pursuant to an amendment to its Certificate of Incorporation dated June 12, 2018. On August 17, 2020, Legacy Core engaged in a holdco restructuring to facilitate a borrowing arrangement by Legacy Core pursuant to which Legacy Core was merged with and into a wholly owned subsidiary of Core Scientific Holding Co. and became a wholly owned subsidiary of Core Scientific Holding Co. and the stockholders of Legacy Core became the stockholders of Core Scientific Holding Co. In July 2021, Core Scientific Holding Co. completed the acquisition of Blockcap, Inc. (“Blockcap”). Prior to its acquisition, Blockcap was one of Legacy Core’s largest hosting customers. On January 19, 2022, following the approval at the special meeting of the stockholders of Power & Digital Infrastructure Acquisition Corp., a Delaware corporation (“XPDI”), Core Scientific Holding Co. merged with XPDI, and XPDI Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of XPDI (“Merger Sub”), consummated the transactions contemplated under the merger agreement. In connection with the closing of that merger (the “Business Combination”), XPDI changed its name from Power & Digital Infrastructure Acquisition Corp. to Core Scientific, Inc. (“Core Scientific” or the “Company”). Core Scientific is an operator of dedicated, purpose-built facilities for digital asset mining and a premier provider of blockchain infrastructure, software solutions and services. The Company currently focuses primarily on digital asset mining. We employ our own large fleet of computers (“miners”) to earn digital assets for our own account and provide hosting services for large customers at our seven operational data centers in Georgia (2), Kentucky (1), North Carolina (1), North Dakota (1) and Texas (2). We derive the majority of our revenue from earning bitcoin for our own account (“self-mining”). Our hosting business provides a full suite of services to digital asset mining customers. We provide deployment, monitoring, troubleshooting, optimization and maintenance of our customers’ digital asset mining equipment and provide necessary electrical power, repair and other infrastructure services necessary to operate, maintain and efficiently mine digital assets. We operate in two segments: “Mining,” consisting of digital asset mining for our own account, and “Hosting,” consisting of our blockchain infrastructure and third-party hosting business. During 2022 and 2021, our “Hosting” segment also included sales of mining equipment to customers and was referred to as “Hosting and Equipment Sales.” Our business strategy is to grow our revenue and profitability by increasing the capacity and efficiency of our self-mining fleet and entering into strategic, revenue-enhancing hosting opportunities with third parties. We intend to develop the infrastructure necessary to support business growth and profitability and capture adjacent opportunities that leverage our mining infrastructure, expertise and capabilities. Chapter 11 Filing and Emergence from Bankruptcy On December 21, 2022, the Company and certain of its affiliates (collectively, the “Debtors”) filed voluntary petitions (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) seeking relief under Chapter 11 of the United States Code (the “Bankruptcy Code”). The Chapter 11 Cases are jointly administered under Case No. 22-90341. The Debtors continue to operate their business and manage their properties as “debtors-in-possession” (“DIP”) under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Debtors have filed various “first day” motions with the Bankruptcy Court requesting customary relief, which were generally approved by the Bankruptcy Court on December 22, 2022, that have enabled the Company to operate in the ordinary course while under Chapter 11 protection. For detailed discussion about the Chapter 11 Cases, refer to Note 3 — Chapter 11 Filing and Other Related Matters. On January 15, 2024, the Debtors filed the Fourth Amended Joint Chapter 11 Plan of Reorganization of Core Scientific, Inc. and its Debtor Affiliates (with Technical Modifications) (the “Plan of Reorganization”) with the Bankruptcy Court. On January 16, 2024, the Bankruptcy Court entered an order (the “Confirmation Order”) among other things, confirming the Plan of Reorganization. On January 23, 2024 (the “Effective Date”), the conditions to the effectiveness of the Plan of Reorganization were satisfied or waived and the Company emerged from bankruptcy. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the consolidated financial statements. Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. Debtor-in Possession As of December 31, 2023, we were debtors-in-possession under the Bankruptcy Code. As such, we were authorized to continue to operate as an ongoing business but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. For detailed discussion about the Chapter 11 Cases and our emergence from bankruptcy, refer to Note 3 — Chapter 11 Filing and Other Related Matters and Note 17 — Subsequent Events. Liquidity and Financial Condition For the year ended December 31, 2023, the Company generated a net loss of $246.5 million. The Company had unrestricted cash and cash equivalents of $50.4 million as of December 31, 2023. The Company has historically generated cash primarily from the issuance of common stock and debt, through sales of digital assets received as digital asset mining revenue and from operations through contracts with customers. As of December 31, 2023, the Company had a working capital deficit of $391.4 million and a total stockholders’ deficit of $596.9 million. The Company’s status in bankruptcy along with its historical financial performance resulted in the Company previously concluding and disclosing that there was substantial doubt regarding its ability to continue as a going concern. The Plan of Reorganization at the Effective Date (i) eliminated substantial debt and debt service, (ii) established new debt in the form of a secured credit agreement, publicly traded notes and convertible notes, and debt to equipment lenders secured by mining machines, and (iii) new publicly traded equity and warrants. The settlement of accrued and payable claims through new debt and equity issuance and the extension of debt service to future periods on the Effective Date substantially eliminates the reported working capital deficit at December 31, 2023. When combined with the additional liquidity of the available delayed-draw term loan and the expected cash flows from operations, management has concluded that the Company’s capital, liquidity and cash flow from operations is sufficient to fund its operations and debt service obligations for at least the next 12 months and that its previous conclusion regarding substantial doubt has been alleviated. For detailed discussion about our emergence from bankruptcy, refer to Note 17 — Subsequent Events. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Some of the more significant estimates include assumptions used to estimate the Company’s ability to continue as a going concern, the valuation of the Company’s common shares and the determination of the grant date fair value of stock-based compensation awards for periods prior to the Business Combination, the valuation of digital assets, goodwill, other intangible assets and property, plant and equipment, the fair value of convertible debt, derivative warrants, acquisition purchase price accounting, and income taxes. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ from management’s estimates. Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents include all cash balances and highly liquid investments with original maturities of three months or less from the date of acquisition. As of December 31, 2023, cash equivalents included $42.2 million of highly liquid money market funds, which are classified as Level 1 within the fair value hierarchy. Restricted cash consists of cash held in escrow under the Original DIP Credit Agreement and in escrow to pay for construction and development activities. Accounts Receivable and Allowance for Doubtful Accounts The Company’s accounts receivable balance consists of amounts due from its hosting customers. The Company records accounts receivable at the invoiced amount less an allowance for any potentially uncollectible accounts under the current expected credit loss (“CECL”) impairment model and presents the net amount of the financial instrument expected to be collected. The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, which considers forecasts of future economic conditions in addition to information about past events and current conditions. Based on this model, the Company considers many factors, including the age of the balance, collection history, and current economic trends. Bad debts are written off after all collection efforts have ceased. Allowances for credit losses are recorded as a direct reduction from an asset’s amortized cost basis. Credit losses and recoveries are recorded in general and administrative expenses in the consolidated statements of operations. Recoveries of financial assets previously written off are recorded when received. For the years ended December 31, 2023 and 2022, the Company did not record any credit losses or recoveries. The Company’s allowance for doubtful accounts was nil and $8.7 million as of December 31, 2023 and 2022, respectively. Valuation of Common Stock Upon completion of the Business Combination (as discussed in Note 4 — Business Combinations, Acquisitions and Restructuring) in fiscal 2022, the Company determined the fair value of New Core Common Stock (as defined below) using the most observable inputs available, including quoted prices of XPDI Class A Common Stock and sales of the Company’s Series A and Series B Contingently Redeemable Convertible Preferred Stock. The Company also used the market approach, which estimated the value of the Company’s business by applying valuation multiples derived from the observed valuation multiples of comparable public companies to the Company’s expected financial results. The Company retained the services of certified valuation specialists to assist with the valuation of the Company’s common stock. Certain inputs for the New Core Common Stock fair value were unobservable and significant to the resulting fair value measurement, resulting in Level 3 instrument classification. Applying these valuation and allocation approaches involves the use of estimates, judgments and assumptions that are highly complex and subjective, such as those regarding the Company’s expected future revenue, expenses, valuation multiples, the selection of comparable public companies and the probability of future events. Changes in any or all of these estimates and assumptions, or the relationships between these assumptions, impact the Company’s valuation as of each valuation date and may have a material impact on the valuation of the Company’s common stock and common stock warrants issued with the Company’s debt and equity instruments. Digital Assets The Company has sold or held its digital assets as dictated by liquidity and funding needs. Currently the Company is required by covenant to sell bitcoin it receives as consideration shortly after receipt. Sales of digital assets awarded to the Company through its self-mining activities are classified as cash flows from operating activities. The Company’s digital assets are accounted for as intangible assets with indefinite useful lives. Digital assets that are received as digital asset mining revenue are initially measured at fair value as discussed below in Digital Asset Mining Revenue. Digital assets that are purchased in an exchange of one digital asset for another digital asset are recognized at the fair value of the asset surrendered. As indefinite lived intangible assets digital assets are not amortized but are evaluated and assessed for impairment on at least an annual basis and more frequently in the interim when indicators of impairment exist. Impairment is indicated and recognized when the carrying amount of the digital asset lot exceeds its fair value. Impairment is measured using quoted prices of the digital asset at the time its fair value is being assessed. Quoted prices, including intraday low prices, are collected and utilized in impairment testing and measurement on a daily basis. To the extent that an impairment loss is recognized, the loss establishes the new cost basis of the digital asset. For the years ended December 31, 2023, 2022 and 2021, the Company recognized impairments of digital assets of $4.4 million, $231.3 million, and $37.2 million, respectively. For the years ended December 31, 2023, 2022 and 2021, the Company recognized net gains of $3.9 million, $44.3 million, and $4.8 million respectively, on sales of digital assets. Activity related to our digital asset balances for the years ended December 31, 2023 and 2022 were as follows (in thousands): December 31, 2023 December 31, 2022 Digital assets, beginning of period $ 724 $ 234,298 Digital asset mining revenue, net of receivables * 389,456 397,796 Mining proceeds from shared hosting 17,626 — Proceeds from sales of digital assets (404,686) (444,353) Gain from sales of digital assets 3,886 44,298 Impairment of digital assets (4,406) (231,315) Payment of board fee (316) — Digital assets, end of period $ 2,284 $ 724 __________________ * As of December 31, 2023 and 2022, there was $1.7 million and $0.8 million, respectively, of digital asset receivable included in prepaid expenses and other current assets on the consolidated balance sheets. Digital assets are available to be sold as a source of funds, if needed, for current operations and are classified as current assets on the Company’s Consolidated Balance Sheets. In connection with the credit and note agreements described in Note 17 — Subsequent Events, the Company is required to sell its bitcoin within ten days of receipt. The Company does not have any off-balance sheet holdings of digital assets nor does it have the obligation to safeguard digital assets for third parties. Property, Plant and Equipment, Net Property, plant and equipment includes land, buildings and improvements for datacenter facilities and leasehold improvements for the Company’s corporate headquarters. Property and equipment consists of computer, mining, network, electrical and other equipment, including property and equipment under finance leases. Property, plant and equipment, net is stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are capitalized at cost and amortized over the shorter of their estimated useful lives or the lease term. Future obligations related to finance leases are presented as Finance lease liabilities, current portion and Finance lease liabilities, net of current portion in the Company’s Consolidated Balance Sheets. Depreciation expense, including amortization of assets held under finance leases, is primarily included in Cost of revenue in the Company’s Consolidated Statements of Operations. Self-mining computer equipment that is subsequently contracted for sale to customers is valued at the lower of cost or net realizable value, with any write-down recognized as Cost of Equipment Sales in the Company’s Consolidated Statements of Operations. Long-Lived Asset Impairments The Company tests long-lived asset groups for recoverability whenever events or changes in circumstances have occurred that may affect the recoverability or the estimated useful lives of long-lived assets. Long-lived assets include property, plant and equipment and intangible assets subject to amortization. A long-lived asset may be impaired when the estimated future undiscounted cash flows are less than the carrying amount of the asset. If that comparison indicates that the asset’s carrying value may not be recoverable, the impairment is measured based on the difference between the carrying amount and the estimated fair value of the asset. Long-lived assets to be disposed of are reported at the lower of the carrying amount or estimated fair value less costs to sell. See Note 5 — Property, Plant and Equipment, Net, for discussion of long-lived asset impairments related to property, plant and equipment, including impairments. Goodwill The total purchase price of any of the Company’s acquisitions is allocated to the tangible and intangible assets acquired and the liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the purchase price over those fair values is recorded as goodwill. The Company does not amortize goodwill, but tests it for impairment annually as of October 31, or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of its reporting units are less than their carrying amounts as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or chooses not to perform a qualitative assessment, then the quantitative goodwill impairment test will be performed. The quantitative test compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds its fair value, the excess of the carrying amount over the fair value is recognized as an impairment loss, and the resulting measurement of goodwill becomes its new carrying value. The Company identified goodwill impairment triggering events during the year ended December 31, 2022. These events included declines in the market price of bitcoin, the market price of the Company’s stock and the Company’s market capitalization. As a result, the Company performed the quantitative test to compare the fair value to the carrying amount for each reporting unit at June 30, 2022. Sustained and further deterioration in market prices and in the Company’s financial position resulted in additional quantitative testing at September 30, 2022. The Company concluded that the carrying value of the Mining reporting unit exceeded its fair value and, as such, recorded a $996.5 million impairment of goodwill in its Mining reporting unit for the year ended December 31, 2022. The Company concluded the carrying amount of the Equipment Sales and Hosting reporting unit exceeded its fair value and, as such, recorded a $58.2 million impairment of goodwill in its Equipment Sales and Hosting reporting unit for the year ended December 31, 2022. These impairments are presented within impairment of goodwill and other intangibles on the Company’s Consolidated Statements of Operations. As of December 31, 2023 and 2022, the Company had no remaining goodwill. Energy Forward Purchase Contract In October 2023, the Company entered into an energy forward purchase contract to fix a specified component of the energy price related to forecasted energy purchases at the Cottonwood 1 facility from November 1, 2023 through May 31, 2024, respectively, in incremental blocks of 48 MW per month. The energy forward purchase contract minimizes price volatility risk as energy is purchased at a fixed rate, addressing exposures related to changes in operating costs. The Company did not enter into the forward purchase contract for speculative or trading purposes. The Company determined the forward purchase contract meets the definition of a derivative because it has a notional amount, no initial net investment, and can be net settled. The forward purchase contract is not designated as a hedging instrument for accounting. The forward purchase contract is recorded and initially measured at its fair value and is subsequently remeasured at its fair value each reporting period, with changes in fair value reported in net (loss) income. The following table summarizes the fair value of the energy forward purchase contract on the Company’s Consolidated Balance Sheets (in thousands): Fair Value (Level 2) as of December 31, Financial statement line item 2023 2022 Energy forward purchase contract Accrued expenses and other current liabilities $ 2,262 $ — The Company recorded the following gains/(losses) related to the energy forward purchase contract on the Company’s Consolidated Statements of Operations (in thousands): Year Ended December 31, Financial statement line item 2023 2022 Energy forward purchase contract Change in fair value of derivative instruments $ (3,918) $ — Derivative Warrant Liabilities The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The classification of derivative instruments, including whether such instruments should be classified as liabilities or as equity, is re-assessed at the end of each reporting period. The Company has public warrants and private placement warrants that have been recognized as derivative liabilities. Accordingly, the Company recognized the warrant instruments as liabilities at fair value and adjusted the instruments to fair value at each reporting period. The liabilities were subject to re-measurement at each balance sheet date until exercised, and any change in fair value was recognized in the Company’s Consolidated Statements of Operations and presented as fair value adjustment on derivative warrant liabilities. The initial and subsequent estimated fair value of both the public warrants and private placement warrants was based on the listed price in an active market for the public warrants. After the Petition Date, as defined below, discussed in Note 3 — Chapter 11 Filing and Other Related Matters below, the public warrants and private placement warrants were moved to liabilities subject to compromise. See Note 11 — Derivative Warrant Liabilities for additional discussion. Debt Issuance Costs Debt issuance costs are capitalized and amortized over the term of the associated debt. Debt issuance costs are presented in the consolidated balance sheets as a direct deduction from the carrying amount of the debt liability consistent with the debt discount. Revenue From Contracts With Customers - Digital Asset Mining Revenue The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue Recognition (“ASC 606”). The core principle of the revenue standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: • Step 1: Identify the contract with the customer • Step 2: Identify the performance obligations in the contract • Step 3: Determine the transaction price • Step 4: Allocate the transaction price to the performance obligations in the contract • Step 5: Recognize revenue when the Company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, an entity must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: • The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct); and • The entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: • Variable consideration • Constraining estimates of variable consideration • The existence of a significant financing component in the contract • Noncash consideration • Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized under the accounting contract will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time, as appropriate. Application of the five-step model to the Company’s mining operations One of the Company’s ongoing major or central operations is to provide a service of performing hash calculations to third-party pool operators alongside collectives of third-party bitcoin miners (such collectives, “mining pools”) as a participant. The Company considers the third-party mining pool operators to be its customers under Topic 606. Contract inception and our enforceable right to consideration begins when we commence providing hash calculation services to the mining pool operators. Each party to the contract has the unilateral right to terminate the contract at any time without any compensation to the other party for such termination. As such, the duration of a contract is less than a day and may be continuously renewed multiple times throughout the day. The implied renewal option is not a material right because there are no upfront or incremental fees in the initial contract and the terms, conditions, and compensation amount for the renewal options are at the then market rates. The Company is entitled to non-cash compensation based on the Full-Pay-Per-Share (“FPPS”) model of the mining pool it is a participant in. FPPS pools pay block rewards and transaction fees, less mining pool fees and the participants are entitled to non-cash consideration even if a block is not successfully validated by the mining pool operator. The Company is entitled to compensation once it begins to perform hash calculations for the pool operator in accordance with the operator’s specifications over a 24-hour period beginning mid-night UTC and ending 23:59:59 UTC on a daily basis. The non-cash consideration that we are entitled to for providing hash calculations to the pool operator under the FPPS payout method is made up of block rewards and transaction fees less pool operator expenses determined as follows: • The non-cash consideration in the form of a block reward is based on the total blocks expected to be generated on the Bitcoin Network for the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: the daily hash calculations that we provided to the pool operator as a percent of the Bitcoin Network’s implied hash calculations as determined by the network difficulty, multiplied by the total Bitcoin Network block rewards expected to be generated for the same daily period. • The non-cash consideration in the form of transaction fees paid by transaction requestors is based on the share of total actual fees paid over the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: total actual transaction fees generated on the Bitcoin Network during the 24-hour period as a percent of total block rewards the Bitcoin Network actually generated during the same 24-hour period, multiplied by the block rewards we earned for the same 24-hour period noted above. • The block reward and transaction fees earned by the Company is reduced by mining pool fees charged by the operator for operating the pool based on a rate schedule per the mining pool contract. The mining pool fee is only incurred to the extent we perform hash calculations and generate revenue in accordance with the pool operator’s payout formula during the same 24-hour period beginning mid-night UTC daily. The above non-cash consideration is variable, since the amount of block reward earned depends on the amount of hash calculations we perform; the amount of transaction fees we are entitled to depends on the actual Bitcoin Network transaction fees over the same 24-hour period; and the operator fees for the same 24-hour period are variable since it is determined based on the total block rewards and transaction fees in accordance with the pool operator’s agreement. While the non-cash consideration is variable, the Company has the ability to estimate the variable consideration at contract inception with reasonable certainty without the risk of significant revenue reversal. The Company does not constrain this variable consideration because it is probable that a significant reversal in the amount of revenue recognized from the contract will not occur when the uncertainty is subsequently resolved and recognizes the non-cash consideration on the same day that control is transferred, which is the same day as contract inception. The Company measures the non-cash consideration based on the volume weighted average spot rates of aggregated exchanges over a 24-hour period beginning mid-night UTC and ending 23:59:59 UTC on the day of contract inception using the Company’s primary bitcoin pricing source system. The Company recognizes non-cash consideration on the same day that control of the contracted service is transferred to the pool operator, which is the same day as the contract inception. Prior to 2022, in certain arrangements, the Company did not have a reliable means to estimate its relative share of the rewards until they were paid to it and the variable consideration was constrained until the Company received the consideration, at which time revenue was recognized. The Company measured consideration at fair value on the date received, which was typically not materially different than the fair value at inception of the arrangement or the time the Company had earned the award from the pools. Direct expenses associated with providing hash calculation services to a third-party operated mining pool are recorded as cost of revenues. Depreciation and amortization expenses on fixed and right-of-use assets, including digital asset mining equipment, used to provide the services are also recorded as a component of cost of revenues. Revenue From Contracts With Customers - Hosting The Company primarily generates revenue from contracts with customers from hosting services. Prior to fiscal 2023, the “Hosting” segment also included sales of mining equipment to customers and was referred to as “Hosting and Equipment Sales”, when the Company also recognized revenue from contracts with customers from sales of computer equipment, in which the Company generally recognized revenue when control of the promised equipment was transferred to customers. The Company generally recognizes revenue when the promised service is performed. Revenue excludes any amounts collected on behalf of third parties, including sales and indirect taxes. Performance Obligations The Company’s performance obligations primarily relate to hosting services, which are described below. The Company has performance obligations associated with commitments in customer hosting contracts for future services that have not yet been recognized in the financial statements. As of December 31, 2023, for contracts with original terms that exceed one year (typically ranging from 15 to 24 months), we expect to recognize approximately $78.1 million of revenue in the future related to performance obligations associated with existing hosting contracts. As of December 31, 2023, unsatisfied performance obligations that are expected to be recognized in 2024 and 2025 are $68.4 million and $9.7 million, respectively. Hosting Services The Company regularly enters contracts that include hosting services, for which revenue is recognized as services are performed on a variable basis. The Company performs hosting services that enable customers to run blockchain and other high-performance computing operations. The Company’s performance obligation related to these services is satisfied over time. The Company recognizes revenue for services that are performed on a consumption basis, such as the amount of electricity used in a period, based on the customer’s use of such resources. The Company recognizes variable consumption usage hosting revenue each month as the uncertainty related to the consideration is resolved, hosting services are provided to our customers, and our customers utilize the hosting services (the customer simultaneously receives and consumes the benefits of the Company’s performance). The Company generally bills its customers in advance based on estimated consumption under the contract. The Company recognizes revenue based on actual consumption in the period and invoices adjustments in subsequent periods or retains credits toward future consumption. The term between invoicing and when payment is due typically does not exceed 30 days. Equipment Sales (Applicable to years ended December 31, 2022 and 2021) The Company entered into contracts with more than one performance obligation. For example, the Company entered into contracts that include both hosting services and sales of computer equipment to those same customers, for which revenue is recognized at the point in time when control of the equipment is transferred to the customer (typically at the start of the contract period). For these contracts, revenue was recognized based on the relative standalone selling price of each performance obligation in the contract. The Company recognized revenue from sales of computer equipment to customers at the point in time when control of the equipment is transferred to the customer, which generally occurred upon deployment of the equipment. Customers made a series of deposits on equipment purchases with the final payment typically being due at least one month prior to deployment. Self-mining computer equipment that was subsequently sold to customers was recognized as Equipment Sales to Customers in the Company’s Consolidated Statements of Operations. We do not expect to enter equipment sales contracts in the future or to have any equipment sales revenue after December 31, 2022. Deferred Revenue The Company records contract liabilities in Deferred revenue on the Company’s Consolidated Balance Sheets when cash payments are received in advance of performance and recognizes them as revenue when the performance obligations are satisfied. The Company’s current and non-current deferred revenue balance as of December 31, 2023 and 2022, was $9.8 million and $80.4 million, respectively, all from advance payments received during the years then ended. In the year ended December 31, 2023, the Company recognized $21.0 million of revenue that was included in the deferred revenue balance as of the beginning of the year. Of the remaining deferred revenue balance, $20.5 million and $33.0 million were released as a result of the Celsius and Gryphon claim settlements, respectively. See Note 3 — Chapter 11 Filing and Other Related Matters for further details on the settlements. In the year ended December 31, 2022, the Company recognized $88.6 million of revenue that was included in the deferred revenue balance a |
CHAPTER 11 FILING AND OTHER REL
CHAPTER 11 FILING AND OTHER RELATED MATTERS | 12 Months Ended |
Dec. 31, 2023 | |
Reorganizations [Abstract] | |
CHAPTER 11 FILING AND OTHER RELATED MATTERS | 3. CHAPTER 11 FILING AND OTHER RELATED MATTERS Chapter 11 On December 21, 2022 (the “Petition Date”), the Debtors filed the Chapter 11 Cases in the Bankruptcy Court seeking relief under Chapter 11 of the Bankruptcy Code. The Chapter 11 Cases are jointly administered under Case No. 22-90341. The Debtors continue to operate their business and manage their properties as DIP under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. On June 20, 2023 the Debtors filed with the Bankruptcy Court (i) a proposed Joint Chapter 11 Plan of Reorganization of Core Scientific, Inc. and its Debtor Affiliates and a related proposed form of Disclosure Statement; (ii) on August 8, 2023, the Amended Joint Chapter 11 Plan of Reorganization of Core Scientific, Inc. and its Debtor Affiliates and a related Disclosure Statement; and (iii) on September 7, 2023, the Second Amended Joint Chapter 11 Plan of Reorganization of Core Scientific, Inc. and its Debtor Affiliates and a related Disclosure Statement; (iv) on November 16, 2023, the Debtors filed the Third Amended Joint Chapter 11 Plan of Reorganization of Core Scientific, Inc. and its Debtor Affiliates and a related Disclosure Statement; and (v) on January 15, 2024, the Debtors filed the Fourth Amended Joint Chapter 11 Plan of Reorganization of Core Scientific, Inc. and its Affiliated Debtors (with Technical Modifications) with the Bankruptcy Court. On September 19, 2023, the Debtors, the ad hoc group of the Debtors’ secured convertible notes holders (the “Ad Hoc Noteholder Group”) and the equity committee (the “Equity Committee”) reached an agreement in principle with respect to the economic terms of the Plan of Reorganization (the “Mediated Settlement”). The Debtors, the Ad Hoc Noteholder Group and the Equity Committee continued to work and negotiate in good faith to document the Mediated Settlement, resolve certain open issues and culminating in the Plan of Reorganization. On January 16, 2024, the Bankruptcy Court entered the Confirmation Order among other things, confirming the Plan of Reorganization. On the Effective Date, the conditions to the effectiveness of the Plan of Reorganization were satisfied or waived and the Company emerged from bankruptcy. See Note 17 — Subsequent Events for additional details. Original DIP Credit Agreement and Restructuring Support Agreement In connection with the Chapter 11 Cases, the Debtors entered into a senior secured super-priority debtor-in-possession loan and security agreement, dated as of December 22, 2022 (the “Original DIP Credit Agreement”), with Wilmington Savings Fund Society, FSB, as administrative agent, and the lenders from time to time party thereto (collectively, the “Original DIP Lenders”). The Original DIP Lenders are also holders or affiliates, partners or investors of holders under the Company’s notes sold pursuant to (i) the Secured Convertible Note Purchase Agreement, dated as of April 19, 2021 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time), by and among Core Scientific, Inc. (as successor of Core Scientific Holding Co.), the guarantors party thereto from time to time, U.S. Bank National Association, as note agent and collateral agent, and the purchasers of the notes issued thereunder (the “Secured Convertible Notes”), and (ii) the Convertible Note Purchase Agreement, dated as of August 20, 2021 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time), by and among Core Scientific, Inc. (as successor of Core Scientific Holding Co.), the guarantors party thereto from time to time, U.S. Bank National Association, as note agent and collateral agent, and the purchasers of the notes issued thereunder (the “Other Convertible Notes,” and together with the Secured Convertible Notes, the “Convertible Notes”). Also in connection with the filing of the Chapter 11 Cases, the Company entered into a restructuring support agreement (together with all exhibits and schedules thereto, the “Restructuring Support Agreement”) with the ad hoc group of noteholders, representing more than 70% of the Ad Hoc Noteholder Group pursuant to which the Ad Hoc Noteholder Group agreed to provide commitments for a debtor-in-possession facility (the “Original DIP Facility”) of more than $57 million and agreed to support the syndication of up to an additional $18 million in new money debtor-in-possession facility loans to all holders of Convertible Notes. The Company terminated the Restructuring Support Agreement pursuant to a “fiduciary out” which permitted the Company to pursue better alternatives. Replacement DIP Credit Agreement On February 2, 2023, the Bankruptcy Court entered an interim order (the “Replacement Interim DIP Order”) authorizing, among other things, the Debtors to obtain senior secured non-priming super-priority replacement post-petition financing (the “Replacement DIP Facility”). On February 27, 2023, the Debtors entered into a senior secured super-priority replacement debtor-in-possession loan and security agreement governing the Replacement DIP Facility (the “Replacement DIP Credit Agreement”), with B. Riley Commercial Capital, LLC, as administrative agent (the “Administrative Agent”), and the lenders from time to time party thereto (collectively, the “Replacement DIP Lender”). Proceeds of the Replacement DIP Facility were used to, among other things, repay amounts outstanding under the Original DIP Facility, including payment of all fees and expenses required to be paid under the terms of the Original DIP Facility. These funds, along with ongoing cash generated from operations, were anticipated to provide the necessary financing to effectuate the planned restructuring, facilitate the emergence from Chapter 11, and cover the fees and expenses of legal and financial advisors. The Replacement DIP Facility, among other things, provides for a non-amortizing super-priority senior secured term loan facility in an aggregate principal amount not to exceed $70 million. Under the Replacement DIP Facility, (i) $35 million was made available following Bankruptcy Court approval of the Interim DIP Order and (ii) $35 million was made available following Bankruptcy Court approval of the Final DIP Order. Loans under the Replacement DIP Facility will bear interest at a rate of 10%, which will be payable in kind in arrears on the first day of each calendar month. The Administrative Agent received an upfront payment equal to 3.5% of the aggregate commitments under the Replacement DIP Facility on February 3, 2023, payable in kind, and the Replacement DIP Lender will receive an exit premium equal to 5% of the amount of the loans being repaid, reduced or satisfied, payable in cash. The Replacement DIP Credit Agreement includes representations and warranties, covenants applicable to the Debtors, and events of default. If an event of default under the Replacement DIP Credit Agreement occurs, the Administrative Agent may, among other things, permanently reduce any remaining commitments and declare the outstanding obligations under the Replacement DIP Credit Agreement to be immediately due and payable. On March 1, 2023, the Bankruptcy Court entered an order approving the Replacement DIP Facility on a final basis and the terms under which the Debtors are authorized to use the cash collateral of the holders of their convertible notes (the “Final DIP Order”). On July 4, 2023, the Debtors, the Administrative Agents and the Replacement DIP Lender entered into the First Amendment to the Replacement DIP Credit Agreement. For detailed discussion about the First Amendment, refer to Note 10 — Commitments and Contingencies. In January 2024, the Replacement DIP Facility was repaid in full and terminated on the Effective Date of the Company’s Plan of Reorganization. NYDIG Settlement On February 26, 2023, the Bankruptcy Court entered an order (the “NYDIG Order”), whereby the Debtors and NYDIG agreed that the Debtors would transfer the miners serving as collateral under the NYDIG Loan back to NYDIG over a period of several months in exchange for the full extinguishment of the NYDIG Loan. The final shipment of miners serving as collateral under the NYDIG loan occurred during the quarter ended March 31, 2023, after which the NYDIG Loan was extinguished in full and the Company recorded a $20.8 million Gain on debt extinguishment in the Company’s Consolidated Statements of Operations. Priority Power Settlement On March 20, 2023, the Bankruptcy Court entered an order (the “Priority Power Order”), whereby the Debtors and Priority Power Management, LLC (“Priority Power”) agreed that the Debtors would transfer equipment to Priority Power and assume an Energy Management and Consulting Services Agreement and other new agreements. Priority Power was determined to have a single aggregate allowed claim of $20.8 million, which was secured by a perfected mechanic’s lien. The claim was deemed paid and fully satisfied by transfer of specific equipment from the Debtors to Priority Power on the date of the Priority Power Order, thereby releasing all Priority Power liens. The satisfaction of the obligation and transfer of the equipment is a noncash transaction which occurred during the quarter ended March 31, 2023, and resulted in a gain of $4.9 million recorded to Reorganization items, net in the Consolidated Statements of Operations for the year ended December 31, 2023. City of Denton Lease Settlement On August 16, 2023, the Bankruptcy Court entered an order (the “City of Denton Order”), approving the parties’ agreement to settle all claims of City of Denton and Denton Municipal Electric (“Denton”) against the Debtors and releasing any and all liens related to the Debtors’ lease of the Denton facility in exchange for the Debtors’ execution lease cure costs totaling $1.5 million. There was no impact to the Consolidated Statements of Operations as a result of the satisfaction of the settlement. Huband-Mantor Construction Settlement On August 18, 2023, the Bankruptcy Court entered an order (the “HMC Order”), approving the parties’ agreement to settle all claims of Huband-Mantor Construction (“HMC”) and its subcontractors against the Debtors and releasing any and all liens in favor of HMC and its subcontractors in exchange for the Debtors’ payment of $2 million and the Debtors’ execution of a promissory note in favor of HMC in the principal amount of $15.5 million. The promissory note is secured by a mortgage of the Debtors Cottonwood 1 facility in Texas. The satisfaction of the settlement resulted in a loss of $8.3 million recorded to Reorganization items, net in the Consolidated Statements of Operations for the year ended December 31, 2023. See Note 7 — Notes Payable for further discussion of the promissory note. Celsius Mining LLC Settlement On September 14, 2023, the Debtors and Celsius Mining LLC (“Celsius”) entered into a purchase and sale agreement, as amended, (the “PSA”) that provides, in addition to a full mutual release of claims asserted against each party in the respective bankruptcy cases, for a cash payment by Celsius to the Company of $14.0 million and a full and final release of all claims of Celsius against the Debtors related to the Celsius Contracts, in exchange for the Debtors’: (i) sale to Celsius of the Debtors’ Ward County, Texas bitcoin mining data center site (the “Cedarvale Facility”) and certain related assets, (ii) grant to Celsius of a perpetual, non-transferable (except as described in Section 14 of the PSA), non-exclusive limited license to use identified Company intellectual property solely as and to the extent necessary to (x) finish construction and development of the Cedarvale Facility, (y) develop and construct other mining facilities on other properties owned or leased by Celsius similar in type and scope to the Cedarvale Facility, and (z) operate all of the foregoing, (iii) assumption and assignment to Celsius of certain executory contracts, and (iv) unequivocal release of claims against Celsius asserted by the Company in connection with the Celsius Chapter 11 Cases and the Company’s Chapter 11 Cases. On November 2, 2023, the Company received the payment of $14.0 million from Celsius in connection with the PSA. The sale of the Cedarvale Facility resulted in a loss of $2.2 million recorded to Reorganization items, net in the Consolidated Statements of Operations for the year ended December 31, 2023. Refer to Note 10 — Commitments and Contingencies for further discussion of the sale. ACM ELF ST LLC Lease Settlement In September 2023, the Company entered into a $7.5 million equipment finance agreement with ACM ELF ST LLC in settlement and satisfaction of a previous equipment finance agreement which resulted in a gain of $5.0 million recorded to Reorganization items, net in