Marathon(MARA) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements Presents unaudited condensed consolidated financial statements and notes for the three months ended March 31, 2025 Condensed Consolidated Balance Sheets Summarizes the company's assets, liabilities, and equity at the end of the reporting period Balance Sheet Summary | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Cash and cash equivalents | $196,215 | $391,771 | $(195,556) | | Total current assets | $291,826 | $470,373 | $(178,547) | | Digital assets, net of current portion | $2,745,302 | $3,223,989 | $(478,687) | | Total assets | $6,444,446 | $6,801,317 | $(356,871) | | Total current liabilities | $368,370 | $95,197 | $273,173 | | Total liabilities | $2,715,766 | $2,665,375 | $50,391 | | Total equity | $3,728,680 | $4,135,942 | $(407,262) | Condensed Consolidated Statements of Operations Details revenues, expenses, and the resulting net loss for the first quarter of 2025 Operations Summary | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :------------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | | Revenues | $213,884 | $165,198 | $48,686 | | Total costs and operating expenses (income) | $754,947 | $(204,506) | $959,453 | | Operating income (loss) | $(541,063) | $369,704 | $(910,767) | | Net income (loss) | $(533,443) | $337,173 | $(870,616) | | Net income (loss) per share - basic | $(1.55) | $1.30 | $(2.85) | | Net income (loss) per share - diluted | $(1.55) | $1.26 | $(2.81) | - The significant shift from net income to net loss was primarily due to a $394.2 million loss on the change in fair value of digital assets in Q1 2025, compared to a $488.8 million gain in Q1 2024, and a $116.1 million loss on digital assets - receivable, net in Q1 2025[13][210][215] Condensed Consolidated Statements of Equity Outlines the changes in stockholders' equity during the first quarter of 2025 Equity Summary | Metric | December 31, 2024 (in thousands) | March 31, 2025 (in thousands) | | :----------------------------------- | :----------------------------- | :----------------------------- | | Total Stockholders' Equity | $4,129,033 | $3,724,727 | | Net loss | N/A | $(533,199) | | Issuance of common stock, net | N/A | $100,140 | | Stock-based compensation | N/A | $49,115 | Condensed Consolidated Statements of Cash Flows Details the sources and uses of cash from operating, investing, and financing activities Cash Flow Summary | Cash Flow Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :----------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net cash used in operating activities | $(215,488) | $(88,340) | | Net cash used in investing activities | $(209,846) | $(416,591) | | Net cash provided by financing activities | $229,778 | $471,886 | | Net decrease in cash, cash equivalents and restricted cash | $(195,556) | $(33,045) | | Cash, cash equivalents and restricted cash — end of period | $208,215 | $324,268 | - Operating cash flow was negatively impacted by changes in operating assets and liabilities, including a $212.7 million use of funds related to digital assets due to non-cash bitcoin mining revenues[228] - Investing activities included $97.4 million in advances to vendors, $38.9 million in property and equipment purchases, and $36.3 million for the Wind Farm acquisition[229] - Financing activities were boosted by $100.1 million from common stock issuance under the 2024 ATM and a new $150.0 million line of credit[230] Notes to Condensed Consolidated Financial Statements Provides detailed explanations of the company's accounting policies and financial data NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Describes the company's focus as a vertically integrated digital energy and infrastructure firm - MARA is a vertically integrated digital energy and infrastructure company[21] - Core business involves leveraging high-intensity compute (bitcoin mining) to monetize excess energy and optimize power management[21] - Focuses on acquiring and holding bitcoin as a long-term investment (HODL strategy)[21] NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Outlines key accounting principles, including digital asset valuation and revenue recognition - Adopted a full holding onto bitcoin ("HODL") approach in 2024, retaining all mined bitcoin as a long-term investment[32] - Digital assets are measured at fair value with changes recognized in the statements of operations, following ASU 2023-08[32] - Reclassified cost of revenue and operating expenses