Core Scientific, Inc./tx

9. FAIR VALUE MEASUREMENTS

The Company measures certain assets and liabilities at fair value on a recurring or nonrecurring basis. For a description of the Company’s fair value measurement policies, including the fair value hierarchy and valuation methodologies, see Note 10 - Fair Value Measurements of the Form 10-K for the fiscal year ended December 31, 2025.

Recurring Fair Value Measurements

The following table presents the fair value hierarchy levels and carrying amounts of assets and liabilities measured at fair value on a recurring basis at the dates indicated (dollars in thousands):

(1)The fair value of contingent value rights is included within “Other current liabilities” and “Other noncurrent liabilities” in the Company’s condensed consolidated balance sheets, based on the expected timing of settlement.

(2)The fair value of the Tranche 1 and Tranche 2 Warrants, current portion is included within "Warrant liabilities, current portion" in the Company's condensed consolidated balance sheets.

(3)The fair values of the Tranche 1 and Tranche 2 Warrants, net of current portion, and liability-classified portion of the AMD Warrant are included within "Warrant liabilities, net of current portion" in the Company's condensed consolidated balance sheets.

The following table presents the changes in fair value of the Company’s CVRs and warrant liabilities included in “Change in fair value of warrants and contingent value rights” in the condensed consolidated statements of operations for the periods indicated (in thousands):

AMD Warrant Valuation

The September 30, 2026 fair value of the liability-classified portion of the AMD Warrant was estimated using a Monte Carlo simulation model. The liability-classified portion is categorized within Level 3 of the fair value hierarchy because the valuation incorporates significant unobservable inputs, including the probability of satisfying the applicable vesting conditions. The following assumptions were used in the valuation:

(1)Weighted averages are presented in parentheses and are calculated based on the number of warrant shares subject to each unvested tranche. Expected term represents the remaining contractual term from each assumed vesting date through expiration.

The probability of vesting reflects management's assessment of the likelihood that additional capacity will be contracted under the related lease arrangements. Higher vesting probabilities generally increase the estimated fair value of the liability, holding other assumptions constant. Changes in expected volatility and the anticipated timing of vesting could also significantly affect the valuation.

The following table reconciles the AMD Warrant liability for the periods indicated (in thousands):

Nonrecurring Fair Value Measurements

The Company measures certain non-financial assets at fair value on a nonrecurring basis when events or circumstances indicate that the carrying amount may not be recoverable, or upon classification as held for sale.

During the three months ended June 30, 2026, the Company classified certain mining and electrical equipment as held for sale, which was initially measured at fair value less cost to sell. As of September 30, 2026, the Company remeasured the assets remaining classified as held for sale, resulting in a gain of $3.6 million reflecting a partial reversal of the write-down recognized upon their initial classification as held for sale. The gain was recognized within "Loss on remeasurement of assets held for sale, net" in the condensed consolidated statement of operations.

During the three months ended September 30, 2026, the Company classified additional mining, electrical, and HPC equipment as held for sale. Upon classification, the equipment was written down to fair value less cost to sell, resulting in a loss of $5.2 million recognized within "Loss on remeasurement of assets held for sale, net" in the condensed consolidated statement of operations. The fair value of the additional equipment at the measurement date was $12.8 million, which was classified as Level 2 within the fair value hierarchy. See Note 4 — Property, Plant and Equipment for further information.

The fair value of mining equipment held for sale was determined using a market approach based on observable pricing from published secondary market indices for digital asset mining hardware. The fair value of electrical and HPC equipment held for sale was determined using a market approach based on observed sales prices for comparable equipment. Each of these measurements is classified as Level 2 within the fair value hierarchy.

Financial Instruments Not Carried at Fair Value

The Company’s financial instruments not subject to recurring fair value measurements include cash and cash equivalents (other than money market funds), restricted cash, accounts receivable, certificates of deposit, accounts payable, leases, debt, and certain accrued expenses and other liabilities. Except for the Senior Secured Notes, the 2029 Convertible Notes, and 2031 Convertible Notes, the carrying amounts of these financial instruments materially approximate their fair values.

The Senior Secured Notes, the 2029 Convertible Notes and 2031 Convertible Notes are recorded at amortized cost in the condensed consolidated balance sheets. The following table presents the carrying amounts, estimated fair values, and the level within the fair value hierarchy of these instruments at the dates indicated (dollars in thousands):