Press release·03/29/2025 00:01:02

Business Overview

We are a technology company focused on digital infrastructure platforms. The Company develops and operates digital infrastructure platforms for enterprise customers and for its own purposes. The Company’s digital infrastructure platforms can be used to operate computing resources for a number of applications, including AI, HPC, digital assets, and other computing applications. The Company also has an energy management business, which utilizes software and analysis to generate revenue when the Company adapts its operations to the real-time needs of the power grid. The Company also periodically transacts in digital computational machines, data center infrastructure, and related equipment, subject to business and commercial opportunities.

The Company has a strategy to prioritize the usage of carbon-free energy sources, including nuclear energy, to power its digital infrastructure platforms and computational machines. The Company manages and operates two data center facilities in Pennsylvania delivering a total current capacity of approximately 129 megawatts (MW) and has an additional 24 MW of future capacity in Ohio that is under development, all strategically located in locations served by the PJM Energy Market in the United States. The PJM Energy Market is the largest wholesale power market in North America.

The Company previously had interests in the Australian market, however for strategic and commercial reasons, the Company is currently focused on advancing its interests in North America. The Company currently operates facilities in the United States of America and does not have operating sites in Australia.

Results of Operations

The table below summarizes the Company’s financial results for the years ended December 31, 2024 and 2023:

Metric	2024	2023
Revenues
Digital colocation revenue	$38,546,912	$16,364,767
Energy management revenue	$7,576,553	$5,354,272
Digital assets mining revenue	$12,591,660	$21,590,523
Equipment sales	$550,000	$262,158
Total revenues	$59,265,125	$43,571,720
Less: Cost of revenues (excluding depreciation)	$38,987,911	$28,557,004
Gross profit	$20,277,214	$15,014,716
Operating expenses
Selling, general and administrative	$18,313,904	$19,177,492
Stock based compensation	$14,064,883	$10,834,838
Depreciation and amortization	$17,877,770	$38,080,506
Change in fair value of derivative asset	$1,173,104	$7,241,883
Total operating expenses	$51,429,661	$75,334,719
Loss from operations	$(31,152,447)	$(60,320,003)
Non-operating income (expense), net	$(14,207,770)	$7,723,529
Loss before income taxes	$(45,360,217)	$(52,596,474)

Revenues

Digital colocation revenue increased by 136% year-over-year to $38.5 million in 2024, driven by the Company expanding its number of digital colocation customers and increasing the number of machines using its digital colocation infrastructure services.

Energy management revenue increased by 42% year-over-year to $7.6 million in 2024, due to the Company’s enhanced energy management programs that generate revenue when the Company adapts its power usage to the real-time needs of the grid.

Digital assets mining revenue decreased by 42% year-over-year to $12.6 million in 2024, due to the impact of the April 2024 bitcoin halving event and a higher global network difficulty rate, as well as the Company reallocating some of its mining capacity to grow its digital colocation services business.

Equipment sales increased by 50% year-over-year to $0.6 million in 2024.

Overall, the Company’s total revenues increased by 36% year-over-year to $59.3 million in 2024.

Cost of Revenues

The Company’s cost of revenues, which consists primarily of direct power costs related to digital asset mining and colocation services and cost of mining equipment sold, increased from $28.6 million in 2023 to $39.0 million in 2024. This increase was primarily attributable to higher power costs related to the increase in energy used to operate the colocated equipment for the Company’s enterprise digital colocation customers.

Operating Expenses

Selling, general and administrative expenses decreased by $0.9 million in 2024, primarily due to decreases in rent, equipment rental, marketing, and property costs, partially offset by an increase in employee and personnel compensation.

Stock-based compensation expenses increased by $3.2 million in 2024, primarily due to an increase in service-based restricted stock awards.

Depreciation and amortization expense decreased by $20.2 million in 2024, as a result of the Company’s digital asset mining hardware being fully depreciated during 2023 and 2024, and a lower number of digital asset miners being acquired during 2024.

The change in fair value of the derivative asset resulted in an unrealized loss of $1.2 million in 2024, compared to a $7.2 million loss in 2023, primarily due to one less year remaining on the derivative asset and a reduction in forward market prices.

Non-Operating Income (Expense)

Non-operating expense was $14.2 million in 2024, compared to non-operating income of $7.7 million in 2023. The expense in 2024 was primarily attributed to a $12.4 million loss on deconsolidation and $3.1 million in interest expense, partially offset by a $1.0 million gain on foreign currency transactions. The income in 2023 was primarily attributed to a $9.5 million gain on deconsolidation, $3.4 million in profit from the sale of a site, and a $1.4 million gain on the sale of marketable securities, partially offset by $3.0 million in interest expense, $1.8 million in impairment of financial assets, and a $1.7 million loss on foreign currency transactions.

Non-GAAP Financial Measures

The Company reports Adjusted EBITDA, a non-GAAP financial measure, which is defined as net loss plus income tax, depreciation and amortization, further adjusted by impairment of financial assets, net loss of equity method investments, stock-based compensation, loss on foreign currency, other non-operating income and expenses, change in fair value of derivative asset, fair value loss on investments, and gain on deconsolidation. Adjusted EBITDA was $2.0 million in 2024 and $0.6 million in 2023.

Liquidity and Capital Resources

The Company financed its operations primarily through net positive cash flow provided by operating activities and other cash reserves in 2024. As of December 31, 2024, the Company had a cash and cash equivalent balance of $6.1 million.

The Company had negative working capital of $35.9 million as of December 31, 2024, and an accumulated deficit of $228.8 million. The Company will need to raise substantial additional capital to continue its operations, execute its business strategy, and meet its debt service obligations.

The Company has material cash requirements related to short-term borrowings, including a $9.9 million loan from Marshall Investments, a $1.3 million loan from W Capital Advisors, a $9.7 million loan from Celsius Mining, and a $0.1 million secured convertible promissory note. The Company is taking steps to preserve cash, optimize operations, reduce costs, and pursue efficiencies to improve its cash flows.

Outlook

The Company is focused on enhancing its revenue generation by growing its digital colocation services business, diversifying its revenue streams, and optimizing its cash flows. However, the Company’s financial condition remains challenging, and it will need to raise substantial additional capital to continue its operations and meet its debt obligations. The Company’s ability to execute its business strategy and secure adequate financing will be critical to its future success.