[10-Q] Big Digital Energy, Inc. Quarterly Earnings Report
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from ________________ to ________________
Commission File No.
(Exact name of registrant as specified in its charter)
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Registrant’s telephone number, including area code:
Securities Registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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| ☒ | Smaller reporting company | |||
| Emerging growth company |
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As of August 7, 2026, the issuer had a total of
BIG DIGITAL ENERGY, INC.
FORM 10-Q
FOR THE QUARTER ENDED June 30, 2026
TABLE OF CONTENTS
| Item | Page Number | |||
| Part I – Financial Information | ||||
| Item 1. | Financial Statements | 1 | ||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 31 | ||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 45 | ||
| Item 4. | Controls and Procedures | 45 | ||
| Part II – Other Information | ||||
| Item 1. | Legal Proceedings | 46 | ||
| Item 1A. | Risk Factors | 46 | ||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 47 | ||
| Item 3. | Defaults Upon Senior Securities | 47 | ||
| Item 4. | Mine Safety Disclosures | 47 | ||
| Item 5. | Other Information | 47 | ||
| Item 6. | Exhibits | 48 | ||
| Signatures | 50 | |||
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BIG DIGITAL ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Cryptocurrencies held for customers | - | |||||||
| Trade and other receivables, net | ||||||||
| Total current assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Derivative asset | ||||||||
| Security deposits | ||||||||
| Operating lease right-of-use asset, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Trade and other payables | $ | $ | ||||||
| Current portion of operating lease liability | ||||||||
| Current portion of finance lease liability | ||||||||
| Revolving line of credit and current portion of long-term loans | ||||||||
| Total current liabilities | ||||||||
| Operating lease liability, net of current portion | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ equity (deficit): | ||||||||
| Series D Convertible Preferred Stock, par value $ | - | |||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive income | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity (deficit) | ( | ) | ||||||
| Total liabilities and stockholders’ equity (deficit) | $ | $ | ||||||
See accompanying notes to unaudited consolidated condensed financial statements.
1
BIG DIGITAL ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
| For the three months ended June 30, |
For the six months ended June 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues: | ||||||||||||||||
| Digital colocation revenue | $ | $ | $ | $ | ||||||||||||
| Energy management revenue | ||||||||||||||||
| Digital assets mining revenue | ||||||||||||||||
| Total revenues | ||||||||||||||||
| Less: Cost of revenues (excluding depreciation) | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Stock based compensation | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Change in fair value of derivative asset | ( | ) | ||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Non-operating income (expense): | ||||||||||||||||
| Loss on foreign currency transactions | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain on legal settlements | - | - | - | |||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income | ||||||||||||||||
| Other expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total non-operating income (expense), net | ( | ) | ( | ) | ( | ) | ||||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax benefit (expense) | ( | ) | ( | ) | ( | ) | ||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net Loss per share, basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of shares outstanding | ||||||||||||||||
See accompanying notes to unaudited consolidated condensed financial statements.
2
BIG DIGITAL ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
| For the three months ended June 30, |
For the six months ended June 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other comprehensive income: | ||||||||||||||||
| Foreign currency translation adjustment | ||||||||||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
See accompanying notes to unaudited consolidated condensed financial statements.
3
BIG DIGITAL ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
For the Three Months Ended June 30, 2026
| Common Stock (#) |
Common Stock ($) |
Series D Convertible Preferred Stock (#) |
Series D Convertible Preferred Stock ($) |
Additional Paid-in- Capital |
Accumulated Other Comprehensive Income |
Accumulated Deficit |
Total Equity |
|||||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | - | $ | - | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| Exercise of RSUs and stock options | - | - | ( | ) | - | - | - | |||||||||||||||||||||||||
| Stock based compensation expense for RSUs and stock options | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Issuance of common stock, net of issuance costs | - | - | - | - | ||||||||||||||||||||||||||||
| Equity award conversions, settled in cash | - | - | - | - | ( | ) | - | - | ( | ) | ||||||||||||||||||||||
| Issuance of Series D Convertible Stock and warrant, net of issuance costs | - | - | - | - | ||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Other comprehensive income | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
For the Three Months Ended June 30, 2025
| Common Stock (#) |
Common Stock ($) |
Additional Paid-in- Capital |
Accumulated Other Comprehensive Income |
Accumulated Deficit |
Total Deficit |
|||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Exercising of RSUs and stock options | ( | ) | - | - | - | |||||||||||||||||||
| Stock based compensation expense for RSUs and stock options | - | - | - | - | ||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||
| Other comprehensive income | - | - | - | - | ||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
See accompanying notes to unaudited consolidated condensed financial statements.
