The Company entered into a $165,000 contract subject to certain discounts in June 2024 for the purchase and on-site construction and installation of modular immersion data centers. The contract includes two phases for which only phase 1 is a firm commitment to the Company in the amount of $66,000 (before taxes and discounts), for which $30,000 of phase 1 was paid in July 2024 and is included in Deposits on miners and mining equipment in the Consolidated Balance Sheet as of September 30, 2024. The remainder is expected to be paid before the end of the first quarter in the 2025 fiscal year. In August 2024, the Company elected to undertake phase 2 for $99,000 (before taxes and discounts), an advanced payments of approximately 50% are due in November 2024 and the remainder is expected to be paid in installments between December 2024 through April 2024. Upon timely payment of the first installments due for both phase 1 and phase 2, discounts of $3,000 and $4,500, respectively, are applied to the obligation.

The Company had $115,299 in unrecorded open purchase commitments for miners or mining equipment as of September 30, 2024. These commitments pertain to the purchase transactions with Bitmain Technologies Delaware Limited ("Bitmain Technologies") signed in April 2024 and August 2024 for the purchase of 100,000 S21 Pro bitcoin mining machines for a total purchase price of $374,400 and 26,000 S21 XP Immersion bitcoin mining machines for a total purchase price of $167,700. The Company had made $376,883 in combined payments in relation to these miners. As of September 30, 2024, the Company had $49,918 in Accounts payable in relation to these agreements on the Consolidated Balance Sheets.

The Company has open commitments relating to the construction and development of new mining locations and operational facilities of $15,261, which includes $2,888 for the construction of the data center in Clinton, MS.

The contractual future payment related to the Company’s leases and loans payable are disclosed in Note 11 - Leases and Note 12 - Loans, respectively, to the Consolidated Financial Statements. The following table sets forth certain information concerning the Company’s unconditional obligations to make contractual future payments towards our agreements as of September 30, 2024 (these amounts are not recorded in the Consolidated Balance Sheets):


($ in thousands)	Fiscal Year 2025		Fiscal Year 2026		Fiscal Year 2027		Fiscal Year 2028		Fiscal Year 2029		Thereafter		Total
Contractual obligations:
Modular immersion data centers (net discounts)	$	135,000	$	—	$	—	$	—	$	—	$	—	$	135,000
Miners and mining equipment contracts		115,299		—		—		—		—		—		115,299
Construction in progress		15,261		—		—		—		—		—		15,261
Tennessee Real Estate (Note 5)		2,500		—		—		—		—		—		2,500
Total	$	268,060	$	—	$	—	$	—	$	—	$	—	$	268,060

Obligation to return of power deposits

Upon receiving power bills pertaining to the month in which each MIPA (Note 5 - Acquisitions) closed, the Company has an obligation to pay the TN MIPA Seller an amount equal to the deposits the TN MIPA Seller had made to power providers for each location less the portion of power bill covering the power utilized by TN MIPA Seller and any other remedies identified within 10 days. In aggregate, the power providers held $6,012 in power deposits from the TN MIPA Seller.

State Tax Incentives

When the Company enters new jurisdictions, it seeks incentives on taxes including; sales and use taxes, property taxes, employment taxes and income taxes. The Company has been previously successful obtaining such incentives and is currently seeking incentives, which if the Company is unsuccessful may result in a liability of approximately $6,300.

In addition to the legal matters disclosed below, the Company may from time to time be subject to various legal proceedings and claims that arise in the ordinary course of its business activities. The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts above management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially adversely affected.

On January 20, 2021, Scott Bishins (“Bishins”), individually, and on behalf of all others similarly situated (together, the “Class”), filed a class action complaint in the United States District Court for the Southern District of New York against the Company and certain of its officers, including the Company’s CEO and the Executive Chair (such action, the “Class Action”).

On December 2, 2021, the court appointed Bishins and Darshan Hasthantra as lead plaintiffs, and on February 1, 2024, the Court entered a voluntary dismissal on behalf of Bishins.

The plaintiffs filed an Amended Complaint on February 28, 2022 alleging that, between December 10, 2020 and August 16, 2021, defendants made material misstatements and omissions in relation to disclosures surrounding the Company’s acquisition of ATL and its anticipated expansion of bitcoin mining operations. The plaintiffs seek certification of the Class, an award of compensatory damages and an award of reasonable costs and expenses incurred by the Class in the litigation.

To date, no class has been certified in the Class Action. Discovery is currently proceeding.

The Company believes that the claims asserted are without merit and intends to defend against them vigorously. At this time, the Company is unable to estimate potential losses, if any, that may arise.

On May 26, 2021, Andrea Ciceri (“Ciceri”) filed a shareholder derivative action in the United States District Court for the District of Nevada against officers and directors of the Company, including the Company’s Executive Chair, CEO, former CFO, and certain other members of the Board of Directors. This and other related filings were consolidated by the Court on June 29, 2021 (the “Consolidated Ciceri Action”).

The claims asserted in the Consolidated Ciceri Action include breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement and waste of corporate assets. The plaintiffs seek declaratory relief, monetary damages and the imposition of additional corporate governance and internal controls.

On June 27, 2023, the Company’s Board of Directors appointed a Special Litigation Committee (“SLC”) comprised of independent directors to intervene in the case, investigate, evaluate and prosecute as appropriate any and all claims asserted in the Consolidated Ciceri Action as well as the Consolidated Smith Action (as defined below). On October 23, 2023, the Consolidated Ciceri Action was stayed to allow the SLC to intervene, investigate and determine an appropriate course of action for the claims alleged, which stay was later extended up to November 30, 2024. On October 16, 2024, the SLC filed a motion to defer to the SLC’s determination that the claims in the Consolidated Ciceri Action should be dismissed. On October 28, 2024, the court ordered the parties’ stipulation wherein the parties agreed to submit a status update to the court by November 30, 2024 and meet and confer regarding a proposed briefing schedule.

The Company believes that the claims raised in the Consolidated Ciceri Action are without merit and intends to defend itself vigorously. At this time, the Company is unable to estimate potential losses, if any, related to the Consolidated Ciceri Action.

Starting with a February 21, 2023 filing by Brandon Smith, and continuing through March 8, 2023, four shareholder derivative actions were filed in the Eighth Judicial District Court of the State of Nevada in Clark County against officers and directors of the Company, including the Company’s Executive Chair, CEO, former CFO, and certain other members of the Board of Directors. Each of these actions was consolidated in the Eighth Judicial District Court of Nevada in Clark County (the “Consolidated Smith Action”).

The claims asserted in the Consolidated Smith Action include breach of fiduciary duties, unjust enrichment and corporate waste. The plaintiffs seek monetary damages, restitution, declaratory relief, litigation costs and the imposition of adequate corporate governance and internal controls.

On December 1, 2023, the Court granted the SLC’s motion to intervene and stay the case pending the SLC’s investigation, staying the case through April 6, 2024, which was later extended to November 30, 2024. On October 16, 2024, the SLC filed a motion to defer to the SLC’s determination that the claims in the Consolidated Smith Action should be dismissed. On October 31, 2024, the court ordered the parties’ stipulation, wherein the parties agreed to submit a status update to the court by November 30, 2024, and meet and confer regarding a proposed briefing schedule.

The Company believes that the claims raised in the Consolidated Smith Action are without merit and intends to defend itself vigorously against them. At this time, the Company is unable to estimate potential losses, if any, related to the Consolidated Smith Action.