into "Purchased energy costs," "Third party hosting and other energy costs," and "Operating and maintenance costs" for improved transparency, effective Q1 2025[26][27] - Entered into derivative contracts to manage exposure to bitcoin price and energy cost fluctuations, recording them at fair value with changes recognized in earnings[38] NOTE 3 – ACQUISITIONS Details recent strategic acquisitions of a wind farm and two bitcoin mining sites - Acquired a wind farm in Hansford County, Texas, on February 14, 2025, for $49.2 million, including 240 MW interconnection capacity and 114 MW nameplate wind capacity[72] - Acquired two operational bitcoin mining sites in Granbury, Texas, and Kearney, Nebraska, on January 12, 2024, for $189.6 million, totaling 390 MW nameplate capacity[73] - The GC Data Center Acquisition resulted in $30.9 million in goodwill, attributed to growth, efficiency, and expected synergies[76] - The company will transition the acquired data center sites to self-mining, exiting hosting services for new customers[74][87][102] NOTE 4 – REVENUES Breaks down revenue sources, highlighting growth in bitcoin mining and a decline in hosting services Revenue by Source | Revenue Source | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | | Mining operator - transaction fees | $2,781 | $8,984 | $(6,203) | | Mining participant | $10,789 | $13,442 | $(2,653) | | Hosting services | $1,151 | $20,775 | $(19,624) | | Mining operator - block rewards and other revenue | $199,163 | $121,997 | $77,166 | | Total revenues | $213,884 | $165,198 | $48,686 | - Total revenues increased by approximately 30% YoY, primarily due to a 77% increase in the average bitcoin price, which contributed $90.7 million to bitcoin mining revenue[202] - Bitcoin production decreased by $21.8 million due to the halving event[202] - Revenue from hosting services decreased by $19.6 million due to the termination of various hosting agreements as the company transitions to self-mining[203] NOTE 5 – DIGITAL ASSETS Reports the quantity and fair value of the company's digital asset holdings Digital Asset Holdings | Digital Asset | Quantity (March 31, 2025) | Fair Value (March 31, 2025, in thousands) | Quantity (December 31, 2024) | Fair Value (December 31, 2024, in thousands) | | :---------------------- | :-------------------------- | :--------------------------------------- | :-------------------------- | :--------------------------------------- | | Bitcoin | 33,263 | $2,745,302 | 34,519 | $3,223,989 | | Bitcoin - receivable | 14,269 | $1,177,666 | 10,374 | $968,436 | | Total bitcoin holdings | 47,531 | $3,922,968 | 44,893 | $4,192,425 | | Other digital assets | N/A | $3,098 | 34,817,098 (Kaspa) | $4,327 | | Total digital assets held | N/A | $3,926,066 | N/A | $4,196,752 | - The company's bitcoin holdings increased by 2,638 BTC from December 31, 2024, to March 31, 2025[105] NOTE 6 – DIGITAL ASSETS - RECEIVABLE, NET Details the composition of digital assets receivable from lending and collateralized activities Digital Assets Receivable | Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Digital asset receivable - lending | $608,856 | $688,674 | | Digital asset receivable - collateralized | $568,810 | $279,762 | | Total digital asset receivable | $1,177,666 | $968,436 | | Less: Allowance for credit loss | $(13,477) | $(8,379) | | Digital assets - receivable, net | $1,164,189 | $960,057 | - As of March 31, 2025, 7,377 bitcoin were loaned out and 6,892 bitcoin were collateralized for lines of credit[106][107] NOTE 7 – ADVANCES TO VENDORS AND DEPOSITS Summarizes prepayments made to vendors for equipment and other deposits Advances and Deposits | Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------- | :----------------------------- | :----------------------------- | | Advances to vendors | $134,045 | $121,298 | | Deposits | $263,518 | $259,429 | NOTE 8 – PROPERTY AND EQUIPMENT Provides a breakdown of the company's fixed assets and associated depreciation Property and Equipment, Net | Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :---------------------------------- | :----------------------------- | :----------------------------- | | Total gross property, equipment | $2,297,459 | $2,143,175 | | Less: Accumulated depreciation and amortization | $(731,390) | $(593,684) | | Property and equipment, net | $1,566,069 | $1,549,491 | - Depreciation expense for the three months ended March 31, 2025, was $154.8 million, up from $78.0 million in the prior year period[118] NOTE 