4
BIG DIGITAL ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
For the Six Months Ended June 30, 2026
| Common Stock (#) |
Common Stock ($) |
Series D Convertible Preferred Stock (#) |
Series D Convertible Preferred Stock ($) |
Additional Paid-in- Capital |
Accumulated Other Comprehensive Income |
Accumulated Deficit |
Total Equity (Deficit) |
|||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | - | $ | - | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Exercise of RSUs and stock options | - | - | ( | ) | - | - | - | |||||||||||||||||||||||||
| Stock based compensation expense for RSUs and stock options | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Issuance of common stock, net of issuance costs | - | - | - | - | ||||||||||||||||||||||||||||
| Equity award conversions, settled in cash | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||
| Issuance of Series D Convertible Stock and warrant, net of issuance costs | - | - | - | - | ||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Other comprehensive income | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
For the Six Months Ended June 30, 2025
| Common Stock (#) |
Common Stock ($) |
Additional Paid-in- Capital |
Accumulated Other Comprehensive Income |
Accumulated Deficit |
Total Deficit |
|||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Exercising of RSUs and stock options | ( | ) | - | - | - | |||||||||||||||||||
| Stock based compensation expense for RSUs and stock options | - | - | - | - | ||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||
| Other comprehensive income | - | - | - | - | ||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
See accompanying notes to unaudited consolidated condensed financial statements.
5
BIG DIGITAL ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the six months ended June 30, |
||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of operating lease right-of-use asset | ||||||||
| Foreign exchange loss | ||||||||
| Stock based compensation | ||||||||
| Non-cash interest expense | ||||||||
| Unrealized (gain) loss on derivative asset | ( | ) | ||||||
| Loss on lease termination | ||||||||
| Provision for doubtful accounts | - | |||||||
| Gain on legal settlements | ( | ) | - | |||||
| Changes in operating assets and liabilities: | ||||||||
| Trade and other receivables | ||||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Other current assets | ( | ) | ||||||
| Trade and other payables | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Capital expenditures | ( | ) | ( | ) | ||||
| Purchases of property, plant and equipment | ( | ) | - | |||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from common share issuances and equity conversions settled in cash | - | |||||||
| Payments of finance lease liabilities | ( | ) | ( | ) | ||||
| Proceeds from Series D Convertible Stock, net of share issuance cost | - | |||||||
| Proceeds from borrowings | - | |||||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid (received) for income taxes – Federal | $ | $ | ( | ) | ||||
| Cash paid for income taxes – State | $ | $ | - | |||||
See accompanying notes to unaudited consolidated condensed financial statements.
6
BIG DIGITAL ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – GENERAL
Nature of Operations
Big Digital Energy, Inc., whose name was changed from Mawson Infrastructure Group Inc. (“Mawson”) effective April 24, 2026 (“Big Digital”) (the “Company,” “we,” “us,” and “our”) is a technology company focused on digital infrastructure platforms, headquartered in the United States of America.
On April 20, 2026, Mawson filed with the Secretary of State of the State of Delaware a Certificate of Amendment (the “Certificate of Amendment”) to its Certificate of Incorporation, as amended (the “Charter”), to change its name from “Mawson Infrastructure Group Inc.” to “Big Digital Energy, Inc.” (the “Name Change”). The Certificate of Amendment became effective as of April 24, 2026, and the only change to the Company’s prior Charter was to change the Company’s name.
The Company’s Board of Directors (the “Board”) approved the Name Change pursuant to Section 242 of the General Corporation Law of the State of Delaware (“DGCL”). In accordance with the DGCL and the provisions of the Company’s organizational documents, approval of the Company’s stockholders was not required to effectuate the Name Change, and the Name Change will not affect the rights of the Company’s security holders.
The Company designs, builds and operates next-generation digital infrastructure platforms for enterprise customers and for its own purposes. The Company provides services spanning artificial intelligence (“AI”), high-performance computing (“HPC”), digital assets including Bitcoin mining, and other intensive compute applications. The Company delivers both self-mining operations and colocation services to enterprise customers with a vertically integrated infrastructure model built for scalability and efficiency. The Company also has an energy management business, which utilizes software and analysis, to generate revenue when the Company participates in energy management programs related to the real-time needs of the power grid.