the Consolidated Statements of Operations for the year ended December 31, 2023. See Note 7 — Notes Payable for further discussion of the promissory note. J.W. Didado Electric, LLC Settlement On October 2, 2023, the Bankruptcy Court entered an order (the “J.W. Didado Order”), approving the parties’ agreement to settle all claims of W. Didado Electric, LLC (“Didado”) against the Debtors and releasing any and all liens related to the Debtors’ Muskogee datacenter in exchange for the Debtors’ execution of an unsecured promissory note in favor of Didado in the principal amount of $13 million to be paid over 36 months upon emergence from bankruptcy. The satisfaction of the settlement resulted in a loss of $0.7 million recorded to Reorganization items, net in the Consolidated Statements of Operations for the year ended December 31, 2023. Trilogy LLC Settlement On October 2, 2023, the Bankruptcy Court entered an order (the “Trilogy Order”), approving the parties’ agreement to settle all claims of Trilogy LLC (“Trilogy”) against the Debtors and releasing any and all liens related to the Trilogy contracts in exchange for the Debtors’ execution of an unsecured promissory note in favor of Trilogy in the principal amount of $2.9 million to be paid over 30 months starting three months after the confirmation date. The satisfaction of the settlement resulted in a gain of $0.4 million recorded to Reorganization items, net in the Consolidated Statements of Operations for the year ended December 31, 2023. Harper Construction Company, Inc. Settlement On November 4, 2023, the Bankruptcy Court entered an order (the “Harper Order”), approving the parties agreement to settle all claims of Harper Construction Company, Inc (“Harper”) against the Debtors and releasing any and all liens related to the Debtors’ Muskogee datacenter in exchange for the Debtors’ execution of an unsecured promissory note in favor of Harper in the principal amount of $4.7 million to be paid over 30 months starting forty-five Dalton Settlement On December 29, 2023, the Bankruptcy Court entered an order (the “Dalton Settlement Agreement”), approving the parties’ agreement to settle all claims of Dalton Utilities (“Dalton”) against the Debtors including the Dalton Cure Claims in exchange for Debtors’ execution of an unsecured promissory note. As of December 31, 2023, the Company accrued the face value of the pending settlement of $9.1 million as the execution of the promissory note is still pending. The satisfaction of the settlement resulted in a gain of $1.1 million recorded to Reorganization items, net in the Consolidated Statements of Operations for the year ended December 31, 2023. Maddox Settlement On January 16, 2024, the Bankruptcy Court entered an order (the “Maddox Settlement”) approving the parties’ agreement to terminate and reject all existing purchase orders and enter into a new purchase order. Pursuant to the new purchase order, the Company will pay a total purchase price of $2.8 million in seven equal monthly installments to Maddox Industrial Transformer LLC (“Maddox”) for 39 18 kilovolt transformers. The satisfaction of the settlement resulted in a loss of $1.3 million recorded to Reorganization items, net in the Consolidated Statements of Operations for the year ended December 31, 2023. Sphere 3D Corp. and Gryphon Settlement On January 16, 2024, the Bankruptcy Court entered an order (the “Core-Sphere-Gryphon Order”), granting Sphere 3D Corp (“Sphere”) an allowed $10 million general unsecured claim and a complete and final release of all claims of Sphere and Gryphon Digital Mining, Inc. (“Gryphon”) against the Debtors related to the hosting contracts. As part of the resolution, all miners have been returned to the client. Furthermore, the adversary proceeding was dismissed with prejudice, against both Gryphon and Sphere. The satisfaction of the settlement resulted in a gain of $23.3 million recorded to Reorganization items, net in the Consolidated Statements of Operations for the year ended December 31, 2023. McCarthy & Humphrey Settlement On January 18, 2024, the Bankruptcy Court entered an order (the “McCarthy Order”) approving the parties’ agreement to settle all claims and release all liens of McCarthy Building Companies, Inc. (“McCarthy”) and Humphrey & Associates, Inc. (“Humphrey”) against the Company in exchange for cash payments ($6.8 million to McCarthy and $5.6 million to Humphrey) within 90 days of emergence and promissory notes (to McCarthy in principal amount of $5.4 million and to Humphrey in principal amount of $1.4 million). However, if the Company delivers notice to McCarthy to proceed with construction activities, the Company will make the cash payments within three business days of such notice, and pay off the promissory notes in full within one business day of such notice. As the amount of the expected settlement results in amounts that are estimable and probable, the Company accrued for those liabilities as of December 31, 2023. The satisfaction of the settlement resulted in a loss of $4.6 million recorded to Reorganization items, net in the Consolidated Statements of Operations for the year ended December 31, 2023. Foundry Settlement On January 16, 2024, the Bankruptcy Court entered an order (the “Foundry Order”), granting Foundry Digital LLC (“Foundry”) an allowed $5.5 million general unsecured claim and a comprehensive release of all claims of Foundry against the Debtors. Concurrently, hosting contracts are assumed, and common stock in Core after emergence from bankruptcy have been confirmed as part of the resolution. The satisfaction of the settlement resulted in a gain of $12.6 million recorded to Reorganization items, net in the Consolidated Statements of Operations for the year ended December 31, 2023. Oklahoma Gas & Electric Settlement On January 24, 2024, the Bankruptcy Court entered an order (the “OG&E Order”), granting Oklahoma Gas & Electric Company (“OG&E”) an allowed $4.8 million general unsecured claim in full and final satisfaction of all claims of OG&E against the Debtors. The satisfaction of the settlement resulted in a loss of $4.8 million recorded to Reorganization items, net in the Consolidated Statements of Operations for the year ended December 31, 2023. Reorganization items, net and Liabilities Subject to Compromise Effective on December 21, 2022, the Company began to apply the provisions of ASC 852, Reorganizations (“ASC 852”), which is applicable to companies under bankruptcy protection, and requires amendments to the presentation of certain financial statement line items. ASC 852 requires that the financial statements for periods including and after the filing of the Chapter 11 Cases distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Expenses (including professional fees), realized gains and losses, and provisions for losses that can be directly associated with the reorganization must be reported separately as Reorganization items, net in the Consolidated Statements of Operations beginning December 21, 2022, the date of filing of the Chapter 11 Cases. Liabilities that may be affected by the Plan must be classified as liabilities subject to compromise at the amounts expected to be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts as a result of the Plan or negotiations with creditors. The amounts currently classified as liabilities subject to compromise may be subject to future adjustments depending on Bankruptcy Court actions, further developments with respect to disputed claims, determinations of secured status of certain claims, the values of any collateral securing such claims, or other events. Any resulting changes in classification will be reflected in subsequent financial statements. If there is uncertainty about whether a secured claim is undersecured, or will be impaired under the Plan, the entire amount of the claim is included with prepetition claims in liabilities subject to compromise. As a result of the filing of the Chapter 11 Cases on December 21, 2022, the classification of pre-petition indebtedness is generally subject to compromise pursuant to the Plan of Reorganization. Generally, actions to enforce or otherwise effect payment of pre-bankruptcy filing liabilities were stayed. The Bankruptcy Court granted the Debtors authority to pay certain pre-petition claims in designated categories and subject to certain terms and conditions. This relief generally was designed to preserve the value of the Debtors’ businesses and assets. Among other things, the Bankruptcy Court authorized the Debtors to pay certain pre-petition claims relating to employee wages and benefits, taxes and critical vendors. The Debtors are paying and intend to pay undisputed post-petition liabilities in the ordinary course of business. In addition, the Debtors may reject certain pre-petition executory contracts and unexpired leases with respect to their operations with the approval of the Bankruptcy Court. Any damages resulting from the rejection of executory contracts and unexpired leases are treated as general unsecured claims. Reorganization items, net incurred as a result of the Chapter 11 Cases presented separately in the accompanying Consolidated Statements of Operations were as follows (in thousands): Years Ended December 31, 2023 2022 Professional fees and other bankruptcy related costs $ 92,195 $ 2,302 Settlements with creditors: Priority Power (4,878) — ACM ELF ST LLC Lease (5,003) — HMC 8,269 — Trilogy (385) — Didado 657 — Celsius - Cedarvale PSA 2,175 — Harper 4,977 — McCarthy 4,590 — Dalton (1,122) — Gryphon (23,260) — Foundry (12,636) — OG&E 4,800 — Maddox 1,277 — Other, net 14 — Total settlements with creditors (20,525) — Post-petition interest, fees and other cures 94,567 — Debtor-in-possession financing costs 24,885 — Write-off of debt issuance costs and original issue net discount on liabilities subject to compromise — 3,529 (Gain) from adjustment of liabilities subject to compromise fair value to expected allowed amount — (203,236) Reorganization items, net $ 191,122 $ (197,405) The Company incurred significant costs associated with the reorganization, primarily debtor-in-possession financing costs and legal and professional fees, which were classified as Reorganization items, net subsequent to our petition. The accompanying Consolidated Balance Sheets as of December 31, 2023 and 2022, include amounts classified as Liabilities subject to compromise, which represent liabilities the Company anticipates will be allowed as claims in the Chapter 11 Cases. These amounts represent the Company's current estimate of known or potential obligations to be resolved in connection with the Chapter 11 Cases and may differ from actual future settlement amounts paid. Differences between liabilities estimated and claims filed, or to be filed, will be investigated and resolved in connection with the claims resolution process. Liabilities subject to compromise consisted of liabilities reclassified from the following balance sheet categories (in thousands): December 31, 2023 December 31, 2022 Accounts payable $ 36,678 $ 20,908 Accrued expenses and other current liabilities 20,300 64,493 Accounts payable, and accrued expenses and other current liabilities $ 56,978 $ 85,401 Operating lease liability $ — $ 13,868 Financing lease liability — 70,796 Debt subject to compromise 41,777 844,695 Accrued interest on liabilities subject to compromise 580 12,553 Leases, debt and accrued interest 42,357 941,912 Liabilities subject to compromise $ 99,335 $ 1,027,313 Pre-petition unsecured and secured claims which were identified as impaired and subject to compromise during the bankruptcy process have been reclassified as Liabilities subject to compromise. During the quarter ended September 30, 2023, improvements in the Company’s condition and other developments indicated that secured claims which were initially considered subject to compromise at the beginning of the bankruptcy process and at December 31, 2022, were determined to no longer be subject to compromise as of September 30, 2023 and December 31, 2023. This determination is the primary reason for the decrease in the reclassification of debt, leases, accounts payable and accrued expenses and other current liabilities to the Liabilities subject to compromise balance, with Court approved settlements contributing nominally to the reductions. |
BUSINESS COMBINATIONS, ACQUISIT
BUSINESS COMBINATIONS, ACQUISITIONS AND RESTRUCTURING | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS, ACQUISITIONS AND RESTRUCTURING | 4. BUSINESS COMBINATIONS, ACQUISITIONS AND RESTRUCTURING Merger Agreement In 2021, XPDI entered into that certain Agreement and Plan of Reorganization and Merger, dated as of July 20, 2021, as amended on October 1, 2021, and as further amended on December 29, 2021, by and among Core Scientific Holding Co., XPDI Merger Sub and XPDI (the “Merger Agreement”). XPDI’s stockholders approved the transactions (collectively, the “Merger”) contemplated by the Merger Agreement at a special meeting of stockholders held on January 19, 2022 (the “Special Meeting”). Pursuant to the terms of (a) the Merger Agreement and (b) that certain Agreement and Plan of Merger, dated as of October 1, 2021, as amended on January 14, 2022, by and among XPDI, Core Scientific Holding Co., XPDI Merger Sub 3, LLC, a Delaware limited liability company and wholly owned subsidiary of XPDI (“Merger Sub 3”), and Blockcap, Inc., a Nevada corporation and wholly owned subsidiary of Core Scientific (“Blockcap”), the Business Combination was effected by (i) the merger of Merger Sub with and into Core Scientific (the “First Merger”), which occurred on January 19, 2022 (the “Closing Date”), with Core Scientific surviving the First Merger as a wholly owned subsidiary of XPDI, (ii) the merger of Core Scientific with and into XPDI (the “Second Merger”), which occurred on January 20, 2022, with XPDI surviving the Second Merger, and (iii) following the closing of the Second Merger on January 20, 2022, the merger of Blockcap with and into Merger Sub 3 (the “Third Merger”), with Merger Sub 3 surviving the Third Merger as a wholly owned subsidiary of XPDI under the name “Core Scientific Acquired Mining LLC.” Immediately prior to the effective time of the First Merger (such effective time of the First Merger, the “Effective Time”), XPDI filed a Second Amended and Restated Certificate of Incorporation (the “Post-Combination Charter”) with the Secretary of State of the State of Delaware pursuant to which XPDI changed its name from “Power & Digital Infrastructure Acquisition Corp.” to “Core Scientific, Inc.” (hereinafter referred to as the “Company” or “New Core”) and redesignated its Class A common stock, par value $0.0001 per share (“XPDI Class A Common Stock”), and Class B common stock, par value $0.0001 per share (“XPDI Class B Common Stock”), as common stock, par value $0.0001, of the Company (“New Core Common Stock”). The Exchange Ratio (as defined in the Merger Agreement) was 1.60015286880 of a share of New Core Common Stock per fully-diluted share of Legacy Core. In connection with the Special Meeting and the Business Combination, holders of 12.3 million of the 34.5 million then-outstanding shares of XPDI Class A Common Stock exercised their right to redeem their shares for cash at a redemption price of approximately $10.00 per share, for an aggregate redemption amount of $123.5 million. The Business Combination provided gross proceeds of approximately $221.6 million from the XPDI trust account, resulting in approximately $201.0 million in net cash proceeds to Core Scientific, after the payment of transaction expenses, which is presented within proceeds from issuance of common stock, net of transaction costs on the consolidated statements of cash flows. Following the Business Combination, Legacy Core stockholders owned 90.7%, former XPDI public stockholders owned 6.7% and XPDI’s sponsor owned 2.6% of the issued and outstanding shares of New Core Common Stock, excluding the impact of unvested restricted stock units and options. The proceeds from the Business Combination were used to fund mining equipment purchases and infrastructure build-out. The Business Combination is accounted for as a reverse recapitalization with the Company being the accounting acquirer. A reverse recapitalization does not result in a new basis of accounting. Accordingly, the reverse recapitalization was treated as the equivalent of Core Scientific Holding Co. issuing stock for the net assets of XPDI, accompanied by a recapitalization. The net assets of XPDI are stated at historical costs, with no goodwill or other intangible assets recorded. The Company identified $18.6 million of direct and incremental transaction costs, which consist of legal, accounting, and other professional services directly related to the Business Combination, of which $7.9 million were recognized during the year ended December 31, 2022. These transaction costs have been allocated to all instruments assumed or issued in the Business Combination on a relative fair value basis as of the date of the Business Combination. Transaction costs of $16.6 million have been allocated to equity-classified instruments and recognized as an adjustment to additional paid-in capital within total stockholders’ (deficit) equity. The cash outflows related to these costs have been netted against the proceeds from the issuance of New Core Common Stock upon the Business Combination with XPDI within financing activities on the Company’s consolidated statement of cash flows. Transaction costs of $2.0 million have been allocated to liability-classified instruments that are measured at fair value through earnings and have been recognized as a charge within general and administrative expenses for the year ended December 31, 2022. Immediately prior to the Effective Time, each share of Series A convertible preferred stock, par value $0.0001, of Legacy Core automatically converted into one share of New Core Common Stock, and each share of Series B convertible preferred stock, par value $0.0001, of Legacy Core automatically converted into one share of New Core Common Stock. In addition, immediately prior to the Effective Time, each share of XPDI Class B Common Stock automatically converted into one share of New Core Common Stock. 1.7 million shares (“SPAC Vesting Shares”) are subject to vesting conditions, and will vest i) upon the date on which New Core Common Stock’s volume-weighted average price is greater than $12.50 per share for any 20 trading days within any 30 consecutive trading day period within five years of the Closing Date or ii) upon any change in control of the Company, or a sale of substantially all of the Company’s assets that results in a change of control that is consummated within five years of the Closing Date that results in a price per share paid to the holders of the Company’s Common Stock equal to or in excess of $12.50 per share. As a result of the Business Combination, all of XPDI’s Class A Common Stock and Class B Common Stock automatically converted into shares of New Core Common Stock on a one-for-one basis. XPDI’s 8.6 million public warrants issued in its initial public offering (the “Public Warrants”) and 6.3 million warrants issued in connection with private placement at the time of XPDI’s initial public offering (the “Private Placement Warrants”) became warrants for New Core Common Stock. All share-based compensation awards were converted into comparable equity awards that are settled or exercisable for shares of New Core Common Stock. As a result, each stock option and warrant was converted into an option or warrant to purchase shares of New Core Common Stock based on an exchange ratio of 1.60015286880. Each award of the Company’s restricted stock units (“RSUs”) was converted into RSUs of New Core based on an exchange ratio of 1.60015286880. Each convertible note is convertible into New Core Common Stock in accordance with the terms of such convertible promissory note; provided, however, that with respect to outstanding convertible promissory notes for which Core Scientific received a duly executed exercise of conversion in accordance with such convertible promissory note, exercising the right of such holder to convert such convertible promissory note subject to and conditioned upon the occurrence of the Effective Time, the outstanding principal amount and accrued interest as of the Effective Time with respect to such convertible promissory note was converted into shares of New Core Common Stock, equal to the product (rounded down to the nearest whole number) of (i) the number of shares of Core Scientific Common Stock issuable upon the conversion of such convertible promissory note in accordance with such convertible promissory note immediately prior to the Effective Time and (ii) the Exchange Ratio. Blockcap Acquisition On July 30, 2021, the Company acquired 100% of the equity interest in Blockcap, one of its largest hosting customers at the time. Blockcap was a blockchain technology company with industrial scale digital asset mining operations. Blockcap’s primary historical business was the mining of digital asset coins and tokens, primarily bitcoin and, to a lesser extent, Siacoin and Ethereum. While Blockcap did sell or exchange the digital assets it mined to fund its growth strategies or for general corporate purposes from time to time, it generally retained its digital assets as investments in anticipation of continued adoption of digital assets as a “store of value” and a more accessible and efficient medium of exchange than traditional fiat currencies. In addition to mining, holding and exchanging digital assets, Blockcap also evaluated and completed investments in related technologies and ancillary businesses, including RADAR, an early-stage company focused on technology enhancement and development in the digital asset industry that it acquired on July 1, 2021. The acquisition of Blockcap significantly expanded the Company’s self-mining operations and increased the number of miners it owns. Transaction Costs The Company recognized transaction costs of $1.1 million for the year ended December 31, 2021. These costs were associated with legal and professional services and were recognized as General and administrative expenses in the Company’s Consolidated Statements of Operations. Unaudited Pro Forma Information The following unaudited pro forma financial information gives effect to the Blockcap acquisition as if it had been completed on January 1, 2020. The unaudited pro forma information was prepared in accordance with the requirements of ASC 805, Business Combinations , which is a different basis than pro forma information prepared under Article 11 of Regulation S-X (“Article 11”). As such, they are not directly comparable with historical results for stand-alone Core Scientific prior to July 30, 2021, historical results for Core Scientific from July 30, 2021, that reflect the acquisition and are inclusive of the results and operations of Blockcap, nor our previously provided pro forma financials prepared in accordance with Article 11. The pro forma results for the year ended December 31, 2021, include the impact of several significant nonrecurring pro forma adjustments to previously reported operating results. The pro forma adjustments are based on historically reported transactions by the respective companies. The pro forma results do not include any anticipated synergies or other expected benefits of the acquisition (in thousands). Year Ended December 31, 2021 2020 Total revenue $ 586,991 $ 70,948 Operating income $ 137,109 $ (23,354) Significant pro forma adjustments include: • Transaction costs of $1.9 million are assumed to have occurred on the pro forma close date of January 1, 2020, and are recognized as if incurred in the first quarter of 2020; • Tangible and intangible assets are assumed to be recorded at their estimated fair values as of January 1, 2020 and are depreciated or amortized over their estimated useful lives; and • Accounting policies of Blockcap are conformed to those of Core Scientific including depreciation for mining equipment. • Share-based compensation awards of Blockcap for which the performance condition of the award is assumed to be probable of being met as of January 1, 2020 and expensed as they are earned based on the service condition. • The elimination of $19.2 million of expense recognized by Blockcap in July 2021, for the acceleration of certain equity awards of its CEO and others. Because this acceleration was deemed to be in contemplation of the Business Combination, Core Scientific has recorded $23.3 million of compensation expense for the acceleration in its financial statements for the period ending December 31, 2021, which was determined based on the fair value of the awards at the time of the Business Combination. This adjustment is necessary to avoid duplication of the expense attributable to the combined company related to the acceleration of the same awards. The selected unaudited pro forma condensed combined financial information is provided for illustrative purposes only and does not purport to represent what the actual consolidated results of operations would have been had the acquisition actually occurred on January 1, 2021, nor do they purport to project the future consolidated results of operations. For the periods subsequent to the acquisition, Blockcap contributed total revenues of $42.6 million and operating income of $15.5 million for the year ended December 31, 2021, that were included in the Company’s Consolidated Statements of Operations. Restructuring Activities During the second quarter of 2022 market conditions led management to evaluate its operations and refocus its efforts and resources on the core activities of its hosting and mining segments. Management initiated a plan to exit certain activities, technologies and ancillary businesses, and to reduce portions of the Company’s workforce including those acquired through Blockcap’s acquisition of RADAR. Management completed the restructuring plan in October 2022 and all expected costs of the restructuring plan were recognized as of December 31, 2022. Cash severance and related payments under the Company’s ongoing severance policy of $0.9 million were paid as compensation for the year ended December 31, 2022. In addition to the cash restructuring charges, $1.0 million of stock-based compensation was paid in severance during the year ended December 31, 2022. Total cash and stock-based restructuring charges of $2.3 million were recognized in general and administrative expenses for the year ended December 31, 2022. |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | 5. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net as of December 31, 2023 and 2022 consist of the following (in thousands): December 31, 2023 2022 Estimated Useful Lives Land and improvements (1) $ 21,852 $ 22,309 20 years Building and improvements 164,495 166,486 12 to 39 years Mining and network equipment (2) 441,404 448,346 1 to 5 years Electrical equipment (3) 64,810 64,810 5 to 10 years Other property, plant and equipment (4) 2,935 2,917 5 to 7 years Total 695,496 704,868 Less: accumulated depreciation and amortization (5) 293,974 268,233 Total 401,522 436,635 Add: Construction in progress 183,909 254,499 Property, plant and equipment, net $ 585,431 $ 691,134 __________________ (1) Estimated useful life of improvements. Land is not depreciated. (2) Includes finance lease assets of $46.6 million and $112.7 million at December 31, 2023 and 2022, respectively. (3) Includes finance lease assets of $12.7 million and $12.6 million at December 31, 2023 and 2022, respectively. (4) Includes finance lease assets of $0.4 million and $0.4 million at December 31, 2023 and 2022, respectively. (5) Includes accumulated amortization for assets under finance leases of $43.4 million and $41.7 million at December 31, 2023 and 2022, respectively. Depreciation expense, including amortization of finance lease assets, for the years ended December 31, 2023, 2022 and 2021, was $95.7 million, $224.1 million, and $31.8 million, respectively. Depreciation for the years ended December 31, 2023, 2022 and 2021, allocated to costs of revenue was $95.4 million, $223.6 million, and $31.7 million, respectively. During the year ended December 31, 2022, the Company’s operating performance and liquidity continued to be severely impacted by the prolonged decrease in the price of bitcoin, the increase in electricity costs, the increase in the global Bitcoin network hash rate and an increase in additional operating costs related to these factors. Additionally, primary and secondary market prices for application-specific integrated circuit (“ASIC”) miners of the type used by the Company in its business operations have decreased significantly from previous levels. During the quarter ended September 30, 2022, the Company evaluated whether the estimated future undiscounted cash flows from the operation of its data center facilities would recover the carrying value of the property, plant and equipment located at the sites and used in site operations, including the Company’s deployed mining equipment. Based on this evaluation, the Company determined that the carrying value of the property, plant and equipment at the Cedarvale, Texas facility site may no longer be fully recoverable by the cash flows of the site. The Company measured the amount of impairment at the Cedarvale facility site as the difference between the carrying amount of the site asset group of $119.8 million and the estimated fair value of the site asset group of $60.5 million, resulting in an impairment of the facility site’s property, plant and equipment of $59.3 million for the year ended December 31, 2022. During the quarter ended December 31, 2022, the Company evaluated whether the estimated future undiscounted cash flows from its operations would recover the carrying value of the property, plant and equipment asset groups located at the sites and used in site operations, including the Company’s deployed mining equipment. Based on this evaluation, the Company determined that the carrying value of its entire fleet of mining equipment and the other property, plant and equipment at the Cedarvale and Cottonwood, Texas facility sites may no longer be fully recoverable by the cash flows of those asset groups. The Company measured the amount of impairment of its fleet of mining equipment as the difference between their carrying amount of $668.5 million and their estimated fair value of $176.3 million resulting in an impairment of the fleet of mining equipment of $492.2 million. The Company measured the amount of impairment of its other property, plant and equipment at the Cedarvale and Cottonwood, Texas facility sites as the difference between their carrying amount of $174.3 million and their estimated fair value of $135.1 million resulting in an impairment of the other site property, plant and equipment of $39.2 million. During the year ended December 31, 2022, the Company recognized impairments to property, plant and equipment of $590.7 million. There were no impairments or indicators of impairment to long-lived assets for the years ended December 31, 2023 and 2021. The Company’s analysis involved the use of a combination and corroboration of cost and market approaches. The cost approach has been used to estimate the fair value of some buildings, improvements, electrical equipment and other tangible assets used in combination with other assets. The cost approach was also used to corroborate certain estimates made using the market approach. Significant assumptions used in the cost approach include reproduction and replacement costs, useful service life, and orderly liquidation values. The cost approach utilizes useful service life and other estimates developed by the Company to determine fair value, which are unobservable Level 3 inputs. The market approach has been used to estimate the fair value of the Company’s ASIC miners, network equipment, real estate, and other of its buildings, improvements, electrical equipment and other tangible assets. The market approach was also used to corroborate certain estimates made using the cost approach. Valuations using the market approach are derived from manufacturer and secondary market pricing sources and, when available, comparable secondary market transactions. Significant judgment in using the market approach includes the selection of comparable assets based on the most relevant attributes of the evaluated asset, a selection of and modifications to transactions according to comparable use, size, geography and other traits, and the use of broker indications of relative market price metrics. The market approach utilizes comparable use, relative efficiency and other estimates developed by the Company to determine fair value, which are unobservable Level 3 inputs. Unobservable Level 3 inputs are used to measure fair value to the extent that relevant observable inputs are not available. The Company developed its estimates using the best information available at the time. |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BALANCE SHEET COMPONENTS | 6. BALANCE SHEET COMPONENTS Prepaid expenses and other current assets as of December 31, 2023 and 2022 consist of the following (in thousands): December 31, 2023 2022 Prepaid power $ 7,325 $ 4,430 Prepaid insurance 5,506 7,321 Prepaid expenses 2,032 10,440 Prepaid construction — 6,102 Digital assets and receivables 6,158 3,285 Other 3,001 303 Total prepaid expenses and other current assets $ 24,022 $ 31,881 Prepaid expenses includes prepayments related to subscriptions, rent, and other operating expenses. Other includes prepayments of equipment and taxes, as well as security deposits associated with utilities and leases. Accrued expenses and other current liabilities as of December 31, 2023 and 2022, consist of the following (in thousands): December 31, 2023 2022 Accrued interest (1) $ 94,311 $ — Accrued liabilities 38,288 — Accrued expenses and other 20,283 11,590 Accrued inventory purchases 16,285 — Accrued taxes 3,694 4,720 Other current liabilities 6,775 1,642 Total accrued expenses and other current liabilities $ 179,636 $ 17,952 __________________ (1) As a result of the Company's Chapter 11 Cases, the Company has not made any payments related to accrued interest for any debt obligations that are subject to compromise. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | 7. NOTES PAYABLE The commencement of the Chapter 11 Cases constituted an event of default under certain of the Company's debt agreements. Any efforts to enforce payment obligations under the debt instruments are automatically stayed as a result of the Chapter 11 Cases and the creditors' rights in respect of the debt instruments are subject to the applicable provisions of the Bankruptcy Code. See Note 3 — Chapter 11 Filing and Other Related Matters for further information. The stay applies to the ability of creditors to demand accelerated payments under default provisions, as a result, the Company continues to classify its notes and leases, not subject to compromise, according to the original payment schedules. Notes payable as of December 31, 2023 and 2022 consist of the following (in thousands): Stated Interest Rate Effective Interest Rates Maturities December 31, 2023 December 31, 2022 Kentucky note 5.0% 5.0% 2023 $ 529 $ 529 NYDIG loan 11.0% - 15.0% 11.0% - 17.0% Various — 38,573 Stockholder loan 10.0% 20.0% 2023 10,000 10,000 Trinity loan 11.0% 11.0% 2024 23,356 23,356 Bremer loan 5.5% 5.6% 2026 18,331 18,331 Blockfi loan 9.7% - 13.1% 10.1% - 13.1% 2023 53,913 53,913 Anchor Labs loan 12.5% 12.5% 2024 25,159 25,159 Mass Mutual Barings loans 9.8% - 13.0% 9.8% - 13.0% 2025 63,844 63,844 B. Riley Bridge Notes 7.0% 7.0% 2023 41,777 41,777 Liberty loan 10.6% 10.6% 2024 6,968 6,968 Secured Convertible Notes (1) 10.0% 10.0% 2025 237,584 237,584 Other Convertible Notes (2) 10.0% 10.0% 2025 322,396 322,396 Original DIP Credit Agreement (3) 10.0% 10.0% 2023 — 35,547 Replacement DIP Credit Agreement (4) 10.0% 10.0% 2024 4,273 — HMC note 5.0% 15.0% 2026 14,208 — ACM financing —% 15.0% 2025 6,519 — First Insurance loan —% 7.6% 2024 2,538 — Trilogy note 5.0% 15.0% 2026 2,927 — Didado note 5.0% 15.0% 2027 13,000 — Harper note 5.0% 15.0% 2026 4,678 — Other 2,453 2,960 Notes payable, prior to reclassification to Liabilities subject to compromise 854,453 880,937 Less: Notes payable in Liabilities subject to compromise (5) 41,777 844,695 Less: Unamortized discount and debt issuance costs - post-petition (6) 4,236 — Total notes payable, net 808,440 36,242 Less: current maturities 124,358 36,242 Notes payable, net of current portion $ 684,082 $ — __________________ (1) Secured Convertible Notes includes principal balance at issuance and PIK interest. (2) Other Convertible Notes includes principal balance at issuance and PIK interest. (3) Original DIP Credit Agreement, see Note 3 - Chapter 11 Filing and Other Related Matters for further information. (4) Replacement DIP Credit Agreement, see Note 3 - Chapter 11 Filing and Other Related Matters for further information. (5) In connection with the Company's Chapter 11 Cases, $41.8 million and $844.7 million of outstanding notes payable have been reclassified to Liabilities subject to compromise in the Company's Consolidated Balance Sheets as of December 31, 2023 and 2022, respectively, at their expected allowed amount. As of December 31, 2023 and 2022, $0.6 million and $12.6 million, respectively, of accrued interest was classified as Liabilities subject to compromise. (6) As a result of the Company's Chapter 11 Cases, the Company expensed $3.5 million of unamortized discount and debt issuance costs, net recorded in Reorganization items, net in the year ended December 31, 2022. Kentucky Note —In December 2018, the Company entered into a five-year secured promissory note agreement for $2.4 million in connection with the acquisition of property in Kentucky for datacenter development (“Kentucky note”). The note bears interest at a rate per annum of 5% and the Company is required to make monthly payments of principal and interest. Interest expense on the note has been recognized based on an effective interest rate of 5%. The loan is secured by the underlying property purchased. NYDIG Loan —In October 2020, the Company entered into a master equipment finance agreement with NYDIG and received a loan of $0.8 million to finance the Company’s acquisition of blockchain computing equipment. In March 2021, the Company received $3.8 million of additional loans under the master equipment finance agreement with NYDIG to finance the Company’s acquisition of blockchain computing equipment. The loans bear an interest rate of 15% and have a term of 24 months from issuance. Interest expense on the loans has been recognized based on an effective interest rate of 16%. The loans are secured by the blockchain computing equipment financed by the loans. In May 2021, the Company received $13.4 million of additional loans under the master equipment finance agreement with NYDIG to finance the Company’s acquisition of blockchain computing equipment that bear an interest rate of 14.25% and have a term of 24 months from issuance. Interest expense on the loans issued in May 2021 has been recognized based on an effective interest rate of 17%. In July 2021, the Company received blockchain computing equipment from NYDIG (which had been concurrently acquired by NYDIG from Blockcap in exchange for settlement of Blockcap’s debt with NYDIG) in exchange for $26.1 million of additional loans under the master equipment finance agreement with NYDIG that bear an interest rate of 14.25% and have a term of 24 months from issuance. Interest expense on the loans issued in July 2021 has been recognized based on an effective interest rate of 16%. In November 2021, the Company received blockchain computing equipment from NYDIG in exchange for $33.4 million of additional loans under the master equipment finance agreement with NYDIG that bear an interest rate of 11% and have a term of 24 months from issuance. Interest expense on the loans issued in November 2021 has been recognized based on an effective interest rate of 11%. As discussed in Note 3 — Chapter 11 Filing and Other Related Matters, under the NYDIG Order, the final shipment of miners that served as collateral under the NYDIG loan occurred during the quarter ended March 31, 2023, after which the NYDIG Loan was extinguished in full and the Company recorded a $20.8 million Gain on extinguishment of debt in the Company’s Consolidated Statements of Operations. Stockholder Loan —In January 2021, the Company borrowed $10.0 million from a stockholder for the purchase of blockchain computing equipment. The loan bears interest at 10% per annum over a two-year term. The loan was issued with a warrant to purchase 0.2 million shares of common stock at an exercise price of $4.21 per share. The warrant has a two-year term. The Company allocated proceeds of $9.5 million to the notes and $0.5 million to the warrants on a relative fair value basis. Interest expense on the loan has been recognized based on an effective interest rate of 20%. The loan is secured by the blockchain computing equipment financed by the loan. Trinity Loan —In August 2021, the Company entered into a $30.0 million master equipment finance facility agreement with Trinity Capital Inc. (“Trinity”) to finance the Company’s acquisition of blockchain computing equipment and received a loan of $1.0 million at close. The loan has a term of 36 months from issuance. Interest expense on the loan has been recognized based on an effective interest rate of 11.0%. In November and December 2021, the Company borrowed $14.0 million and $5.0 million, respectively. The remaining balance of $10.0 million was drawn in February 2022. The loan is secured by the blockchain computing equipment financed by the loan. Bremer Loan —In October 2021, the Company entered into a lending agreement with Bremer Bank, National Association to borrow up to $16.2 million in two tranches through May 22, 2022, for the purchase of blockchain mining equipment and for improvements to data center and infrastructure. In December 2021, the Company entered into an additional term loan to borrow up to $9.6 million. The Company borrowed $15.2 million in October through December 2021. The Company borrowed an additional $4.8 million in January through March 2022. In April 2022, the Company borrowed an additional $0.7 million from Bremer to finance the construction of our North Dakota facility. The loans bear interest at 5.5% annually and are due at the earlier of the date of sale of the underlying mining equipment or 60 months from issuance. Interest expense on the loans has been recognized based on an effective interest rate of 5.6%. The loans require the Company to maintain the following financial covenants: (1) a minimum debt service coverage ratio (defined in the agreement as EBITDA divided by scheduled principal and interest payments) of not less than 1.2:1, measured annually beginning December 31, 2022; and (2) a fixed charge coverage ratio (defined in the agreement as EBITDA minus net distributions divided by scheduled principal and interest payments) of 1:1, measured annually beginning December 31, 2022. The loans are secured by a first priority security interest in certain of the assets financed by the loans. Additionally, an interest buydown agreement was made between Grand Forks Growth Fund and the Bank of North Dakota acting on behalf of the PACE Program for the purpose of a buydown on the interest for certain of the Company’s loans financed through Bremer Bank. The total amount of interest buydown over the term of the loan is $0.8 million. In order to receive the interest buydown incentive, the Company must (a) continue operation in the jurisdiction for a minimum of five years from the benefit date, (b) employ 13 new full-time employees within two years of receiving the incentive and continue to keep them employed for the duration of the agreement and (c) continue to make debt payments and no event of default should occur. If the Company discontinues operation in the jurisdiction within the next five years, it is obligated to repay the incentive back to the Bank of North Dakota. If after two years, the Company does not employ 13 new full-time employees, the interest buydown will be prorated to reflect any partial fulfillment and the Company, at a minimum, is required to pay back the value of the incentive to the Bank of North Dakota. For the years ended December 31, 2023, 2022 and 2021, there was no interest buydown. Blockfi Loan —In December 2021, the Company entered into two lending agreements with Blockfi Lending, LLC to borrow up to $110.0 million for the purchase of blockchain mining equipment. The first agreement consists of $10.0 million and bears interest at 9.7% with a term of 24 months from issuance. Interest expense on the loans issued in December 2021 has been recognized based on an effective interest rate of 10.1%. The second agreement consists of $100.0 million and bears interest at 13.1% with a term of 24 months from issuance. The Company borrowed the first tranche totaling $60.0 million across the two loans in December 2021 and borrowed the second tranche of $20.0 million in January 2022. The remaining $30.0 million expired unused in March 2022. Interest expense on the loans issued in December 2021 has been recognized based on an effective interest rate of 13.1%. The loans are secured by a first priority security interest in certain of the assets financed by the loans. Anchor Labs Loan —In March 2022, the Company entered into a $20.0 million equipment loan and security agreement with Anchorage Lending CA, LLC. (“Anchor Labs”) to finance the Company’s purchase of blockchain computing equipment. The Company borrowed $20.0 million in March 2022. The loan has a term of 24 months from issuance. Interest expense on the loan has been recognized based on an effective interest rate of 12.5%. In May 2022, the Company entered into a $11.7 million equipment loan and security agreement with