9 – INVESTMENTS Details the company's equity method and other strategic investments Investment Summary | Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------- | :----------------------------- | :----------------------------- | | Equity method investments | $51,267 | $57,447 | | Other investments | $85,947 | $54,046 | | Total investments | $137,214 | $111,493 | - Converted $1.2 million from Auradine SAFE investment into preferred stock and purchased an additional $20.0 million of Auradine preferred stock in February 2025[124] - Recognized an $11.9 million gain on investment to adjust the carrying value of Auradine investments to an observable price[124] NOTE 10 – FAIR VALUE MEASUREMENT Classifies assets and liabilities measured at fair value into the three-level hierarchy Fair Value Hierarchy | Asset/Liability | March 31, 2025 (in thousands) | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | | :-------------------------------- | :----------------------------- | :--------------------- | :--------------------- | :--------------------- | | Money market funds | $129,267 | $129,267 | $— | $— | | Digital assets | $2,748,400 | $2,748,400 | $— | $— | | Digital assets - receivable, net | $1,164,189 | $— | $1,164,189 | $— | | Derivative instrument | $35,775 | $— | $35,775 | $— | | Contingent consideration liability | $15,255 | $— | $— | $15,255 | - No transfers occurred among Levels 1, 2, or 3 during the three months ended March 31, 2025[133] NOTE 11 – NET INCOME (LOSS) PER SHARE Presents the calculation of basic and diluted net income (loss) per share Earnings Per Share Calculation | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net income (loss) per share - basic | $(1.55) | $1.30 | | Weighted average shares - basic | 344,098,009 | 259,098,664 | | Net income (loss) per share - diluted | $(1.55) | $1.26 | | Weighted average shares - diluted | 344,098,009 | 267,912,443 | - Potential dilutive securities, including warrants, restricted stock units, performance-based restricted stock units, and convertible notes, totaling over 104 million shares, were anti-dilutive for Q1 2025 due to the net loss[136] NOTE 12 – STOCKHOLDERS' EQUITY Details changes in stockholders' equity, including share authorizations and ATM offerings - Authorized common stock increased to 800,000,000 shares on February 19, 2025[137] - Commenced a new $2.0 billion ATM offering program (2025 ATM) on March 28, 2025[138] - Sold 5,428,548 shares for $100.1 million (net) under the previous 2024 ATM program during Q1 2025, which was then concluded[139] NOTE 13 – STOCK-BASED COMPENSATION Reports on stock-based compensation expenses and unrecognized costs Stock-Based Compensation Expense | Award Type | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | | Performance-based restricted stock units | $24,323 | $— | | Restricted stock units | $24,792 | $51,913 | | Total stock-based compensation expense | $49,115 | $51,913 | - As of March 31, 2025, approximately $73.1 million of unrecognized compensation related to unvested service-based RSUs is expected to be recognized over 2.6 years[143] - Approximately $133.9 million of unrecognized compensation related to unvested PSUs is expected to be recognized over 3.0 years[146] NOTE 14 – DEBT Summarizes the company's outstanding debt obligations, including convertible notes and lines of credit Debt Summary | Debt Type | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :---------------------- | :----------------------------- | :----------------------------- | | December 2026 Notes | $66,900 | $66,811 | | September 2031 Notes | $292,287 | $292,014 | | March 2030 Notes | $980,617 | $979,642 | | June 2031 Notes | $908,745 | $908,111 | | Line of credit | $350,000 | $200,000 | | Total debt | $2,598,549 | $2,446,578 | - Secured a new $150.0 million line of credit in March 2025, collateralized by 3,250 bitcoin, bringing the total outstanding line of credit to $350.0 million[154][155] NOTE 15 – LEASES Details the company's operating and finance lease assets and liabilities Lease Assets and Liabilities | Lease Type | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :----------------------------- | :----------------------------- | | Operating lease ROU assets | $27,335 | $16,874 | | Finance lease ROU assets | $2,870 | $2,877 | | Total ROU assets | $30,205 | $19,751 | | Total lease liabilities | $38,047 | $27,093 | - Total rent expense for Q1 2025 was $23.4 million, consistent with Q1 2024, with variable lease costs being the largest