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 to support the rapid growth of the digital economy in an environmentally sustainable way.
The Company manages and operates digital infrastructure platforms and data centers delivering a total current capacity of approximately 129 megawatts (“MW”) with its current operational sites and more future capacity under development, all strategically located in locations served by the Pennsylvania-New Jersey-Maryland Interconnection Energy Market (the “PJM Energy Market”) in the United States. The PJM Energy Market is among the largest wholesale power markets in North America.
The accompanying consolidated financial statements, including the results of Cosmos Infrastructure LLC (“Cosmos”), Luna Squares LLC (“Luna Squares”), Mawson Bellefonte LLC, Luna Squares Repairs LLC, Luna Squares Property LLC, Mawson Midland LLC, Mawson Hosting LLC (“Mawson Hosting”), Mawson Ohio LLC, Mawson Mining LLC and Mawson Capital LLC (collectively referred to as the “Group”), have been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and in accordance with generally accepted accounting principles in the United States (“GAAP”).
7
NOTE 1 – GENERAL (Cont.)
Nature of Operations (Cont.)
These unaudited consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements of the Company as of December 31, 2025, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on March 31, 2026. The results of the interim period are not necessarily indicative of the results to be expected for the full year ending December 31, 2026. These unaudited consolidated condensed financial statements reflect all adjustments which, in the opinion of management, are necessary to present fairly the financial position, the results of operations and cash flows of the Company for the periods presented.
Going Concern
The accompanying unaudited consolidated condensed financial statements have been prepared assuming the Company will continue on a going concern basis and in accordance with GAAP. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.
Pursuant to the requirements of the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date these financial statements are issued. This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.
For the six months ended June 30, 2026, the Company incurred a net loss of $6.8 million and used $
The Company’s revenue is dependent on a number of external factors, including commercial terms, payments from customers, payments from partners, counterparty risks, and market conditions, including those related to digital assets, AI, HPC and other markets. These factors are outside the Company’s direct control, and the Company may not be able to practically mitigate their impact. The Company cannot predict with any certainty whether these trends will reverse or persist.
The Company has ongoing litigation related to the Marshall Loan, W Capital Loan, Celsius Promissory Note and Celsius Colocation Agreement (each defined below). See Note 8 – Commitments and Contingencies.
8
NOTE 1 – GENERAL (Cont.)
Going Concern (Cont.)
The Company has evaluated the above conditions and concluded that these conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of these consolidated financial statements.
To mitigate these conditions, the Company has explored various avenues to enhance liquidity, fund the Company’s expenditures, and meet debt servicing requirements. These strategies include, among others:
| ● | Expanding its digital infrastructure platform and increasing capacities for either digital colocation services and/or AI and HPC markets; |
| ● | Executing new customer digital colocation service agreements in either AI, HPC, and/or digital assets mining to diversify its exposure across customers and/or markets; |
| ● | Engaging in discussions with capital providers, relating to equity and/or debt; |
| ● | Considering equity issuances such as capital raises and at-the-market transactions; |
| ● | Assessing and evaluating corporate and strategic transactions; |
| ● | Assessing and evaluating commercial opportunities or other business opportunities under consideration; |
| ● | Conducting assessments to identify and implement operational improvements and/or efficiencies and other actions aimed at enhancing revenue and/or optimizing expenses; and |
| ● | Evaluating, assessing and pursuing business revenue and margin expansion opportunities. |
ATM Program
On October 16, 2025, the Company entered into an At the Market Offering Agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) to sell shares (the “Shares”) of our common stock, par value $
During the six months ended June 30, 2026, the Company has sold
Revolving Line of Credit
On May 28, 2026, the Company (the “Borrower”), and Endeavor Blockchain, LLC, an Arkansas limited liability company (“Endeavor” and the “Noteholder”), entered into a promissory note providing for a revolving line of credit, with the aggregate principal sum of all revolving loans advanced from time to time by the Noteholder to the Borrower not to exceed forty million dollars ($
Pursuant to the Revolver, each revolving loan will bear interest at a fixed rate of
The Revolver contains customary representations, warranties, covenants, events of default and security arrangements. Borrower is also subject to restrictions on incurring additional indebtedness and additional liens on the collateral. The Revolver provides for customary events of default, including, among others, failure to pay principal or interest, breach of representations and warranties, violation of covenants, bankruptcy or insolvency events. The Borrower may at any time, and without penalty, prepay outstanding amounts under the revolving loans, or if there are no outstanding amounts, terminate the Revolver. The outstanding balance including interest is $
9
NOTE 1 – GENERAL (Cont.)