Anchor Labs to finance the Company’s purchase of blockchain computing equipment. The Company borrowed $11.7 million in May 2022. The loan has a term of 24 months from issuance. Interest expense on the loan has been recognized based on an effective interest rate of 12.5%. The loans are secured by a first priority security interest in certain of the assets financed by the loans. Mass Mutual Barings Loans —In March 2022, the Company entered into a $100.0 million equipment loan and security agreement with Barings BDC, Inc., Barings Capital Investment Corporation and Barings Private Credit Corp. (“Mass Mutual Barings”) to finance the Company’s purchase of blockchain computing equipment. The Company borrowed the first tranche of $30.0 million in March 2022 and borrowed the second tranche of $39.6 million in April 2022. On June 30, 2022, the remaining $30.4 million funding commitment expired unused. The loans under the agreement have a term of 36 months from issuance. Interest expense on the loans have been recognized based on an effective interest rate of 9.8%. The loans are secured by certain blockchain computing equipment. In August 2022, the Company amended the Mass Mutual Barings loans to defer principal payments for a period of six months beginning with payments due in August 2022. The amendments result in no change to the term of the loans and the remaining principal will amortize over the remaining life of the loans beginning in February 2023. The amendments also require an additional amount of blockchain computing equipment to be provided as collateral. Interest expense on the amended loans has been recognized based on an effective interest rate of 13.0%. In August 2022, the Company issued 0.3 million shares of Common Stock to Mass Mutual Barings as an amendment fee. B. Riley Bridge Notes —In April 2022, the Company entered into a $60.0 million bridge promissory note with B. Riley Commercial Capital, LLC and a $15.0 million bridge promissory note with an affiliate of B. Riley Commercial Capital, LLC (the “Bridge Notes”) maturing in December 2022. Interest expense on the Bridge Notes has been recognized based on an effective interest rate of 7.0%. In August 2022, the Company amended the Bridge Notes to, among other things, extend the maturity date to June 2023 (the “Amended Bridge Notes”). Under the terms of the modified agreement, $37.5 million of principal payments previously due in the second half of 2022 are now due in the first half of 2023. The Amended Bridge Notes require the proceeds of (i) any equity issuances (other than issuances consummated for purposes of making tax payments in connection with the vesting of restricted stock and restricted stock units and equity line of credit under the Equity Line of Credit discussed in Note 12 — Stockholders' (Deficit) Equity (“ELOC”) sales), (ii) any secured debt incurred on or after April 7, 2022 (other than purchase money debt) in excess of $500 million and (iii) any ELOC sales in an amount equal to 25% of the net cash proceeds received from any such ELOC sale, in each case, to be applied by us to repay the outstanding principal amount of the Amended Bridge Notes. On August 1, 2022, the Company issued a total of 0.4 million shares of Common Stock to B. Riley Securities, Inc., an affiliate of B. Riley Commercial Capital, in satisfaction of an advisory fee for providing advisory services to the Company in connection with entering into the Amended Bridge Notes. Liberty Loan —In April 2022, the Company entered into an $11.0 million equipment finance agreement with Liberty Commercial Finance LLC (“Liberty”) to finance the Company’s purchase of blockchain computing equipment. The Company borrowed $11.0 million in April 2022. The loan has a term of 24 months from issuance. Interest expense on the loan has been recognized based on an effective interest rate of 10.6%. The loans are secured by a first priority security interest in the equipment purchased. HMC Note - In August 2023, in addition to a cash payment of $2 million, the Company entered into a $15.5 million secured promissory note agreement with Huband-Mantor Construction, Inc (the “HMC note”) in connection with its settlement and release from all claims. The note bears interest at a contractual rate per annum of 5.0% and has a term of 36 months from issuance, The Company is required to make monthly payments of principal and interest. Interest expense on the note has been recognized based on an effective interest rate of 15.0%. The loan is secured by a security interest in the underlying property leased. ACM Financing - In September 2023, the Company entered into a $7.5 million equipment finance agreement with ACM ELF ST LLC (the “ACM Loan”) in settlement and satisfaction of a previous equipment finance agreement. The finance agreement has a term of 26 months from issuance. Interest expense on the finance agreement has been recognized based on an effective rate of 15.0%. The finance agreement is secured by a security interest in the underlying equipment. First Insurance Loan - In August 2023, the Company entered into an unsecured $5.0 million Insurance Premium Financing Agreement with First Insurance Funding, a Division of Lake Forest Bank & Trust Company (the “First Insurance loan”) to finance the renewal premium of property insurance policies. Under the agreement, a down payment was paid in the amount of $2.1 million, and the Company will pay the balance in eight monthly installments commencing on September 24, 2023. The contractual annual percentage interest rate is 0%. Interest expense on the note has been recognized based on an effective interest rate of 7.6% Replacement DIP Credit Agreement - On July 4, 2023, the Debtors, the Administrative Agent and the Replacement DIP Lenders entered into a First Amendment to the Replacement DIP Credit Agreement (the “First Amendment”). The First Amendment, among other things, provides (i) that the Debtors may make certain transfers or payments in connection with settlements of certain third-party claims as described in the First Amendment and (ii) for a reduction in the excess cash threshold amount to the sum of $40.0 million and an amount (which shall not be less than zero) equal to $5.0 million less the amount of any payments on account of prepetition claims, liens or cure costs made by any Obligor after June 30, 2023. This excess cash threshold amount reduction resulted in the Debtors making additional mandatory prepayments of $28.9 million under the Replacement DIP Credit Agreement during the year ended December 31, 2023. Trilogy Note - As discussed in Note 3 — Chapter 11 Filing and Other Related Matters, the Company entered into a settlement agreement with Trilogy LLC which resulted in the issuance of an unsecured Promissory note (the “Trilogy Note”) with a principal amount of $2.9 million dated October 6, 2023. The note bears interest at a contractual rate per annum of 5.0% and has a term of 30 months from issuance. The Company is required to make monthly payments of principal and interest with interest being recognized using an effective interest rate of 15.0%. Didado Note - As discussed in Note 3 — Chapter 11 Filing and Other Related Matters, the Company entered into a settlement agreement with J.W. Didado Electric, LLC, (“Didado”) which resulted in the issuance of an unsecured Promissory note (the “Didado Note”) with a principal amount of $13.0 million dated October 6, 2023. The note bears interest at a contractual rate per annum of 5.0% and has a term of 36 months from issuance. The Company is required to make monthly payments of principal and interest with interest being recognized using an effective interest rate of 15.0%. Harper Note - As discussed in Note 3 — Chapter 11 Filing and Other Related Matters, the Company entered into a settlement agreement with Harper Construction Company, Inc, (“Harper”) which resulted in the issuance of an unsecured Promissory note (the “Harper Note”) with a principal amount of $4.7 million dated November 9, 2023. The note bears interest at a contractual rate per annum of 5.0% and has a term of 30 months from issuance. The Company is required to make monthly payments of principal and interest with interest being recognized using an effective interest rate of 15.0%. Convertible Notes - As discussed in Note 8 — Fair Value Measurements, the Company had elected to measure its Convertible Notes at fair value prior to the Petition Date and accordingly recognized $13.1 million of debt issuance costs as incurred at the time of issuance within interest expense, net in the Company’s Consolidated Statements of Operations for the year ended December 31, 2022. The Company presented changes in fair value of the Convertible Notes during the periods prior to the Petition Date as follows: (1) the 10% contractual rate of interest on the convertible notes (consisting of 4% cash interest and 6% PIK interest) was presented as interest expense, net on the Consolidated Statements of Operations; (2) changes in fair value attributable to the Company’s own credit risk were presented within Accumulated other comprehensive loss on the Company’s Consolidated Balance Sheets and as a component of Other comprehensive income (loss) on the Consolidated Statements of Comprehensive Loss; and (3) other fair value changes were presented within Non-operating expenses, net on the Consolidated Statements of Operations. The fair value option is not available to liabilities subject to compromise as they are recorded at their expected allowed amount. At the Petition Date, the accumulated fair value adjustment on the Convertible Notes was $130.3 million and the Accumulated other comprehensive loss related to changes in fair value attributable to the Company’s own credit risk was $72.6 million. These amounts were derecognized for a gain of $202.9 million reported in Reorganization items, net when the Convertible Notes were reclassified as Liabilities subject to compromise during the year ended December 31, 2022. The fair value of the Company’s Convertible Notes as of December 31, 2021, included the effect of a negotiation discount, which is a calibration adjustment that reflects the illiquidity of the instruments and the Company's negotiating position. Since the transaction was an orderly transaction, the Company deemed that the fair value equaled the transaction price at initial recognition. However, the closing of the merger of XPDI (which represents the occurrence of a qualified financing event as defined by the terms of the notes) in January 2022 resulted in the elimination of the negotiation discount along with other changes in fair value resulted in a significant increase in the fair value of the convertible notes (excluding interest expense and instrument-specific credit risk) for the year up until the Petition Date. The Convertible Notes did not have any fair value adjustments or recognized debt issuance costs in fiscal 2023. The following summarizes the fair value adjustments and debt issuance costs recognized on the Convertible Notes for the year ended December 31, 2022 (in thousands): Year Ended December 31, Financial statement line item 2022 Cash interest payments Interest expense, net $ 21,581 Payment-in-kind (PIK) interest Interest expense, net 31,550 Instrument-specific credit risk Other comprehensive income, net of income taxes (83,579) Other fair value adjustments Fair value adjustment on convertible notes (103,274) Reclass to Reorganization items, net Reorganization items, net 202,900 Total fair value adjustments $ 69,178 Debt issuance costs Reorganization items, net $ 2,788 The principal amount of the Convertible Notes as of December 31, 2023, reflects the proceeds received plus any PIK interest added to the principal balance of the notes. Upon the closing of the Merger Agreement with XPDI in January 2022, the conversion price for the Convertible Notes became fixed at 80% of the financing price ($8.00 per share of common stock) and the holders now have the right to convert at any time until maturity. At maturity, any Secured Convertible Notes not converted will be owed two times the original face value plus accrued interest; any other Convertible Notes (other than the Secured Convertible Notes) not converted will be owed the original face value plus accrued interest. In addition, at any time (both before and after the merger with XPDI), the Company has the right to prepay the Secured Convertible Notes at the minimum payoff of two times the outstanding face value plus accrued interest and for other Convertible Notes the outstanding face value plus accrued interest. All of the Convertible Notes, totaling $560.0 million as of December 31, 2023, are scheduled to mature on April 19, 2025, which includes $237.6 million for the face value of the Secured Convertible Notes which have payoff at maturity of two times the face value of the note plus accrued interest. The total amount that would be owed on the Secured Convertible Notes outstanding as of December 31, 2023, if held to maturity was $475.2 million. The total amount that would be owed on the Convertible Notes if prepaid as of December 31, 2023, was $797.6 million. See Note 8 — Fair Value Measurements for further information on fair value measurement of the Convertible Notes. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 8. FAIR VALUE MEASUREMENTS The Company measures certain assets and liabilities at fair value on a recurring or non-recurring basis in certain circumstances. 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. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 — Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. The Company uses observable market data when determining fair value whenever possible and relies on unobservable inputs only when observable market data is not available. Recurring fair value measurements Prior to the Petition Date, the Public Warrants and Private Placement Warrants were recognized as derivative liabilities in accordance with ASC 815, Derivatives and Hedging . Accordingly, the Company recognized the warrant instruments as liabilities at fair value and adjusted the instruments to fair value at each reporting period. The liabilities were subject to remeasurement at each balance sheet date until exercised, and any change in fair value were recognized in the Company’s Consolidated Statements of Operations. The initial and subsequent fair value estimates of the Public Warrants and Private Placement Warrants are based on the listed price in an active market for such warrants. After the Petition Date the Public Warrants and Private Placement Warrants were transferred to Liabilities subject to compromise at the expected allowed amount of zero dollars. A gain of $0.3 million from the derecognition of the prior fair value is reported in Reorganization items, net. The Company had elected prior to the Petition Date to measure its Convertible Notes at fair value on a recurring basis because the Company believed it better reflected the underlying economics of the Convertible Notes, which contain multiple embedded derivative features. The fair value of the Company’s convertible notes payable is determined using a market approach based on observable market prices for similar securities when available. Prior to the three months ended June 30, 2022, when observable market data was not available, the Company used an as-converted value plus risk put option model that included certain unobservable inputs that were significant to the fair value measurement such as probability of a financing event occurring (e.g., a SPAC merger or qualified financing), expected term, volatility and the negotiation discount. The fair value of the Secured Convertible Notes considered the minimum payoff at maturity of two times the face value of the note plus accrued interest, as well as the opportunity for appreciation if the value of the Company's stock increased 60% or more relative to the pricing at the financing event (since the conversion price is set at 80% of the stock price at the financing event, a stock price appreciation of 60% would match the minimum payoff of two times the face value plus accrued interest). The fair value of the Other Convertible Notes considered the minimum payoff at maturity of one times the face value of the note plus accrued interest, as well as the opportunity for appreciation if the value of the Company's stock were to fall no more than 20% relative to the pricing at the financing event (since the conversion price is set at 80% of the stock price at the financing event, a stock price decline of 20% would match the minimum payoff of one times the face value plus accrued interest). Upon the closing of the Merger Agreement with XPDI in January 2022, the conversion price for the Convertible Notes became fixed at 80% of the financing price ($8.00 per share of common stock) and the holders now have the right to convert at any time until maturity. Due to the occurrence of the SPAC merger and the subsequent significant decline in the Company’s stock price below the conversion price, the fair value of the Company’s convertible notes beginning with the three months ended June 30, 2022 was determined using a discounted cash flow model that considered the principal and interest payments, including the minimum payoff at maturity of two times the face value of the note plus accrued interest for the Secured Convertible Notes and the value of the call option that includes certain unobservable inputs that may be significant to the fair value measurement such as expected term and volatility of the call option. As of December 31, 2022, there were no recurring fair value measurements. Refer to Energy Forward Purchase Contract in Note 2 — Summary of Significant Accounting Policies for fair value measurements as of December 31, 2023. Level 3 Recurring Fair Value Measurements The following presents a rollforward of the activity for the Convertible Notes measured at fair value on a recurring basis using Level 3 inputs for the year ended December 31, 2022 (in thousands): Convertible Notes Balance at December 31, 2021 $ 557,007 Issuances (PIK principal recorded) 31,382 Settlements (including interest payments and conversions) (23,144) Unrealized gains 186,853 Transfers out of Level 3 (752,098) Balance at December 31, 2022 $ — Securities are transferred from Level 2 to Level 3 when observable market prices for similar securities are no longer available and unobservable inputs become significant to the fair value measurement. All transfers into and out of Level 3 are assumed to occur at the beginning of the quarterly reporting period in which they occur. As of December 31, 2023, there were no Level 3 financial instruments. During the year ended December 31, 2022, the Convertible Notes were transferred from Level 3 out of recurring fair value measurements. Nonrecurring fair value measurements The Company’s non-financial assets, including digital assets, property, plant and equipment, goodwill, and intangible assets are measured at estimated fair value on a nonrecurring basis. These assets are adjusted to fair value only when an impairment is recognized, or the underlying asset is held for sale. Refer to Note 2 — Summary of Significant Accounting Policies and Note 5 — Property, Plant and Equipment, Net, for more information regarding fair value considerations when measuring impairment. The estimated fair value of the Company’s digital assets as of December 31, 2023 and 2022, was $2.3 million and $0.7 million, respectively. We estimate the fair values of our digital assets based on quoted prices in active markets (Level 1). No non-financial assets were classified as Level 3 as of December 31, 2023 or December 31, 2022. Fair value of financial instruments The Company’s financial instruments include cash and cash equivalents, restricted cash, accounts receivable, net, digital assets, accounts payable, notes payable and certain accrued expenses and other liabilities. The carrying amount of these financial instruments materially approximate their fair values. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
LEASES | 9. LEASES The Company has entered into non-cancellable operating and finance leases for offices, data facilities, mining and networking equipment, electrical infrastructure and office equipment, with lease periods expiring through 2035. In addition, certain leases contain bargain renewal options extending through 2051. The Company recognizes lease expense for these leases on a straight-line basis over the lease term, which includes any bargain renewal options. The Company recognizes rent expense on a straight-line basis over the lease period. In addition to minimum rent, certain leases require payment of real estate taxes, insurance, common area maintenance charges, and other executory costs. Differences between rent expense and rent paid are recognized as adjustments to operating lease right-of-use assets on the Company’s Consolidated Balance Sheets. For certain leases, the Company receives lease incentives, such as tenant improvement allowances, and records those as adjustments to operating lease right-of-use assets and operating lease liabilities on the Company’s Consolidated Balance Sheets and amortizes the lease incentives on a straight-line basis over the lease term as an adjustment to rent expense. The components of operating and finance leases are presented on the Company’s Consolidated Balance Sheets as follows (in thousands): Financial statement line item December 31, 2023 December 31, 2022 Assets: Operating lease right-of-use assets Operating lease right-of-use assets $ 7,844 $ 20,430 Finance lease right-of-use assets Property, plant and equipment, net $ 16,268 $ 31,213 Liabilities: Operating lease liabilities, current portion Operating lease liabilities, current portion $ 77 $ 769 Operating lease liabilities, net of current portion Operating lease liabilities, net of current portion $ 1,512 $ 720 Finance lease liabilities, current portion Finance lease liabilities, current portion $ 19,771 $ — Finance lease liabilities, net of current portion Finance lease liabilities, net of current portion $ 35,745 $ — Operating and finance lease liabilities subject to compromise Liabilities subject to compromise $ — $ 84,664 The components of lease expense were as follows (in thousands): Year Ended December 31, Financial statement line item 2023 2022 Operating lease expense General and administrative expenses $ 1,024 $ 1,937 Short-term lease expense General and administrative expenses — 24 Finance lease expense: Amortization of right-of-use assets Cost of revenue 11,424 31,372 Interest on lease liabilities Interest expense, net 1,787 7,080 Total finance lease expense 13,211 38,452 Total lease expense $ 14,235 $ 40,413 In determining the discount rate used to measure the right-of-use asset and lease liability, we use rates implicit in the lease, or if not readily available, we use our incremental borrowing rate. Our incremental borrowing rate is based on an estimated secured rate with reference to recent borrowings of similar collateral and tenure when available. Determining our incremental borrowing rate, especially if there are insufficient observable borrowings near the time of lease commencement, may require significant judgment. Information relating to the lease term and discount rate is as follows: December 31, 2023 December 31, 2022 Weighted Average Remaining Lease Term (Years) Operating leases 16.7 10.5 Finance leases 2.2 2.1 Weighted Average Discount Rate Operating leases 11.7 % 6.5 % Finance leases 12.9 % 12.4 % The following table summarizes the Company’s supplemental cash flow information (in thousands): Year Ended December 31, 2023 2022 Lease Payments Operating lease payments $ 956 $ 726 Finance lease payments $ 4,459 $ 36,740 Supplemental Noncash Information Operating lease right-of-use assets obtained in exchange for lease obligations (1) $ — $ 14,195 Finance lease right-of-use assets obtained in exchange for lease obligations $ — $ 10,557 (Decrease) increase in finance lease right-of-use assets as a result of lease modification $ (11,644) $ 693 Decrease in finance lease liability as a result of lease modification $ (11,644) $ — Decrease in right-of-use assets due to lease termination $ (13,144) $ — Decrease in lease liability due to lease termination $ (13,517) $ — __________________ (1) Includes operating lease right-of-use assets of $6.7 million that were recorded upon adoption of Topic 842 on January 1, 2022. Refer to Note 2 — Summary of Significant Accounting Policies for additional information. The Company’s minimum payments under noncancelable operating and finance leases having initial terms and bargain renewal periods in excess of one year are as follows at December 31, 2023, and thereafter (in thousands): Operating Leases Finance Leases 2024 $ 262 $ 62,859 2025 262 1,862 2026 262 3 2027 195 — 2028 181 — Thereafter 2,054 — Total lease payments 3,216 64,724 Less: imputed interest 1,627 9,208 Less: Liabilities subject to compromise — — Total $ 1,589 $ 55,516 Operating Leases In September 2021, the Company entered into operating lease agreements with Minnkota Power Cooperative to develop a hosting facility in Grand Forks, North Dakota as well as enter into a power supply purchase agreement to purchase 100 megawatts of power supply once construction of the facility is complete. As a result of the agreements being entered into contemporaneously and in contemplation of one another, the agreements are considered to be a single unit of account and consideration has been allocated between lease and non-lease components based on relative standalone selling price with approximately $5.3 million allocated to the lease components and $2.6 million allocated to the non-lease components. Substantially all of the payments for the intended leases would be for a five-year to thirty-year term (comprising an initial five-year term with five five-year bargain renewal options to renew) with purchase options exercisable at any time for approximately $5.6 million less any rent paid to date and subject to certain other adjustments. In addition to the above, in December 2021, the Company entered into an agreement to lease office space for its new corporate headquarters that commenced in July of 2022. The lease includes base rent of approximately $14.0 million to be paid over a period of 130 months. On November 11, 2022, the landlord notified the Company that it was terminating the lease. Finance Leases In December 2021, the Company entered into finance lease agreements with Liberty Commercial Finance LLC totaling $40.9 million for the purchase of bitcoin mining equipment, with a weighted average term of 3.2 years. The leases bear interest at a weighted average rate per annum of 12.6% and the Company is required to make monthly payments of principal and interest. Interest expense on the lease has been recognized based on a weighted average effective interest rate of 12.6%. In December 2021, the Company entered into finance lease agreements with MassMutual Asset Finance LLC totaling $50.0 million for the purchase of bitcoin mining equipment, with a weighted average term of 3.2 years. The leases bear interest at a rate per annum of 10% and the Company is required to make monthly payments of principal and interest. Interest expense on the leases has been recognized based on an effective interest rate of 10%. In August 2022, the Company amended the finance lease agreements with MassMutual Asset Finance LLC to defer lease payments for a period of six months beginning with payments due in August 2022. The amendments result in no change to the term of the finance leases and the remaining principal will amortize over the remaining life of the leases beginning in February 2023. The amendments also requires an additional amount blockchain computing equipment to be provided as collateral. The leases under the amended agreements bear interest at a rate of 13.0% per annum. Interest expense on the amended leases has been recognized based on an effective interest rate of 12.5%. As a result of the lease modification, the lease liabilities decreased by $7.7 million with a corresponding decrease to finance lease right-of assets of $7.7 million. Balance Sheet Classification As discussed in Note 7 — Notes Payable, in October 2022, the Company determined not to make certain payments with respect to several of its debt facilities, equipment financing facilities and leases and other financings, including its two bridge promissory notes. As a result, the creditors under these debt facilities may exercise remedies following any applicable grace periods (which have passed) and pursuant to any confirmed plan of reorganization, including electing to accelerate the principal amount of such debt, suing the Company for nonpayment, increasing interest rates to default rates, or taking action with respect to collateral, where applicable. Remedies available under these debt facilities are stayed while the Company is under Chapter 11 protections. |
LEASES | 9. LEASES The Company has entered into non-cancellable operating and finance leases for offices, data facilities, mining and networking equipment, electrical infrastructure and office equipment, with lease periods expiring through 2035. In addition, certain leases contain bargain renewal options extending through 2051. The Company recognizes lease expense for these leases on a straight-line basis over the lease term, which includes any bargain renewal options. The Company recognizes rent expense on a straight-line basis over the lease period. In addition to minimum rent, certain leases require payment of real estate taxes, insurance, common area maintenance charges, and other executory costs. Differences between rent expense and rent paid are recognized as adjustments to operating lease right-of-use assets on the Company’s Consolidated Balance Sheets. For certain leases, the Company receives lease incentives, such as tenant improvement allowances, and records those as adjustments to operating lease right-of-use assets and operating lease liabilities on the Company’s Consolidated Balance Sheets and amortizes the lease incentives on a straight-line basis over the lease term as an adjustment to rent expense. The components of operating and finance leases are presented on the Company’s Consolidated Balance Sheets as follows (in thousands): Financial statement line item December 31, 2023 December 31, 2022 Assets: Operating lease right-of-use assets Operating lease right-of-use assets $ 7,844 $ 20,430 Finance lease right-of-use assets Property, plant and equipment, net $ 16,268 $ 31,213 Liabilities: Operating lease liabilities, current portion Operating lease liabilities, current portion $ 77 $ 769 Operating lease liabilities, net of current portion Operating lease liabilities, net of current portion $ 1,512 $ 720 Finance lease liabilities, current portion Finance lease liabilities, current portion $ 19,771 $ — Finance lease liabilities, net of current portion Finance lease liabilities, net of current portion $ 35,745 $ — Operating and finance lease liabilities subject to compromise Liabilities subject to compromise $ — $ 84,664 The components of lease expense were as follows (in thousands): Year Ended December 31, Financial statement line item 2023 2022 Operating lease expense General and administrative expenses $ 1,024 $ 1,937 Short-term lease expense General and administrative expenses — 24 Finance lease expense: Amortization of right-of-use assets Cost of revenue 11,424 31,372 Interest on lease liabilities Interest expense, net 1,787 7,080 Total finance lease expense 13,211 38,452 Total lease expense $ 14,235 $ 40,413 In determining the discount rate used to measure the right-of-use asset and lease liability, we use rates implicit in the lease, or if not readily available, we use our incremental borrowing rate. Our incremental borrowing rate is based on an estimated secured rate with reference to recent borrowings of similar collateral and tenure when available. Determining our incremental borrowing rate, especially if there are insufficient observable borrowings near the time of lease commencement, may require significant judgment. Information relating to the lease term and discount rate is as follows: December 31, 2023 December 31, 2022 Weighted Average Remaining Lease Term (Years) Operating leases 16.7 10.5 Finance leases 2.2 2.1 Weighted Average Discount Rate Operating leases 11.7 % 6.5 % Finance leases 12.9 % 12.4 % The following table summarizes the Company’s supplemental cash flow information (in thousands): Year Ended December 31, 2023 2022 Lease Payments Operating lease payments $ 956 $ 726 Finance lease payments $ 4,459 $ 36,740 Supplemental Noncash Information Operating lease right-of-use assets obtained in exchange for lease obligations (1) $ — $ 14,195 Finance lease right-of-use assets obtained in exchange for lease obligations $ — $ 10,557 (Decrease) increase in finance lease right-of-use assets as a result of lease modification $ (11,644) $ 693 Decrease in finance lease liability as a result of lease modification $ (11,644) $ — Decrease in right-of-use assets due to lease termination $ (13,144) $ — Decrease in lease liability due to lease termination $ (13,517) $ — __________________ (1) Includes operating lease right-of-use assets of $6.7 million that were recorded upon adoption of Topic 842 on January 1, 2022. Refer to Note 2 — Summary of Significant Accounting Policies for additional information. The Company’s minimum payments under noncancelable operating and finance leases having initial terms and bargain renewal periods in excess of one year are as follows at December 31, 2023, and thereafter (in thousands): Operating Leases Finance Leases 2024 $ 262 $ 62,859 2025 262 1,862 2026 262 3 2027 195 — 2028 181 — Thereafter 2,054 — Total lease payments 3,216 64,724 Less: imputed interest 1,627 9,208 Less: Liabilities subject to compromise — — Total $ 1,589 $ 55,516 Operating Leases In September 2021, the Company entered into operating lease agreements with Minnkota Power Cooperative to develop a hosting facility in Grand Forks, North Dakota as well as enter into a power supply purchase agreement to purchase 100 megawatts of power supply once construction of the facility is complete. As a result of the agreements being entered into contemporaneously and in contemplation of one another, the agreements are considered to be a single unit of account and consideration has been allocated between lease and non-lease components based on relative standalone selling price with approximately $5.3 million allocated to the lease components and $2.6 million allocated to the non-lease components. Substantially all of the payments for the intended leases would be for a five-year to thirty-year term (comprising an initial five-year term with five five-year bargain renewal options to renew) with purchase options exercisable at any time for approximately $5.6 million less any rent paid to date and subject to certain other adjustments. In addition to the above, in December 2021, the Company entered into an agreement to lease office space for its new corporate headquarters that commenced in July of 2022. The lease includes base rent of approximately $14.0 million to be paid over a period of 130 months. On November 11, 2022, the landlord notified the Company that it was terminating the lease. Finance Leases In December 2021, the Company entered into finance lease agreements with Liberty Commercial Finance LLC totaling $40.9 million for the purchase of bitcoin mining equipment, with a weighted average term of 3.2 years. The leases bear interest at a weighted average rate per annum of 12.6% and the Company is required to make monthly payments of principal and interest. Interest expense on the lease has been recognized based on a weighted average effective interest rate of 12.6%. In December 2021, the Company entered into finance lease agreements with MassMutual Asset Finance LLC totaling $50.0 million for the purchase of bitcoin mining equipment, with a weighted average term of 3.2 years. The leases bear interest at a rate per annum of 10% and the Company is required to make monthly payments of principal and interest. Interest expense on the leases has been recognized based on an effective interest rate of 10%. In August 2022, the Company amended the finance lease agreements with MassMutual Asset Finance LLC to defer lease payments for a period of six months beginning with payments due in August 2022. The amendments result in no change to the term of the finance leases and the remaining principal will amortize over the remaining life of the leases beginning in February 2023. The amendments also requires an additional amount blockchain computing equipment to be provided as collateral. The leases under the amended agreements bear interest at a rate of 13.0% per annum. Interest expense on the amended leases has been recognized based on an effective interest rate of 12.5%. As a result of the lease modification, the lease liabilities decreased by $7.7 million with a corresponding decrease to finance lease right-of assets of $7.7 million. Balance Sheet Classification As discussed in Note 7 — Notes Payable, in October 2022, the Company determined not to make certain payments with respect to several of its debt facilities, equipment financing facilities and leases and other financings, including its two bridge promissory notes. As a result, the creditors under these debt facilities may exercise remedies following any applicable grace periods (which have passed) and pursuant to any confirmed plan of reorganization, including electing to accelerate the principal amount of such debt, suing the Company for nonpayment, increasing interest rates to default rates, or taking action with respect to collateral, where applicable. Remedies available under these debt facilities are stayed while the Company is under Chapter 11 protections. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES Commitments In October 2023, the Company entered into a purchase agreement to acquire S21 miners with a combined exahash of 2.52 or approximately 12,900 miners from Bitmain for approximately $50.4 million, of which $2.4 million was paid as of December 31, 2023, and included in other current assets on the Company's consolidated balance sheets. Delivery of the miners is expected between the first and second quarters of 2024. In September 2023, the Company entered into a purchase agreement to acquire S19 XP miners with a combined exahash of 4.08 or 28,400 miners from Bitmain for approximately $77.1 million, of which $4.1 million was paid as of December 31, 2023. As of December 31, 2023, the Company had received approximately 22,700 miners. The remaining miners were received in January 2024. As of the reporting date of this Annual Report on Form 10-K, we have completed payment on all new bitcoin miners ordered for 2024. Legal Proceedings —The Company is subject to legal proceedings arising in the ordinary course of business. The Company accrues losses for a legal proceeding when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. However, the uncertainties inherent in legal proceedings make it difficult to reasonably estimate the costs and effects of resolving these matters. Accordingly, actual costs incurred may differ materially from amounts accrued and could materially adversely affect the Company’s business, cash flows, results of operations, financial condition and prospects. Unless otherwise indicated, the Company is unable to estimate reasonably possible losses in excess of any amounts accrued. Purported Shareholder Class Action (“Pang”) On November 14, 2022, Plaintiff Mei Pang filed a purported class-action complaint against Core Scientific, Inc., its former chief executive officer, Michael Levitt, and others in the United States District Court, Western District (Austin) of Texas asserting that the Company violated the Securities and Exchange Act by allegedly failing to disclose to investors that – among other things – the Company was vulnerable to litigation given its decision to pass power costs to its customers, that certain clients had breached their contracts, and that this impacted the Company’s profitability and ability to continue as a going concern. The complaint seeks monetary damages. Core filed a notice of suggestion of bankruptcy stating that its petition for bankruptcy—filed on December 21, 2022—operates as a stay to the continuation of this matter. Plaintiff subsequently withdrew its claims against Core. On April 14, 2023, the Court appointed lead plaintiff for the purported class in Pang, individually and on behalf of a class of claimants, filed proofs of claim against the Company in its Chapter 11 Cases in the United States Bankruptcy Court, Southern District (Houston) of Texas based upon the allegations set forth in Pang and Core filed an objection to the proofs of claim. On December 7, 2023, the United States Bankruptcy Court for the Southern District of Texas in Houston, sustained the Company’s objection to the filed class proof of claim without prejudice to re-file a proof of claim on an individual basis by December 20, 2023; and denied plaintiff’s Motion for Class Treatment under Fed. R. Bankr. P. 7023. No individual proof of claim was filed by any of the class representatives of the purported class action by December 20, 2023, and a separately filed objection to confirmation of Debtors’ Fourth Amended Chapter 11 Plan and Disclosure Statement was overruled by the Bankruptcy Court on January 16, 2024. On January 29, 2024, plaintiff filed a notice of appeal of the order confirming the Company’s Plan of Reorganization. Following Core’s motion to dismiss in the District Court case, the Court dismissed without prejudice the 10(b) claim in its entirety for failure to plead scienter and loss causation and all but a single statement under Section 11 and Section 14 of the Exchange Act. The Court also held that none of the Defendants other than Michael Levitt were control persons under Section 15 (even though Mr. Levitt was not even named as a Defendant under Section 15). Core filed a motion for reconsideration of the Court’s failure to dismiss the remaining Section 11 claim and filed an answer to the Plaintiff’s remaining claim. Employment Claim On September 30, 2022, Harlin Dean, a former executive of Blockcap, Inc. (n/k/a Core Scientific Acquired Mining, LLC) sent a demand letter to the Company, seeking approximately $9.8 million. Along with the demand letter, Mr. Dean enclosed a complaint that had been filed in the 419th Judicial District Court, Travis County, Texas, which asserted the following causes of action: (1) breach of employment agreement; (2) quantum meruit; (3) promissory estoppel; (4) conversion; (5) declaratory relief; (6) equitable relief/specific performance; (7) imposition of constructive trust; (8) accounting; and (9) attorneys’ fees and costs. According to Mr. Dean, the Company failed to honor the terms of his employment agreement upon his resignation. Following the Company’s filing of the Chapter 11 Cases, Dean filed proofs of claim in the Chapter 11 Cases alleging the Company breached Mr. Dean’s employment agreement and various equity award agreements. Mr. Dean seeks a total recovery of approximately $8 million. The Debtors filed an objection to Mr. Dean’s proofs of claim on September 19, 2023. Mr. Dean filed a reply in support of his claim and moved for summary judgment on October 19. Adjudication of the validity and value of Dean’s proof of claim is pending. As a general unsecured creditor under the Plan of Reorganization, any amount determined to be owed to plaintiff will be paid in common shares of the Company as provided in the Plan of Reorganization. Contract Claims GEM Mining 1, LLC, GEM Mining 2, LLC, GEM Mining 2B, LLC, and GEM Mining 4, LLC (together “GEM”) have filed proofs of claim in the Chapter 11 Cases alleging the Company breached its hosting agreements with GEM and are seeking to recover approximately $4.1 million. The Debtors filed an initial objection to GEM’s proofs of claim on May 4, 2023, and filed a supplemental objection on May 6, 2023. GEM filed a response in opposition to Debtors’ objections on September 6, 2023. Additionally, GEM 1 and GEM 4 filed proofs of claim in the Chapter 11 Case asserting approximately $8 million in rejection damages. The Debtors are currently preparing an objection to these claims along with a reply to GEM’s response to the Debtors’ earlier filed objections. As a general unsecured creditor under the Plan of Reorganization, any amount determined to be owed to plaintiff will be paid in common shares of the Company as provided in the Plan of Reorganization. Celsius filed the Celsius Chapter 11 Cases in the United States Bankruptcy Court for the Southern District of New York under the Bankruptcy Code. Celsius was one of the Company’s largest host-mining customers in July 2022. Prior to the Celsius Chapter 11 Cases, Celsius paid the Company certain PPT Charges invoiced to Celsius pursuant to the Master Services Agreements between Celsius and the Company (the “Celsius Contracts”). After commencing the Celsius Chapter 11 Cases, Celsius refused to pay all PPT Charges the Company invoiced to Celsius; Celsius and the Company filed competing motions, pleadings, and proofs of claims and engaged in protracted litigation, discovery, and mediation. On September 14, 2023, the Debtors and Celsius entered into a PSA that provides in addition to a full mutual release of claims asserted against each party in the respective bankruptcy cases for a cash payment by Celsius to the Company of $14.0 million and a full and final release of all claims of Celsius against the Debtors related to the Celsius Contracts, in exchange for the Debtors’, (i) sale to Celsius of the Debtors’ Cedarvale Facility and certain related assets, (ii) grant to Celsius of a perpetual, non-transferable (except as described in Section 14 of the PSA), non-exclusive limited license to use identified Company intellectual property solely as and to the extent necessary to (x) finish construction and development of the Cedarvale Facility, (y) develop and construct other mining facilities on other properties owned or leased by Celsius similar in type and scope to the Cedarvale Facility, and (z) operate all of the foregoing, (iii) assumption and assignment to Celsius of certain executory contracts, and (iv) unequivocal release of claims against Celsius asserted by the Company in connection with the Celsius Chapter 11 Cases and the Company’s Chapter 11 Cases. On November 2, 2023, the Company received the payment of $14.0 million from Celsius in connection with the PSA. In November 2022, Sphere 3D Corp. filed a demand for arbitration with JAMS alleging the existence and breach of a contract for hosting services. The arbitration demand alleges that the Company has failed to provide contracted for services and to return prepayments allegedly made by Sphere 3D for such services. The arbitration demand was stayed by the filing of the Company Parties’ Chapter 11 Cases. In April 2023, Sphere 3D Corp. filed a proof of claim against the Debtors in the Chapter 11 Cases alleging a claim for approximately $39.5 million allegedly pursuant to a contract for services as to which the Debtors were allegedly a party and failed to perform and other claims related thereto. On January 16, 2024, the Bankruptcy Court entered an order granting Sphere 3D Corp. (“Sphere”) an allowed $10 million general unsecured claim and a complete and final release of all claims of Sphere and Gryphon Digital Mining, Inc. (“Gryphon”) against the Debtors related to the hosting contracts. As part of the resolution, all miners have been returned to the client. Furthermore, the adversary proceeding was dismissed with prejudice, against both Gryphon and Sphere. The satisfaction of the settlement resulted in a gain of $23.3 million recorded to Reorganization items, net in the Consolidated Statements of Operations for the year ended December 31, 2023. In November 2022, McCarthy Building Companies, Inc. filed a complaint against the Company in the United States District Court for the Eastern District of Texas, alleging breach of contract for failing to pay when due certain payments allegedly owing under a contract for construction entered into between the parties. The case has been stayed as a result of the Company’s filing of a petition for relief under chapter 11 of the United States Bankruptcy Code. On January 18, 2024, the Bankruptcy Court entered the McCarthy Order approving the parties’ agreement to settle all claims and release all liens of McCarthy against the Company. See Note 3 — Chapter 11 Filing and Other Related Matters for further details. As of December 31, 2023 and 2022, there were no other material loss contingency accruals for legal matters. Leases —See Note 9 — Leases for further information. Loss on legal settlements —The Company recognized a loss of $2.6 million during the year ended December 31, 2021, with respect to the resolution of legal actions for damages resulting from the early termination of agreements by former customers. |
