Core Scientific, Inc./txCORZ
Core Scientific, Inc./tx Fair Value Disclosure
10. 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
The CVRs, GUC CVRs and Warrants are recognized as derivative liabilities in accordance with ASC Topic 815, and are
initially and subsequently measured at fair value with changes in fair value reflected in Net loss. When these instruments were
recognized on the Effective Date, observable market data was not available. As of December 31, 2025, observable Level 1 market data
was available for the CVRs and Warrants.
On the Effective Date, the CVRs and GUC CVRs were recognized at their fair value of $86.3 million. During the year ended
December 31, 2024, a decrease in fair value of $82.1 million was included in Change in fair value of warrant and contingent value
rights on the Company’s consolidated statements of operations. During the year ended December 31, 2025, a decrease in fair value of
CVRs of $0.9 million was included in Change in fair value of warrants and contingent value rights in the Company’s consolidated
statements of operations.
On the Effective Date, the warrants were recognized at their fair value of $345.9 million. During the year ended December 31,
2024, an increase in fair value of $1.45 billion was included in Change in fair value of warrant and contingent value rights on the
Company’s consolidated statements of operations. During the year ended December 31, 2025, an increase in fair value of Warrants of
$34.0 million was included in Change in fair value of warrants and contingent value rights in the Company’s consolidated statements
of operations.
The following presents the levels of the fair value hierarchy for the Company's assets and liabilities measured at fair value on a
recurring basis as of December 31, 2025 (in thousands):
Fair Value Hierarchy | |||||||
Level 1 | Level 2 | Level 3 | Fair value | ||||
Assets: | |||||||
Cash and cash equivalents | |||||||
Money market funds | $267,721 | $— | $— | $267,721 | |||
Digital assets | 222,000 | — | — | 222,000 | |||
Total assets measured at fair value on a recurring basis | $489,721 | $— | $— | $489,721 | |||
Liabilities: | |||||||
Contingent value rights1 | $3,366 | $— | $— | $3,366 | |||
Warrants | 936,107 | — | — | 936,107 | |||
Total liabilities measured at fair value on a recurring basis | $939,473 | $— | $— | $939,473 | |||
1 The fair value of contingent value rights is included within Other current liabilities and Other noncurrent liabilities on the Company’s consolidated balance sheets,
based on the expected timing of settlement.
The following presents the levels of the fair value hierarchy for the Company's assets and liabilities measured at fair value on a
recurring basis as of December 31, 2024 (in thousands):
Fair Value Hierarchy | |||||||
Level 1 | Level 2 | Level 3 | Fair value | ||||
Assets: | |||||||
Cash and cash equivalents | |||||||
Money market funds | $832,213 | $— | $— | $832,213 | |||
Digital assets | 23,893 | — | — | 23,893 | |||
Total assets measured at fair value on a recurring basis | $856,106 | $— | $— | $856,106 | |||
Liabilities: | |||||||
Contingent value rights1 | $4,272 | $— | $— | $4,272 | |||
Warrants | 1,097,285 | — | — | 1,097,285 | |||
Total liabilities measured at fair value on a recurring basis | $1,101,557 | $— | $— | $1,101,557 | |||
1 The fair value of contingent value rights is included within Other current liabilities and Other noncurrent liabilities on the Company’s consolidated balance sheets,
based on the expected timing of settlement.
Financial Instruments Not Carried at Fair Value
The Convertible Notes are recorded at amortized cost in the condensed consolidated balance sheets. The fair value is disclosed
for informational purposes only in accordance with ASC Topic 825-10, Financial Instruments, and is determined using trading
activity in over-the-counter markets. The following tables present the carrying amounts and estimated fair values of the Convertible
Notes as of December 31, 2025 and December 31, 2024 (in thousands):
December 31, 2025
Carrying Amount | Fair Value | Fair Value Hierarchy | ||||
3.00% Convertible Senior Notes due 2029 | $460,000 | $718,609 | Level 1 | |||
0.00% Convertible Senior Notes due 2031 | $625,000 | $657,735 | Level 1 |
December 31, 2024
Carrying Amount | Fair Value | Fair Value Hierarchy | ||||
3.00% Convertible Senior Notes due 2029 | $460,000 | $703,100 | Level 1 | |||
0.00% Convertible Senior Notes due 2031 | $625,000 | $615,800 | Level 1 |
Level 2 Recurring Fair Value Measurements
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 Pecos, Texas facility from November 1, 2023 through May 31, 2024 (the “Energy
Derivatives”). The energy forward purchase contract is not designated as a hedging instrument for accounting. The Energy Derivatives
are recognized as derivatives in accordance with ASC Topic 815 initially and subsequently measured at fair value with changes in
value reflected in Net loss. The Company measures the fair value of its energy forward purchase contract using the discounted cash
flow model and uses Intercontinental Exchange forward curves and risk-free rates as observable market inputs.
The Company recorded the following 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 | 2025 | 2024 | 2023 | |||
Energy forward purchase contract | Decrease in fair value of energy derivatives | $— | $2,757 | $3,918 | ||
Nonrecurring Fair Value Measurements
The Company’s non-financial assets, including property, plant and equipment, and intangible assets (other than digital assets)
are measured at estimated fair value on a nonrecurring basis and are adjusted only upon impairment or when held for sale. Prior to the
adoption of ASU 2023-08, digital assets were subject to nonrecurring fair value adjustments only when impairment was recognized.
Refer to Note 2 — Summary of Significant Accounting Policies and Note 5 — Property, Plant, and Equipment, for more information
regarding fair value considerations when measuring impairment.
No non-financial assets were classified as Level 3 as of December 31, 2025 or December 31, 2024.
The Company’s financial instruments, that are not subject to recurring fair value measurements, include cash and cash
equivalents (other than money market funds), restricted cash, accounts receivable, accounts payable, leases, notes payable and certain
accrued expenses and other liabilities. Except for the 2029 Convertible Notes and 2031 Convertible Notes, the carrying amount of
these financial instruments materially approximate their fair values.Free Sentinel
Track for freeWant the next Core Scientific, Inc./tx fair value disclosure the moment it drops?
Set a Sentinel and we'll alert you the moment Core Scientific, Inc./tx's next filing hits EDGAR. No credit card, your email never gets sold.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Mar 13, 2024 | |
| 2022 | Apr 4, 2023 | |
| 2021 | Mar 30, 2022 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.