Going Concern (Cont.)
Series D Convertible Preferred Stock and Warrant
On June 30, 2026, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with Six Thirty AI, LLC (the “Purchaser”), pursuant to which the Company issued and sold to the Purchaser an aggregate of
The Series D Preferred Stock ranks senior to Common Stock, accrues cumulative dividends at
The Warrant is exercisable immediately, at an exercise price of $
Although the Company may have access to capital, debt, and/or other sources of funding, these may require additional time and cost, may impose operational restrictions and other covenants on the Company, may not be available on attractive terms, and may not be available at all. If the Company raises additional capital or debt, this could cause additional dilution to the Company’s stockholders. The terms of any future capital raise or debt issuance and the costs of any financing are uncertain and may be unfavorable to the Company. Should the Company be unable to source sufficient funding, the Company may not be able to realize assets at their recognized values and fulfill its liabilities in the normal course of business at the amounts stated in these consolidated financial statements.
The Company obtains advice from outside resources; however, it is important to note that strategic and other initiatives may not lead to any transaction or other outcome.
These unaudited consolidated condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and other commitments in the normal course of business. They do not include any adjustments relating to the recoverability and carrying amounts of assets and the amounts of liabilities should the Company be unable to continue as a going concern and meet its obligations and debts as and when they fall due.
10
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Basis of Preparation
The accompanying unaudited consolidated condensed financial statements of the Company include the accounts of the Company and its wholly or majority owned and controlled subsidiaries. Intercompany investments, balances and transactions have been eliminated in consolidation. Certain reclassifications of current year amounts on the statement of operations have been made to improve presentation.
Use of Estimates and Assumptions
The preparation of the financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the unaudited consolidated condensed financial statements, and the reported amounts of income and expenses during the reporting periods. Actual results could differ from those estimates. The Company has considered the following to be significant estimates made by management, including but not limited to, going concern assumptions, estimating the useful lives of fixed assets, realization of long-lived assets, unrealized tax positions, and valuing the derivative asset classified under Level 3 fair value hierarchy.
Revenue recognition
The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of ASC 606 is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Five steps are required to be followed in evaluating revenue recognition: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfies a performance obligation.
In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).
Digital colocation revenue
The Company offers other businesses and customers the opportunity to colocate their specialized computers used in mining digital assets and other equipment within our facilities. The Company generates revenue from these customers for their use of our digital colocation services and facilities. This offering is known as “colocation” and can be customized and tailored for each customer’s situation and strategy as well as the Company’s strategy. For example, customers may agree to be charged upfront digital infrastructure fees, minimum fees, and maintenance fees. The Company, on the other hand, charges colocation fees for the use of its facilities, and other related fees. In addition, digital colocation customers typically pay for energy used in connection with the customer colocation services agreement on a pass-through basis, which may be on a fixed or variable basis calculated on the portion of energy used by the customer on the site. The Company satisfies the performance obligation when the customer has the ability to direct the use and obtain substantially all of the remaining benefits of the good or service. Revenue is recognized over time as customers simultaneously receive and consume the benefits because another party would not need to substantially reperform the work completed by the Company in order to fulfill the remaining performance obligation to the customer. Revenue is recognized upon confirmation of the Company’s power usage by the electricity provider and billed at the rates outlined in each customer contract on a monthly basis.
11
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Revenue recognition (Cont.)
The customer contracts contain variable consideration to be allocated to and recognized in the period to which the consideration relates. Usually this is when it is invoiced, rather than obtaining an estimation of variable consideration at the beginning of the customer contracts.
Energy management revenue
The Company has developed several energy management program capabilities and has an energy management business to generate revenue when the Company adapts its power usage to the real-time needs of the power grid. Energy management revenue consists of revenue for curtailing power and through a power pricing arrangement.
Revenue for curtailing power is recognized over the period that the services are being provided. The Company estimates the amount of curtailable power and the expected payment for that curtailment and recognizes revenue based on the proportion of the service that has been provided. In this arrangement, the Company is considered the principal and revenue is recognized on a gross basis.
Revenue through the Company’s power pricing arrangement is recognized over the period that the services are being provided. The Company estimates the amount of energy available for sale and the expected payment for that energy, and recognizes revenue based on the proportion of the service that has been provided. In this arrangement, the Company is considered the principal and revenue is recognized on a gross basis.