component[159] NOTE 16 – COMMITMENTS AND CONTINGENCIES Discloses future commitments, contingent liabilities, and significant legal proceedings - Remaining commitment of $23.5 million for miners and other mining equipment due in 2025[161] - Expected minimum payments of $468.1 million for hosting and operational support over the next three years[162] Contingent Consideration | Contingent Consideration | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | | Balance | $15,255 | $8,138 | - The SEC's Division of Enforcement concluded its investigation into the Hardin, Montana data center facility and related party transactions, not recommending enforcement action[175] - A jury verdict of $138.8 million was returned against the company in the Ho v. Marathon case for breach of a non-disclosure agreement, later reduced by 20% by the court; the company intends to appeal[177][178] NOTE 17 – RELATED PARTY TRANSACTIONS Describes transactions with related parties, primarily concerning investments in Auradine - Converted $1.2 million Auradine SAFE investment to preferred stock and purchased $20.0 million additional preferred stock in Q1 2025[179] - Total investment holdings in Auradine reached $85.4 million as of March 31, 2025[179] - Advanced $22.3 million to Auradine for future purchases, bringing total advances to $57.2 million[180] NOTE 18 – SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL INFORMATION Provides details on significant non-cash investing and financing activities Non-Cash Activities | Non-Cash Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :---------------------------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Digital assets transferred to digital assets - receivable, net | $325,296 | $— | | Reclassifications from advances to vendor to property and equipment | $84,685 | $59,615 | | Contingent consideration from acquisition | $10,000 | $— | | Asset retirement obligation acquired | $3,250 | $— | NOTE 19 – SUBSEQUENT EVENTS Reports material events that occurred after the balance sheet date - Issued 5,220,713 shares of common stock under the 2025 ATM program after March 31, 2025[182] - Approximately $1.9 billion aggregate offering price remains available under the 2025 ATM[182] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, strategic shifts, and market impacts for the first quarter of 2025 BUSINESS OVERVIEW AND TRENDS Details the company's strategic focus on digital energy, recent developments, and bitcoin mining operations Overview - MARA is a vertically integrated digital energy and infrastructure company focused on bitcoin mining and power management[186] - Expanding into AI and adjacent markets, developing modular edge infrastructure solutions, including next-generation two-phase immersion cooling (2PIC) systems[187][188] - Total energy portfolio of approximately 1.7 GW capacity with 16 data centers across North America, Middle East, Europe, and Latin America[186] Recent Developments - Acquired a wind farm in Hansford County, Texas, with 114 MW nameplate wind capacity on February 14, 2025[193] - Secured a $150.0 million line of credit in March 2025, collateralized by bitcoin holdings[193] - Commenced a new $2.0 billion at-the-market offering program on March 28, 2025[193] - Fully energized 25 MW micro data centers at wellheads in North Dakota and Texas in April 2025, converting flared gas into power for low-cost operations[189] Bitcoin Value - Maintains a "HODL" strategy, retaining all bitcoin mined or purchased[191] Bitcoin Holdings | Date | Quantity | Fair Value per Bitcoin | | :----------------- | :--------- | :--------------------- | | March 31, 2025 | 47,531 | $82,534 | | December 31, 2024 | 44,893 | $93,354 | | March 31, 2024 | 17,320 | $71,289 | - Total bitcoin holdings (including loaned and collateralized) increased to 47,531 BTC with a fair value of $3.9 billion as of March 31, 2025[191] Bitcoin Mining Operations - Mined 2,286 bitcoin in Q1 2025, a 19% decrease (525 BTC) from Q1 2024, mainly due to the April 2024 halving event and increased global hashrate[194] Mining Metrics | Metric | March 31, 2025 | March 31, 2024 | | :-------------------------------- | :------------- | :------------- | | Energized hashrate ("EH/s") | 54.3 | 27.8 | | Miner efficiency (joules per terahash) | 19.3 | 25.0 | | BTC Yield | 3.5 % | 2.6 % | | Share of available miner rewards | 5.5 % | 3.1 % | - Owned approximately 420,000 mining rigs globally with an energized hashrate of 54.3 EH/s as of March 31, 2025[195] Energy