DERIVATIVE WARRANT LIABILITIES
DERIVATIVE WARRANT LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
Temporary Equity Disclosure [Abstract] | |
DERIVATIVE WARRANT LIABILITIES | 11. DERIVATIVE WARRANT LIABILITIES As of December 31, 2023, the Company had 14.9 million warrants outstanding, including: (a) 8.6 million Public Warrants and (b) 6.3 million Private Placement Warrants issued to XPDI Sponsor LLC (“Sponsor”) and certain institutional investors (“Anchor Investors”). All of these warrants were cancelled without any payment therefore pursuant to the Plan of Reorganization. Prior to the warrants’ cancellation under the Plan of Reorganization, each Public Warrant and Private Placement Warrant were exercisable 30 days following the Closing Date of the XPDI Merger for one share of common stock at an exercise price of $11.50 per share for the five years from the Closing Date (January 19, 2027). Redemption of Private Placement Warrants The Private Placement Warrants were also cancelled without payment pursuant to the Plan of Reorganization. The terms of redemption of the Private Placement Warrants were identical in all respects to those for the Public Warrants except that, so long as they are held by the Sponsor, Anchor Investors or their permitted transferees they were not redeemable, except when the price per share of common stock equaled or exceeded $10.00. If the Private Placement Warrants were held by someone other than the Sponsor, the Anchor Investors or their respective permitted transferees, the Private Placement Warrants were redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. Effect of Chapter 11 Filing As discussed in Note 3 - Chapter 11 Filing and Other Related Matters, liabilities that may be affected by the Plan of Reorganization must be classified as liabilities subject to compromise at the amounts expected to be allowed by the Bankruptcy Court. The warrants were classified as liabilities subject to compromise at their expected allowed amount of zero as of December 31, 2023 and 2022. Their fair value of $0.3 million was derecognized as a gain in Reorganization items, net in the Company’s Consolidated Statements of Operations for the year ended December 31, 2022. |
STOCKHOLDERS_ (DEFICIT) EQUITY
STOCKHOLDERS’ (DEFICIT) EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ (DEFICIT) EQUITY | 12. STOCKHOLDERS' (DEFICIT) EQUITY Authorized Capital —As of December 31, 2023, the Company was authorized to issue 10.0 billion shares of common stock, $0.00001 par value. The holders of the Company’s common stock are entitled to one vote per share. In January 2021, in connection with a stockholder loan, the Company issued a warrant to the stockholder to purchase up to 0.2 million shares of common stock at an exercise price of $4.21 per share. The warrant expired unexercised in January 2023. As a result of the Business Combination, all of XPDI’s Class A Common Stock and Class B Common Stock automatically converted into 30.8 million shares of Core common stock on a one-for-one basis. XPDI’s 8.6 million public warrants issued in its initial public offering (the “Public Warrants”) and 6.3 million warrants issued in connection with private placement at the time of XPDI’s initial public offering (the “Private Placement Warrants”) became warrants for Core common stock. Following the Business Combination with XPDI, each share of common stock or warrant was converted to shares of Core common stock or a warrant to purchase shares of Core common stock based on an exchange ratio of 1.60015286880. On January 15, 2024, the Debtors filed with the Bankruptcy Court the Plan of Reorganization, and on January 16, 2024, the Bankruptcy Court entered the Confirmation Order. On the Effective Date, the Plan of Reorganization became effective in accordance with its terms and the Debtors emerged from the Chapter 11 Cases. On the Effective Date, in connection with the effectiveness of, and pursuant to the terms of, the Plan of Reorganization and the Confirmation Order, the Company’s common stock outstanding immediately before the Effective Date was canceled and is of no further force or effect, and the new organizational documents of the Company became effective, authorizing the issuance of shares of common stock, par value $0.00001 per share (the “New Common Stock”). In accordance with the foregoing, on the Effective Date, the Company, as reorganized on the Effective Date and in accordance with the Plan of Reorganization, issued the: (i) New Common Stock, (ii) Warrants, (iii) CVRs, (iv) Secured Convertible Notes, (v) Secured Notes and (vi) the GUC CVRs (each, as defined below). Such securities, rights, or interests were issued in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) provided by section 1145 of the Bankruptcy Code. On the Effective Date, pursuant to the Plan of Reorganization, the Company issued, or will issue: • 176,266,782 shares of New Common Stock; • 180,241,211 Warrants; • New Secured Convertible Notes in an aggregate principal amount of $260.0 million; • New Secured Notes in an aggregate principal amount of $150.0 million; • 51,783,625 CVRs; and • GUC CVRs. Equity Line of Credit In July 2022, the Company entered into a common stock purchase agreement (the “Equity Line of Credit”) and a Registration Rights Agreement (the “Registration Rights Agreement”) with B. Riley. Pursuant to the Equity Line of Credit, the Company had the right to sell to B. Riley, up to $100.0 million of shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), subject to certain limitations and conditions set forth in the Equity Line of Credit, from time to time during the term of the Equity Line of Credit. Sales of Common Stock pursuant to the Equity Line of Credit, and the timing of any sales, were solely at the Company’s option, and the Company is under no obligation to sell any securities to B. Riley under the Equity Line of Credit. The Equity Line of Credit was terminated as a result of the Plan of Reorganization and the obligations of the parties under the Equity Line of Credit were extinguished. As consideration for B. Riley’s commitment to purchase shares of Common Stock at the Company’s direction upon the terms and subject to the conditions set forth in the Equity Line of Credit, upon execution of the Equity Line of Credit in July 2022, the Company issued 0.6 million shares to B. Riley with a fair value of $1.1 million at issuance which was recorded within other non-operating expenses, net on the Company’s Consolidated Statements of Operations and presented as equity line of credit expenses on the Consolidated Statements of Cash Flows. In addition, the Company reimbursed $0.1 million of reasonable legal fees and disbursements of B. Riley’s legal counsel in connection with the transactions contemplated by the Equity Line of Credit and the Registration Rights Agreement. During the year ended December 31, 2022, the Company issued 13.4 million shares under the Equity Line of Credit for a total sales price to B. Riley of $20.7 million is net of $0.6 million for the fixed 3.0% discount to the VWAP described above which was recorded within other non-operating expenses, net on the Company’s Consolidated Statements of Operations and presented as equity line of credit expenses on the Consolidated Statements of Cash Flows. During the year ended December 31, 2023, the Company did not issue any shares under the Equity Line of Credit. No shares of common stock were available to be issued under the Equity Line of Credit as of December 31, 2023, and the Equity Line of Credit was terminated as a result of the Plan of Reorganization. Warrant Exercises In March 2020, the Company issued warrants to the Company’s President and Chief Executive Officer and a member of the Board of Directors to purchase up to 6.4 million shares of the Company’s common stock at an exercise price of $0.84 per share (as amended). In March 2022, a warrant holder exercised their warrant to purchase 3.2 million shares in a cashless exercise resulting in 2.9 million net shares issued to the warrant holder after withholding 0.3 million shares for the exercise price. In March 2020, the Company issued warrants to service providers in exchange for services provided related to the issuance of Series A Convertible Preferred Stock. The warrants were for an aggregate of 0.2 million shares at an exercise price of $4.27 per share. During the year ended December 31, 2022, 4.4 million of the warrants were exercised in a cashless exercise resulting in 3.0 million net shares issued to the warrant holders. There were no warrant exercises during the year ended December 31, 2023. Convertible Note Exercises As discussed in Note 7 — Notes Payable, the Company issued $514.8 million of Convertible Notes in 2021 along with issuing an additional $31.4 million from issuance through December 31, 2022, as payment-in-kind interest on convertible notes outstanding. The Convertible Notes became convertible into common shares at the option of the holder at a conversion price equal to $8.00 per share upon the closing of the Merger Agreement with XPDI in January 2022. During the year ended December 31, 2022, $1.6 million of Convertible Notes were exercised resulting in 0.2 million shares issued to the holders of the Convertible Notes that were exercised. There were no exercises of Convertible Notes during the year ended December 31, 2023. SPAC Vesting Shares 1.7 million common shares are subject to vesting requirements, as described further in Note 4 — Business Combinations, Acquisitions and Restructuring. These contingently issuable shares do not require future service in order to vest and do not result in stock-based compensation expense. The SPAC Vesting Shares are accounted for as an equity contract, and meet the criteria for equity classification. The Company has recorded the SPAC Vesting Shares within additional paid-in capital on the Company’s Consolidated Balance Sheets as of December 31, 2023 and 2022. Vendor Settlement In March 2022, the Company issued 1.6 million shares of the Company’s common stock related to a vendor liability that had been assumed by the Company in July 2021 as part of the Blockcap acquisition. In addition, the vendor liability requires settlement in cash based on the difference between the weighted average of the closing price of the Company’s common stock for each day there was a closing price during the thirty Equity Incentive Plans The Company has outstanding awards under the 2018 Omnibus Incentive Plan (the “2018 Plan”). No new awards can be made under the 2018 Plan subsequent to the XPDI Merger, as described below. Awards that were granted under the 2018 Plan included incentive stock options (must meet all statutory requirements), non-qualified stock options and restricted stock units. Awards granted under the 2018 Plan were subject to a minimum vesting period of at least one year commencing from the date of grant. Additionally, options granted under the plan must expire within ten years of the grant date and were required to be granted with exercise prices of no less than the fair value of the common stock on the grant date, as determined by the Company’s Board of Directors (the “Board of Directors”). In July 2021, the Company acquired Blockcap. Under the terms of the Blockcap merger agreement, (i) each stock option granted, whether vested or unvested, and each award of restricted stock under the Blockcap, Inc. Equity Incentive Plan (the “Legacy Blockcap Plan”) was assumed by the Company. In addition, the Radar Relay, Inc. Amended and Restated 2018 Equity Incentive Plan (the “RADAR Plan”) provides for the grant of stock options, restricted stock awards, and other awards to eligible employees, non-employee directors and consultants. On June 4, 2021, prior to its acquisition by the Company, Blockcap entered into an agreement and plan of merger with RADAR for all the issued and outstanding equity interests of RADAR, which merger closed on July 1, 2021 (the “Blockcap/RADAR Merger”). The RADAR Plan was assumed by us upon the closing of the Blockcap/RADAR Merger and the Blockcap acquisition. No new awards may be made under the Legacy Blockcap Plan and the RADAR Plan (the “Blockcap Plans”) subsequent to the closing of the Blockcap acquisition. At the Special Meeting in connection with the XPDI Merger, the stockholders of XPDI approved the Core Scientific, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). Awards granted under the 2021 Plan may be incentive stock options (subject to satisfaction of applicable statutory requirements), non-qualified stock options, stock appreciation rights, restricted stock and stock units, performance awards and other cash-based or stock-based awards. Awards granted under the 2021 Plan are subject to a minimum vesting period of at least one year commencing from the date of grant. Additionally, options granted under the plan must expire within ten years of the grant date and must be granted with exercise prices of no less than the fair value of the common stock on the grant date, as determined by the Company’s Board of Directors. Following the consummation of the Business Combination, the Company expects that its Board of Directors will make grants of awards under the 2021 Plan to eligible participants. The maximum number of shares of the Company’s common stock that may be issued under the 2021 Plan is 45.0 million shares. As of the Effective date of the Plan of Reorganization, the Company no longer grants equity incentive awards under the 2021 Plan. Stock-Based Compensation Stock-based compensation expense relates primarily to expense for restricted stock awards (“RSAs”), restricted stock units (“RSUs”), and stock options. As of December 31, 2023, we had unvested or unexercised stock-based awards outstanding representing approximately 60.9 million shares of our common stock, consisting of approximately 38.4 million RSAs and RSUs and options to purchase approximately 22.6 million shares of our common stock. On June 8, 2022, the compensation committee (the “Compensation Committee”) of the Board of Directors of the Company approved an amendment to the Company’s award agreement for the RSUs outstanding under the 2018 Plan, to provide for the waiver and elimination of the requirement that the Company undergo a “change in control” or a “public offering” for full vesting of the previously outstanding time-vested award (the “RSU Amendment”). Although the mergers that the Company underwent did not satisfy the event-based vesting requirement, they significantly reduced the possibility of the requirement being met as contemplated under the 2018 Plan. The RSU Amendment was authorized and approved by the Board of Directors and the Compensation Committee as necessary, desirable, and in the best interest of the Company and its stockholders. As a result of the RSU Amendment, all outstanding RSUs under the 2018 Plan are subject only to time-based vesting, of which RSUs covering approximately 42.0 million shares of Common Stock were net settled, with approximately 15.0 million shares of Common Stock to be canceled and forfeited to satisfy tax withholding obligations in June 2022. The Company recognizes the cost of services received in exchange for awards of equity instruments based upon the fair value of those awards on the grant date. For the years ended December 31, 2023, 2022 and 2021, the Company’s consolidated operating results included $28.9 million, $36.6 million, and $0.9 million of stock-based compensation expense related to restricted stock units issued to employees, respectively, and $30.0 million, $146.3 million and $5.8 million of stock-based compensation expense related to stock options issued to employees and consultants, respectively. In addition, for the year ended December 31, 2021, the Company recognized $32.2 million of post-combination expense for share-based compensation awards related to the Blockcap acquisition described in Note 4 — Business Combinations, Acquisitions and Restructuring. The total tax benefit related to stock-based compensation was nil, nil, and $6.1 million for the years ended December 31, 2023, 2022, and 2021, respectively. Stock-based compensation expense for the years ended December 31, 2023, 2022 and 2021 is included in the Company’s Consolidated Statements of Operations as follow: Year Ended December 31, 2023 2022 2021 Cost of revenue $ 5,050 $ 25,779 $ 4,084 Research and development 1,337 22,093 1,140 Sales and marketing 4,929 9,401 836 General and administrative (1) 47,576 125,621 32,877 Total stock-based compensation expense (1) $ 58,892 $ 182,894 $ 38,937 __________________ (1) Includes $1.0 million of stock-based compensation that was provided in severance as part of restructuring charges incurred during the year ended December 31, 2022. Stock Options —Stock options granted under the 2018 Plan are granted at a price per share not less than the fair value at date of grant. Options granted to date generally vest over 4 years and are exercisable for up to 10 years. Determining the fair value of stock options at the grant date requires judgment, including estimating the expected term, expected volatility, risk-free interest rate, and expected dividends. Expected Term —The Company’s expected term is determined using the simplified method and represents the midpoint between the vesting period and the contractual term of the awards. Expected Volatility —The Company’s volatility factor is estimated using comparable public company volatility for similar terms. Risk-Free Interest Rate —The Company bases the risk-free interest rate used in the Black-Scholes option-pricing model on the implied yield currently available on US Treasury zero coupon issues with an equivalent remaining term. Where the expected term of the Company’s stock-based awards does not correspond with the term for which an interest rate is quoted, the Company performs a straight-line interpolation to determine the rate from the available term maturities. Expected Dividends —The Company has no history of paying cash dividends and has no present intention to pay common stock cash dividends in the future; as a result, the expected dividend yield is 0% as of December 31, 2023 and 2022. A summary of stock option activity for the year ended December 31, 2023, is as follows (amounts in thousands, except per share amounts): Number of Weighted- Weighted-Average Aggregate Options outstanding - January 1, 2023 23,915 8.64 Granted — — Exercised (3) 1.44 Forfeited (674) 11.47 Expired (663) 6.60 Options outstanding - December 31, 2023 22,575 $ 8.88 6.9 $ — Options vested and expected to vest as of December 31, 2023 22,575 $ 8.88 7.9 $ — Options vested and exercisable as of December 31, 2023 10,508 $ 7.42 5.8 $ — The weighted-average grant date fair value of options granted was nil as no options were granted during the years ended December 31, 2023 and 2022. The total fair value of stock options vested during the years ended December 31, 2023 and 2022, was nil and $0.6 million, respectively. As of December 31, 2023, total unrecognized stock-based compensation expense related to unvested stock options was approximately $55.4 million, which is expected to be recognized over a weighted-average time period of 2.1 years. Restricted Stock Units —Restricted stock units (“RSUs”) granted in 2018 required that the holder elect before the date of grant whether the RSUs will vest either: • Over a 4-year service period, or • Over a 4-year service period and upon either i) completion of an initial public offering of the Company’s common stock, or ii) upon consummation of a transaction resulting in a change in control of the Company. RSUs granted in 2022 generally vest over a 4-year service period and upon either i) completion of an initial public offering of the Company’s common stock, or ii) upon consummation of a transaction resulting in a change in control of the Company. A summary of RSU activity for the year ended December 31, 2023, is as follows (amounts in thousands, except per share amounts): Number of Weighted-Average Unvested - January 1, 2023 45,216 $ 2.79 Granted — — Vested (217) 10.11 Forfeited (6,641) 3.18 Unvested - December 31, 2023 38,358 $ 2.69 As of December 31, 2023, the Company had approximately $55.6 million of unrecognized stock-based compensation expense related to RSUs, of which $44.8 million is expected to be recognized over a weighted- average time period of 2.1 years and $10.8 million is related to RSUs for which some or all of the requisite service had been provided under the service condition but had performance conditions that had not yet been achieved. For RSUs subject to both the service and performance conditions, the unrecognized compensation expense will be recognized as expense when it is probable that the performance conditions will be achieved. The performance conditions for the RSUs are satisfied upon the earlier of a change in control or an initial public offering. The performance condition can be met in future years only with respect to a change in control or waiver of the condition by the Company’s Board of Directors and is not expected to occur, if at all, prior to expiration of the applicable lock-up period. If the performance conditions become probable of being achieved before the end of the requisite service period, the unrecognized compensation expense for which requisite service has not been provided will be recognized as expense prospectively on an accelerated attribution basis over the remaining requisite service period. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 13. INCOME TAXES Current income tax expense represents the amount expected to be reported on the Company’s income tax returns, and deferred tax expense or benefit represents the change in net deferred tax assets and liabilities. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. Valuation allowances are recorded as appropriate to reduce deferred tax assets to the amount considered likely to be realized. The Company had $0.7 million of income tax expense, $17.1 million income tax benefit and $15.8 million income tax expense for the years ended December 31, 2023, 2022 and 2021, respectively. Year Ended December 31, 2023 2022 2021 Current tax: Federal $ — $ 74 $ — State 683 1,356 6,235 Total current tax 683 1,430 6,235 Deferred tax: Federal — (18,532) 11,218 State — 11 (1,690) Total deferred tax — (18,521) 9,528 Total income tax expense (benefit) $ 683 $ (17,091) $ 15,763 The reconciliation between the U.S. statutory tax rate and the Company’s effective tax is presented as follows (in thousands): Year Ended December 31, 2023 2022 2021 U.S. federal statutory income tax (benefit) expense applied to loss before income taxes $ (51,619) $ (454,316) $ 13,246 State income taxes, net of federal benefit 12,325 (31,667) 3,591 Stock compensation 16,578 4,789 141 Non-deductible interest 11,659 11,366 5,310 Fair value adjustment - convertible notes — (10,942) 3,370 Reorganization costs 40,572 — — Non-deductible expenses — 288 (702) Valuation allowance (29,195) 241,892 (9,180) Goodwill impairment — 221,499 — Other permanent items 363 — (13) Total income tax expense (benefit) $ 683 $ (17,091) $ 15,763 The Company’s deferred tax assets and liabilities are detailed as follows (in thousands): Year Ended December 31, 2023 2022 2021 Deferred tax assets: Net operating loss carryforward $ 73,272 $ 79,729 $ 29,837 Capital loss carryforward 50,313 52,765 — Deferred interest carryforward 18,438 11,289 — Research tax credit carryforward 483 404 404 Reserves and accruals 2,440 4,248 148 Stock-based compensation 17,614 16,917 15,190 Unrealized capital loss — — — Property, plant and equipment, net 53,334 75,349 — Digital asset impairment loss 6 — 8,368 Debt extinguishment loss 2,446 2,561 2,558 Intangibles (other than goodwill) 2,660 2,301 2,270 Leases 2,099 7,062 5,231 Capitalized research and development expenses 4,226 801 — Other 6 169 3 Gross deferred tax assets 227,337 253,595 64,009 Valuation allowance (219,515) (248,710) (6,781) Deferred tax assets, net of valuation allowance 7,822 4,885 57,228 Deferred tax liabilities: Deferred settlement (6,031) — — Operating lease ROU assets (1,791) (4,885) — Property, plant and equipment, net — — (75,759) Deferred tax liabilities, net (7,822) (4,885) (75,759) Total net deferred tax assets (liabilities) $ — $ — $ (18,531) The changes in the Company’s valuation allowance were as follows (in thousands): Year Ended December 31, 2023 2022 2021 Beginning Balance $ 248,710 $ 6,781 $ 15,961 Change related to current net operating losses and impairments (561) 241,892 20,680 Net change related to generation of tax attributes — — (695) Change related to deferred tax adjustments (37,485) 37 (20,025) Change related to prior period adjustments 8,851 — (137) Acquisition deferred tax liabilities — — (9,003) Ending Balance $ 219,515 $ 248,710 $ 6,781 Realization of deferred tax assets is dependent upon the generation of future taxable income, if any, the timing and amount of which are uncertain. The assessment regarding whether a valuation allowance is required on deferred tax assets considers the evaluation of both positive and negative evidence when concluding whether it is more likely than not that deferred tax assets are realizable. After reviewing the positive and negative evidence available, the Company has recorded a valuation allowance of $219.5 million. The valuation allowance primarily relates to deferred tax assets for fixed assets, net operating loss carryforwards and capital loss carryforwards. As of December 31, 2023, the Company has federal and state net operating loss carryforwards in the amount of $330.2 million and $106.6 million, respectively. As of December 31, 2022, the Company had federal and state net operating loss carryforwards in the amount of $344.6 million and $198.5 million, respectively. The federal net operating loss can be carried forward indefinitely, however the utilization of the federal net operating loss for a tax year is equal to the lesser of (1) the aggregate of the net operating loss carryovers to such year, plus the net operating carrybacks to such tax year, or (2) 80% of taxable income determined without regard to the deduction. The Company's state net operating loss carryforwards range from 2033 to indefinite. As of December 31, 2023, the Company had U.S. federal and state capital loss carryforwards of $220.3 million and $109.6 million, respectively. The capital loss carryforwards begin to expire in 2027. In addition, the Company's net operating loss may be subject to utilization limitations due to changes of control, as defined by tax law under Internal Revenue Code Sections 382. Similar provisions may subject the capital loss carryforwards to utilization limitation. The Company completed a Section 382 study related to the acquired Blockcap tax attributes and determined there are no limitations on future utilization of the acquired attributes. At December 31, 2023, we recorded a total amount of unrecognized tax benefit of $0.3 million. The Company had no unrecognized income tax benefits as of December 31, 2022. Accrued interest and penalties related to unrecognized tax benefits are recorded as income tax expense. The Company continues to believe its positions are supportable; however, due to uncertainties in any tax audit outcome, the Company's estimates of the ultimate settlement of uncertain tax positions may change and the actual tax benefits may differ from the estimates. The Company files income tax returns in the U.S. federal and various state jurisdictions. The Company’s 2019 through 2023 tax years are subject to U.S. federal and state examination. |
NET (LOSS) INCOME ATTRIBUTABLE
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | 14. NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS Basic EPS is measured as the income or loss available to common stockholders divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per-share basis from the potential conversion of convertible securities or the exercise of options and/or warrants; the dilutive impacts of potentially convertible securities are calculated using the if-converted method; the potentially dilutive effect of options or warrants are computed using the treasury stock method. Securities that potentially have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the diluted EPS calculation. Upon the closing of the Merger Agreement with XPDI in January 2022, the Convertible Notes became convertible into common shares at the option of the holder at a conversion price equal to $8.00 per share and also began to meet the definition of a participating security. On or after the closing of the Business Combination, dividend payments made to equity holders of the Company are also made ratably to holders of the Convertible Notes on an as-converted basis. As a result, the Convertible Notes meet the definition of participating securities based on their respective rights to receive dividends and they are treated as a separate class of securities in computing basic EPS using the two-class method. Under the two-class method, all earnings (distributed and undistributed) are allocated to common stock and participating securities. However, undistributed losses are not allocated to the Convertible Notes under the two-class method because holders of the Convertible Notes do not have a contractual obligation to share in the losses of the Company. Diluted EPS for the Convertible Notes is calculated under both the two-class and if-converted methods, and the more dilutive amount is reported. Restricted stock awards assumed from the SPAC Vesting Shares issued as part of the XPDI Merger in January 2022 also have non-forfeitable rights to receive dividends, if declared, and meet the definition of participating securities. Because these instruments do not have a contractual obligation to share in the losses of the Company, undistributed losses are not allocated to them. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share (in thousands, except per share amounts): Year Ended December 31, 2023 2022 2021 Net (loss) income $ (246,487) $ (2,146,318) $ 47,312 Weighted average shares outstanding - basic 379,863 340,647 207,263 Add: Dilutive share-based compensation awards — — 26,042 Weighted average shares outstanding - diluted 379,863 340,647 233,305 Net (loss) income per share - basic $ (0.65) $ (6.30) $ 0.23 Net (loss) income per share - diluted $ (0.65) $ (6.30) $ 0.20 On January 23, 2024, the Company emerged from bankruptcy, which resulted in various transactions that affected the capital structure of the Company. Refer to Note 17 — Subsequent Events for more details. Potentially dilutive securities includes securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive and contingently issuable shares for which all necessary conditions for issuance had not been satisfied by the end of the period. Potentially dilutive securities are as follows (in common stock equivalent shares, in thousands): Year Ended December 31, 2023 2022 2021 Stock options 22,575 23,915 6,716 Warrants 14,892 18,311 — Restricted stock 38,358 45,217 84,035 Convertible Notes 69,998 69,998 — Share settled liability — — 1,943 SPAC vesting shares 1,725 1,725 — Total potentially dilutive shares 147,548 159,166 92,694 |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | 15. SEGMENT REPORTING The Company’s operating segments are aggregated into reportable segments only if they exhibit similar economic characteristics and have similar business activities. The Company has two operating segments: “Hosting” which consists primarily of its blockchain infrastructure and third-party hosting business; and “Mining” consisting of digital asset mining for its own account. The blockchain hosting business generates revenue through the sale of consumption-based contracts for its hosting services which are recurring in nature. During 2022, our “Hosting” segment also included sales of mining equipment to customers and was referred to as “Hosting and Equipment Sales”. The Mining segment generates revenue from operating owned computer equipment as part of a pool of users that process transactions conducted on one or more blockchain networks. In exchange for these services, the Company receives digital assets. The primary financial measures used by the chief operating decision maker (“CODM”) to evaluate performance and allocate resources are revenue and gross profit. The CODM does not evaluate performance or allocate resources based on segment asset or liability information; accordingly, the Company has not presented a measure of assets by segment. The segments’ accounting policies are the same as those described in the summary of significant accounting policies. The Company excludes certain operating expenses and other expense from the allocations to operating segments. The following table presents revenue and gross profit by reportable segment for the periods presented (in thousands): Year Ended December 31, 2023 2022 2021 Hosting Segment (1) Revenue: Hosting revenue $ 112,067 $ 159,688 $ 79,323 Equipment sales — 82,829 248,235 Total revenue 112,067 242,517 327,558 Cost of revenue: Cost of hosting services 87,245 169,717 77,678 Cost of equipment sales — 67,114 177,785 Total cost of revenue 87,245 236,831 255,463 Gross profit $ 24,822 $ 5,686 $ 72,095 Gross margin (2) 22 % 2 % 22 % Mining Segment Digital asset mining revenue $ 390,333 $ 397,796 $ 216,925 Total revenue 390,333 397,796 216,925 Cost of revenue 291,696 395,082 50,158 Gross profit $ 98,637 $ 2,714 $ 166,767 Gross margin (2) 25 % 1 % 77 % Consolidated total revenue $ 502,400 $ 640,313 $ 544,483 Consolidated cost of revenue $ 378,941 $ 631,913 $ 305,621 Consolidated gross profit $ 123,459 $ 8,400 $ 238,862 Consolidated gross margin (2) 25 % 1 % 44 % __________________ (1) During the year ended December 31. 2022, our “Hosting” segment also included sales of mining equipment to customers and was referred to as “Hosting and Equipment Sales”. (2) Gross margin is calculated as gross profit as a percentage of total revenue. For the years ended December 31, 2023, 2022 and 2021, cost of revenue included depreciation expense of $6.9 million, $12.1 million and $7.4 million, respectively for the Hosting segment. For the years ended December 31, 2023, 2022 and 2021, cost of revenue included depreciation expense of $88.5 million, $214.8 million and $24.3 million, respectively for the Mining segment. Concentrations of Revenue and Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. Credit risk with respect to accounts receivable is concentrated with a small number of customers. The Company places its cash and cash equivalents with major financial institutions, which management assesses to be of high credit quality, in order to limit the exposure to credit risk. As of December 31, 2023 and 2022, all of the Company’s fixed assets were located in the United States. For the years ended December 31, 2023 and 2022, 100% and 99% of the Company’s revenue was generated in the United States, respectively. For the years ended December 31, 2023 and 2022, 78% and 62%, respectively, of the Company’s total revenue was generated from digital asset mining of bitcoin, which is subject to extreme price volatility. As of December 31, 2023 and 2022, substantially all of our digital assets were held by two third-party digital asset services. For the years ended December 31, 2023, 2022 and 2021, the concentration of customers comprising 10% or more of the Company’s total revenue are as follows: Year Ended December 31, Year Ended December 31, 2023 2022 2021 2023 2022 2021 Percent of total revenue: Percent of Hosting segment revenue: Customer A N/A N/A 15 % N/A N/A 26 % B N/A N/A 14 % N/A N/A 23 % E N/A 14 % N/A N/A 38 % N/A F (1) 11 % N/A N/A 49 % N/A N/A __________________ (1) On the Effective Date, Customer F became a minority shareholder of the Company. A reconciliation of the reportable segment gross profit to (loss) income before income taxes included in the Company’s Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021, is as follows (in thousands): Year Ended December 31, 2023 2022 2021 Reportable segment gross profit $ 123,459 $ 8,400 $ 238,862 (Loss) gain on legal settlement — — (2,636) Gain from sales of digital assets 3,893 44,298 4,814 Impairment of digital assets (4,406) (231,315) (37,206) Change in fair value of derivative instruments (3,918) — — Impairment of goodwill and other intangibles — (1,059,265) — Impairment of property, plant and equipment — (590,673) — Losses on exchange or disposal of property, plant and equipment (1,956) (28,025) (118) Operating expense: Research and development 7,184 26,962 7,674 Sales and marketing 7,019 12,731 4,062 General and administrative 93,908 213,280 60,486 Total operating expense 108,111 252,973 72,222 Operating income (loss) 8,961 (2,109,553) 131,494 Non-operating expense, net: (Gain) loss on debt extinguishment and other (20,065) 287 8,016 Interest expense, net 86,238 96,826 44,354 Fair value adjustment on convertible notes — 186,853 16,047 Fair value adjustment on derivative warrant liabilities — (37,937) — Reorganization items, net 191,122 (197,405) — Other non-operating (income) expenses, net (2,530) 5,232 2 Total non-operating expense, net 254,765 53,856 68,419 (Loss) income before income taxes $ (245,804) $ (2,163,409) $ 63,075 |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | 16. RELATED-PARTY TRANSACTIONS In the ordinary course of business, the Company enters into various transactions with related parties. The Company had agreements to provide hosting services to various entities that are managed and invested in by individuals that were directors and executives of the Company in 2023. For the years ended December 31, 2023 and 2022, the Company recognized hosting revenue from the contracts with these entities of $10.1 million and $29.5 million, respectively. In addition, for the years ended December 31, 2023 and 2022, there was equipment sales revenue recognized of nil and $71.4 million to these same various entities. Receivables from these entities were nil as of December 31, 2023, and a nominal amount as of December 31, 2022. In 2022, the Company reimbursed its former chief executive officer, and its co-founder and director, for use of a personal aircraft for flights taken on Company business. We did not make such reimbursements in fiscal 2023. For the years ended December 31, 2023 and 2022, the Company incurred reimbursements of nil and $1.9 million, respectively. Nominal amounts were payable at December 31, 2023 and 2022. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 17. SUBSEQUENT EVENTS Payoff of DIP On January 4, 2024, the Company pre-paid the outstanding balance of $4.5 million on the Replacement DIP Facility provided by B. Riley Financial, the Company’s DIP lender. The $4.5 million payment included exit fees of approximately $0.2 million. The Replacement DIP was terminated on the Effective Date. Equity Rights Offering On November 20, 2023, the Company commenced an equity rights offering (the “Equity Rights Offering”) of common shares of the reorganized Company (the “ERO Shares”) in an aggregate amount of $55 million. Also, on November 16, 2023, the Company entered into an agreement (the “Backstop Commitment Letter”) with the parties named therein (the “Commitment Parties”), pursuant to which the Commitment Parties agreed to severally and not jointly backstop $37.1 million of the Equity Rights Offering (the “Backstop Commitment”), subject to the terms and conditions of the Backstop Commitment Letter. The subscription period for the ERO expired on January 5, 2024. The Equity Rights Offering was oversubscribed and the aggregate subscriptions (including oversubscriptions) exceeded the number of ERO Shares offered to be purchased as part of the Equity Rights Offering. The results of the Equity Rights Offering render the previously arranged Backstop Commitment unnecessary. Emergence from Bankruptcy As disclosed in Note 1 — Organization and Description of Business, on December 21, 2022, the Debtors filed the Chapter 11 Cases in the Bankruptcy Court seeking relief under Chapter 11 of the Bankruptcy Code. On January 15, 2024, the Debtors filed with the Bankruptcy Court the Plan of Reorganization, and on January 16, 2024, the Bankruptcy Court entered the Confirmation Order. On the Effective Date, the Plan of Reorganization became effective in accordance with its terms and the Debtors emerged from the Chapter 11 Cases. On the Effective Date, in connection with the effectiveness of, and pursuant to the terms of, the Plan of Reorganization and the Confirmation Order, the Company’s common stock outstanding immediately before the Effective Date was canceled and is of no further force or effect, and the new organizational documents of the Company became effective, authorizing the issuance of shares of common stock, par value $0.00001 per share (the “New Common Stock”). In accordance with the foregoing, on the Effective Date, the Company, as reorganized on the Effective Date and in accordance with the Plan of Reorganization, issued the: (i) New Common Stock, (ii) Warrants, (iii) CVRs, (iv) Secured Convertible Notes, (v) Secured Notes and (vi) the GUC CVRs (each, as defined below). Such securities, rights, or interests were issued in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) provided by section 1145 of the Bankruptcy Code. On the Effective Date, pursuant to the Plan of Reorganization, the Company issued: • 176,266,782 shares of New Common Stock (as defined below); • 180,241,211 Warrants, composed of 98,313,313 Tranche 1 Warrants (as defined below) and 81,927,898 Tranche 2 Warrants (as defined below) • 51,783,625 CVRs; and • GUC CVRs. On the Effective Date, pursuant to the Plan of Reorganization, the Company issued the following debt instruments, which are defined and described in further detail below (in thousands): Principal Balance Exit Credit Agreement $ 61,200 Secured Notes Indenture $ 150,000 Secured Convertible Notes Indenture $ 260,000 Miner Equipment Lender Agreements $ 52,947 In addition, approximately $4.6 million of finance lease liabilities and $15.0 million of debt were reinstated pursuant to the Plan of Reorganization. Exit Credit Agreement On the Effective Date, under the terms of the Plan of Reorganization, the Company entered into a credit and guaranty agreement, dated as of January 23, 2024 (the “Exit Credit Agreement”), by and among the Company, as borrower, the guarantors named therein, the lenders party thereto and Wilmington Trust, National Association, as administrative agent and collateral agent, consisting of an $80 million first-lien credit facility with certain holders of the Company’s April Convertible Notes and August Convertible Notes (in such capacity, the “Exit Lenders”) equal to (i) a $40 million term loan comprised of (x) a $20 million initial term loan and (y) a $20 million delayed-draw term loan and (ii) a $40 million roll-up of the outstanding balance of the April Convertible Notes and August Convertible Notes (the “Exit Facility”). The Exit Facility will mature on January 23, 2027. From the Effective Date, cash borrowings under the Exit Facility bear interest at 9.0% per annum, payable on the first business day of each Fiscal Quarter (as defined in the Exit Credit Agreement), commencing on April 1, 2024. The Exit Facility amortizes in equal quarterly installments of $1.25 million beginning on January 1, 2026. Upon the occurrence and during the continuance of an Event of Default (as such term is defined in the Exit Credit Agreement), the obligations under the Exit Facility shall automatically bear interest at a rate equal to an additional 2.0% per annum over the rate otherwise applicable, with such interest being payable in cash on each interest payment date (unless the administrative agent demands prior payment). Obligations under the Exit Credit Agreement are secured by a valid and perfected lien and security interest on substantially all assets and property of the Company and the guarantors thereof, including a first-priority lien on all new, unencumbered miner equipment purchased by the Company or any subsidiary thereof other than the following, which are each secured by a second priority lien on, (i) Equipment Priority Collateral (as defined below) and (ii) future financed equipment. Obligations under the Exit Credit Agreement are guaranteed by all direct and indirect subsidiaries of the Company. The Exit Facility provides for affirmative, negative and financial covenants, that, among other things, limit the ability of the Company and, in certain cases, certain of the Company’s subsidiaries, to incur more indebtedness; pay dividends, redeem stock or make other distributions; make investments; grant or permit certain liens; transfer or sell assets; merge or consolidate; and enter into certain transactions with our affiliates. The Exit Facility also imposes financial maintenance covenants in the form of a maximum leverage ratio and minimum liquidity requirements. The Exit Facility contains certain events of default, including, without limitation, nonpayment of principal, nonpayment of interest, fees or other obligations after three business days, bankruptcy events of the Company or any of its subsidiaries and certain changes of control. Secured Notes Indenture On the Effective Date, under the terms of the Plan of Reorganization, the Company issued $150.0 million aggregate principal amount of senior secured notes due 2028 (the “Secured Notes”) pursuant to a secured notes indenture (the “Secured Notes Indenture”) among (i) the Company, as the issuer, (ii) the guarantors named therein and (iii) Wilmington Trust, National Association, as trustee and collateral agent (the “Secured Notes Agent”). The maturity date of the Secured Notes is January 23, 2028. The Secured Notes bear interest at a rate of 12.5% per annum, payable on March 15, June 15, September 15 and December 15 of each year, beginning on June 15, 2024. There is no amortization on the New Secured Notes prior to maturity. The Secured Notes are secured by a valid and perfected second lien and security interest on substantially all assets of the Company and the guarantors thereof, which liens are junior in priority to liens securing the Exit Facility and are subject to the terms of the New Intercreditor Agreement. The Secured Notes are guaranteed by all direct and indirect subsidiaries of the Company. The Company is entitled to prepay the notes prior to maturity. If the notes are prepaid after the first year (including in the event that the notes are accelerated), or if the notes are not paid when due at the stated maturity, the Company is required to pay a premium on the outstanding principal amount equal to: (a) 1.00% of the aggregate principal amount of the notes then outstanding, if the notes are prepaid on or after the first anniversary of the Issue Date (as such term is defined in the Secured Notes Indenture) and prior to the second anniversary of the Issue Date, (b) 2.00% of the aggregate principal amount of the notes then outstanding, if the notes are prepaid on or after the second anniversary of the Issue Date and prior to the third anniversary of the Issue Date and (c) 3.00% of the aggregate principal amount of the notes then outstanding, if the notes are prepaid on or after the third anniversary of the Issue Date or if the notes are not paid when due at maturity, in each case whether such payment is made before or after an event of default or an acceleration (including any acceleration as a result of an insolvency proceeding) of all or part of the notes. No prepayment premium shall be applicable in connection with any prepayment, repayment or refinancing that occurs prior to the first anniversary of the Issue Date. The Secured Notes Indenture contains affirmative and negative covenants consistent with those in the Exit Facility and the Secured Convertible Notes Indenture that, among other things, limit the ability of the Company and, in certain cases, certain of the Company’s subsidiaries to incur more indebtedness; pay dividends, redeem stock or make other distributions; make investments; grant or permit certain liens; transfer or sell assets; merge or consolidate; and enter into certain transactions with its affiliates. The Secured Notes Indenture contains certain events of default, including, without limitation, nonpayment of principal, nonpayment of fees, interest or other obligations after three business days, violations of the covenants (subject, in the case of certain affirmative covenants, to certain grace periods), and bankruptcy events of the Company or any of its subsidiaries. Secured Convertible Notes Indenture On the Effective Date, under the terms of the Plan of Reorganization, the Company issued $260.0 million aggregate principal amount of secured convertible notes due 2029 (the “Secured Convertible Notes”) pursuant to a secured convertible notes indenture (the “Secured Convertible Notes Indenture”) among (i) Core Scientific, Inc., as the issuer, (ii) the guarantors party thereto and (iii) Wilmington Trust, National Association, as trustee and as collateral agent for the Secured Convertible Notes (in such capacity, the “Secured Convertible Notes Agent”). The Secured Convertible Notes were issued to holders of the Company’s April Convertible Notes and August Convertible Notes. The maturity date of the Secured Convertible Notes is January 23, 2029. The Secured Convertible Notes bear interest payable quarterly on March 15, June 15, September 15 and December 15, beginning on June 15, 2024, at the Company’s option, (i) in cash at a rate of 10% per annum, or (ii) in cash at a rate of 6% of per annum and in stock at a rate of 6% of per annum (the “Cash/PIK Interest”); provided that the payable-in-stock portion of the Cash/PIK Interest is payable in New Common Stock using a price equal to the volume weighted average price of the New Common Stock for the 20-consecutive trading day period immediately preceding the date that is three business days prior to the applicable interest payment date. The Secured Convertible Notes are secured by a valid and perfected third lien and security interest on substantially all assets of the Company and the guarantors thereof, and which liens are junior in priority to liens securing the Exit Facility and Secured Notes and are subject to the terms of the New Intercreditor Agreement. The Secured Convertible Notes are guaranteed by all direct and indirect subsidiaries of the Company. Upon the occurrence of a Fundamental Change (as such term is defined in the Secured Convertible Notes Indenture), the holders of the Secured Convertible Notes have the right to require the Company to purchase all or any portion of such holder’s Secured Convertible Notes at the principal amount thereof plus accrued interest to the repurchase date. Holders may elect to convert the Secured Convertible Notes into shares of New Common Stock at any time prior to maturity at an initial conversion rate of 171.48 shares of New Common Stock per $1,000 principal amount of Secured Convertible Notes (equal to a conversion price of $5.8317 per share of New Common Stock), which the Company may deliver in cash, New Common Stock or a combination thereof. The conversion price is subject to anti-dilution adjustments upon (among other triggering events) the occurrence of certain dilutive transactions, including share dividends, splits, combinations and reclassification. The Secured Convertible Notes also automatically convert into New Common Stock if the volume weighted average price for each day for any 20 consecutive trading days is greater than or equal to 133.6% of the as-adjusted conversion price. The Secured Convertible Notes Indenture contains affirmative and negative covenants consistent with those in the Exit Facility and the Secured Notes Indenture that, among other things, limit the ability of the Company and, in certain cases, certain of the Company’s subsidiaries to incur more indebtedness; pay dividends, redeem stock or make other distributions; make investments; grant or permit certain liens; transfer or sell assets; merge or consolidate; and enter into certain transactions with its affiliates. The Secured Convertible Notes Indenture contains certain events of default, including, without limitation, nonpayment of principal, nonpayment of interest, fees or other obligations after three business days, and bankruptcy events of the Company or any of its subsidiaries. Miner Equipment Lender Agreements On the Effective Date, under the terms of the Plan of Reorganization, the Company entered into separate New Miner Equipment Lender Agreements (Election 2) with each Holder of an Allowed Miner Equipment Lender Secured Claim that is a Settling Miner Equipment Lender that elected on its Ballot (as defined in the RSA) to receive and is receiving the Miner Equipment Lender Treatment Election 2 (the “Election 2 Miner Equipment Facility Lenders”), in each case, in the principal amount of eighty percent (80%) of each applicable Holders’ Allowed Miner Equipment Lender Claim as of the Effective Date (the “Miner Equipment Lender Facility”). The maturity date on the Miner Equipment Lender Facility is January 23, 2029. Loans issued under the Miner Equipment Lender Facility shall accrue interest (1) from the Effective Date to and including the second anniversary of the Effective Date, (x) if the Company does not deliver an Election Notice (as defined below), at a rate of 13.0% per annum and shall be payable 3.0% in cash interest and 10.0% paid-in-kind, and (y) if the Company delivers a written notice to the Election 2 Miner Equipment Facility Lenders five (5) business days prior to the due date of any interest payment during this period (an “Election Notice”), the Company may elect to have interest accrue at either (a) 12.0% per annum, payable 5.0% in cash and 7.0% paid-in-kind or (ii) 8.0% per annum, payable in cash and (2) following the second anniversary of the Effective Date, at a rate of 10.0% per annum, payable in cash. Upon the occurrence and during the continuance of an Event of Default (as such term is defined in the New Miner Equipment Lender Agreements (Election 2)), the obligations under the Miner Equipment Lender Facility may, at the option of the Election 2 Miner Equipment Facility Lenders, accrue interest at a rate equal to an additional 2.0% per annum over the rate otherwise applicable, with such interest being payable in cash on demand. Loans issued under the Miner Equipment Lender Facility are secured by a first-priority, duly-perfected and validly enforceable lien on (i) the collateral securing each Election 2 Miner Equipment Facility Lenders’ existing equipment loan/lease and (ii) new, non-financed miners acquired by the Company after the Effective Date, in an aggregate amount of up to $18,204,559 (collectively, the “Equipment Priority Collateral”). On the Effective Date, under the terms of the Plan of Reorganization, each Miner Equipment Facility Lender entered into a separate intercreditor agreement with the Secured Convertible Notes Agent (as defined below), the Secured Notes Agent (as defined below) and the Exit Agent with respect to the Equipment Priority Collateral. The Miner Equipment Lender Facility contains customary covenants, representations and warranties. Warrant Agreement On the Effective Date and pursuant to the Plan of Reorganization and the Confirmation Order, the Company entered into a warrant agreement dated as January 23, 2024, (the “Warrant Agreement”) among the Company and Computershare Inc., a Delaware corporation and its affiliate, Computershare Trust Company, N.A., a federally chartered trust company (collectively, in such capacity, the “Warrant Agent”). Pursuant to the Warrant Agreement, the Company was authorized to issue (i) an aggregate of 98,313,313 warrants, each exercisable for one share of New Common Stock at an exercise price of $6.81 per share (the “Tranche 1 Warrants”) and (ii) an aggregate of 81,927,898 warrants, each exercisable for one share of New Common Stock at an exercise price of $0.01 per share (the “Tranche 2 Warrants” and, together with the Tranche 1 Warrants, the “Warrants”). Pursuant to the Plan of Reorganization, holders of the Company’s previous common stock received, for each share of the Company’s previous stock held, 0.253244 Tranche 1 Warrants and 0.211037 Tranche 2 Warrants. Each whole Tranche 1 Warrant entitles the registered holder to purchase one whole share of New Common Stock at an exercise price of $6.81 per share (the “Tranche 1 Exercise Price”). Each whole Tranche 2 Warrant entitles the registered holder to purchase one whole share of New Common Stock at an exercise price of $0.01 per share at any time following the time the volume weighted average price per share of New Common Stock equals or exceeds $8.72 per share on each trading day for 20 consecutive trading days (the “TEV Triggering Event”). The Tranche 1 Exercise Price and the price per share used to determine a TEV Triggering Event are subject to certain adjustments as set forth in the Warrant Agreement. The Tranche 1 Warrants will expire on January 23, 2027, and the Tranche 2 Warrants will expire on January 23, 2029, each at 5:00 p.m., New York City time, or earlier upon the occurrence of certain events as set forth in the Warrant Agreement. The Warrant Agreement provides that the Warrant Agreement, with respect to the Tranche 1 Warrants or Tranche 2 Warrants, may be amended with the prior written consent of holders holding a majority of the shares then issuable upon exercise of the Tranche 1 Warrants or Tranche 2 Warrants then outstanding, as applicable; provided, however, that any amendment or supplement to the Warrant Agreement that would reasonably be expected to materially and adversely affect any right of a holder of Warrants shall require the written consent of such holder. In addition, the consent of each holder of Warrants affected shall be required for any amendment pursuant to which the applicable exercise price would be increased, the number of shares issuable upon exercise of Warrants would be decreased (other than pursuant to adjustments provided in the Warrant Agreement) or the applicable expiration date would be revised to an earlier date; provided, however, that the Company and the Warrant Agent may amend the Warrant Agreement without the consent of holders of Warrants to (i) to cure any ambiguity; (ii) correct any defective provision; or (iii) make any other provisions with respect to matters or questions arising under the Warrant Agreement as long as the new provisions do not adversely affect (other than a de minimis adverse effect) the interest of holders of Warrants. The Warrants may be exercised upon prior written notice of such election, payment of the applicable exercise price (together with any applicable taxes and governmental charges) and, with respect to Warrants held through the book-entry facilities of the Depository (as defined in the Warrant Agreement), surrender of the warrant certificate on or prior to the settlement date. The Tranche 2 Warrants may be exercised on a cashless basis, pursuant to which the holder shall be entitled to receive a number of shares of New Common Stock equal to one share of New Common Stock multiplied by a fraction equal to (x) the fair market value (as of the business day immediately preceding the date on which the exercise notice was delivered) of one share of New Common Stock, minus the applicable exercise price, divided by (y) such fair market value. Holders of Warrants do not have the rights or privileges of holders of New Common Stock or any voting rights until they exercise their Warrants and receive shares of New Common Stock. After the issuance of shares of New Common Stock upon exercise of the Warrants, each holder will be entitled to the same rights as holders of New Common Stock. Pursuant to the Warrant Agreement, holders of Warrants may exercise their Warrants only for a whole number of shares of New Common Stock. If, upon exercise, a holder would be entitled to receive a fractional interest in a share, such fractional interest will be rounded to the next higher whole number of the number of shares of New Common Stock to be issued to the holder. Effective January 24, 2024, the Nasdaq Stock Market LLC has approved listing of the Tranche 1 Warrants and Tranche 2 Warrants on the Nasdaq Global Market, which will trade under the symbols “CORZW” and “CORZZ,” respectively. Contingent Value Rights Agreement On the Effective Date, under the terms of the Plan of Reorganization, the Company entered into a contingent value rights agreement (the “Contingent Value Rights Agreement”) among (i) the Company and (ii) Computershare Inc., a Delaware corporation and its affiliate, Computershare Trust Company, N.A., a federally chartered trust company (collectively, in such capacity, the “CVR Agent”). Pursuant to the Contingent Value Rights Agreement, the Company issued 51,783,625 contingent value rights (the “CVRs”) to holders of the Company’s April Convertible Notes and August Convertible Notes who received New Common Stock pursuant to the Convertible Noteholders Equity Distribution (in such capacity, the “Payees”) in an aggregate amount of 51,783,625 shares of New Common Stock (the “Corresponding New Common Stock”). The CVRs require the Company to make payments to each Payee, of: (i) at the first testing date, cash equal to such Payee’s pro rata share (the “Year 1 Contingent Payment Obligation”) of the lesser of (a) $43,333,333.33 and (b) the difference between (1) $260,000,000 and (2) the fair market value of the Corresponding New Common Stock (the “First Anniversary Payment Amount”); provided that the Year 1 Contingent Payment Obligation will be extinguished if the fair market value of the Corresponding New Common Stock is equal to or in excess of $260,000,000 with respect to the first testing date; (ii) at the second testing date, cash or New Common Stock (or a combination of cash and New Common Stock), in the Company’s sole discretion, equal to such Payee’s pro rata share (the “Year 2 Contingent Payment Obligation”) of the lesser of (a) $43,333,333.33 and (b) the difference between (1) $260,000,000 minus the First Anniversary Payment Amount and (2) the fair market value of the Corresponding New Common Stock (the “Second Anniversary Payment Amount”); provided that the Year 2 Contingent Payment Obligation will be extinguished if the fair market value of the Corresponding New Common Stock is equal to or in excess of $260,000,000 minus the First Anniversary Payment Amount, if any, with respect to the second testing date; and (iii) at the third testing date, cash or New Common Stock (or a combination of cash and New Common Stock), in the Company’s sole discretion, equal to such Payee’s pro rata share (the “Year 3 Contingent Payment Obligation”) of the lesser of (a) $43,333,333.33 and (b) the difference between (1) $260,000,000 minus the sum of the First Anniversary Payment Amount and the Second Anniversary Payment Amount and (2) the fair market value of the Corresponding New Common Stock (the “Third Anniversary Payment Amount”); provided that the Year 3 Contingent Payment Obligation will be extinguished if the fair market value of the Corresponding New Common Stock is equal to or in excess of $260,000,000 minus (1) the First Anniversary Payment amount, if any and (2) the Second Anniversary Payment Amount, if any, with respect to the third testing date. In each case, the fair market value of the Corresponding New Common Stock is determined by the product of (i) the volume weighted average of the closing price calculated based on the weighted average price in the consecutive 60-day period immediately prior to the applicable testing date, multiplied by (ii) Corresponding New Common Stock as of the applicable testing date. Equity Interests On the Effective Date, all equity interests in the Company that existed immediately prior to the Effective Date were cancelled, including the Company’s then-existing common stock and warrants, and the Company issued or caused to be issued the New Common Stock in accordance with the terms of the Plan of Reorganization. Debt Securities and Agreements On the Effective Date, the obligations of the Company under the Company’s April Convertible Notes, August Convertible Notes, replacement debtor-in-possession credit agreement, stock certificates, book entries, and any other certificate, share, note, bond, indenture, purchase right, option, warrant, or other instrument or document, directly or indirectly, evidencing or creating any indebtedness or obligation of or ownership interest in the Debtors giving rise to any claim or interest (except such certificates, notes or other instruments or documents evidencing indebtedness or obligations of, or interests in, the Debtors that are specifically reinstated pursuant to the Plan of Reorganization) were cancelled, and the duties and obligations of all parties thereto were deemed satisfied in full, canceled, released, discharged, and of no force or effect. New Common Stock and Preferred Stock The Company is authorized to issue 10,000,000,000 shares of New Common Stock and 2,000,000,000 shares of preferred stock (the “Preferred Stock”), each having a par value of $0.00001 per share. The rights and preferences of the New Common Stock shall at all times be subject to the rights of the Preferred Stock as may be set forth in one more certificates of designations filed with the Secretary of State of the State of Delaware from time to time in accordance with the Delaware General Corporation Law and the Charter. The number of authorized shares of Preferred Stock and New Common Stock may be increased or decreased from time to time by the affirmative vote of the holders of at least a majority of the voting power of the Company’s then outstanding shares of stock entitled to vote thereon, voting together as a single class, and no vote of the holders of any of the New Common Stock or the Preferred Stock voting separately as a class or series shall be required therefor. The Charter authorized the Board of Directors to provide for the issuance of a share or shares of Preferred Stock in one or more series and to fix for each such series (i) the number of shares constituting such series and the designation of such series, (ii) the voting powers (if any) of the shares of such series, (iii) the powers, preferences, and relative, participating, optional or other special rights of the shares of each such series, and (iv) the qualifications, limitations, and restrictions thereof. The authority of the Board of Directors with respect to the Preferred Stock shall include, but not be limited to, determination of (i) the number of shares constituting any series, (ii) the dividend rate or rates on the shares of any series, (iii) the voting rights, if any, of such series and the number of votes per share, (iv) conversion privileges, (v) whether the shares of any series shall be redeemable, (vi) whether any series shall have a sinking fund for the redemption or purchase of shares of such series, (vii) the rights of the shares in the event of voluntary or involuntary liquidation, dissolution or winding up of the Company and (viii) any other powers, preferences, rights, qualifications, limitations and restrictions of any series. Management Incentive Plan In accordance with the Plan of Reorganization, the Board of Directors will adopt an equity-based management incentive plan (the “Management Incentive Plan”), under which up to ten percent of the New Common Stock issued and outstanding, on a fully diluted basis, on the date of the Effective Date may be issued to members of the Company’s management. The Confirmation Order authorized and approved any (i) necessary action with respect to the Management Incentive Plan and (ii) reservation for issuance or share issuances pursuant to the Management Incentive Plan. The Board of Directors will adopt the Management Incentive Plan on or as soon as reasonably practicable after the Effective Date, but in any event no later than ninety days after the Effective Date. The participants in the Management Incentive Plan, the timing and allocations of the awards to participants, and the other terms and conditions of such awards (including, but not limited to, vesting, exercise prices, base values, hurdles, forfeiture, repurchase rights and transferability) shall be determined by the Board of Directors in its discretion. GUC Contingent Value Rights On the Effective Date, pursuant to the Plan of Reorganization, the Company issued (i) 20,232,308 shares of New Common Stock, with an aggregate value, based on Plan Value, of $101,584,257, to holders of Allowed General Unsecured Claims (the “GUC Equity Distribution”) and (ii) contingent value rights (the “GUC CVRs”) to Holders of Allowed General Unsecured Claims (in such capacity, the “GUC Payees”). Within 45 days of the GUC CVR Testing Date (as defined below), the Company will be required to pay to each GUC Payee New Common Stock in an amount equal to the lesser of (i) such GUC Payee’s pro rata share of the New Common Stock with an aggregate value, based on Plan Value, of $7,100,000 and (ii) the difference between (a) the GUC Equity Distribution at Plan Value and (b) the value of the GUC Equity Distribution as implied by the volume weighted average of the closing price of the GUC Equity Distribution during the 60 trading days prior to the GUC CVR Testing Date; provided that, to the extent that the value of the GUC Equity Distribution, as implied by the volume weighted average of the closing price during any 20 trading days over any consecutive 30 trading day period during the GUC CVR Testing Period, is equal to or in excess of the GUC Equity Distribution at Plan Value, the Company shall not owe any amounts to the GUC Payees and the GUC CVRs shall be immediately extinguished. The testing period (the “GUC CVR Testing Period”) began on the Effective Date and will end on the date that is 18 months following the Effective Date (the “GUC CVR Testing Date”). Federal Income Tax Consequences As of December 31, 2023, the Tax Group had net operating loss (“NOL”) carryforwards of approximately $330.2 million (all of which are post-2017 NOLs that are subject to an 80% taxable income limitation) and certain other tax attributes before taking into account the implementation of the Plan. An ownership change is not expected with the implementation of the Plan which would, if it occurred, limit our ability to utilize our NOL carryforwards under Sec. 382 of the Internal Revenue Code (the “Tax Code”). However, certain future equity trading activity and other actions could result in an ownership change of the Tax Group independent of the Plan, which could adversely affect the ability of the Debtors to utilize their tax attributes. In addition, as discussed below, in connection with and as a result of the implementation of the Plan, the amount of the Tax Group’s NOL carryforwards, and possibly certain other tax attributes, may be reduced. In general |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. |
Debtor-in-Possession | Debtor-in Possession |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Some of the more significant estimates include assumptions used to estimate the Company’s ability to continue as a going concern, the valuation of the Company’s common shares and the determination of the grant date fair value of stock-based compensation awards for periods prior to the Business Combination, the valuation of digital assets, goodwill, other intangible assets and property, plant and equipment, the fair value of convertible debt, derivative warrants, acquisition purchase price accounting, and income taxes. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ from management’s estimates. |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents include all cash balances and highly liquid investments with original maturities of three months or less from the date of acquisition. As of December 31, 2023, cash equivalents included $42.2 million of highly liquid money market funds, which are classified as Level 1 within the fair value hierarchy. Restricted cash consists of cash held in escrow under the Original DIP Credit Agreement and in escrow to pay for construction and development activities. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company’s accounts receivable balance consists of amounts due from its hosting customers. The Company records accounts receivable at the invoiced amount less an allowance for any potentially uncollectible accounts under the current expected credit loss (“CECL”) impairment model and presents the net amount of the financial instrument expected to be collected. The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, which considers forecasts of future economic conditions in addition to information about past events and current conditions. Based on this model, the Company considers many factors, including the age of the balance, collection history, and current economic trends. Bad debts are written off after all collection efforts have ceased. |
Valuation of Common Stock | Valuation of Common Stock Upon completion of the Business Combination (as discussed in Note 4 — Business Combinations, Acquisitions and Restructuring) in fiscal 2022, the Company determined the fair value of New Core Common Stock (as defined below) using the most observable inputs available, including quoted prices of XPDI Class A Common Stock and sales of the Company’s Series A and Series B Contingently Redeemable Convertible Preferred Stock. The Company also used the market approach, which estimated the value of the Company’s business by applying valuation multiples derived from the observed valuation multiples of comparable public companies to the Company’s expected financial results. The Company retained the services of certified valuation specialists to assist with the valuation of the Company’s common stock. Certain inputs for the New Core Common Stock fair value were unobservable and significant to the resulting fair value measurement, resulting in Level 3 instrument classification. Applying these valuation and allocation approaches involves the use of estimates, judgments and assumptions that are highly complex and subjective, such as those regarding the Company’s expected future revenue, expenses, valuation multiples, the selection of comparable public companies and the probability of future events. Changes in any or all of these estimates and assumptions, or the relationships between these assumptions, impact the Company’s valuation as of each valuation date and may have a material impact on the valuation of the Company’s common stock and common stock warrants issued with the Company’s debt and equity instruments. |
Digital Assets | Digital Assets The Company has sold or held its digital assets as dictated by liquidity and funding needs. Currently the Company is required by covenant to sell bitcoin it receives as consideration shortly after receipt. Sales of digital assets awarded to the Company through its self-mining activities are classified as cash flows from operating activities. The Company’s digital assets are accounted for as intangible assets with indefinite useful lives. Digital assets that are received as digital asset mining revenue are initially measured at fair value as discussed below in Digital Asset Mining Revenue. Digital assets that are purchased in an exchange of one digital asset for another digital asset |
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, plant and equipment includes land, buildings and improvements for datacenter facilities and leasehold improvements for the Company’s corporate headquarters. Property and equipment consists of computer, mining, network, electrical and other equipment, including property and equipment under finance leases. Property, plant and equipment, net is stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are capitalized at cost and amortized over the shorter of their estimated useful lives or the lease term. Future obligations related to finance leases are presented as Finance lease liabilities, current portion and Finance lease liabilities, net of current portion in the Company’s Consolidated Balance Sheets. Depreciation expense, including amortization of assets held under finance leases, is primarily included in Cost of revenue in the Company’s Consolidated Statements of Operations. Self-mining computer equipment that is subsequently contracted for sale to customers is valued at the lower of cost or net realizable value, with any write-down recognized as Cost of Equipment Sales in the Company’s Consolidated Statements of Operations. |
Long-Lived Asset Impairments | Long-Lived Asset Impairments |
Goodwill | Goodwill The total purchase price of any of the Company’s acquisitions is allocated to the tangible and intangible assets acquired and the liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the purchase price over those fair values is recorded as goodwill. The Company does not amortize goodwill, but tests it for impairment annually as of October 31, or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of its reporting units are less than their carrying amounts as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or chooses not to perform a qualitative assessment, then the quantitative goodwill impairment test will be performed. The quantitative test compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds its fair value, the excess of the carrying amount over the fair value is recognized as an impairment loss, and the resulting measurement of goodwill becomes its new carrying value. |
Energy Forward Purchase Contract and Derivative Warrant Liabilities | Energy Forward Purchase Contract In October 2023, the Company entered into an energy forward purchase contract to fix a specified component of the energy price related to forecasted energy purchases at the Cottonwood 1 facility from November 1, 2023 through May 31, 2024, respectively, in incremental blocks of 48 MW per month. The energy forward purchase contract minimizes price volatility risk as energy is purchased at a fixed rate, addressing exposures related to changes in operating costs. The Company did not enter into the forward purchase contract for speculative or trading purposes. The Company determined the forward purchase contract meets the definition of a derivative because it has a notional amount, no initial net investment, and can be net settled. The forward purchase contract is not designated as a hedging instrument for accounting. The forward purchase contract is recorded and initially measured at its fair value and is subsequently remeasured at its fair value each reporting period, with changes in fair value reported in net (loss) income. Derivative Warrant Liabilities The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The classification of derivative instruments, including whether such instruments should be classified as liabilities or as equity, is re-assessed at the end of each reporting period. The Company has public warrants and private placement warrants that have been recognized as derivative liabilities. Accordingly, the Company recognized the warrant instruments as liabilities at fair value and adjusted the instruments to fair value at each reporting period. The liabilities were subject to re-measurement at each balance sheet date until exercised, and any change in fair value was recognized in the Company’s Consolidated Statements of Operations and presented as fair value adjustment on derivative warrant liabilities. The initial and subsequent estimated fair value of both the public warrants and private placement warrants was based on the listed price in an active market for the public warrants. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs are capitalized and amortized over the term of the associated debt. Debt issuance costs are presented in the consolidated balance sheets as a direct deduction from the carrying amount of the debt liability consistent with the debt discount. |
Revenue From Contracts With Customers and Deferred Revenue | Revenue From Contracts With Customers - Digital Asset Mining Revenue The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue Recognition (“ASC 606”). The core principle of the revenue standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: • Step 1: Identify the contract with the customer • Step 2: Identify the performance obligations in the contract • Step 3: Determine the transaction price • Step 4: Allocate the transaction price to the performance obligations in the contract • Step 5: Recognize revenue when the Company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, an entity must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: • The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct); and • The entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: • Variable consideration • Constraining estimates of variable consideration • The existence of a significant financing component in the contract • Noncash consideration • Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized under the accounting contract will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time, as appropriate. Application of the five-step model to the Company’s mining operations One of the Company’s ongoing major or central operations is to provide a service of performing hash calculations to third-party pool operators alongside collectives of third-party bitcoin miners (such collectives, “mining pools”) as a participant. The Company considers the third-party mining pool operators to be its customers under Topic 606. Contract inception and our enforceable right to consideration begins when we commence providing hash calculation services to the mining pool operators. Each party to the contract has the unilateral right to terminate the contract at any time without any compensation to the other party for such termination. As such, the duration of a contract is less than a day and may be continuously renewed multiple times throughout the day. The implied renewal option is not a material right because there are no upfront or incremental fees in the initial contract and the terms, conditions, and compensation amount for the renewal options are at the then market rates. The Company is entitled to non-cash compensation based on the Full-Pay-Per-Share (“FPPS”) model of the mining pool it is a participant in. FPPS pools pay block rewards and transaction fees, less mining pool fees and the participants are entitled to non-cash consideration even if a block is not successfully validated by the mining pool operator. The Company is entitled to compensation once it begins to perform hash calculations for the pool operator in accordance with the operator’s specifications over a 24-hour period beginning mid-night UTC and ending 23:59:59 UTC on a daily basis. The non-cash consideration that we are entitled to for providing hash calculations to the pool operator under the FPPS payout method is made up of block rewards and transaction fees less pool operator expenses determined as follows: • The non-cash consideration in the form of a block reward is based on the total blocks expected to be generated on the Bitcoin Network for the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: the daily hash calculations that we provided to the pool operator as a percent of the Bitcoin Network’s implied hash calculations as determined by the network difficulty, multiplied by the total Bitcoin Network block rewards expected to be generated for the same daily period. • The non-cash consideration in the form of transaction fees paid by transaction requestors is based on the share of total actual fees paid over the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: total actual transaction fees generated on the Bitcoin Network during the 24-hour period as a percent of total block rewards the Bitcoin Network actually generated during the same 24-hour period, multiplied by the block rewards we earned for the same 24-hour period noted above. • The block reward and transaction fees earned by the Company is reduced by mining pool fees charged by the operator for operating the pool based on a rate schedule per the mining pool contract. The mining pool fee is only incurred to the extent we perform hash calculations and generate revenue in accordance with the pool operator’s payout formula during the same 24-hour period beginning mid-night UTC daily. The above non-cash consideration is variable, since the amount of block reward earned depends on the amount of hash calculations we perform; the amount of transaction fees we are entitled to depends on the actual Bitcoin Network transaction fees over the same 24-hour period; and the operator fees for the same 24-hour period are variable since it is determined based on the total block rewards and transaction fees in accordance with the pool operator’s agreement. While the non-cash consideration is variable, the Company has the ability to estimate the variable consideration at contract inception with reasonable certainty without the risk of significant revenue reversal. The Company does not constrain this variable consideration because it is probable that a significant reversal in the amount of revenue recognized from the contract will not occur when the uncertainty is subsequently resolved and recognizes the non-cash consideration on the same day that control is transferred, which is the same day as contract inception. The Company measures the non-cash consideration based on the volume weighted average spot rates of aggregated exchanges over a 24-hour period beginning mid-night UTC and ending 23:59:59 UTC on the day of contract inception using the Company’s primary bitcoin pricing source system. The Company recognizes non-cash consideration on the same day that control of the contracted service is transferred to the pool operator, which is the same day as the contract inception. Prior to 2022, in certain arrangements, the Company did not have a reliable means to estimate its relative share of the rewards until they were paid to it and the variable consideration was constrained until the Company received the consideration, at which time revenue was recognized. The Company measured consideration at fair value on the date received, which was typically not materially different than the fair value at inception of the arrangement or the time the Company had earned the award from the pools. Direct expenses associated with providing hash calculation services to a third-party operated mining pool are recorded as cost of revenues. Depreciation and amortization expenses on fixed and right-of-use assets, including digital asset mining equipment, used to provide the services are also recorded as a component of cost of revenues. Revenue From Contracts With Customers - Hosting The Company primarily generates revenue from contracts with customers from hosting services. Prior to fiscal 2023, the “Hosting” segment also included sales of mining equipment to customers and was referred to as “Hosting and Equipment Sales”, when the Company also recognized revenue from contracts with customers from sales of computer equipment, in which the Company generally recognized revenue when control of the promised equipment was transferred to customers. The Company generally recognizes revenue when the promised service is performed. Revenue excludes any amounts collected on behalf of third parties, including sales and indirect taxes. Performance Obligations The Company’s performance obligations primarily relate to hosting services, which are described below. The Company has performance obligations associated with commitments in customer hosting contracts for future services that have not yet been recognized in the financial statements. As of December 31, 2023, for contracts with original terms that exceed one year (typically ranging from 15 to 24 months), we expect to recognize approximately $78.1 million of revenue in the future related to performance obligations associated with existing hosting contracts. As of December 31, 2023, unsatisfied performance obligations that are expected to be recognized in 2024 and 2025 are $68.4 million and $9.7 million, respectively. Hosting Services The Company regularly enters contracts that include hosting services, for which revenue is recognized as services are performed on a variable basis. The Company performs hosting services that enable customers to run blockchain and other high-performance computing operations. The Company’s performance obligation related to these services is satisfied over time. The Company recognizes revenue for services that are performed on a consumption basis, such as the amount of electricity used in a period, based on the customer’s use of such resources. The Company recognizes variable consumption usage hosting revenue each month as the uncertainty related to the consideration is resolved, hosting services are provided to our customers, and our customers utilize the hosting services (the customer simultaneously receives and consumes the benefits of the Company’s performance). The Company generally bills its customers in advance based on estimated consumption under the contract. The Company recognizes revenue based on actual consumption in the period and invoices adjustments in subsequent periods or retains credits toward future consumption. The term between invoicing and when payment is due typically does not exceed 30 days. Equipment Sales (Applicable to years ended December 31, 2022 and 2021) The Company entered into contracts with more than one performance obligation. For example, the Company entered into contracts that include both hosting services and sales of computer equipment to those same customers, for which revenue is recognized at the point in time when control of the equipment is transferred to the customer (typically at the start of the contract period). For these contracts, revenue was recognized based on the relative standalone selling price of each performance obligation in the contract. The Company recognized revenue from sales of computer equipment to customers at the point in time when control of the equipment is transferred to the customer, which generally occurred upon deployment of the equipment. Customers made a series of deposits on equipment purchases with the final payment typically being due at least one month prior to deployment. Self-mining computer equipment that was subsequently sold to customers was recognized as Equipment Sales to Customers in the Company’s Consolidated Statements of Operations. We do not expect to enter equipment sales contracts in the future or to have any equipment sales revenue after December 31, 2022. Deferred Revenue The Company records contract liabilities in Deferred revenue on the Company’s Consolidated Balance Sheets when cash payments are received in advance of performance and recognizes them as revenue when the performance obligations are satisfied. The Company’s current and non-current deferred revenue balance as of December 31, 2023 and 2022, was $9.8 million and $80.4 million, respectively, all from advance payments received during the years then ended. In the year ended December 31, 2023, the Company recognized $21.0 million of revenue that was included in the deferred revenue balance as of the beginning of the year. Of the remaining deferred revenue balance, $20.5 million and $33.0 million were released as a result of the Celsius and Gryphon claim settlements, respectively. See Note 3 — Chapter 11 Filing and Other Related Matters for further details on the settlements. In the year ended December 31, 2022, the Company recognized $88.6 million of revenue that was included in the deferred revenue balance as of the beginning of the year. Advanced payments for hosting services are typically recognized in the following month and advanced payments for equipment sales are generally recognized within one year. |