Digital assets mining revenue
The Company has a contract with mining pools and has undertaken the performance obligation of providing computing power in exchange for non-cash consideration in the form of digital assets. The provision of computing power is the only performance obligation in the Company’s contract with its pool operators. Where the consideration received is variable (for example, due to payment only being made upon successful mining), it is recognized when it is highly probable that the variability is resolved, which is generally when the digital asset is received.
The Company measures the non-cash consideration received at the fair market value of the digital asset received. Management estimates fair value on a daily basis, as the quantity of digital assets received multiplied by the price quoted on the exchange that the Company uses to dispose of digital assets.
Cost of revenues
Cost of revenue consists primarily of expenses that are directly related to providing the Company’s service to its paying customers. These primarily consist of costs associated with operating our colocation facilities such as direct power costs, energy costs, freight costs and material costs related to digital asset mining.
12
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Income taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance may be established to reduce the deferred tax asset to the level at which it is “more likely than not” that the tax asset or benefits will be realized. Realization of tax benefits of deductible temporary differences and operating loss carryforwards depends on having sufficient taxable income of an appropriate character within the carryback or carryforward periods.
The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained upon review by the taxing authority. Recognized income tax positions are measured at the largest amount that is greater than
Functional currency
All subsidiaries of the Company have a functional currency of United States dollar (“USD”). Assets and liabilities denominated in Australian dollars are translated into USD at exchange rates in effect on the consolidated balance sheet dates. Revenue and expense accounts are translated using the monthly average exchange rates during the period. Translation of all the consolidated companies’ financial records into USD is required due to the reporting currency for these consolidated financial statements presented as USD and the functional currency of the parent company being that of USD. Translation adjustments are accumulated in other comprehensive income (loss). Gains or losses on foreign currency transactions and translation adjustments in highly inflationary economies are recorded as income (expense) in the period in which they are incurred.
Segment reporting
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision–making group in deciding how to allocate resources and in assessing performance. The Company’s CODM group is composed of the Chief Executive Officer.
The Company operates as
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, cash held with digital asset exchanges, and other short-term and highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less.
13
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Concentrations of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. Cash and cash equivalents are invested in banks. If the counterparty completely failed to perform in accordance with the terms of the contract, the maximum amount of loss to the Company would be the balance. Management believes that the financial institutions that hold the Company’s investments are financially sound and, accordingly, minimal credit risk exists with respect to these investments. The Company has no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements.
Property, plant and equipment
Property, plant and equipment (“PP&E”) are stated at cost, net of accumulated depreciation. All other repair and maintenance costs are charged to operating expenses as incurred. The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met. PP&E transferred from customers is initially measured at the fair value at the date on which control is obtained.
PP&E are depreciated on a straight-line or declining balance basis based on the asset classification, over their useful lives to the economic entity, commencing from the time the assets arrive at their destination where they are ready for use. Low-cost assets are capitalized and immediately depreciated.
| Asset class | Useful life | Depreciation Method | ||
| Fixtures | Straight-Line | |||
| Plant and equipment | Straight-Line | |||
| Modular data center | Declining | |||
| Motor vehicles | Straight-Line | |||
| Computer equipment | Straight-Line | |||
| Computational and Processing machinery (Miners) | Straight-Line | |||
| Transformers | Straight-Line | |||
| Leasehold improvements | Shorter of useful life or lease term | Straight-Line |
PP&E are derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the consolidated statement of operations.
The residual values, useful lives, and methods of depreciation of PP&E are reviewed at each financial year end and adjusted prospectively, if appropriate.
The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such an asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Fair value of financial instruments:
The Company accounts for financial instruments under ASC 820, Fair Value Measurements. 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 in a principal or most advantageous market. To increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:
| Level 1 — | quoted prices (unadjusted) in active markets for identical assets or liabilities; |
| Level 2 — | observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived valuations whose significant inputs and significant value drivers are observable in active markets; and |
| Level 3 — | assets and liabilities whose significant value drivers are unobservable. |
Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement.