Cost - Energy cost represented 38.3% of owned mining revenues for Q1 2025[197] - Average price of direct energy for owned facilities was $0.04 per kilowatt hour (kWh) in Q1 2025[199] Energy Cost per BTC | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Purchased energy costs per BTC (owned facilities) | $35,728 | $12,953 | | Total BTC produced (owned facilities) | 1,217 | 470 | RESULTS OF OPERATIONS Analyzes the significant shift from net income to a net loss, driven by digital asset valuation changes Revenues Revenue by Category | Revenue Category | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | % Change | | :----------------------- | :--------------------- | :--------------------- | :-------------------- | :------- | | Bitcoin mining revenue | $207,760 | $138,841 | $68,919 | 49.6% | | Hosting services | $1,151 | $20,775 | $(19,624) | (94.5)% | | Total Revenues | $213,884 | $165,198 | $48,686 | 29.5% | - Average price of BTC mined increased by 77% to $93,317 in Q1 2025 from $52,591 in Q1 2024[201] - Bitcoin production decreased by 19% (525 BTC) to 2,286 BTC in Q1 2025 from 2,811 BTC in Q1 2024[201] Costs and expenses Expense Breakdown | Expense Category | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | % Change | | :------------------------------------ | :--------------------- | :--------------------- | :-------------------- | :------- | | Purchased energy costs | $43,481 | $6,088 | $37,393 | 614.2% | | Third party hosting and other energy costs | $68,183 | $69,566 | $(1,383) | (2.0)% | | Operating and maintenance costs | $19,794 | $15,814 | $3,980 | 25.2% | | General and administrative | $85,865 | $68,906 | $16,959 | 24.6% | | Depreciation and amortization | $157,897 | $81,602 | $76,295 | 93.5% | | Change in fair value of digital assets | $394,162 | $(488,807) | $882,969 | (180.6)% | | Change in fair value of derivative instrument | $(26,828) | $15,252 | $(42,080) | (276.0)% | | Research and development | $9,298 | $2,466 | $6,832 | 277.0% | - Purchased energy costs increased by 614% due to the expansion of owned mining sites and growth in hashrate[204] - Depreciation and amortization increased by 94% due to the deployment of additional mining rigs and overall business scale[209] - Research and development expenses surged by 277% due to increased contractor costs, supplies, personnel, and related expenses for mining and technology businesses[214] Other income (loss) Other Income (Loss) Breakdown | Other Income (Loss) Category | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | | :------------------------------------------ | :--------------------- | :--------------------- | :-------------------- | | Change in fair value of digital assets - receivable, net | $(116,067) | $— | $(116,067) | | Interest income | $11,995 | $2,573 | $9,422 | | Interest expense | $(9,941) | $(1,256) | $(8,685) | | Total other income (loss) | $(111,552) | $5,520 | $(117,072) | - Interest income increased by $9.4 million due to higher average cash balances and interest earned on loaned bitcoin[217] - Interest expense increased by $8.7 million due to Convertible Notes and the Line of Credit[217] Income tax benefit (expense) Income Tax Summary | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | :-------------------- | | Income tax benefit (expense) | $119,172 | $(38,051) | $157,223 | - The income tax benefit was driven by changes in pretax book income/loss, particularly fair value adjustments related to digital assets[218] - The company concluded it was more likely than not to realize its federal and state deferred tax assets due to being in a three-year cumulative income position[64] NON-GAAP FINANCIAL MEASURES Presents a reconciliation of GAAP net income (loss) to non-GAAP measures like Adjusted EBITDA Non-GAAP Reconciliation | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | | :------------------------------------------ | :--------------------- | :--------------------- | :-------------------- | | Net income (loss) attributable to common stockholders | $(533,199) | $337,173 | $(870,372) | | EBITDA | $(493,423) | $458,092 | $(951,515) | | Adjusted EBITDA | $(483,565) | $542,118 | $(1,025,683) | - Adjusted EBITDA is used by management to evaluate business performance by excluding non-cash and non-recurring items[221][222] FINANCIAL CONDITION AND LIQUIDITY Assesses the company's liquidity position, capital resources, and ability to fund future operations Liquidity Summary | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :---------------------------------------------------------------- | :----------------------------- | :----------------------------- | | Cash and cash equivalents (excluding restricted cash) | $196,215 | $391,771 | | Fair value of digital asset holdings (including loaned/collateralized) | $3,900,000 | $4,192,425 | | Combined liquid resources | $4,096,215 | $4,584,196 | - Total bitcoin holdings were 47,531 BTC (including 14,269 loaned/collateralized) with a fair value of $3.9 billion as of March 31, 2025[231] - The company expects sufficient liquidity for ongoing operations and growth, primarily through available cash and public capital markets (e.g., ATM facilities)[239] - The rescission of SAB 121 is expected to increase commercial bank activity in the sector, potentially expanding access to traditional financing[237] CONTRACTUAL OBLIGATIONS AND COMMITMENTS Summarizes future payment obligations for equipment, hosting, debt, and leases - Remaining commitment of $23.5 million for miners and other mining equipment due in 2025[241] - Expected minimum payments of $468.1 million for hosting and operational support over the next three years (2025-2028)[240] - Convertible Notes have remaining interest payments of approximately $0.5 million (2026 Notes) and $4.8 million (2031 Notes) for the remainder of 2025, with annual interest payments extending through 2031 and total principal of $2.3 billion due at maturity[242] - Lease obligations include $1.8 million for operating leases and $0.2 million for finance leases for the remainder of 2025, with long-term obligations of $65.5 million and $89.6 million, respectively[243] CRITICAL ACCOUNTING ESTIMATES Confirms no material changes to critical accounting estimates from the prior annual report - No material changes to critical accounting estimates from the previous annual report[246] RECENT ACCOUNTING PRONOUNCEMENTS Discusses the potential impact of recently issued accounting standards - ASU 2025-02 (Liabilities) is effective immediately and not expected to have a material impact[70] - ASU 2023-09 (Income Taxes) will be adopted prospectively for annual periods beginning January 1, 2025, with the impact currently under evaluation[71] Item 3. Quantitative and Qualitative Disclosure About Market Risk Reports no material changes to market risk disclosures from the prior annual report - No material changes to market risk disclosures from the previous annual report[248] Item 4. Controls and Procedures Evaluates the effectiveness of disclosure controls and internal control over financial reporting Evaluation of Disclosure Controls and Procedures - Disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2025[249] - Implemented a whistleblower hotline to improve internal controls and allow anonymous reporting of noncompliant activity[251] Change in Internal Control Over Financial Reporting - No material changes in internal control over financial reporting during Q1 2025, apart from ongoing remediation efforts[252] PART II. OTHER INFORMATION Item 1. Legal Proceedings Discloses no material litigation beyond what is detailed in the financial statement notes - No material litigation or regulatory proceedings beyond those disclosed in Note 16[255] Item 1A. Risk Factors Reports no material changes to risk factors from the prior annual report - No material changes to risk factors from the previous annual report[256] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Confirms no unregistered sales of equity securities occurred during the period - None reported[257] Item 3. Defaults Upon Senior Securities Confirms no defaults upon senior securities occurred during the period - None reported[258] Item 4. Mine Safety Disclosures States that mine safety disclosures are not applicable to the company's operations - Not applicable[259] Item 5. Other Information Details Director and Officer trading plans established under Rule 10b5-1 - Douglas Mellinger, a director, entered a 10b5-1 Plan for potential sale of up to 13,000 shares between June 6, 2025, and June 30, 2026[260] - Jay Leupp, a director, entered a 10b5-1 Plan for potential sale of up to 33,500 shares between June 9, 2025, and March 31, 2026[261] - Salman Khan, CFO, entered a 10b5-1 Plan for potential sale of up to 69,465 shares between June 12, 2025, and December 31, 2025[262] Item 6. Exhibits and Financial Statement Schedules Lists all exhibits filed as part of the Quarterly Report - Includes various corporate governance documents, agreements, and certifications[264][265]