Deposits for Equipment | Deposits for Equipment The Company has entered into agreements with vendors to supply equipment for its customers and for the Company’s own digital asset mining operations. These agreements generally require significant refundable deposits payable months in advance of delivery and additional advance payments in monthly installments thereafter. |
Cost of Revenue | Costs of Revenue The Company’s Cost of Hosting Services and Cost of Digital Asset Mining primarily consist of electricity costs, salaries, stock-based compensation, depreciation of property, plant and equipment used to perform hosting services and mining operations and other related costs. Cost of Equipment Sales represents costs of computer equipment sold to customers. |
Research and Development | Research and Development The Company’s research and development expenses primarily include personnel costs associated with technology and product development and data science research. Research and development costs are expensed as incurred. |
Share-Based Compensation | Stock-Based Compensation Stock-based compensation expense is measured at the grant date based on the value of the equity award. The fair value of stock option awards is estimated on the date of grant using the Black-Scholes option-pricing model. The fair value of restricted stock unit awards is estimated on the date of grant using the estimated fair value of the Company’s common stock on the date of grant. For awards with only service conditions, primarily stock options and certain restricted stock units, the estimated fair value of the equity awards is recognized as expense on a straight-line basis, less actual forfeitures as they occur, over the requisite service period for the entire award, which is generally the vesting period. For awards with service and performance conditions, primarily restricted stock unit awards, the compensation expense is recognized separately for each tranche of each award as if it were a separate award with its own vesting |
Employee Benefit Plan | Employee Benefit Plan |
Earnings Per Share | Earnings Per Share The Company computes earnings per share (“EPS”) following ASC Topic 260, Earnings per share . Basic EPS is measured as the income or loss available to common stockholders divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per-share basis from the potential conversion of convertible securities or the exercise of options and or warrants; the dilutive impacts of potentially convertible securities are calculated using the if-converted method; the potentially dilutive effect of options or warrants are computed using the treasury stock method. Securities that are potentially an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from diluted EPS calculation. |
Income Taxes | Income Taxes The Company is subject to income taxes mainly in the jurisdictions in which it provides various infrastructure, technology and hosting services. The Company’s tax position requires significant judgment in order to properly evaluate and quantify tax positions and to determine the provision for income taxes. The Company uses the assets and liabilities method to account for income taxes, which requires that deferred tax assets and deferred tax liabilities be determined based on the differences between the financial statement and tax basis of assets and liabilities, using enacted tax rates in effect for the years in which the differences are expected to be reversed. The Company estimates its actual current tax expense, including permanent charges and benefits, and the temporary differences resulting from differing treatment of items, for tax and financial accounting purposes. The Company assesses whether it is more likely than not that its deferred tax assets will be realized by considering both positive and negative evidence. If the Company believes that recovery of these deferred tax assets is not more likely than not, the Company establishes a valuation allowance. Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, the Company considered all available evidence, including recent operating results, projections of future taxable income, the reversal of taxable temporary differences, and the feasibility of tax planning strategies. GAAP sets forth a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Interest and penalties related to unrecognized tax benefits are included within Income Tax Expense. Accrued interest and penalties are included in the related tax liability line in the Company’s Consolidated Balance Sheets. The Company adjusts its reserves for tax positions in light of changing facts and circumstances, such as the closing of a tax audit, the refinement of an estimate based on new facts or changes in tax laws. To the extent that the final tax outcome of these matters is different than the amounts recorded, the differences are recorded as adjustments to the provision for income taxes in the period in which such determination is made. The provision (benefit) for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. The Company’s future effective tax rates could be adversely affected by changes in the valuation of the Company’s deferred tax assets or liabilities, or changes in tax laws, regulations, accounting principles or interpretations thereof. In addition, the Company is subject to examination of income tax returns by various tax authorities. The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provisions for income taxes. |
Recently Adopted Accounting Standard and Accounting Standards Not Yet Adopted | Recently Adopted Accounting Standards In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Measurement of Credit Losses on Financial Instruments , which requires an entity to measure credit losses for certain financial instruments and financial assets, including trade receivables. Under this update, on initial recognition and at each reporting period, an entity is required to recognize an allowance that reflects the entity’s current estimate of credit losses expected to be incurred over the life of the financial instrument. The Company adopted ASU 2016-13 as of January 1, 2023, and the adoption did not have a material impact on the Company’s consolidated financial statements. In December 2023, the FASB issued Accounting Standards Update 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 is intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income. The amendments also improve the information provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period. ASU 2023-08 is effective for annual and interim reporting periods beginning after December 15, 2024, with early adoption permitted. The Company elected to early adopt the new standard effective January 1, 2024. The financial statement impact upon adoption was not material. Under the Company’s current bitcoin strategy, the impact of the adoption on 2024 financial performance is expected to be immaterial. Accounting Standards Not Yet Adopted In December 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which will improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This update will be effective for the Company during the annual reporting period beginning January 1, 2025.The Company is currently evaluating the impact this ASU will have on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. Under the ASU, PBEs must annually “(1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate).” This update will be effective for the Company during the annual reporting period beginning January 1, 2025. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements and related disclosures. There are no other new accounting pronouncements that are expected to have a significant impact on the Company’s consolidated financial statements. |
Fair Value Measurements | The Company measures certain assets and liabilities at fair value on a recurring or non-recurring basis in certain circumstances. 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. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 — Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. The Company uses observable market data when determining fair value whenever possible and relies on unobservable inputs only when observable market data is not available. Nonrecurring fair value measurements The Company’s non-financial assets, including digital assets, property, plant and equipment, goodwill, and intangible assets are measured at estimated fair value on a nonrecurring basis. These assets are adjusted to fair value only when an impairment is recognized, or the underlying asset is held for sale. Refer to Note 2 — Summary of Significant Accounting Policies and Note 5 — Property, Plant and Equipment, Net, for more information regarding fair value considerations when measuring impairment. The estimated fair value of the Company’s digital assets as of December 31, 2023 and 2022, was $2.3 million and $0.7 million, respectively. We estimate the fair values of our digital assets based on quoted prices in active markets (Level 1). No non-financial assets were classified as Level 3 as of December 31, 2023 or December 31, 2022. Fair value of financial instruments The Company’s financial instruments include cash and cash equivalents, restricted cash, accounts receivable, net, digital assets, accounts payable, notes payable and certain accrued expenses and other liabilities. The carrying amount of these financial instruments materially approximate their fair values. |
Concentrations of Revenue and Credit Risk | Concentrations of Revenue and Credit Risk |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Digital Currency Assets | Activity related to our digital asset balances for the years ended December 31, 2023 and 2022 were as follows (in thousands): December 31, 2023 December 31, 2022 Digital assets, beginning of period $ 724 $ 234,298 Digital asset mining revenue, net of receivables * 389,456 397,796 Mining proceeds from shared hosting 17,626 — Proceeds from sales of digital assets (404,686) (444,353) Gain from sales of digital assets 3,886 44,298 Impairment of digital assets (4,406) (231,315) Payment of board fee (316) — Digital assets, end of period $ 2,284 $ 724 __________________ * |
Schedule of Fair Value of Energy Forward Purchase Contract | he following table summarizes the fair value of the energy forward purchase contract on the Company’s Consolidated Balance Sheets (in thousands): Fair Value (Level 2) as of December 31, Financial statement line item 2023 2022 Energy forward purchase contract Accrued expenses and other current liabilities $ 2,262 $ — |
Derivative Instruments, Gain (Loss) | The Company recorded the following gains/(losses) related to the energy forward purchase contract on the Company’s Consolidated Statements of Operations (in thousands): Year Ended December 31, Financial statement line item 2023 2022 Energy forward purchase contract Change in fair value of derivative instruments $ (3,918) $ — |
CHAPTER 11 FILING AND OTHER R_2
CHAPTER 11 FILING AND OTHER RELATED MATTERS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Reorganizations [Abstract] | |
Schedule of Reorganization Items under Chapter 11 of US Bankruptcy Code | Reorganization items, net incurred as a result of the Chapter 11 Cases presented separately in the accompanying Consolidated Statements of Operations were as follows (in thousands): Years Ended December 31, 2023 2022 Professional fees and other bankruptcy related costs $ 92,195 $ 2,302 Settlements with creditors: Priority Power (4,878) — ACM ELF ST LLC Lease (5,003) — HMC 8,269 — Trilogy (385) — Didado 657 — Celsius - Cedarvale PSA 2,175 — Harper 4,977 — McCarthy 4,590 — Dalton (1,122) — Gryphon (23,260) — Foundry (12,636) — OG&E 4,800 — Maddox 1,277 — Other, net 14 — Total settlements with creditors (20,525) — Post-petition interest, fees and other cures 94,567 — Debtor-in-possession financing costs 24,885 — Write-off of debt issuance costs and original issue net discount on liabilities subject to compromise — 3,529 (Gain) from adjustment of liabilities subject to compromise fair value to expected allowed amount — (203,236) Reorganization items, net $ 191,122 $ (197,405) |
Schedule of Liabilities Subject to Compromise | Liabilities subject to compromise consisted of liabilities reclassified from the following balance sheet categories (in thousands): December 31, 2023 December 31, 2022 Accounts payable $ 36,678 $ 20,908 Accrued expenses and other current liabilities 20,300 64,493 Accounts payable, and accrued expenses and other current liabilities $ 56,978 $ 85,401 Operating lease liability $ — $ 13,868 Financing lease liability — 70,796 Debt subject to compromise 41,777 844,695 Accrued interest on liabilities subject to compromise 580 12,553 Leases, debt and accrued interest 42,357 941,912 Liabilities subject to compromise $ 99,335 $ 1,027,313 |
BUSINESS COMBINATIONS, ACQUIS_2
BUSINESS COMBINATIONS, ACQUISITIONS AND RESTRUCTURING (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisition Pro Forma Information | The following unaudited pro forma financial information gives effect to the Blockcap acquisition as if it had been completed on January 1, 2020. The unaudited pro forma information was prepared in accordance with the requirements of ASC 805, Business Combinations , which is a different basis than pro forma information prepared under Article 11 of Regulation S-X (“Article 11”). As such, they are not directly comparable with historical results for stand-alone Core Scientific prior to July 30, 2021, historical results for Core Scientific from July 30, 2021, that reflect the acquisition and are inclusive of the results and operations of Blockcap, nor our previously provided pro forma financials prepared in accordance with Article 11. The pro forma results for the year ended December 31, 2021, include the impact of several significant nonrecurring pro forma adjustments to previously reported operating results. The pro forma adjustments are based on historically reported transactions by the respective companies. The pro forma results do not include any anticipated synergies or other expected benefits of the acquisition (in thousands). Year Ended December 31, 2021 2020 Total revenue $ 586,991 $ 70,948 Operating income $ 137,109 $ (23,354) |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment, Net | Property, plant and equipment, net as of December 31, 2023 and 2022 consist of the following (in thousands): December 31, 2023 2022 Estimated Useful Lives Land and improvements (1) $ 21,852 $ 22,309 20 years Building and improvements 164,495 166,486 12 to 39 years Mining and network equipment (2) 441,404 448,346 1 to 5 years Electrical equipment (3) 64,810 64,810 5 to 10 years Other property, plant and equipment (4) 2,935 2,917 5 to 7 years Total 695,496 704,868 Less: accumulated depreciation and amortization (5) 293,974 268,233 Total 401,522 436,635 Add: Construction in progress 183,909 254,499 Property, plant and equipment, net $ 585,431 $ 691,134 __________________ (1) Estimated useful life of improvements. Land is not depreciated. (2) Includes finance lease assets of $46.6 million and $112.7 million at December 31, 2023 and 2022, respectively. (3) Includes finance lease assets of $12.7 million and $12.6 million at December 31, 2023 and 2022, respectively. (4) Includes finance lease assets of $0.4 million and $0.4 million at December 31, 2023 and 2022, respectively. (5) Includes accumulated amortization for assets under finance leases of $43.4 million and $41.7 million at December 31, 2023 and 2022, respectively. |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Prepaid Expenses & Other Current Assets | Prepaid expenses and other current assets as of December 31, 2023 and 2022 consist of the following (in thousands): December 31, 2023 2022 Prepaid power $ 7,325 $ 4,430 Prepaid insurance 5,506 7,321 Prepaid expenses 2,032 10,440 Prepaid construction — 6,102 Digital assets and receivables 6,158 3,285 Other 3,001 303 Total prepaid expenses and other current assets $ 24,022 $ 31,881 |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities as of December 31, 2023 and 2022, consist of the following (in thousands): December 31, 2023 2022 Accrued interest (1) $ 94,311 $ — Accrued liabilities 38,288 — Accrued expenses and other 20,283 11,590 Accrued inventory purchases 16,285 — Accrued taxes 3,694 4,720 Other current liabilities 6,775 1,642 Total accrued expenses and other current liabilities $ 179,636 $ 17,952 __________________ (1) As a result of the Company's Chapter 11 Cases, the Company has not made any payments related to accrued interest for any debt obligations that are subject to compromise. |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable as of December 31, 2023 and 2022 consist of the following (in thousands): Stated Interest Rate Effective Interest Rates Maturities December 31, 2023 December 31, 2022 Kentucky note 5.0% 5.0% 2023 $ 529 $ 529 NYDIG loan 11.0% - 15.0% 11.0% - 17.0% Various — 38,573 Stockholder loan 10.0% 20.0% 2023 10,000 10,000 Trinity loan 11.0% 11.0% 2024 23,356 23,356 Bremer loan 5.5% 5.6% 2026 18,331 18,331 Blockfi loan 9.7% - 13.1% 10.1% - 13.1% 2023 53,913 53,913 Anchor Labs loan 12.5% 12.5% 2024 25,159 25,159 Mass Mutual Barings loans 9.8% - 13.0% 9.8% - 13.0% 2025 63,844 63,844 B. Riley Bridge Notes 7.0% 7.0% 2023 41,777 41,777 Liberty loan 10.6% 10.6% 2024 6,968 6,968 Secured Convertible Notes (1) 10.0% 10.0% 2025 237,584 237,584 Other Convertible Notes (2) 10.0% 10.0% 2025 322,396 322,396 Original DIP Credit Agreement (3) 10.0% 10.0% 2023 — 35,547 Replacement DIP Credit Agreement (4) 10.0% 10.0% 2024 4,273 — HMC note 5.0% 15.0% 2026 14,208 — ACM financing —% 15.0% 2025 6,519 — First Insurance loan —% 7.6% 2024 2,538 — Trilogy note 5.0% 15.0% 2026 2,927 — Didado note 5.0% 15.0% 2027 13,000 — Harper note 5.0% 15.0% 2026 4,678 — Other 2,453 2,960 Notes payable, prior to reclassification to Liabilities subject to compromise 854,453 880,937 Less: Notes payable in Liabilities subject to compromise (5) 41,777 844,695 Less: Unamortized discount and debt issuance costs - post-petition (6) 4,236 — Total notes payable, net 808,440 36,242 Less: current maturities 124,358 36,242 Notes payable, net of current portion $ 684,082 $ — __________________ (1) Secured Convertible Notes includes principal balance at issuance and PIK interest. (2) Other Convertible Notes includes principal balance at issuance and PIK interest. (3) Original DIP Credit Agreement, see Note 3 - Chapter 11 Filing and Other Related Matters for further information. (4) Replacement DIP Credit Agreement, see Note 3 - Chapter 11 Filing and Other Related Matters for further information. (5) In connection with the Company's Chapter 11 Cases, $41.8 million and $844.7 million of outstanding notes payable have been reclassified to Liabilities subject to compromise in the Company's Consolidated Balance Sheets as of December 31, 2023 and 2022, respectively, at their expected allowed amount. As of December 31, 2023 and 2022, $0.6 million and $12.6 million, respectively, of accrued interest was classified as Liabilities subject to compromise. (6) As a result of the Company's Chapter 11 Cases, the Company expensed $3.5 million of unamortized discount and debt issuance costs, net recorded in Reorganization items, net in the year ended December 31, 2022. On the Effective Date, pursuant to the Plan of Reorganization, the Company issued the following debt instruments, which are defined and described in further detail below (in thousands): Principal Balance Exit Credit Agreement $ 61,200 Secured Notes Indenture $ 150,000 Secured Convertible Notes Indenture $ 260,000 Miner Equipment Lender Agreements $ 52,947 |
Schedule of Fair Value Adjustments and Debt Issuance Costs | The following summarizes the fair value adjustments and debt issuance costs recognized on the Convertible Notes for the year ended December 31, 2022 (in thousands): Year Ended December 31, Financial statement line item 2022 Cash interest payments Interest expense, net $ 21,581 Payment-in-kind (PIK) interest Interest expense, net 31,550 Instrument-specific credit risk Other comprehensive income, net of income taxes (83,579) Other fair value adjustments Fair value adjustment on convertible notes (103,274) Reclass to Reorganization items, net Reorganization items, net 202,900 Total fair value adjustments $ 69,178 Debt issuance costs Reorganization items, net $ 2,788 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Convertible Notes | The following presents a rollforward of the activity for the Convertible Notes measured at fair value on a recurring basis using Level 3 inputs for the year ended December 31, 2022 (in thousands): Convertible Notes Balance at December 31, 2021 $ 557,007 Issuances (PIK principal recorded) 31,382 Settlements (including interest payments and conversions) (23,144) Unrealized gains 186,853 Transfers out of Level 3 (752,098) Balance at December 31, 2022 $ — |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Assets and Liabilities | The components of operating and finance leases are presented on the Company’s Consolidated Balance Sheets as follows (in thousands): Financial statement line item December 31, 2023 December 31, 2022 Assets: Operating lease right-of-use assets Operating lease right-of-use assets $ 7,844 $ 20,430 Finance lease right-of-use assets Property, plant and equipment, net $ 16,268 $ 31,213 Liabilities: Operating lease liabilities, current portion Operating lease liabilities, current portion $ 77 $ 769 Operating lease liabilities, net of current portion Operating lease liabilities, net of current portion $ 1,512 $ 720 Finance lease liabilities, current portion Finance lease liabilities, current portion $ 19,771 $ — Finance lease liabilities, net of current portion Finance lease liabilities, net of current portion $ 35,745 $ — Operating and finance lease liabilities subject to compromise Liabilities subject to compromise $ — $ 84,664 |
Schedule of Lease Cost | The components of lease expense were as follows (in thousands): Year Ended December 31, Financial statement line item 2023 2022 Operating lease expense General and administrative expenses $ 1,024 $ 1,937 Short-term lease expense General and administrative expenses — 24 Finance lease expense: Amortization of right-of-use assets Cost of revenue 11,424 31,372 Interest on lease liabilities Interest expense, net 1,787 7,080 Total finance lease expense 13,211 38,452 Total lease expense $ 14,235 $ 40,413 Information relating to the lease term and discount rate is as follows: December 31, 2023 December 31, 2022 Weighted Average Remaining Lease Term (Years) Operating leases 16.7 10.5 Finance leases 2.2 2.1 Weighted Average Discount Rate Operating leases 11.7 % 6.5 % Finance leases 12.9 % 12.4 % |
Schedule of Supplemental Cash Flow Information | The following table summarizes the Company’s supplemental cash flow information (in thousands): Year Ended December 31, 2023 2022 Lease Payments Operating lease payments $ 956 $ 726 Finance lease payments $ 4,459 $ 36,740 Supplemental Noncash Information Operating lease right-of-use assets obtained in exchange for lease obligations (1) $ — $ 14,195 Finance lease right-of-use assets obtained in exchange for lease obligations $ — $ 10,557 (Decrease) increase in finance lease right-of-use assets as a result of lease modification $ (11,644) $ 693 Decrease in finance lease liability as a result of lease modification $ (11,644) $ — Decrease in right-of-use assets due to lease termination $ (13,144) $ — Decrease in lease liability due to lease termination $ (13,517) $ — __________________ (1) |
Schedule of Operating Lease Liability, Maturity | The Company’s minimum payments under noncancelable operating and finance leases having initial terms and bargain renewal periods in excess of one year are as follows at December 31, 2023, and thereafter (in thousands): Operating Leases Finance Leases 2024 $ 262 $ 62,859 2025 262 1,862 2026 262 3 2027 195 — 2028 181 — Thereafter 2,054 — Total lease payments 3,216 64,724 Less: imputed interest 1,627 9,208 Less: Liabilities subject to compromise — — Total $ 1,589 $ 55,516 |
Schedule of Finance Lease Liability, Maturity | The Company’s minimum payments under noncancelable operating and finance leases having initial terms and bargain renewal periods in excess of one year are as follows at December 31, 2023, and thereafter (in thousands): Operating Leases Finance Leases 2024 $ 262 $ 62,859 2025 262 1,862 2026 262 3 2027 195 — 2028 181 — Thereafter 2,054 — Total lease payments 3,216 64,724 Less: imputed interest 1,627 9,208 Less: Liabilities subject to compromise — — Total $ 1,589 $ 55,516 |
STOCKHOLDERS_ (DEFICIT) EQUITY
STOCKHOLDERS’ (DEFICIT) EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of Share-based Compensation Arrangements by Share-based Payment Award | Stock-based compensation expense for the years ended December 31, 2023, 2022 and 2021 is included in the Company’s Consolidated Statements of Operations as follow: Year Ended December 31, 2023 2022 2021 Cost of revenue $ 5,050 $ 25,779 $ 4,084 Research and development 1,337 22,093 1,140 Sales and marketing 4,929 9,401 836 General and administrative (1) 47,576 125,621 32,877 Total stock-based compensation expense (1) $ 58,892 $ 182,894 $ 38,937 __________________ (1) |
Schedule of Stock Option Activity | A summary of stock option activity for the year ended December 31, 2023, is as follows (amounts in thousands, except per share amounts): Number of Weighted- Weighted-Average Aggregate Options outstanding - January 1, 2023 23,915 8.64 Granted — — Exercised (3) 1.44 Forfeited (674) 11.47 Expired (663) 6.60 Options outstanding - December 31, 2023 22,575 $ 8.88 6.9 $ — Options vested and expected to vest as of December 31, 2023 22,575 $ 8.88 7.9 $ — Options vested and exercisable as of December 31, 2023 10,508 $ 7.42 5.8 $ — |
Schedule of Restricted Stock Units Activity | A summary of RSU activity for the year ended December 31, 2023, is as follows (amounts in thousands, except per share amounts): Number of Weighted-Average Unvested - January 1, 2023 45,216 $ 2.79 Granted — — Vested (217) 10.11 Forfeited (6,641) 3.18 Unvested - December 31, 2023 38,358 $ 2.69 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | Year Ended December 31, 2023 2022 2021 Current tax: Federal $ — $ 74 $ — State 683 1,356 6,235 Total current tax 683 1,430 6,235 Deferred tax: Federal — (18,532) 11,218 State — 11 (1,690) Total deferred tax — (18,521) 9,528 Total income tax expense (benefit) $ 683 $ (17,091) $ 15,763 |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation between the U.S. statutory tax rate and the Company’s effective tax is presented as follows (in thousands): Year Ended December 31, 2023 2022 2021 U.S. federal statutory income tax (benefit) expense applied to loss before income taxes $ (51,619) $ (454,316) $ 13,246 State income taxes, net of federal benefit 12,325 (31,667) 3,591 Stock compensation 16,578 4,789 141 Non-deductible interest 11,659 11,366 5,310 Fair value adjustment - convertible notes — (10,942) 3,370 Reorganization costs 40,572 — — Non-deductible expenses — 288 (702) Valuation allowance (29,195) 241,892 (9,180) Goodwill impairment — 221,499 — Other permanent items 363 — (13) Total income tax expense (benefit) $ 683 $ (17,091) $ 15,763 |
Schedule of Deferred Tax Assets and Liabilities | The Company’s deferred tax assets and liabilities are detailed as follows (in thousands): Year Ended December 31, 2023 2022 2021 Deferred tax assets: Net operating loss carryforward $ 73,272 $ 79,729 $ 29,837 Capital loss carryforward 50,313 52,765 — Deferred interest carryforward 18,438 11,289 — Research tax credit carryforward 483 404 404 Reserves and accruals 2,440 4,248 148 Stock-based compensation 17,614 16,917 15,190 Unrealized capital loss — — — Property, plant and equipment, net 53,334 75,349 — Digital asset impairment loss 6 — 8,368 Debt extinguishment loss 2,446 2,561 2,558 Intangibles (other than goodwill) 2,660 2,301 2,270 Leases 2,099 7,062 5,231 Capitalized research and development expenses 4,226 801 — Other 6 169 3 Gross deferred tax assets 227,337 253,595 64,009 Valuation allowance (219,515) (248,710) (6,781) Deferred tax assets, net of valuation allowance 7,822 4,885 57,228 Deferred tax liabilities: Deferred settlement (6,031) — — Operating lease ROU assets (1,791) (4,885) — Property, plant and equipment, net — — (75,759) Deferred tax liabilities, net (7,822) (4,885) (75,759) Total net deferred tax assets (liabilities) $ — $ — $ (18,531) |
Schedule of Valuation Allowance | The changes in the Company’s valuation allowance were as follows (in thousands): Year Ended December 31, 2023 2022 2021 Beginning Balance $ 248,710 $ 6,781 $ 15,961 Change related to current net operating losses and impairments (561) 241,892 20,680 Net change related to generation of tax attributes — — (695) Change related to deferred tax adjustments (37,485) 37 (20,025) Change related to prior period adjustments 8,851 — (137) Acquisition deferred tax liabilities — — (9,003) Ending Balance $ 219,515 $ 248,710 $ 6,781 |
NET (LOSS) INCOME ATTRIBUTABL_2
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Year Ended December 31, 2023 2022 2021 Net (loss) income $ (246,487) $ (2,146,318) $ 47,312 Weighted average shares outstanding - basic 379,863 340,647 207,263 Add: Dilutive share-based compensation awards — — 26,042 Weighted average shares outstanding - diluted 379,863 340,647 233,305 Net (loss) income per share - basic $ (0.65) $ (6.30) $ 0.23 Net (loss) income per share - diluted $ (0.65) $ (6.30) $ 0.20 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings (Loss) Per Share | Year Ended December 31, 2023 2022 2021 Stock options 22,575 23,915 6,716 Warrants 14,892 18,311 — Restricted stock 38,358 45,217 84,035 Convertible Notes 69,998 69,998 — Share settled liability — — 1,943 SPAC vesting shares 1,725 1,725 — Total potentially dilutive shares 147,548 159,166 92,694 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Revenue and Gross Profit by Reporting Segment | The following table presents revenue and gross profit by reportable segment for the periods presented (in thousands): Year Ended December 31, 2023 2022 2021 Hosting Segment (1) Revenue: Hosting revenue $ 112,067 $ 159,688 $ 79,323 Equipment sales — 82,829 248,235 Total revenue 112,067 242,517 327,558 Cost of revenue: Cost of hosting services 87,245 169,717 77,678 Cost of equipment sales — 67,114 177,785 Total cost of revenue 87,245 236,831 255,463 Gross profit $ 24,822 $ 5,686 $ 72,095 Gross margin (2) 22 % 2 % 22 % Mining Segment Digital asset mining revenue $ 390,333 $ 397,796 $ 216,925 Total revenue 390,333 397,796 216,925 Cost of revenue 291,696 395,082 50,158 Gross profit $ 98,637 $ 2,714 $ 166,767 Gross margin (2) 25 % 1 % 77 % Consolidated total revenue $ 502,400 $ 640,313 $ 544,483 Consolidated cost of revenue $ 378,941 $ 631,913 $ 305,621 Consolidated gross profit $ 123,459 $ 8,400 $ 238,862 Consolidated gross margin (2) 25 % 1 % 44 % __________________ (1) During the year ended December 31. 2022, our “Hosting” segment also included sales of mining equipment to customers and was referred to as “Hosting and Equipment Sales”. (2) Gross margin is calculated as gross profit as a percentage of total revenue. |
Schedules of Customer Concentration Risk | For the years ended December 31, 2023, 2022 and 2021, the concentration of customers comprising 10% or more of the Company’s total revenue are as follows: Year Ended December 31, Year Ended December 31, 2023 2022 2021 2023 2022 2021 Percent of total revenue: Percent of Hosting segment revenue: Customer A N/A N/A 15 % N/A N/A 26 % B N/A N/A 14 % N/A N/A 23 % E N/A 14 % N/A N/A 38 % N/A F (1) 11 % N/A N/A 49 % N/A N/A __________________ (1) |
Reconciliation of Reportable Segment Gross Profit to Loss Before Income Taxes | A reconciliation of the reportable segment gross profit to (loss) income before income taxes included in the Company’s Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021, is as follows (in thousands): Year Ended December 31, 2023 2022 2021 Reportable segment gross profit $ 123,459 $ 8,400 $ 238,862 (Loss) gain on legal settlement — — (2,636) Gain from sales of digital assets 3,893 44,298 4,814 Impairment of digital assets (4,406) (231,315) (37,206) Change in fair value of derivative instruments (3,918) — — Impairment of goodwill and other intangibles — (1,059,265) — Impairment of property, plant and equipment — (590,673) — Losses on exchange or disposal of property, plant and equipment (1,956) (28,025) (118) Operating expense: Research and development 7,184 26,962 7,674 Sales and marketing 7,019 12,731 4,062 General and administrative 93,908 213,280 60,486 Total operating expense 108,111 252,973 72,222 Operating income (loss) 8,961 (2,109,553) 131,494 Non-operating expense, net: (Gain) loss on debt extinguishment and other (20,065) 287 8,016 Interest expense, net 86,238 96,826 44,354 Fair value adjustment on convertible notes — 186,853 16,047 Fair value adjustment on derivative warrant liabilities — (37,937) — Reorganization items, net 191,122 (197,405) — Other non-operating (income) expenses, net (2,530) 5,232 2 Total non-operating expense, net 254,765 53,856 68,419 (Loss) income before income taxes $ (245,804) $ (2,163,409) $ 63,075 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Schedule of Debt | Notes payable as of December 31, 2023 and 2022 consist of the following (in thousands): Stated Interest Rate Effective Interest Rates Maturities December 31, 2023 December 31, 2022 Kentucky note 5.0% 5.0% 2023 $ 529 $ 529 NYDIG loan 11.0% - 15.0% 11.0% - 17.0% Various — 38,573 Stockholder loan 10.0% 20.0% 2023 10,000 10,000 Trinity loan 11.0% 11.0% 2024 23,356 23,356 Bremer loan 5.5% 5.6% 2026 18,331 18,331 Blockfi loan 9.7% - 13.1% 10.1% - 13.1% 2023 53,913 53,913 Anchor Labs loan 12.5% 12.5% 2024 25,159 25,159 Mass Mutual Barings loans 9.8% - 13.0% 9.8% - 13.0% 2025 63,844 63,844 B. Riley Bridge Notes 7.0% 7.0% 2023 41,777 41,777 Liberty loan 10.6% 10.6% 2024 6,968 6,968 Secured Convertible Notes (1) 10.0% 10.0% 2025 237,584 237,584 Other Convertible Notes (2) 10.0% 10.0% 2025 322,396 322,396 Original DIP Credit Agreement (3) 10.0% 10.0% 2023 — 35,547 Replacement DIP Credit Agreement (4) 10.0% 10.0% 2024 4,273 — HMC note 5.0% 15.0% 2026 14,208 — ACM financing —% 15.0% 2025 6,519 — First Insurance loan —% 7.6% 2024 2,538 — Trilogy note 5.0% 15.0% 2026 2,927 — Didado note 5.0% 15.0% 2027 13,000 — Harper note 5.0% 15.0% 2026 4,678 — Other 2,453 2,960 Notes payable, prior to reclassification to Liabilities subject to compromise 854,453 880,937 Less: Notes payable in Liabilities subject to compromise (5) 41,777 844,695 Less: Unamortized discount and debt issuance costs - post-petition (6) 4,236 — Total notes payable, net 808,440 36,242 Less: current maturities 124,358 36,242 Notes payable, net of current portion $ 684,082 $ — __________________ (1) Secured Convertible Notes includes principal balance at issuance and PIK interest. (2) Other Convertible Notes includes principal balance at issuance and PIK interest. (3) Original DIP Credit Agreement, see Note 3 - Chapter 11 Filing and Other Related Matters for further information. (4) Replacement DIP Credit Agreement, see Note 3 - Chapter 11 Filing and Other Related Matters for further information. (5) In connection with the Company's Chapter 11 Cases, $41.8 million and $844.7 million of outstanding notes payable have been reclassified to Liabilities subject to compromise in the Company's Consolidated Balance Sheets as of December 31, 2023 and 2022, respectively, at their expected allowed amount. As of December 31, 2023 and 2022, $0.6 million and $12.6 million, respectively, of accrued interest was classified as Liabilities subject to compromise. (6) As a result of the Company's Chapter 11 Cases, the Company expensed $3.5 million of unamortized discount and debt issuance costs, net recorded in Reorganization items, net in the year ended December 31, 2022. On the Effective Date, pursuant to the Plan of Reorganization, the Company issued the following debt instruments, which are defined and described in further detail below (in thousands): Principal Balance Exit Credit Agreement $ 61,200 Secured Notes Indenture $ 150,000 Secured Convertible Notes Indenture $ 260,000 Miner Equipment Lender Agreements $ 52,947 |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) | 12 Months Ended |
Dec. 31, 2023 data_center segment | |
Product Information [Line Items] | |
Number of operational data center | 7 |
Number of operating segments | segment | 2 |
Georgia | |
Product Information [Line Items] | |
Number of operational data center | 2 |
Kentucky | |
Product Information [Line Items] | |
Number of operational data center | 1 |
North Carolina | |
Product Information [Line Items] | |
Number of operational data center | 1 |
North Dakota | |
Product Information [Line Items] | |
Number of operational data center | 1 |
Texas | |
Product Information [Line Items] | |
Number of operational data center | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Oct. 31, 2023 MW | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Net (loss) income | $ (246,487) | $ (2,146,318) | $ 47,312 | ||
Cash and cash equivalents | 50,409 | 15,884 | 117,871 | ||
Working capital deficit | (391,400) | ||||
Stockholder's deficit | 596,941 | 409,346 | (1,341,210) | $ (89,224) | |
Accounts receivable, allowance for credit loss | 0 | 8,724 | |||
Impairment of digital currency assets | 4,406 | 231,315 | 37,206 | ||
Gain from sales of digital assets | $ 3,893 | 44,298 | $ 4,814 | ||
Digital assets, period to sell after receipt of payment | 10 days | ||||
Goodwill, impairment | 1,050,000 | ||||
Goodwill | $ 0 | 0 | |||
Monthly energy consumption (in MWh) | MW | 48 | ||||
Revenue from contract with customer, payment term | 30 days | ||||
Last payment due period before deployment (at least) | 1 month | ||||
Deferred revenue | $ 9,800 | 80,400 | |||
Deferred revenue recognized | $ 21,000 | 88,600 | |||
Deferred revenue recognition period | 1 year | ||||
Matching contributions cost | $ 1,000 | 1,100 | |||
Hosting Service | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Commitments not yet recognized | 78,100 | ||||
Deferred revenue | 68,400 | ||||
Unsatisfied performance obligation, noncurrent | 9,700 | ||||
Celsius Mining LLC | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Remaining deferred revenue used to settle claims | 20,500 | ||||
Sphere 3D Corp. and Gryphon Settlement | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Remaining deferred revenue used to settle claims | $ 33,000 | ||||
Mining Segment | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Goodwill, impairment | 996,500 | ||||
Equipment Sales and Hosting reporting unit | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Goodwill, impairment | $ 58,200 | ||||
Minimum | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Contract with customer, term | 15 months | ||||
Maximum | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Contract with customer, term | 24 months | ||||
Money Market Funds | Level 1 | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Cash equivalents | $ 42,200 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Digital Currency Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Digital Currency Assets, Current [Roll Forward] | ||
Digital assets, beginning of period | $ 724 | $ 234,298 |
Digital asset mining revenue, net of receivables | 389,456 | 397,796 |
Mining proceeds from shared hosting | 17,626 | 0 |
Proceeds from sales of digital assets | (404,686) | (444,353) |
Gain from sales of digital assets | 3,886 | 44,298 |
Impairment of digital assets | (4,406) | (231,315) |
Payment of board fee | (316) | 0 |
Digital assets, end of period | 2,284 | $ 724 |
Digital currency assets, current receivable | $ 1,700 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - The Fair Value of Energy Forward Purchase Contract on Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Energy forward purchase contract | ||
Derivatives, Fair Value [Line Items] | ||
Fair value | $ 2,262 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Gains/(Losses) Related to the Energy Forward Purchase Contract (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Energy forward purchase contract | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gain or (loss) recognized | $ (3,918) | $ 0 |
CHAPTER 11 FILING AND OTHER R_3
CHAPTER 11 FILING AND OTHER RELATED MATTERS - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Jan. 24, 2024 USD ($) | Jan. 18, 2024 USD ($) day | Jan. 16, 2024 USD ($) installment | Nov. 09, 2023 | Nov. 04, 2023 USD ($) | Oct. 06, 2023 | Oct. 02, 2023 USD ($) | Sep. 14, 2023 USD ($) | Aug. 18, 2023 USD ($) | Mar. 20, 2023 USD ($) | Feb. 02, 2023 USD ($) | Sep. 30, 2023 USD ($) | Aug. 31, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 29, 2023 USD ($) | Nov. 02, 2023 USD ($) | Dec. 22, 2022 USD ($) | |
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Gain on debt extinguishment | $ 20,065 | $ (287) | $ (8,016) | |||||||||||||||||
Gain (loss) on settlement of reorganization items | 20,525 | 0 | ||||||||||||||||||
Priority Power | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Gain (loss) on settlement of reorganization items | 4,878 | 0 | ||||||||||||||||||
Debtor reorganization items, settlements with creditors | $ 20,800 | |||||||||||||||||||
Denton | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Debtor reorganization items, settlements with creditors | 1,500 | |||||||||||||||||||
HMC | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Gain (loss) on settlement of reorganization items | (8,269) | 0 | ||||||||||||||||||
Celsius Mining LLC | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Gain (loss) on settlement of reorganization items | (2,200) | |||||||||||||||||||
Purchase and sale agreement, cash payment from counterparty | $ 14,000 | |||||||||||||||||||
Debtor reorganization items, settlements with creditors | $ 14,000 | |||||||||||||||||||
ACM ELF ST LLC Lease | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Gain (loss) on settlement of reorganization items | 5,003 | 0 | ||||||||||||||||||
Debtor reorganization items, settlements with creditors | $ 7,500 | |||||||||||||||||||
J.W. Didado Electric | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Gain (loss) on settlement of reorganization items | (700) | |||||||||||||||||||
Trilogy LLC | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Gain (loss) on settlement of reorganization items | 400 | |||||||||||||||||||
Harper Construction Company | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Gain (loss) on settlement of reorganization items | (5,000) | |||||||||||||||||||
Dalton Settlement Agreement | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Gain (loss) on settlement of reorganization items | 1,100 | |||||||||||||||||||
Maddox | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Gain (loss) on settlement of reorganization items | (1,277) | 0 | ||||||||||||||||||
Maddox | Subsequent Event | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Debtor reorganization items, settlements with creditors | $ 2,800 | |||||||||||||||||||
Debtor reorganization items, number of payment installments | installment | 7 | |||||||||||||||||||
Sphere 3D Corp. and Gryphon Settlement | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Gain (loss) on settlement of reorganization items | 23,300 | |||||||||||||||||||
Sphere 3D Corp. and Gryphon Settlement | Subsequent Event | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Debtor reorganization items, settlements with creditors | $ 10,000 | |||||||||||||||||||
McCarthy & Humphrey Settlement | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Gain (loss) on settlement of reorganization items | (4,600) | |||||||||||||||||||
McCarthy & Humphrey Settlement | Subsequent Event | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Settlement, term | 90 days | |||||||||||||||||||
Debtor reorganization items, cash payment period upon notice | day | 3 | |||||||||||||||||||
Debtor reorganization items, debt payment period upon notice | day | 1 | |||||||||||||||||||
McCarthy | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Gain (loss) on settlement of reorganization items | (4,590) | 0 | ||||||||||||||||||
McCarthy | Subsequent Event | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Debtor reorganization items, settlements with creditors | $ 6,800 | |||||||||||||||||||
Debtor reorganization items, settlements with creditors, principal amount | 5,400 | |||||||||||||||||||
Humphery | Subsequent Event | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Debtor reorganization items, settlements with creditors | 5,600 | |||||||||||||||||||
Debtor reorganization items, settlements with creditors, principal amount | $ 1,400 | |||||||||||||||||||
Foundry Settlement | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Gain (loss) on settlement of reorganization items | 12,600 | |||||||||||||||||||
Foundry Settlement | Subsequent Event | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Debtor reorganization items, settlements with creditors | $ 5,500 | |||||||||||||||||||
Oklahoma Gas & Electric Settlement | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Gain (loss) on settlement of reorganization items | (4,800) | |||||||||||||||||||
Oklahoma Gas & Electric Settlement | Subsequent Event | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Debtor reorganization items, settlements with creditors | $ 4,800 | |||||||||||||||||||
Notes Payable | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Notes payable | $ 854,453 | 880,937 | ||||||||||||||||||
DIP Facility | Ad Hoc Noteholder Group | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 57,000 | |||||||||||||||||||
Line of credit facility, additional borrowing capacity | $ 18,000 | |||||||||||||||||||
Replacement DIP Facility | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 70,000 | |||||||||||||||||||
Interest rate per annum | 10% | |||||||||||||||||||
Commitment fee percentage | 3.50% | |||||||||||||||||||
Exit fee calculation, percentage of loans being repaid, reduced or satisfied | 5% | |||||||||||||||||||
Replacement DIP Facility | Notes Payable | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Interest rate per annum | 10% | |||||||||||||||||||
Notes payable | $ 4,273 | 0 | ||||||||||||||||||
Interim DIP Order | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 35,000 | |||||||||||||||||||
Final DIP Order | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 35,000 | |||||||||||||||||||
NYDIG loan | Notes Payable | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Gain on debt extinguishment | $ 20,800 | |||||||||||||||||||
Notes payable | $ 0 | 38,573 | ||||||||||||||||||
HMC note | Notes Payable | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Interest rate per annum | 5% | 5% | ||||||||||||||||||
Payment to execute debt instrument | $ 2,000 | $ 2,000 | ||||||||||||||||||
Notes payable | $ 15,500 | $ 15,500 | $ 14,208 | 0 | ||||||||||||||||
Debt instrument, term | 36 months | |||||||||||||||||||
Didado note | Notes Payable | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Interest rate per annum | 5% | |||||||||||||||||||
Notes payable | $ 13,000 | 0 | ||||||||||||||||||
Didado note | Unsecured Promissory Note | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Interest rate per annum | 5% | |||||||||||||||||||
Notes payable, carrying amount | $ 13,000 | |||||||||||||||||||
Debt instrument, term | 36 months | 36 months | ||||||||||||||||||
Trilogy note | Notes Payable | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Interest rate per annum | 5% | |||||||||||||||||||
Notes payable | $ 2,927 | 0 | ||||||||||||||||||
Trilogy note | Unsecured Promissory Note | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Interest rate per annum | 5% | |||||||||||||||||||
Notes payable, carrying amount | $ 2,900 | |||||||||||||||||||
Debt instrument, term | 30 months | 30 months | ||||||||||||||||||
Payment period threshold starting day | 3 months | |||||||||||||||||||
Harper note | Notes Payable | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Interest rate per annum | 5% | |||||||||||||||||||
Notes payable | $ 4,678 | $ 0 | ||||||||||||||||||
Harper note | Unsecured Promissory Note | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Interest rate per annum | 5% | |||||||||||||||||||
Notes payable, carrying amount | $ 4,700 | |||||||||||||||||||
Debt instrument, term | 30 months | 30 months | ||||||||||||||||||
Payment period threshold starting day | 45 days | |||||||||||||||||||
Dalton Settlement Agreement | Unsecured Promissory Note | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Notes payable | $ 9,100 | |||||||||||||||||||
Ad Hoc Noteholder Group | ||||||||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||||||||
Convertible notes holders represented, percentage (more than) | 70% |
CHAPTER 11 FILING AND OTHER R_4
CHAPTER 11 FILING AND OTHER RELATED MATTERS - Schedule of Reorganization Items under Chapter 11 of US Bankruptcy Code (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reorganization, Chapter 11 [Line Items] | |||
Professional fees and other bankruptcy related costs | $ 92,195 | $ 2,302 | |
Total settlements with creditors | (20,525) | 0 | |
Post-petition interest, fees and other cures | 94,567 | 0 | |
Debtor-in-possession financing costs | 24,885 | 0 | |
Write-off of debt issuance costs and original issue net discount on liabilities subject to compromise | 0 | 3,529 | |
(Gain) from adjustment of liabilities subject to compromise fair value to expected allowed amount | 0 | (203,236) | |
Reorganization items, net | 191,122 | (197,405) | $ 0 |
Priority Power | |||
Reorganization, Chapter 11 [Line Items] | |||
Total settlements with creditors | (4,878) | 0 | |
ACM ELF ST LLC Lease | |||
Reorganization, Chapter 11 [Line Items] | |||
Total settlements with creditors | (5,003) | 0 | |
HMC | |||
Reorganization, Chapter 11 [Line Items] | |||
Total settlements with creditors | 8,269 | 0 | |
Trilogy | |||
Reorganization, Chapter 11 [Line Items] | |||
Total settlements with creditors | (385) | 0 | |
Didado | |||
Reorganization, Chapter 11 [Line Items] | |||
Total settlements with creditors | 657 | 0 | |
Celsius - Cedarvale PSA | |||
Reorganization, Chapter 11 [Line Items] | |||
Total settlements with creditors | 2,175 | 0 | |
Harper | |||
Reorganization, Chapter 11 [Line Items] | |||
Total settlements with creditors | 4,977 | 0 | |
McCarthy | |||
Reorganization, Chapter 11 [Line Items] | |||
Total settlements with creditors | 4,590 | 0 | |
Dalton | |||
Reorganization, Chapter 11 [Line Items] | |||
Total settlements with creditors | (1,122) | 0 | |
Gryphon | |||
Reorganization, Chapter 11 [Line Items] | |||
Total settlements with creditors | (23,260) | 0 | |
Foundry | |||
Reorganization, Chapter 11 [Line Items] | |||
Total settlements with creditors | (12,636) | 0 | |
OG&E | |||
Reorganization, Chapter 11 [Line Items] | |||
Total settlements with creditors | 4,800 | 0 | |
Maddox | |||
Reorganization, Chapter 11 [Line Items] | |||
Total settlements with creditors | 1,277 | 0 | |
Other, net | |||
Reorganization, Chapter 11 [Line Items] | |||
Total settlements with creditors | $ 14 | $ 0 |
CHAPTER 11 FILING AND OTHER R_5
CHAPTER 11 FILING AND OTHER RELATED MATTERS - Schedule of Liabilities Subject to Compromise (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Reorganizations [Abstract] | ||
Accounts payable | $ 36,678 | $ 20,908 |
Accrued expenses and other current liabilities | 20,300 | 64,493 |
Accounts payable, and accrued expenses and other current liabilities | 56,978 | 85,401 |
Operating lease liability | 0 | 13,868 |
Financing lease liability | 0 | 70,796 |
Debt subject to compromise | 41,777 | 844,695 |
Accrued interest on liabilities subject to compromise | 580 | 12,553 |
Leases, debt and accrued interest | 42,357 | 941,912 |
Liabilities subject to compromise | $ 99,335 | $ 1,027,313 |
BUSINESS COMBINATIONS, ACQUIS_3
BUSINESS COMBINATIONS, ACQUISITIONS AND RESTRUCTURING - Merger Agreement (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||||
Jan. 19, 2022 USD ($) $ / shares shares | Jan. 18, 2022 $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) | Dec. 31, 2023 $ / shares shares | |
Class of Stock [Line Items] | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.00001 | $ 0.00001 | ||
Common stock, exchange ratio | 1.60015286880 | ||||
Common stock, shares outstanding (in shares) | 375,225 | 386,883 | |||
Proceeds from transactions | $ | $ 221,600 | ||||
Proceeds from reverse recapitalization, net | $ | $ 201,000 | ||||
Reverse recapitalization, transaction costs | $ | $ 7,900 | $ 18,600 | |||
Costs attributable to issuance of common stock and equity instruments - Merger with XPDI | $ | 16,642 | ||||
Transaction costs allocated to liability-classified instruments | $ | $ 2,000 | ||||
Recapitalization transaction, conversion ratio | 1 | ||||
SPAC vesting shares (in shares) | 1,700 | ||||
Volume weighted average price (in dollars per share) | $ / shares | $ 12.50 | ||||
Vesting terms, threshold number of trading days | 20 days | ||||
Vesting terms, threshold number of consecutive trading days | 30 days | ||||
Threshold period after the Closing Date | 5 years | ||||
Public Warrants | |||||
Class of Stock [Line Items] | |||||
Number of common stock called by warrants (in shares) | 8,600 | ||||
Private Placement Warrants | |||||
Class of Stock [Line Items] | |||||
Number of common stock called by warrants (in shares) | 6,300 | ||||
Conversion of Series A Preferred Stock to Common Stock | |||||
Class of Stock [Line Items] | |||||
Recapitalization transaction, conversion ratio | 1 | ||||
Conversion of Series B Preferred Stock to Common Stock | |||||
Class of Stock [Line Items] | |||||
Recapitalization transaction, conversion ratio | 1 | ||||
Conversion of XPDI Class B Common Stock to New Core Common Stock | |||||
Class of Stock [Line Items] | |||||
Recapitalization transaction, conversion ratio | 1 | ||||
Conversion of XPDI's Common Stock to New Core Common Stock | |||||
Class of Stock [Line Items] | |||||
Recapitalization transaction, conversion ratio | 1 | ||||
Former Core Scientific Stockholders | |||||
Class of Stock [Line Items] | |||||
Percent of ownership after transaction | 0.907 | ||||
Former XPDI Public Stockholders | |||||
Class of Stock [Line Items] | |||||
Percent of ownership after transaction | 0.067 | ||||
XPDI Sponsor | |||||
Class of Stock [Line Items] | |||||
Percent of ownership after transaction | 0.026 | ||||
XPDI | |||||
Class of Stock [Line Items] | |||||
Stock redeemed (in shares) | 12,300 | ||||
Share redemption price (in dollars per share) | $ / shares | $ 10 | ||||
Stock redeemed | $ | $ 123,500 | ||||
XPDI | Public Warrants | |||||
Class of Stock [Line Items] | |||||
Number of common stock called by warrants (in shares) | 8,600 | ||||
XPDI | Private Placement Warrants | |||||
Class of Stock [Line Items] | |||||
Number of common stock called by warrants (in shares) | 6,300 | ||||
Class A common stock | XPDI | |||||
Class of Stock [Line Items] | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | ||||
Common stock, shares outstanding (in shares) | 34,500 | ||||
Class B common stock | XPDI | |||||
Class of Stock [Line Items] | |||||
Common stock, par value (in dollars per share) | $ / shares | 0.0001 | ||||
New Core Common Stock | |||||
Class of Stock [Line Items] | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | ||||
Series A Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Contingently redeemable preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 |
BUSINESS COMBINATIONS, ACQUIS_4
BUSINESS COMBINATIONS, ACQUISITIONS AND RESTRUCTURING - Business Combination (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jul. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 30, 2021 | |
Business Acquisition [Line Items] | ||||||
Net (loss) income | $ (246,487) | $ (2,146,318) | $ 47,312 | |||
Share-based payment arrangement, expense | 58,892 | 182,894 | 38,937 | |||
Acquisition-related Costs | ||||||
Business Acquisition [Line Items] | ||||||
Net (loss) income | $ (1,900) | |||||
General and administrative | ||||||
Business Acquisition [Line Items] | ||||||
Share-based payment arrangement, expense | $ 47,576 | $ 125,621 | 32,877 | |||
Blockcap | ||||||
Business Acquisition [Line Items] | ||||||
Equity interest acquired | 100% | |||||
Share-based payment expense eliminated | $ 19,200 | |||||
Share-based payment arrangement, expense | 23,300 | |||||
Revenue of acquiree since acquisition date, actual | 42,600 | |||||
Operating loss of acquiree since acquisition date, actual | 15,500 | |||||
Blockcap | General and administrative | ||||||
Business Acquisition [Line Items] | ||||||
Recognized transaction cost | $ 1,100 |
BUSINESS COMBINATIONS, ACQUIS_5
BUSINESS COMBINATIONS, ACQUISITIONS AND RESTRUCTURING - Schedule of Business Acquisition Unaudited Pro Forma Information (Details) - Blockcap - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||
Total revenue | $ 586,991 | $ 70,948 |
Operating income | $ 137,109 | $ (23,354) |
BUSINESS COMBINATIONS, ACQUIS_6
BUSINESS COMBINATIONS, ACQUISITIONS AND RESTRUCTURING - Restructuring (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||
Severance expense | $ 1 | |
Intangible assets, amount ceased to be used | $ 2 | |
Goodwill, impairment | 1,050 | |
Acquired Intangible Assets | ||
Restructuring Cost and Reserve [Line Items] | ||
Intangible assets, amount ceased to be used | $ 2.5 | |
Other Intangible Assets | ||
Restructuring Cost and Reserve [Line Items] | ||
Impairment of intangible assets (excluding goodwill) | 4.5 | |
Mining Segment | ||
Restructuring Cost and Reserve [Line Items] | ||
Goodwill, impairment | 996.5 | |
Hosting Segment | ||
Restructuring Cost and Reserve [Line Items] | ||
Goodwill, impairment | 58.2 | |
2022 Restructuring | ||
Restructuring Cost and Reserve [Line Items] | ||
Payments for restructuring | 0.9 | |
Severance expense | 2.3 | |
2022 Restructuring | Employee Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance expense | $ 1 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET - Schedule of Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 695,496 | $ 704,868 |
Less accumulated depreciation and amortization | 293,974 | 268,233 |
Property, plant and equipment, net | 585,431 | 691,134 |
Accumulated amortization for assets under finance leases | 43,400 | 41,700 |
Property, Plant, and Equipment Excluding Construction in Progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | 401,522 | 436,635 |
Land and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 21,852 | 22,309 |
Estimated Useful Lives | 20 years | |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 164,495 | 166,486 |
Building and improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 12 years | |
Building and improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 39 years | |
Computer, mining and net work equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 441,404 | 448,346 |
Finance lease assets | $ 46,600 | 112,700 |
Computer, mining and net work equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 1 year | |
Computer, mining and net work equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 5 years | |
Electrical equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 64,810 | 64,810 |
Finance lease assets | $ 12,700 | 12,600 |
Electrical equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 5 years | |
Electrical equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 10 years | |
Other property, plant and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 2,935 | 2,917 |
Finance lease assets | $ 400 | 400 |
Other property, plant and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 5 years | |
Other property, plant and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 7 years | |
Construction in Progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | $ 183,909 | $ 254,499 |
PROPERTY, PLANT AND EQUIPMENT_4
PROPERTY, PLANT AND EQUIPMENT, NET - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 95,700,000 | $ 224,100,000 | $ 31,800,000 | |
Property, plant and equipment, net | $ 691,134,000 | 585,431,000 | 691,134,000 | |
Impairment of property, plant and equipment | 0 | 590,673,000 | 0 | |
Cedarvale, Texas | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, net | 119,800,000 | 119,800,000 | ||
Property, plant, and equipment, fair value | 60,500,000 | 60,500,000 | ||
Impairment of property, plant and equipment | 59,300,000 | |||
Locations Other Than Cedarvale, Cottonwood | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, net | 668,500,000 | 668,500,000 | ||
Property, plant, and equipment, fair value | 176,300,000 | 176,300,000 | ||
Impairment of property, plant and equipment | 492,200,000 | |||
Cedarvale, Texas and Cottonwood, Texas | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, net | 174,300,000 | 174,300,000 | ||
Property, plant, and equipment, fair value | 135,100,000 | 135,100,000 | ||
Impairment of property, plant and equipment | $ 39,200,000 | |||
Cost of revenue | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 95,400,000 | $ 223,600,000 | $ 31,700,000 |
BALANCE SHEET COMPONENTS - Sche
BALANCE SHEET COMPONENTS - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid power | $ 7,325 | $ 4,430 |
Prepaid insurance | 5,506 | 7,321 |
Prepaid expenses | 2,032 | 10,440 |
Prepaid construction | 0 | 6,102 |
Digital assets and receivables | 6,158 | 3,285 |
Other | 3,001 | 303 |
Total prepaid expenses and other current assets | $ 24,022 | $ 31,881 |
BALANCE SHEET COMPONENTS - Accr
BALANCE SHEET COMPONENTS - Accrued Expenses and Other (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued interest | $ 94,311 | $ 0 |
Accrued liabilities | 38,288 | 0 |
Accrued expenses and other | 20,283 | 11,590 |
Accrued inventory purchases | 16,285 | 0 |
Accrued taxes | 3,694 | 4,720 |
Other current liabilities | 6,775 | 1,642 |
Total accrued expenses and other current liabilities | $ 179,636 | $ 17,952 |
NOTES PAYABLE - Schedule of Not
NOTES PAYABLE - Schedule of Notes Payable (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | Aug. 31, 2023 | Aug. 18, 2023 | Feb. 02, 2023 | |
Debt Instrument [Line Items] | ||||||
Less: Notes payable in Liabilities subject to compromise | $ 41,777 | $ 844,695 | ||||
Accrued interest on liabilities subject to compromise | 580 | 12,553 | ||||
Write-off of debt issuance costs and original issue net discount on liabilities subject to compromise | 0 | 3,529 | ||||
Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Notes payable | 854,453 | 880,937 | ||||
Less: Unamortized discount and debt issuance costs - post-petition | 4,236 | 0 | ||||
Total notes payable, net | 808,440 | 36,242 | ||||
Less: current maturities | 124,358 | 36,242 | ||||
Notes payable, net of current portion | $ 684,082 | 0 | ||||
Kentucky note | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 5% | |||||
Effective Interest Rates | 5% | |||||
Notes payable | $ 529 | 529 | ||||
NYDIG loan | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Notes payable | $ 0 | 38,573 | ||||
NYDIG loan | Notes Payable | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 11% | |||||
Effective Interest Rates | 11% | |||||
NYDIG loan | Notes Payable | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 15% | |||||
Effective Interest Rates | 17% | |||||
Stockholder loan | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 10% | |||||
Effective Interest Rates | 20% | |||||
Notes payable | $ 10,000 | 10,000 | ||||
Trinity loan | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 11% | |||||
Effective Interest Rates | 11% | |||||
Notes payable | $ 23,356 | 23,356 | ||||
Bremer loan | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 5.50% | |||||
Effective Interest Rates | 5.60% | |||||
Notes payable | $ 18,331 | 18,331 | ||||
Blockfi loan | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Notes payable | $ 53,913 | 53,913 | ||||
Blockfi loan | Notes Payable | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 9.70% | |||||
Effective Interest Rates | 10.10% | |||||
Blockfi loan | Notes Payable | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 13.10% | |||||
Effective Interest Rates | 13.10% | |||||
Anchor Labs loan | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 12.50% | |||||
Effective Interest Rates | 12.50% | |||||
Notes payable | $ 25,159 | 25,159 | ||||
Mass Mutual Barings loans | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Notes payable | $ 63,844 | 63,844 | ||||
Mass Mutual Barings loans | Notes Payable | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 9.80% | |||||
Effective Interest Rates | 9.80% | |||||
Mass Mutual Barings loans | Notes Payable | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 13% | |||||
Effective Interest Rates | 13% | |||||
B. Riley Bridge Notes | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 7% | |||||
Effective Interest Rates | 7% | |||||
Notes payable | $ 41,777 | 41,777 | ||||
Liberty loan | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 10.60% | |||||
Effective Interest Rates | 10.60% | |||||
Notes payable | $ 6,968 | 6,968 | ||||
Secured Convertible Notes Issued April 2021 | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 10% | |||||
Effective Interest Rates | 10% | |||||
Notes payable | $ 237,584 | 237,584 | ||||
Other Convertible Notes | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 10% | |||||
Effective Interest Rates | 10% | |||||
Notes payable | $ 322,396 | 322,396 | ||||
Original DIP Credit Agreement | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 10% | |||||
Effective Interest Rates | 10% | |||||
Notes payable | $ 0 | 35,547 | ||||
Replacement DIP Facility | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 10% | |||||
Replacement DIP Facility | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 10% | |||||
Effective Interest Rates | 10% | |||||
Notes payable | $ 4,273 | 0 | ||||
HMC note | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 5% | 5% | ||||
Effective Interest Rates | 15% | 15% | ||||
Notes payable | $ 14,208 | 0 | $ 15,500 | $ 15,500 | ||
ACM financing | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 0% | |||||
Effective Interest Rates | 15% | 15% | ||||
Notes payable | $ 6,519 | 0 | $ 7,500 | |||
First Insurance loan | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 0% | 0% | ||||
Effective Interest Rates | 7.60% | 7.60% | ||||
Notes payable | $ 2,538 | 0 | $ 5,000 | |||
Trilogy note | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 5% | |||||
Effective Interest Rates | 15% | |||||
Notes payable | $ 2,927 | 0 | ||||
Didado note | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 5% | |||||
Effective Interest Rates | 15% | |||||
Notes payable | $ 13,000 | 0 | ||||
Harper note | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 5% | |||||
Effective Interest Rates | 15% | |||||
Notes payable | $ 4,678 | 0 | ||||
Other | Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Notes payable | $ 2,453 | $ 2,960 |
NOTES PAYABLE - Narrative (Deta
NOTES PAYABLE - Narrative (Details) $ / shares in Units, shares in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||
Nov. 09, 2023 USD ($) | Nov. 04, 2023 | Oct. 06, 2023 USD ($) | Oct. 02, 2023 | Aug. 18, 2023 USD ($) | Dec. 21, 2022 USD ($) | Aug. 01, 2022 shares | Sep. 30, 2023 USD ($) | Aug. 31, 2023 USD ($) installment | Aug. 31, 2022 USD ($) shares | May 31, 2022 USD ($) | Apr. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Feb. 28, 2022 USD ($) | Jan. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) loan | Nov. 30, 2021 USD ($) | Oct. 31, 2021 USD ($) employee tranche | Aug. 31, 2021 USD ($) | Jul. 31, 2021 USD ($) | May 31, 2021 USD ($) | Mar. 31, 2021 USD ($) | Jan. 31, 2021 USD ($) $ / shares shares | Oct. 31, 2020 USD ($) | Dec. 31, 2018 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) loan | Dec. 31, 2023 USD ($) $ / shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) loan | Jul. 04, 2023 USD ($) | Feb. 02, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jan. 19, 2022 $ / shares | |
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Gain on debt extinguishment | $ 20,065,000 | $ (287,000) | $ (8,016,000) | ||||||||||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 11.50 | ||||||||||||||||||||||||||||||||||
Warrants term | 5 years | ||||||||||||||||||||||||||||||||||
Debt instrument, interest rate buydown terms, required continued operation period | 5 years | ||||||||||||||||||||||||||||||||||
Debt instrument, convertible, accumulated fair value adjustment | $ 130,300,000 | ||||||||||||||||||||||||||||||||||
Debt Instrument, convertible, accumulated other comprehensive loss related to fair value changes | 72,600,000 | ||||||||||||||||||||||||||||||||||
Debtor reorganization items, gain (loss) from derecognization of accumulated fair value adjustment | 202,900,000 | ||||||||||||||||||||||||||||||||||
Debt instrument, convertible price (in dollars per share) | $ / shares | $ 8 | ||||||||||||||||||||||||||||||||||
Mass Mutual Barings loans | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Issuances of common stock- vendor settlement (in shares) | shares | 0.3 | ||||||||||||||||||||||||||||||||||
B. Riley Securities, Inc. | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Issuances of common stock- vendor settlement (in shares) | shares | 0.4 | ||||||||||||||||||||||||||||||||||
Stockholder Loan Warrants | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Number of common stock called by warrants (in shares) | shares | 0.2 | ||||||||||||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 4.21 | ||||||||||||||||||||||||||||||||||
Proceeds from issuance of warrants | $ 500,000 | ||||||||||||||||||||||||||||||||||
Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Notes payable | $ 854,453,000 | 880,937,000 | |||||||||||||||||||||||||||||||||
Convertible Notes | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, face amount | 514,800,000 | ||||||||||||||||||||||||||||||||||
Interest rate per annum | 10% | ||||||||||||||||||||||||||||||||||
Convertible notes payable, payable in cash percent | 4% | ||||||||||||||||||||||||||||||||||
Convertible notes payable, payable in kind percent | 6% | ||||||||||||||||||||||||||||||||||
Debt instrument, convertible price (in dollars per share) | $ / shares | $ 8 | ||||||||||||||||||||||||||||||||||
Kentucky note | Secured Promissory Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, term | 5 years | ||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 2,400,000 | ||||||||||||||||||||||||||||||||||
Interest rate per annum | 5% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 5% | ||||||||||||||||||||||||||||||||||
Kentucky note | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 5% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 5% | ||||||||||||||||||||||||||||||||||
Notes payable | $ 529,000 | 529,000 | |||||||||||||||||||||||||||||||||
NYDIG loan | Equipment Loan | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, term | 24 months | 24 months | 24 months | 24 months | |||||||||||||||||||||||||||||||
Interest rate per annum | 11% | 14.25% | 14.25% | 15% | |||||||||||||||||||||||||||||||
Effective Interest Rates | 11% | 16% | 17% | 16% | |||||||||||||||||||||||||||||||
Issuances of debt | $ 33,400,000 | $ 26,100,000 | $ 13,400,000 | $ 3,800,000 | $ 800,000 | ||||||||||||||||||||||||||||||
NYDIG loan | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Gain on debt extinguishment | $ 20,800,000 | ||||||||||||||||||||||||||||||||||
Notes payable | $ 0 | 38,573,000 | |||||||||||||||||||||||||||||||||
NYDIG loan | Notes Payable | Minimum | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 11% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 11% | ||||||||||||||||||||||||||||||||||
NYDIG loan | Notes Payable | Maximum | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 15% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 17% | ||||||||||||||||||||||||||||||||||
Stockholder loan | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Warrants term | 2 years | ||||||||||||||||||||||||||||||||||
Stockholder loan | Equipment Loan | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, term | 2 years | ||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 10,000,000 | ||||||||||||||||||||||||||||||||||
Interest rate per annum | 10% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 20% | ||||||||||||||||||||||||||||||||||
Issuances of debt | $ 9,500,000 | ||||||||||||||||||||||||||||||||||
Stockholder loan | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 10% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 20% | ||||||||||||||||||||||||||||||||||
Notes payable | $ 10,000,000 | 10,000,000 | |||||||||||||||||||||||||||||||||
Trinity loan | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 11% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 11% | ||||||||||||||||||||||||||||||||||
Notes payable | $ 23,356,000 | $ 23,356,000 | |||||||||||||||||||||||||||||||||
Trinity loan | Revolving Credit Facility | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Effective Interest Rates | 11% | ||||||||||||||||||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 30,000,000 | ||||||||||||||||||||||||||||||||||
Proceeds from lines of credit | $ 10,000,000 | $ 5,000,000 | $ 14,000,000 | $ 1,000,000 | |||||||||||||||||||||||||||||||
Line of credit facility, expiration period | 36 months | ||||||||||||||||||||||||||||||||||
Bremer loan | Equipment Loan | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, term | 60 months | ||||||||||||||||||||||||||||||||||
Interest rate per annum | 5.50% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 5.60% | ||||||||||||||||||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 16,200,000 | ||||||||||||||||||||||||||||||||||
Proceeds from lines of credit | $ 700,000 | $ 4,800,000 | $ 15,200,000 | ||||||||||||||||||||||||||||||||
Number of installment | tranche | 2 | ||||||||||||||||||||||||||||||||||
Line of credit facility, additional borrowing capacity | $ 9,600,000 | $ 9,600,000 | 9,600,000 | ||||||||||||||||||||||||||||||||
Debt instrument, covenant terms, minimum debt service coverage ratio | 1.2 | ||||||||||||||||||||||||||||||||||
Debt instrument, covenant terms, fixed charge coverage ratio | 1 | ||||||||||||||||||||||||||||||||||
Debt Instrument, interest rate buydown, amount over the term of the loan | $ 800,000 | ||||||||||||||||||||||||||||||||||
Debt instrument, interest rate buydown terms, threshold number of new full time employees | employee | 13 | ||||||||||||||||||||||||||||||||||
Debt Instrument, interest rate buydown, amount | $ 0 | $ 0 | $ 0 | ||||||||||||||||||||||||||||||||
Debt Instrument, interest rate buydown terms, full time employee employment period | 2 years | ||||||||||||||||||||||||||||||||||
Debt Instrument, interest rate buydown terms, minimum continued operation period | 5 years | ||||||||||||||||||||||||||||||||||
Bremer loan | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 5.50% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 5.60% | ||||||||||||||||||||||||||||||||||
Notes payable | $ 18,331,000 | 18,331,000 | |||||||||||||||||||||||||||||||||
Blockfi loan | Equipment Loan | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Effective Interest Rates | 13.10% | 13.10% | 13.10% | ||||||||||||||||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 110,000,000 | $ 110,000,000 | $ 110,000,000 | ||||||||||||||||||||||||||||||||
Proceeds from lines of credit | $ 20,000,000 | $ 60,000,000 | |||||||||||||||||||||||||||||||||
Debt instrument, number of lending agreements | loan | 2 | 2 | 2 | ||||||||||||||||||||||||||||||||
Unused remaining borrowing capacity, expired amount | $ 30,000,000 | 30,000,000 | |||||||||||||||||||||||||||||||||
Blockfi loan | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Notes payable | $ 53,913,000 | 53,913,000 | |||||||||||||||||||||||||||||||||
Blockfi loan | Notes Payable | Minimum | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 9.70% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 10.10% | ||||||||||||||||||||||||||||||||||
Blockfi loan | Notes Payable | Maximum | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 13.10% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 13.10% | ||||||||||||||||||||||||||||||||||
Blockfi Loan, Credit Agreement One | Equipment Loan | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, term | 24 months | ||||||||||||||||||||||||||||||||||
Interest rate per annum | 9.70% | 9.70% | 9.70% | ||||||||||||||||||||||||||||||||
Effective Interest Rates | 10.10% | 10.10% | 10.10% | ||||||||||||||||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | ||||||||||||||||||||||||||||||||
Blockfi Loan, Credit Agreement Two | Equipment Loan | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, term | 24 months | ||||||||||||||||||||||||||||||||||
Interest rate per annum | 13.10% | 13.10% | 13.10% | ||||||||||||||||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | ||||||||||||||||||||||||||||||||
Anchor Labs loan | Equipment Loan | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, term | 24 months | 24 months | |||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 11,700,000 | $ 20,000,000 | $ 20,000,000 | ||||||||||||||||||||||||||||||||
Effective Interest Rates | 12.50% | 12.50% | 12.50% | ||||||||||||||||||||||||||||||||
Proceeds from lines of credit | $ 11,700,000 | $ 20,000,000 | |||||||||||||||||||||||||||||||||
Anchor Labs loan | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 12.50% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 12.50% | ||||||||||||||||||||||||||||||||||
Notes payable | $ 25,159,000 | 25,159,000 | |||||||||||||||||||||||||||||||||
Mass Mutual Barings loans | Equipment Loan | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, term | 36 months | ||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 100,000,000 | $ 100,000,000 | |||||||||||||||||||||||||||||||||
Effective Interest Rates | 13% | 9.80% | 9.80% | ||||||||||||||||||||||||||||||||
Proceeds from lines of credit | $ 39,600,000 | $ 30,000,000 | |||||||||||||||||||||||||||||||||
Unused borrowing capacity, amount | $ 30,400,000 | ||||||||||||||||||||||||||||||||||
Debt instrument, deferred payment period | 6 months | ||||||||||||||||||||||||||||||||||
Mass Mutual Barings loans | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Notes payable | $ 63,844,000 | 63,844,000 | |||||||||||||||||||||||||||||||||
Mass Mutual Barings loans | Notes Payable | Minimum | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 9.80% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 9.80% | ||||||||||||||||||||||||||||||||||
Mass Mutual Barings loans | Notes Payable | Maximum | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 13% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 13% | ||||||||||||||||||||||||||||||||||
B. Riley Bridge Notes | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 7% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 7% | ||||||||||||||||||||||||||||||||||
Notes payable | $ 41,777,000 | 41,777,000 | |||||||||||||||||||||||||||||||||
B. Riley Bridge Notes | Bridge Loan | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Effective Interest Rates | 7% | ||||||||||||||||||||||||||||||||||
B. Riley Bridge Notes | Bridge Loan | B. Riley Commercial Capital, LLC | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 60,000,000 | ||||||||||||||||||||||||||||||||||
B. Riley Bridge Notes | Bridge Loan | Affiliate Of B. Riley Commercial Capital, LLC | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 15,000,000 | ||||||||||||||||||||||||||||||||||
Amended B. Riley Bridge Notes | Bridge Loan | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Bridge loan, amount due in the first half of 2023 | $ 37,500,000 | ||||||||||||||||||||||||||||||||||
Debt instrument, additional payments required, threshold secured debt face amount | $ 500,000,000 | ||||||||||||||||||||||||||||||||||
Bridge loan, additional payments required, percentage of amounts drawn under equity line of credit | 25% | ||||||||||||||||||||||||||||||||||
Liberty loan | Equipment Loan | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, term | 24 months | ||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 11,000,000 | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 10.60% | ||||||||||||||||||||||||||||||||||
Proceeds from lines of credit | $ 11,000,000 | ||||||||||||||||||||||||||||||||||
Liberty loan | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 10.60% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 10.60% | ||||||||||||||||||||||||||||||||||
Notes payable | $ 6,968,000 | 6,968,000 | |||||||||||||||||||||||||||||||||
HMC note | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, term | 36 months | ||||||||||||||||||||||||||||||||||
Interest rate per annum | 5% | 5% | |||||||||||||||||||||||||||||||||
Effective Interest Rates | 15% | 15% | |||||||||||||||||||||||||||||||||
Payment to execute debt instrument | $ 2,000,000 | $ 2,000,000 | |||||||||||||||||||||||||||||||||
Notes payable | $ 15,500,000 | $ 15,500,000 | $ 14,208,000 | 0 | |||||||||||||||||||||||||||||||
ACM financing | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, term | 26 months | ||||||||||||||||||||||||||||||||||
Interest rate per annum | 0% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 15% | 15% | |||||||||||||||||||||||||||||||||
Notes payable | $ 7,500,000 | $ 6,519,000 | 0 | ||||||||||||||||||||||||||||||||
First Insurance loan | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 0% | 0% | |||||||||||||||||||||||||||||||||
Effective Interest Rates | 7.60% | 7.60% | |||||||||||||||||||||||||||||||||
Notes payable | $ 5,000,000 | $ 2,538,000 | 0 | ||||||||||||||||||||||||||||||||
Repayments of debt | $ 2,100,000 | ||||||||||||||||||||||||||||||||||
Number of monthly installments | installment | 8 | ||||||||||||||||||||||||||||||||||
Replacement DIP Facility | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 10% | ||||||||||||||||||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 70,000,000 | ||||||||||||||||||||||||||||||||||
Replacement DIP Facility | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 10% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 10% | ||||||||||||||||||||||||||||||||||
Notes payable | $ 4,273,000 | 0 | |||||||||||||||||||||||||||||||||
Reduction in excess cash threshold, contributor one | $ 40,000,000 | ||||||||||||||||||||||||||||||||||
Additional mandatory prepayment, anticipated amount | $ 28,900,000 | ||||||||||||||||||||||||||||||||||
Replacement DIP Facility | Notes Payable | Minimum | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Reduction in excess cash threshold, contributor two | 0 | ||||||||||||||||||||||||||||||||||
Replacement DIP Facility | Notes Payable | Maximum | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Reduction in excess cash threshold, contributor two | $ 5,000,000 | ||||||||||||||||||||||||||||||||||
Trilogy note | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 5% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 15% | ||||||||||||||||||||||||||||||||||
Notes payable | $ 2,927,000 | 0 | |||||||||||||||||||||||||||||||||
Trilogy note | Unsecured Promissory Note | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, term | 30 months | 30 months | |||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 2,900,000 | ||||||||||||||||||||||||||||||||||
Interest rate per annum | 5% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 15% | ||||||||||||||||||||||||||||||||||
Didado note | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 5% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 15% | ||||||||||||||||||||||||||||||||||
Notes payable | $ 13,000,000 | 0 | |||||||||||||||||||||||||||||||||
Didado note | Unsecured Promissory Note | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, term | 36 months | 36 months | |||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 13,000,000 | ||||||||||||||||||||||||||||||||||
Interest rate per annum | 5% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 15% | ||||||||||||||||||||||||||||||||||
Harper note | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 5% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 15% | ||||||||||||||||||||||||||||||||||
Notes payable | $ 4,678,000 | 0 | |||||||||||||||||||||||||||||||||
Harper note | Unsecured Promissory Note | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, term | 30 months | 30 months | |||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 4,700,000 | ||||||||||||||||||||||||||||||||||
Interest rate per annum | 5% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 15% | ||||||||||||||||||||||||||||||||||
Convertible Notes Mature In April 2025 | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Convertible debt, conversion price, percentage of financing price | 80% | ||||||||||||||||||||||||||||||||||
Debt instrument, convertible price (in dollars per share) | $ / shares | $ 8 | ||||||||||||||||||||||||||||||||||
Convertible Notes Mature In April 2025 | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Notes payable | $ 560,000,000 | ||||||||||||||||||||||||||||||||||
Convertible Notes Mature In April 2025 | Convertible Notes | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt issuance costs | $ 13,100,000 | ||||||||||||||||||||||||||||||||||
Secured Convertible Notes Issued April 2021 | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Convertible debt, conversion price, percentage of financing price | 80% | 80% | |||||||||||||||||||||||||||||||||
Convertible debt, valuation technique, ratio of minimum payoff at maturity to carry value | 2 | 2 | 2 | 2 | |||||||||||||||||||||||||||||||
Convertible debt, amount owed if held to maturity | $ 475,200,000 | ||||||||||||||||||||||||||||||||||
Convertible debt, amount owed if prepaid | $ 797,600,000 | ||||||||||||||||||||||||||||||||||
Secured Convertible Notes Issued April 2021 | Notes Payable | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate per annum | 10% | ||||||||||||||||||||||||||||||||||
Effective Interest Rates | 10% | ||||||||||||||||||||||||||||||||||
Notes payable | $ 237,584,000 | $ 237,584,000 |
NOTES PAYABLE - Schedule of Fai
NOTES PAYABLE - Schedule of Fair Value Adjustments and Debt Issuance Costs (Details) - Convertible Notes Mature In April 2025 - Convertible Notes - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 21, 2022 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Total fair value adjustments | $ 69,178 | |
Debt issuance costs | $ 13,100 | |
Reorganization items, net | ||
Debt Instrument [Line Items] | ||
Debt issuance costs | 2,788 | |
Cash interest payments | Interest expense, net | ||
Debt Instrument [Line Items] | ||
Total fair value adjustments | 21,581 | |
Payment-in-kind (PIK) interest | Interest expense, net | ||
Debt Instrument [Line Items] | ||
Total fair value adjustments | 31,550 | |
Instrument-specific credit risk | Other comprehensive income, net of income taxes | ||
Debt Instrument [Line Items] | ||
Total fair value adjustments | (83,579) | |
Other fair value adjustments | Fair value adjustment on convertible notes | ||
Debt Instrument [Line Items] | ||
Total fair value adjustments | (103,274) | |
Reclass to Reorganization items, net | Reorganization items, net | ||
Debt Instrument [Line Items] | ||
Total fair value adjustments | $ 202,900 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) | Dec. 22, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jun. 30, 2022 | Mar. 31, 2022 | Jan. 19, 2022 $ / shares |
Debt Instrument [Line Items] | ||||||
Warrant liabilities, expected allowed amount | $ 0 | $ 0 | $ 0 | |||
Debtor reorganization items, gain (loss) from fair value adjustment of warrant liabilities subject to compromise | $ 300,000 | |||||
Debt instrument, convertible price (in dollars per share) | $ / shares | $ 8 | |||||
Digital assets, fair value | $ 2,300,000 | $ 700,000 | ||||
Secured Convertible Notes Issued April 2021 | ||||||
Debt Instrument [Line Items] | ||||||
Convertible debt, valuation technique, ratio of minimum payoff at maturity to carry value | 2 | 2 | 2 | |||
Convertible debt, valuation technique, stock appreciation percentage | 60% | |||||
Convertible debt, conversion price, percentage of financing price | 80% | |||||
Other Convertible Notes | ||||||
Debt Instrument [Line Items] | ||||||
Convertible debt, valuation technique, ratio of minimum payoff at maturity to carry value | 1 | |||||
Convertible debt, conversion price, percentage of financing price | 80% | |||||
Convertible debt, valuation technique, stock depreciation percentage | 0.20 | |||||
Convertible Notes Mature In April 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Convertible debt, conversion price, percentage of financing price | 80% | |||||
Debt instrument, convertible price (in dollars per share) | $ / shares | $ 8 |
FAIR VALUE MEASUREMENTS - Activ
FAIR VALUE MEASUREMENTS - Activity of Convertible Notes Measured at Fair Value (Details) - Level 3 - Convertible Notes $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Fair value, beginning balance | $ 557,007 |
Issuances (PIK principal recorded) | 31,382 |
Settlements (including interest payments and conversions) | (23,144) |
Unrealized gains | 186,853 |
Transfers out of Level 3 | (752,098) |
Fair value, ending balance | $ 0 |
LEASES - Schedule of Assets and
LEASES - Schedule of Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2022 |
Assets: | |||
Operating lease, right-of-use asset | $ 7,844 | $ 20,430 | $ 6,700 |
Finance lease right-of-use assets | $ 16,268 | $ 31,213 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, plant and equipment, net | Property, plant and equipment, net | |
Liabilities: | |||
Operating lease liabilities, current portion | $ 77 | $ 769 | |
Operating lease liabilities, net of current portion | 1,512 | 720 | |
Finance lease liabilities, current portion | 19,771 | 0 | |
Finance lease liabilities, net of current portion | 35,745 | 0 | |
Operating and finance lease liabilities subject to compromise | $ 0 | $ 84,664 |
LEASES - Schedule of Lease Cost
LEASES - Schedule of Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Operating lease expense | $ 1,024 | $ 1,937 |
Short-term lease expense | 0 | 24 |
Finance lease expense: | ||
Amortization of right-of-use assets | 11,424 | 31,372 |
Interest on lease liabilities | 1,787 | 7,080 |
Total finance lease expense | 13,211 | 38,452 |
Total lease expense | $ 14,235 | $ 40,413 |
LEASES - Schedule of Lease Term
LEASES - Schedule of Lease Term and Discount Rate (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Operating lease, weighted average remaining lease term | 16 years 8 months 12 days | 10 years 6 months |
Finance lease, weighted average remaining lease term | 2 years 2 months 12 days | 2 years 1 month 6 days |
Operating lease, weighted average discount rate | 11.70% | 6.50% |
Finance lease, weighted average discount rate | 12.90% | 12.40% |
LEASES - Schedule of Supplement
LEASES - Schedule of Supplemental Cash Flow Statement (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2022 | |
Leases [Abstract] | |||
Operating lease payments | $ 956 | $ 726 | |
Finance lease payments | 4,459 | 36,740 | |
Operating lease right-of-use assets obtained in exchange for lease obligations | 0 | 14,195 | |
Finance lease right-of-use assets obtained in exchange for lease obligations | 0 | 10,557 | |
(Decrease) increase in finance lease right-of-use assets as a result of lease modification | (11,644) | 693 | |
Decrease in finance lease liability as a result of lease modification | (11,644) | 0 | |
Decrease in right-of-use assets due to lease termination | (13,144) | 0 | |
Decrease in lease liability due to lease termination | (13,517) | 0 | |
Operating lease, right-of-use asset | $ 7,844 | $ 20,430 | $ 6,700 |
LEASES - Schedule of Lease Liab
LEASES - Schedule of Lease Liability, Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Operating Leases | ||
2024 | $ 262 | |
2025 | 262 | |
2026 | 262 | |
2027 | 195 | |
2028 | 181 | |
Thereafter | 2,054 | |
Total lease payments | 3,216 | |
Less: imputed interest | 1,627 | |
Less: Liabilities subject to compromise | 0 | $ 13,868 |
Total | 1,589 | |
Finance Leases | ||
2024 | 62,859 | |
2025 | 1,862 | |
2026 | 3 | |
2027 | 0 | |
2028 | 0 | |
Thereafter | 0 | |
Total lease payments | 64,724 | |
Less: imputed interest | 9,208 | |
Less: Liabilities subject to compromise | 0 | $ 70,796 |
Total | $ 55,516 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Aug. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) MW option | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Oct. 31, 2022 note | Jan. 01, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | |||||||
Operating lease, right-of-use asset | $ 7,844 | $ 20,430 | $ 6,700 | ||||
Operating lease, base rent to be paid | $ 14,000 | ||||||
Lease not yet commenced, term of contract | 130 months | ||||||
Finance lease obligations | 64,724 | ||||||
Decrease in finance lease right-of-use assets as a result of lease modification | $ 11,644 | $ (693) | |||||
Number of promissory notes | note | 2 | ||||||
Minnkota Power Cooperative | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Power supply to be purchased | MW | 100 | ||||||
Operating lease, right-of-use asset | $ 5,300 | ||||||
Purchase obligation | $ 2,600 | ||||||
Initial term of contract | 5 years | ||||||
Number of renewal options | option | 5 | ||||||
Renewal term | 5 years | ||||||
Lessee option to purchase underlying asset, purchase price | $ 5,600 | ||||||
Minnkota Power Cooperative | Minimum | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Operating lease, term (less than) | 5 years | ||||||
Minnkota Power Cooperative | Maximum | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Operating lease, term (less than) | 30 years | ||||||
Liberty Commercial Finance LLC | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Finance lease obligations | $ 40,900 | ||||||
Finance lease, remaining lease term | 3 years 2 months 12 days | ||||||
Effective interest rate | 12.60% | ||||||
MassMutual Asset Finance LLC | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Finance lease obligations | $ 50,000 | ||||||
Finance lease, remaining lease term | 3 years 2 months 12 days | ||||||
Effective interest rate | 12.50% | 10% | |||||
Finance lease, deferred payment period | 6 months | ||||||
Finance lease, interest rate | 13% | ||||||
Decrease in lease liability as a result of lease modification | $ 7,700 | ||||||
Decrease in finance lease right-of-use assets as a result of lease modification | $ 7,700 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 1 Months Ended | 12 Months Ended | |||||||||
Jan. 16, 2024 USD ($) | Sep. 14, 2023 USD ($) | Sep. 06, 2023 USD ($) | Sep. 30, 2022 USD ($) | Oct. 31, 2023 USD ($) miner | Sep. 30, 2023 USD ($) miner | Apr. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) miner | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Nov. 02, 2023 USD ($) | |
Loss Contingencies [Line Items] | |||||||||||
Gain (loss) on settlement of reorganization items | $ 20,525,000 | $ 0 | |||||||||
Loss contingency accrual | 0 | 0 | |||||||||
Loss on legal settlement | 0 | $ 0 | $ 2,636,000 | ||||||||
Antminer S21 Model | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of miners acquired | miner | 12,900 | ||||||||||
Expected consideration to be transferred | $ 50,400,000 | ||||||||||
Payments to acquire assets as a deposit | $ 2,400,000 | ||||||||||
S19 XP Miners | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of miners acquired | miner | 28,400 | 22,700 | |||||||||
Expected consideration to be transferred | $ 77,100,000 | ||||||||||
Payments to acquire assets as a deposit | $ 4,100,000 | ||||||||||
Celsius Mining LLC | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Purchase and sale agreement, purchase price to be received | $ 14,000,000 | ||||||||||
Purchase and sale agreement, cash payment from counterparty | $ 14,000,000 | ||||||||||
Debtor reorganization items, settlements with creditors | $ 14,000,000 | ||||||||||
Gain (loss) on settlement of reorganization items | (2,200,000) | ||||||||||
Sphere 3D Corp. and Gryphon Settlement | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Gain (loss) on settlement of reorganization items | $ 23,300,000 | ||||||||||
Sphere 3D Corp. and Gryphon Settlement | Subsequent Event | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Debtor reorganization items, settlements with creditors | $ 10,000,000 | ||||||||||
Demand Letter By Harlin Dean,Employment Claim. Complaint Filed | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency, damages sought value | $ 9,800,000 | ||||||||||
Proof of Claim Filed By Harlin Dean | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency, damages sought value | $ 8,000,000 | ||||||||||
Proof of Claim Filed By GEM Contract Breach | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency, damages sought value | $ 4,100,000 | ||||||||||
Damages sought, rejection damage | $ 8,000,000 | ||||||||||
Proof of Claim Filed By Sphere 3D | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency, damages sought value | $ 39,500,000 |
DERIVATIVE WARRANT LIABILITIES
DERIVATIVE WARRANT LIABILITIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 22, 2022 | |
Temporary Equity [Line Items] | |||
Warrant outstanding (in shares) | 14,900,000 | ||
Class of warrant or right, minimum threshold written notice period for redemption of warrants | 30 days | ||
Common stock issued per warrant exercised (in shares) | 1 | ||
Exercise price of warrants (in dollars per share) | $ 11.50 | ||
Warrants term | 5 years | ||
Warrant liabilities, expected allowed amount | $ 0 | $ 0 | $ 0 |
Warrant liabilities, fair value | $ 300,000 | ||
Public Warrants | |||
Temporary Equity [Line Items] | |||
Number of common stock called by warrants (in shares) | 8,600,000 | ||
Private Placement Warrants | |||
Temporary Equity [Line Items] | |||
Number of common stock called by warrants (in shares) | 6,300,000 | ||
Private Placement Warrants | Redemption of Warrants When Price Per Share of Class Common Stock Equals or Exceeds $10.00 | |||
Temporary Equity [Line Items] | |||
Redemption of warrants or rights, stock price trigger (in dollars per share) | $ 10 |
STOCKHOLDERS_ (DEFICIT) EQUIT_2
STOCKHOLDERS’ (DEFICIT) EQUITY - Authorized Capital (Details) $ / shares in Units, $ in Thousands | Jan. 23, 2024 USD ($) $ / shares shares | Jan. 19, 2022 $ / shares shares | Dec. 31, 2023 vote $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Jan. 18, 2022 shares | Jan. 31, 2021 $ / shares shares |
Class of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 10,000,000,000 | 10,000,000,000 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.00001 | $ 0.00001 | |||
Voting rights per share | vote | 1 | |||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 11.50 | |||||
Recapitalization transaction, conversion ratio | 1 | |||||
Common stock, exchange ratio | 1.60015286880 | |||||
Warrant outstanding (in shares) | 14,900,000 | |||||
Convertible Notes | ||||||
Class of Stock [Line Items] | ||||||
Debt instrument, face amount | $ | $ 514,800 | |||||
Subsequent Event | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 10,000,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | |||||
Warrant outstanding (in shares) | 180,241,211 | |||||
Subsequent Event | Secured Convertible Notes | Convertible Notes | ||||||
Class of Stock [Line Items] | ||||||
Debt instrument, face amount | $ | $ 260,000 | |||||
Subsequent Event | Secured Notes Indenture | Secured Debt | ||||||
Class of Stock [Line Items] | ||||||
Debt instrument, face amount | $ | $ 150,000 | |||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Issuances of common stock- Merger with XPDI (in shares) | 30,800,000 | |||||
Common Stock | Subsequent Event | ||||||
Class of Stock [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | |||||
Stock issued during period (in shares) | 176,266,782 | |||||
Stockholder Warrants | ||||||
Class of Stock [Line Items] | ||||||
Number of common stock called by warrants (in shares) | 200,000 | |||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 4.21 | |||||
Public Warrants | ||||||
Class of Stock [Line Items] | ||||||
Number of common stock called by warrants (in shares) | 8,600,000 | |||||
Public Warrants | XPDI | ||||||
Class of Stock [Line Items] | ||||||
Number of common stock called by warrants (in shares) | 8,600,000 | |||||
Private Placement Warrants | ||||||
Class of Stock [Line Items] | ||||||
Number of common stock called by warrants (in shares) | 6,300,000 | |||||
Private Placement Warrants | XPDI | ||||||
Class of Stock [Line Items] | ||||||
Number of common stock called by warrants (in shares) | 6,300,000 | |||||
Contingent Value Rights | Subsequent Event | ||||||
Class of Stock [Line Items] | ||||||
Warrant outstanding (in shares) | 51,783,625 |
STOCKHOLDERS_ (DEFICIT) EQUIT_3
STOCKHOLDERS’ (DEFICIT) EQUITY - Equity Line of Credit (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2023 | Jan. 19, 2022 | |
Class of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | $ 0.0001 | |
Issuances of common stock - vendor settlement | $ 12,674 | |||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Equity line of credit, shares remaining for issuance (in shares) | 0 | |||
B. Riley | Common Stock Equity Line of Credit | ||||
Class of Stock [Line Items] | ||||
Sale of stock, authorized amount | $ 100,000 | |||
Common stock, par value (in dollars per share) | $ 0.0001 | |||
Reimbursement of legal fees | $ 100 | |||
Sale of stock, number of shares issued (in shares) | 13,400,000 | |||
Consideration amount | $ 20,700 | |||
Equity line of credit, discount | $ 600 | |||
Discount rate | 3% | |||
B. Riley | Common Stock Equity Line of Credit | Common Stock, Commitment Shares | ||||
Class of Stock [Line Items] | ||||
Issuances of common stock- vendor settlement (in shares) | 600,000 | |||
Issuances of common stock - vendor settlement | $ 1,100 |
STOCKHOLDERS_ (DEFICIT) EQUIT_4
STOCKHOLDERS’ (DEFICIT) EQUITY - Warrant Exercises (Details) - $ / shares | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2020 | |
Class of Stock [Line Items] | ||||
Exercise price of warrants (in dollars per share) | $ 11.50 | |||
Executive Notes Warrants | ||||
Class of Stock [Line Items] | ||||
Number of common stock called by warrants (in shares) | 6,400,000 | |||
Exercise price of warrants (in dollars per share) | $ 0.84 | |||
Class of warrant or right, warrants exercised | 3,200,000 | 0 | 4,400,000 | |
Exercise of warrants (in shares) | 2,900,000 | 3,000,000 | ||
Shares withheld for tax withholding obligation (in shares) | 300,000 | |||
Service Providers Warrants | ||||
Class of Stock [Line Items] | ||||
Number of common stock called by warrants (in shares) | 200,000 | |||
Exercise price of warrants (in dollars per share) | $ 4.27 |
STOCKHOLDERS_ (DEFICIT) EQUIT_5
STOCKHOLDERS’ (DEFICIT) EQUITY - Convertible Note Exercises (Details) - USD ($) $ / shares in Units, shares in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Jan. 19, 2022 | |
Debt Instrument [Line Items] | |||
Debt instrument, convertible price (in dollars per share) | $ 8 | ||
Conversion of Convertible Notes | |||
Debt Instrument [Line Items] | |||
Debt conversion, converted amount | $ 0 | $ 1,600,000 | |
Debt conversion, converted instrument, shares issued (in shares) | 0.2 | ||
Convertible Notes | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 514,800,000 | ||
Debt instrument, increase | $ 31,400,000 | ||
Debt instrument, convertible price (in dollars per share) | $ 8 |
STOCKHOLDERS_ (DEFICIT) EQUIT_6
STOCKHOLDERS’ (DEFICIT) EQUITY - SPAC Vesting Shares (Details) shares in Millions | Jan. 18, 2022 shares |
Equity [Abstract] | |
SPAC vesting shares (in shares) | 1.7 |
STOCKHOLDERS_ (DEFICIT) EQUIT_7
STOCKHOLDERS’ (DEFICIT) EQUITY - Vendor Settlement (Details) - USD ($) shares in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Jul. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||||
Issuances of common stock- vendor settlement (in shares) | 1.6 | |||
Number of consecutive days | 30 days | |||
Lockup period | 180 days | |||
Vendor liability, contractual amount | $ 21.3 | |||
Vendor liability, changes in fair value | $ 0 | $ 9.5 | ||
Vendor liability, fair value | $ 18.1 | $ 18.1 |
STOCKHOLDERS_ (DEFICIT) EQUIT_8
STOCKHOLDERS’ (DEFICIT) EQUITY - Equity Incentive Plans (Details) shares in Millions | 12 Months Ended |
Dec. 31, 2023 shares | |
2018 Plan | Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based compensation, award vesting period | 4 years |
Share-based compensation, award expiration period | 10 years |
2021 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based compensation, number of shares authorized (in shares) | 45 |
2021 Equity Incentive Plan | Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based compensation, award expiration period | 10 years |
Minimum | 2018 Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based compensation, award vesting period | 1 year |
Minimum | 2021 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based compensation, award vesting period | 1 year |
Maximum | 2018 Plan | Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based compensation, award expiration period | 10 years |
STOCKHOLDERS_ (DEFICIT) EQUIT_9
STOCKHOLDERS’ (DEFICIT) EQUITY - Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 08, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of common shares available for grant, outstanding (in shares) | 60,900,000 | |||
Nonvested RSAs, RSUs and Options (in shares) | 38,400,000 | |||
Common shares purchased for award (in shares) | 22,575,000 | 23,915,000 | ||
Share-based payment arrangement, expense | $ 58,892 | $ 182,894 | $ 38,937 | |
Share-based payment arrangement, tax benefit | $ 0 | $ 0 | 6,100 | |
Options granted (in shares) | 0 | 0 | ||
Blockcap | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payment arrangement, expense | 23,300 | |||
Share-based payment arrangement, post business combination expense | 32,200 | |||
2018 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected dividend yield percentage | 0% | 0% | ||
Share-based compensation, weighted average grant date fair value (in dollars per share) | $ 0 | $ 0 | ||
Options vested, weighted average grant date aggregated fair value | $ 0 | $ 600 | ||
Option, unrecognized share-based compensation expense | $ 55,400 | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Nonvested RSAs, RSUs and Options (in shares) | 38,358,000 | 45,216,000 | ||
Restricted Stock Units (RSUs) | Employees and Consultants | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payment arrangement, expense | $ 28,900 | $ 36,600 | $ 900 | |
Restricted Stock Units (RSUs) | 2018 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of common shares to be net settled (in shares) | 42,000,000 | |||
Number of shares to be forfeited and cancelled (in shares) | 15,000,000 | |||
Share-based compensation, award vesting period | 4 years | 4 years | ||
Period for recognition | 2 years 1 month 6 days | |||
RSUs, unrecognized share-based compensation expense | $ 55,600 | |||
Share-based payment arrangement, cost expected to be recognized | 44,800 | |||
Share-based payment arrangement, cost not expected to be recognized | 10,800 | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payment arrangement, expense | $ 30,000 | $ 146,300 | $ 5,800 | |
Stock options | 2018 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation, award vesting period | 4 years | |||
Share-based compensation, award expiration period | 10 years | |||
Period for recognition | 2 years 1 month 6 days |
STOCKHOLDERS_ (DEFICIT) EQUI_10
STOCKHOLDERS’ (DEFICIT) EQUITY - Schedule of Share-based Compensation Arrangements by Share-based Payment Award (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 58,892 | $ 182,894 | $ 38,937 |
Severance expense | 1,000 | ||
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 5,050 | 25,779 | 4,084 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 1,337 | 22,093 | 1,140 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 4,929 | 9,401 | 836 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 47,576 | $ 125,621 | $ 32,877 |
STOCKHOLDERS_ (DEFICIT) EQUI_11
STOCKHOLDERS’ (DEFICIT) EQUITY - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number of Shares | ||
Beginning balance (in shares) | 23,915,000 | |
Options granted (in shares) | 0 | 0 |
Exercise of stock options (in shares) | (3,000) | |
Options forfeited (in shares) | (674,000) | |
Options expired (in shares) | (663,000) | |
Ending balance (in shares) | 22,575,000 | 23,915,000 |
Options vested and expected to vest (in shares) | 22,575,000 | |
Options vested and exercisable (in shares) | 10,508,000 | |
Weighted- Average Exercise Price | ||
Beginning balance, weighted average exercise price (in dollars per share) | $ 8.64 | |
Granted, weighted average exercise price (in dollars per share) | 0 | |
Exercised, weighted average exercise price (in dollars per share) | 1.44 | |
Forfeited, weighted average exercise price (in dollars per share) | 11.47 | |
Expired, weighted average exercise price (in dollars per share) | 6.60 | |
Ending balance, weighted average exercise price (in dollars per share) | 8.88 | $ 8.64 |
Options vested and expected to vest, weighted average exercise price (in dollars per share) | 8.88 | |
Options vested and exercisable, weighted average exercise price (in dollars per share) | $ 7.42 | |
Options remaining contractual term | 6 years 10 months 24 days | |
Options vested and expected to vest, remaining contractual term | 7 years 10 months 24 days | |
Options vested and exercisable, remaining contractual term | 5 years 9 months 18 days | |
Options aggregate intrinsic value | $ 0 | |
Options vested and expected to vest, aggregate intrinsic value | 0 | |
Options vested and exercisable, aggregate intrinsic value | $ 0 |
STOCKHOLDERS_ (DEFICIT) EQUI_12
STOCKHOLDERS’ (DEFICIT) EQUITY - Schedule of Restricted Stock Units Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Number of Shares | |
Restricted stock unit, ending balance (in shares) | 38,400 |
Weighted-Average Grant Date Fair Value | |
Restricted stock units beginning balance (in dollars per share) | $ / shares | $ 2.79 |
Restricted stock units grant-date fair value (in dollars per share) | $ / shares | 0 |
Restricted stock units vested (in dollars per share) | $ / shares | 10.11 |
Restricted stock units forfeited (in dollars per share) | $ / shares | 3.18 |
Restricted stock units ending balance (in dollars per share) | $ / shares | $ 2.69 |
Restricted Stock Units (RSUs) | |
Number of Shares | |
Restricted stock unit, beginning balance (in shares) | 45,216 |
Restricted stock units granted in period (in shares) | 0 |
Restricted stock units vested (in shares) | (217) |
Restricted stock awards forfeited (in shares) | (6,641) |
Restricted stock unit, ending balance (in shares) | 38,358 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | ||||
Income tax expense (benefit) | $ 683,000 | $ (17,091,000) | $ 15,763,000 | |
Deferred tax assets, valuation allowance | 219,515,000 | 248,710,000 | $ 6,781,000 | $ 15,961,000 |
Operating loss carryforwards | 330,200,000 | |||
Unrecognized tax benefits | 300,000 | 0 | ||
Domestic Tax Authority | Internal Revenue Service (IRS) | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | 330,200,000 | 344,600,000 | ||
Domestic Tax Authority | Internal Revenue Service (IRS) | Operating Loss Carryforwards Begin to Expire In 2027 | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | 220,300,000 | |||
State and Local Jurisdiction | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | 106,600,000 | $ 198,500,000 | ||
State and Local Jurisdiction | Operating Loss Carryforwards Begin to Expire In 2027 | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | $ 109,600,000 |
INCOME TAXES - Schedule of Comp
INCOME TAXES - Schedule of Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current tax: | |||
Federal | $ 0 | $ 74 | $ 0 |
State | 683 | 1,356 | 6,235 |
Total current tax | 683 | 1,430 | 6,235 |
Deferred tax: | |||
Federal | 0 | (18,532) | 11,218 |
State | 0 | 11 | (1,690) |
Deferred income taxes | 0 | (18,521) | 9,528 |
Total income tax expense (benefit) | $ 683 | $ (17,091) | $ 15,763 |
INCOME TAXES - Schedule of Effe
INCOME TAXES - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal statutory income tax (benefit) expense applied to loss before income taxes | $ (51,619) | $ (454,316) | $ 13,246 |
State income taxes, net of federal benefit | 12,325 | (31,667) | 3,591 |
Stock compensation | 16,578 | 4,789 | 141 |
Non-deductible interest | 11,659 | 11,366 | 5,310 |
Fair value adjustment - convertible notes | 0 | (10,942) | 3,370 |
Reorganization costs | 40,572 | 0 | 0 |
Non-deductible expenses | 0 | 288 | (702) |
Valuation allowance | (29,195) | 241,892 | (9,180) |
Goodwill impairment | 0 | 221,499 | 0 |
Other permanent items | 363 | 0 | (13) |
Total income tax expense (benefit) | $ 683 | $ (17,091) | $ 15,763 |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||||
Net operating loss carryforward | $ 73,272 | $ 79,729 | $ 29,837 | |
Capital loss carryforward | 50,313 | 52,765 | 0 | |
Deferred interest carryforward | 18,438 | 11,289 | 0 | |
Research tax credit carryforward | 483 | 404 | 404 | |
Reserves and accruals | 2,440 | 4,248 | 148 | |
Stock-based compensation | 17,614 | 16,917 | 15,190 | |
Unrealized capital loss | 0 | 0 | 0 | |
Property, plant and equipment, net | 53,334 | 75,349 | 0 | |
Digital asset impairment loss | 6 | 0 | 8,368 | |
Debt extinguishment loss | 2,446 | 2,561 | 2,558 | |
Intangibles (other than goodwill) | 2,660 | 2,301 | 2,270 | |
Leases | 2,099 | 7,062 | 5,231 | |
Capitalized research and development expenses | 4,226 | 801 | 0 | |
Other | 6 | 169 | 3 | |
Gross deferred tax assets | 227,337 | 253,595 | 64,009 | |
Valuation allowance | (219,515) | (248,710) | (6,781) | $ (15,961) |
Deferred tax assets, net of valuation allowance | 7,822 | 4,885 | 57,228 | |
Deferred settlement | (6,031) | 0 | 0 | |
Operating lease ROU assets | (1,791) | (4,885) | 0 | |
Property, plant and equipment, net | 0 | 0 | (75,759) | |
Deferred tax liabilities, net | (7,822) | (4,885) | (75,759) | |
Total net deferred tax assets (liabilities) | $ 0 | $ 0 | $ (18,531) |
INCOME TAXES - Schedule of Valu
INCOME TAXES - Schedule of Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Valuation Allowance [Roll Forward] | |||
Beginning Balance | $ 248,710 | $ 6,781 | $ 15,961 |
Change related to current net operating losses and impairments | (561) | 241,892 | 20,680 |
Net change related to generation of tax attributes | 0 | 0 | (695) |
Change related to deferred tax adjustments | (37,485) | 37 | (20,025) |
Change related to prior period adjustments | 8,851 | 0 | (137) |
Acquisition deferred tax liabilities | 0 | 0 | (9,003) |
Ending Balance | $ 219,515 | $ 248,710 | $ 6,781 |
NET (LOSS) INCOME ATTRIBUTABL_3
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS - Narrative (Details) | Jan. 19, 2022 $ / shares |
Earnings Per Share [Abstract] | |
Debt instrument, convertible price (in dollars per share) | $ 8 |
NET (LOSS) INCOME ATTRIBUTABL_4
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |||
Net (loss) income | $ (246,487) | $ (2,146,318) | $ 47,312 |
Weighted average shares outstanding - basic (in shares) | 379,863 | 340,647 | 207,263 |
Add: Dilutive share-based compensation awards (in shares) | 0 | 0 | 26,042 |
Weighted average shares outstanding - diluted (in shares) | 379,863 | 340,647 | 233,305 |
Net (loss) income per share - basic (in dollars per share) | $ (0.65) | $ (6.30) | $ 0.23 |
Net (loss) income per share - diluted (in dollars per share) | $ (0.65) | $ (6.30) | $ 0.20 |
NET (LOSS) INCOME ATTRIBUTABL_5
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS - Schedule of Antidilutive Securities Excluded from Computation of Earnings (Loss) Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of net loss per share (in shares) | 147,548 | 159,166 | 92,694 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of net loss per share (in shares) | 22,575 | 23,915 | 6,716 |
Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of net loss per share (in shares) | 14,892 | 18,311 | 0 |
Restricted stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of net loss per share (in shares) | 38,358 | 45,217 | 84,035 |
Convertible Notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of net loss per share (in shares) | 69,998 | 69,998 | 0 |
Share settled liability | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of net loss per share (in shares) | 0 | 0 | 1,943 |
SPAC vesting shares | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of net loss per share (in shares) | 1,725 | 1,725 | 0 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 USD ($) segment asset_service | Dec. 31, 2022 USD ($) asset_service | Dec. 31, 2021 USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | segment | 2 | ||
Number of third-party digital asset services | asset_service | 2 | 2 | |
UNITED STATES | Revenue Benchmark | Geographic Concentration Risk | |||
Segment Reporting Information [Line Items] | |||
Concentration risk, percentage | 100% | 99% | |
Mining Segment | Revenue Benchmark | Indefinite-Lived Intangible Asset Concentration Risk | Bitcoin | |||
Segment Reporting Information [Line Items] | |||
Concentration risk, percentage | 78% | 62% | |
Operating Segments | Hosting Segment | |||
Segment Reporting Information [Line Items] | |||
Cost of revenue, depreciation expense | $ 6.9 | $ 12.1 | $ 7.4 |
Operating Segments | Mining Segment | |||
Segment Reporting Information [Line Items] | |||
Cost of revenue, depreciation expense | $ 88.5 | $ 214.8 | $ 24.3 |
SEGMENT REPORTING - Schedule of
SEGMENT REPORTING - Schedule of Revenue and Gross Profit by Reporting Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 502,400 | $ 640,313 | $ 544,483 |
Cost of revenue | 378,941 | 631,913 | 305,621 |
Gross profit | $ 123,459 | $ 8,400 | $ 238,862 |
Gross margin | 25% | 1% | 44% |
Hosting Service | |||
Segment Reporting Information [Line Items] | |||
Cost of revenue | $ 87,245 | $ 169,717 | $ 77,678 |
Equipment Sales | |||
Segment Reporting Information [Line Items] | |||
Cost of revenue | 0 | 67,114 | 177,785 |
Digital asset mining revenue | |||
Segment Reporting Information [Line Items] | |||
Cost of revenue | 291,696 | 395,082 | 50,158 |
Hosting Segment | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue | 112,067 | 242,517 | 327,558 |
Cost of revenue | 87,245 | 236,831 | 255,463 |
Gross profit | $ 24,822 | $ 5,686 | $ 72,095 |
Gross margin | 22% | 2% | 22% |
Hosting Segment | Hosting Service | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 112,067 | $ 159,688 | $ 79,323 |
Cost of revenue | 87,245 | 169,717 | 77,678 |
Hosting Segment | Equipment Sales | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue | 0 | 82,829 | 248,235 |
Cost of revenue | 0 | 67,114 | 177,785 |
Mining Segment | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue | 390,333 | 397,796 | 216,925 |
Cost of revenue | 291,696 | 395,082 | 50,158 |
Gross profit | $ 98,637 | $ 2,714 | $ 166,767 |
Gross margin | 25% | 1% | 77% |
Mining Segment | Digital asset mining revenue | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 390,333 | $ 397,796 | $ 216,925 |
SEGMENT REPORTING - Schedule _2
SEGMENT REPORTING - Schedule of Customer Concentration Risk (Details) - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
A | Revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 15% | ||
A | Segment | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 26% | ||
B | Revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 14% | ||
B | Segment | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 23% | ||
E | Revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 14% | ||
E | Segment | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 38% | ||
F | Revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 11% | ||
F | Segment | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 49% |
SEGMENT REPORTING - Reconciliat
SEGMENT REPORTING - Reconciliation of Reportable Segment Gross Profit to Loss Before Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting [Abstract] | |||
Reportable segment gross profit | $ 123,459,000 | $ 8,400,000 | $ 238,862,000 |
Loss on legal settlement | 0 | 0 | (2,636,000) |
Gain from sales of digital assets | 3,893,000 | 44,298,000 | 4,814,000 |
Impairment of digital assets | (4,406,000) | (231,315,000) | (37,206,000) |
Change in fair value of derivative instruments | (3,918,000) | 0 | 0 |
Impairment of goodwill and other intangibles | 0 | (1,059,265,000) | 0 |
Impairment of property, plant and equipment | 0 | (590,673,000) | 0 |
Losses on exchange or disposal of property, plant and equipment | (1,956,000) | (28,025,000) | (118,000) |
Operating expenses: | |||
Research and development | 7,184,000 | 26,962,000 | 7,674,000 |
Sales and marketing | 7,019,000 | 12,731,000 | 4,062,000 |
General and administrative | 93,908,000 | 213,280,000 | 60,486,000 |
Total operating expenses | 108,111,000 | 252,973,000 | 72,222,000 |
Operating income (loss) | 8,961,000 | (2,109,553,000) | 131,494,000 |
Non-operating expense, net: | |||
Gain (loss) on debt extinguishment | (20,065,000) | 287,000 | 8,016,000 |
Interest expense, net | 86,238,000 | 96,826,000 | 44,354,000 |
Fair value adjustment on convertible notes | 0 | 186,853,000 | 16,047,000 |
Fair value adjustment on derivative warrant liabilities | 0 | (37,937,000) | 0 |
Reorganization items, net | 191,122,000 | (197,405,000) | 0 |
Other non-operating (income) expenses, net | (2,530,000) | 5,232,000 | 2,000 |
Total non-operating expense, net | 254,765,000 | 53,856,000 | 68,419,000 |
(Loss) income before income taxes | $ (245,804,000) | $ (2,163,409,000) | $ 63,075,000 |
RELATED-PARTY TRANSACTIONS (Det
RELATED-PARTY TRANSACTIONS (Details) - Related Party - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Accounts receivable | $ 0 | $ 23 | |
Hosting Service | |||
Related Party Transaction [Line Items] | |||
Revenue from customers and related parties | 10,062 | 29,454 | $ 16,973 |
Equipment Sales | |||
Related Party Transaction [Line Items] | |||
Revenue from customers and related parties | 0 | 71,438 | $ 109,859 |
Directors and Executives | Hosting Service | |||
Related Party Transaction [Line Items] | |||
Revenue from customers and related parties | 10,100 | 29,500 | |
Directors and Executives | Equipment Sales | |||
Related Party Transaction [Line Items] | |||
Revenue from customers and related parties | 0 | 71,400 | |
Accounts receivable | 0 | 0 | |
Certain Officers and Directors | |||
Related Party Transaction [Line Items] | |||
Related party transactions, reimbursement | $ 0 | $ 1,900 |
SUBSEQUENT EVENTS - Payoff of D
SUBSEQUENT EVENTS - Payoff of DIP, Equity Rights Offering and Emergence from Bankruptcy (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 23, 2024 | Jan. 04, 2024 | Nov. 20, 2023 | Nov. 16, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Jan. 19, 2022 |
Subsequent Event [Line Items] | |||||||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | $ 0.0001 | ||||
Warrant or right outstanding (in shares) | 14,900,000 | ||||||
Convertible Notes | |||||||
Subsequent Event [Line Items] | |||||||
Debt instrument, face amount | $ 514.8 | ||||||
ERO Shares | Holders of Equity Rights Offering | |||||||
Subsequent Event [Line Items] | |||||||
Equity right offering, amount | $ 55 | ||||||
Backstop amount | $ 37.1 | ||||||
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Common stock, par value (in dollars per share) | $ 0.00001 | ||||||
Warrant or right outstanding (in shares) | 180,241,211 | ||||||
Subsequent Event | Common Stock | |||||||
Subsequent Event [Line Items] | |||||||
Common stock, par value (in dollars per share) | $ 0.00001 | ||||||
Stock issued during period (in shares) | 176,266,782 | ||||||
Subsequent Event | Contingent Value Rights | |||||||
Subsequent Event [Line Items] | |||||||
Warrant or right outstanding (in shares) | 51,783,625 | ||||||
DIP Facility | Subsequent Event | Line of Credit | B Riley Financial | |||||||
Subsequent Event [Line Items] | |||||||
Pre-paid outstanding balance | $ 4.5 | ||||||
Exit fees | $ 0.2 | ||||||
Secured Convertible Notes | Subsequent Event | Convertible Notes | |||||||
Subsequent Event [Line Items] | |||||||
Debt instrument, face amount | $ 260 |
SUBSEQUENT EVENTS - Schedule of
SUBSEQUENT EVENTS - Schedule of Debt Instrument (Details) - USD ($) $ in Thousands | Jan. 23, 2024 | Dec. 31, 2022 |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Finance lease liability, amount restated | $ 4,600 | |
Debt, amount restated | 15,000 | |
Convertible Notes | ||
Subsequent Event [Line Items] | ||
Debt, principal balance | $ 514,800 | |
Exit Credit Agreement | Line of Credit | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Debt, principal balance | 61,200 | |
Secured Notes Indenture | Secured Debt | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Debt, principal balance | 150,000 | |
Secured Convertible Notes Indenture | Convertible Notes | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Debt, principal balance | 260,000 | |
Miner Equipment Lender Agreements | Secured Debt | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Debt, principal balance | $ 52,947 |
SUBSEQUENT EVENTS - Exit Credit
SUBSEQUENT EVENTS - Exit Credit Agreement (Details) - Line of Credit - Subsequent Event $ in Thousands | Jan. 23, 2024 USD ($) day |
Exit Credit Agreement | |
Subsequent Event [Line Items] | |
Line of credit facility, maximum borrowing capacity | $ 80,000 |
Debt instrument, face amount | $ 61,200 |
Exit Credit Agreement | Exit Lenders | |
Subsequent Event [Line Items] | |
Interest rate per annum | 9% |
Exit facility amortizes in equal quarterly installment | $ 1,250 |
Additional interest rate in the event of debt default | 2% |
Debt instrument, number of business days after events of default | day | 3 |
Exit Credit Agreement, Term Loan | Exit Lenders | Secured Debt | |
Subsequent Event [Line Items] | |
Debt instrument, face amount | $ 40,000 |
Exit Credit Agreement, Initial Term Loan | Exit Lenders | Secured Debt | |
Subsequent Event [Line Items] | |
Debt instrument, face amount | 20,000 |
Exit Credit Agreement, Delayed-Draw Term Loan | Exit Lenders | Secured Debt | |
Subsequent Event [Line Items] | |
Debt instrument, face amount | 20,000 |
Exit Credit Agreement, Balance from Convertible Notes | Exit Lenders | Secured Debt | |
Subsequent Event [Line Items] | |
Debt instrument, face amount | $ 40,000 |
SUBSEQUENT EVENTS - Secured Not
SUBSEQUENT EVENTS - Secured Notes Indenture (Details) - Secured Notes Indenture - Secured Debt - Subsequent Event $ in Thousands | Jan. 23, 2024 USD ($) day |
Subsequent Event [Line Items] | |
Debt instrument, face amount | $ | $ 150,000 |
Interest rate per annum | 12.50% |
Debt instrument, number of business days after events of default | day | 3 |
Interest Rate Scenario, Period One | |
Subsequent Event [Line Items] | |
Required premium, percentage of the outstanding principal amount | 1% |
Interest Rate Scenario, Period Two | |
Subsequent Event [Line Items] | |
Required premium, percentage of the outstanding principal amount | 2% |
Interest Rate Scenario, Period Three | |
Subsequent Event [Line Items] | |
Required premium, percentage of the outstanding principal amount | 3% |
SUBSEQUENT EVENTS - Secured Con
SUBSEQUENT EVENTS - Secured Convertible Notes Indenture (Details) $ / shares in Units, $ in Thousands | Jan. 23, 2024 USD ($) day $ / shares | Dec. 31, 2022 USD ($) | Jan. 19, 2022 $ / shares |
Subsequent Event [Line Items] | |||
Debt instrument, convertible price (in dollars per share) | $ / shares | $ 8 | ||
Convertible Notes | |||
Subsequent Event [Line Items] | |||
Debt instrument, face amount | $ | $ 514,800 | ||
Debt instrument, convertible price (in dollars per share) | $ / shares | $ 8 | ||
Secured Convertible Notes Indenture | Convertible Notes | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Debt instrument, face amount | $ | $ 260,000 | ||
Interest payable, threshold consecutive trading days | day | 20 | ||
Debt instrument conversion term, number of business days prior to applicable interest payment date | day | 3 | ||
Debt instrument, convertible price (in dollars per share) | $ / shares | $ 5.8317 | ||
Convertible, conversion ratio (in shares) | 0.17148 | ||
Convertible, threshold percentage of stock price trigger | 133.60% | ||
Debt instrument, number of business days after events of default | day | 3 | ||
Secured Convertible Notes Indenture | Convertible Notes | Subsequent Event | Interest Rate Scenario, Option One | |||
Subsequent Event [Line Items] | |||
Interest payable in cash | 10% | ||
Secured Convertible Notes Indenture | Convertible Notes | Subsequent Event | Interest Rate Scenario, Option Two | |||
Subsequent Event [Line Items] | |||
Interest payable in cash | 6% | ||
Interest stock payable | 6% |
SUBSEQUENT EVENTS - Miner Equip
SUBSEQUENT EVENTS - Miner Equipment Lender Agreements (Details) - Miner Equipment Lender Agreements - Secured Debt - Subsequent Event | Jan. 23, 2024 USD ($) day |
Subsequent Event [Line Items] | |
Percentage of principal amount received to each holders | 80% |
Debt instrument, collateral amount (up to) | $ | $ 18,204,559 |
Interest Rate Scenario, with No Election Notice, Period One | |
Subsequent Event [Line Items] | |
Interest rate per annum | 13% |
Interest payable in cash | 3% |
Interest payable paid in kind | 10% |
Interest Rate Scenario, with Election Notice, Period One | |
Subsequent Event [Line Items] | |
Written notice issuance, days before due date | day | 5 |
Interest Rate Scenario, with Election Notice, Period One, Option One | |
Subsequent Event [Line Items] | |
Interest rate per annum | 12% |
Interest payable in cash | 5% |
Interest payable paid in kind | 7% |
Interest Rate Scenario, with Election Notice, Period One, Option Two | |
Subsequent Event [Line Items] | |
Interest payable in cash | 8% |
Interest Rate Scenario, Period Two | |
Subsequent Event [Line Items] | |
Interest payable in cash | 10% |
Interest Rate Scenario, with Event Of Default | |
Subsequent Event [Line Items] | |
Additional interest rate in the event of debt default | 2% |
SUBSEQUENT EVENTS - Warrant Agr
SUBSEQUENT EVENTS - Warrant Agreement (Details) | Jan. 23, 2024 day $ / shares shares | Dec. 31, 2023 $ / shares shares |
Subsequent Event [Line Items] | ||
Warrant outstanding (in shares) | 14,900,000 | |
Common stock issued per warrant exercised (in shares) | 1 | |
Exercise price of warrants (in dollars per share) | $ / shares | $ 11.50 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Warrant outstanding (in shares) | 180,241,211 | |
Warrant Tranche 1 | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Warrant outstanding (in shares) | 98,313,313 | |
Common stock issued per warrant exercised (in shares) | 1 | |
Exercise price of warrants (in dollars per share) | $ / shares | $ 6.81 | |
Common stock issued per warrant exercised (in shares) | 0.253244 | |
Warrant Tranche 1 | Subsequent Event | Common Stock | ||
Subsequent Event [Line Items] | ||
Common stock issued per warrant exercised (in shares) | 1 | |
Warrant Tranche 2 | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Warrant outstanding (in shares) | 81,927,898 | |
Common stock issued per warrant exercised (in shares) | 1 | |
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.01 | |
Common stock issued per warrant exercised (in shares) | 0.211037 | |
Redemption of warrants or rights, stock price trigger (in dollars per share) | $ / shares | $ 8.72 | |
Threshold trading days following the date on which the notice of redemption is sent | day | 20 | |
Warrant Tranche 2 | Subsequent Event | Common Stock | ||
Subsequent Event [Line Items] | ||
Common stock issued per warrant exercised (in shares) | 1 |
SUBSEQUENT EVENTS - Contingent
SUBSEQUENT EVENTS - Contingent Value Right Agreement (Details) - USD ($) | Jan. 23, 2024 | Dec. 31, 2023 |
Subsequent Event [Line Items] | ||
Warrant outstanding (in shares) | 14,900,000 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Warrant outstanding (in shares) | 180,241,211 | |
CVR, amount payable, maximum amount | $ 43,333,333.33 | |
CVR, threshold amount for calculation of payment | $ 260,000,000 | |
CVR, weighted average price period | 60 days | |
Subsequent Event | Contingent Value Rights | ||
Subsequent Event [Line Items] | ||
Warrant outstanding (in shares) | 51,783,625 |
SUBSEQUENT EVENTS - New Common
SUBSEQUENT EVENTS - New Common Stock and Preferred Stock (Details) - $ / shares | Jan. 23, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Jan. 19, 2022 |
Subsequent Event [Line Items] | ||||
Common stock, shares authorized (in shares) | 10,000,000,000 | 10,000,000,000 | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | $ 0.0001 | |
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Common stock, shares authorized (in shares) | 10,000,000,000 | |||
Preferred stock, shares authorized (in shares) | 2,000,000,000 | |||
Preferred stock, par value (in dollars per share) | $ 0.00001 | |||
Common stock, par value (in dollars per share) | $ 0.00001 |
SUBSEQUENT EVENTS - Management
SUBSEQUENT EVENTS - Management Incentive Plan (Details) - Subsequent Event | Jan. 23, 2024 |
Subsequent Event [Line Items] | |
Management incentive plan, percent of stock issuable | 10% |
Management incentive plan, adoption period threshold | 90 days |
SUBSEQUENT EVENTS - GUC Conting
SUBSEQUENT EVENTS - GUC Contingent Value Rights (Details) - Subsequent Event | Jan. 23, 2024 USD ($) day shares |
Subsequent Event [Line Items] | |
CVR, amount payable, maximum amount | $ | $ 43,333,333.33 |
CVR, weighted average price period | 60 days |
GUC Contingent Value Right | |
Subsequent Event [Line Items] | |
Contingent value rights, Payable term, period following testing date | 45 days |
GUC contingent value rights , weighted average closing price, threshold period, prior to testing | day | 60 |
GUC contingent value rights , weighted average closing price, threshold period | day | 20 |
CVR, weighted average price period | 30 days |
Contingent value rights, testing period | 18 months |
Common Stock | |
Subsequent Event [Line Items] | |
Stock issued during period (in shares) | shares | 176,266,782 |
Common Stock | GUC Contingent Value Right | |
Subsequent Event [Line Items] | |
CVR, amount payable, maximum amount | $ | $ 7,100,000 |
Common Stock | Holders of Allowed General Unsecured Claims | |
Subsequent Event [Line Items] | |
Stock issued during period (in shares) | shares | 20,232,308 |
Stock issued during period | $ | $ 101,584,257 |
Common Stock | |
Subsequent Event [Line Items] | |
Stock issued during period (in shares) | shares | 176,266,782 |
SUBSEQUENT EVENTS - Federal Inc
SUBSEQUENT EVENTS - Federal Income Tax Consequences (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Subsequent Events [Abstract] | |
Operating loss carryforwards | $ 330.2 |
SUBSEQUENT EVENTS - CoreWeave A
SUBSEQUENT EVENTS - CoreWeave Agreement (Details) | 1 Months Ended |
Mar. 31, 2024 vote | |
CoreWeave | Subsequent Event | |
Subsequent Event [Line Items] | |
Hosting agreement, power supply to be supplied | 16 |
SUBSEQUENT EVENTS - Austin Leas
SUBSEQUENT EVENTS - Austin Lease Agreement (Details) $ in Thousands | 1 Months Ended | |
Feb. 29, 2024 USD ($) vote | Dec. 31, 2023 USD ($) | |
Subsequent Event [Line Items] | ||
Finance lease obligations | $ 64,724 | |
Austin, Texas | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Hosting agreement, power supply to be supplied | vote | 12 | |
Finance lease, remaining lease term | 8 years | |
Finance lease obligations | $ 97,800 |