| Fair value measured as of June 30, 2026 | ||||||||||||||||
| Total | Total Level 1 | Total Level 2 | Total Level 3 | |||||||||||||
| Assets: | ||||||||||||||||
| Derivative asset | $ | $ | - | $ | - | $ | ||||||||||
| Fair value measured as of December 31, 2025 | ||||||||||||||||
| Total | Total Level 1 | Total Level 2 | Total Level 3 | |||||||||||||
| Assets: | ||||||||||||||||
| Cryptocurrencies held for customers | $ | $ | $ | - | $ | - | ||||||||||
| Derivative asset | $ | $ | - | $ | - | $ | ||||||||||
| Liabilities: | ||||||||||||||||
| Cryptocurrencies due to customers | $ | $ | $ | - | $ | - | ||||||||||
Level 1 Assets and Liabilities:
In accordance with ASU 2023-08, cryptocurrency that was mined from colocation services and held in a digital asset account controlled by the Company is measured at fair value and recognized separately on the cryptocurrencies line of the balance sheet. Due to a customer dispute that was resolved during the six months ended June 30, 2026, the Company had recognized corresponding cryptocurrencies due to customer liability included in trade and other payables on the balance sheet at December 31, 2025. The estimated fair value of the cryptocurrency and alleged liability was classified as Level 1 of the fair value hierarchy and was based on the quantity of cryptocurrency held in the digital asset account multiplied by the price quoted on the exchange the Company used to dispose of digital assets on December 31, 2025.
Level 3 Assets:
In June 2022, the Company entered into a power supply agreement (“PSA”) with Dynegy Inc., formerly Energy Harbor LLC, (“Dynegy”), the energy supplier to the Company’s Midland, Pennsylvania facility, to provide the delivery of a fixed portion of the total amount of electricity for a fixed price through December 2026. If the Midland, Pennsylvania facility uses more electricity than contracted, the cost of the excess is incurred at a new price quoted by Dynegy.
15
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Fair value of financial instruments: (Cont.)
While the Company participates in energy management programs at its Midland, Pennsylvania facility, the Company does not consider such actions as trading activities. That is, the Company does not engage in speculation in the power market as part of its ordinary activities. Because the sale of any electricity under a curtailment program allows for net settlement, the Company has determined the PSA meets the definition of a derivative under ASC 815, Derivatives and Hedging. However, because the Company has the ability to sell the power back to the grid rather than take physical delivery, physical delivery is not probable through the entirety of the contract and therefore, the Company does not believe the normal purchases and normal sales scope exception applies to the PSA. Accordingly, the PSA (a non-hedging derivative contract) is recorded at estimated fair value each reporting period with the change in the fair value recorded in “change in fair value of derivative asset” in the consolidated statements of operations.
The PSA was classified as a derivative asset beginning in the quarter ended September 30, 2022, and measured at fair value on the date of the PSA, with changes in fair value recognized in the accompanying consolidated statements of operations. The estimated fair value of the Company’s derivative asset is classified in Level 3 of the fair value hierarchy due to the significant unobservable inputs utilized in the valuation. Specifically, the Company’s discounted cash flow estimation models contain quoted commodity exchange spot and forward prices and are adjusted for basis spreads for load zone-to-hub differentials through the term of the PSA, which expires in December 2026. In addition, the Company adopted a discount rate of approximately
Stock based compensation
The Company follows ASC 718-10, Compensation-Stock Compensation. The Company expenses stock-based compensation to directors, employees, and non-employees over the requisite service period based on the grant-date fair value of the awards. The Company determines the grant-date fair value of options using the Trinomial Lattice Method. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. These assumptions are the expected stock volatility, the risk-free interest rate, the expected life of the option, and the expected forfeiture rate. Expected volatility computes stock price volatility over expected terms based on the historical trading prices of the Common Stock. Risk–free interest rates are calculated based on the yield of a
Recent accounting pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.
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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Recent Accounting Pronouncements (Cont.)
In July 2025, the FASB issued ASU 2025-05, Financials Instruments-Credit Losses (Topic 326). The amendments introduce two key simplifications for estimating expected credit losses on current accounts receivable and current contract assets under ASC 606, the practical expedient and an accounting policy election. Entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The updates in ASU 2025-05 are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim periods within those annual periods. Early adoption is permitted. In January 2026, the Company decided to elect a practical expedient allowing the assumption that current conditions at the balance sheet date remain unchanged over the asset’s remaining life—meaning no forward-looking forecasting is required for these short-term assets. Adoption of ASU 2025-05 did not have a material impact on our financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2025, the FASB issued ASU 2025-12, “Codification Improvements.” The amendments in this update clarify, correct, and otherwise improve a wide variety of Topics in the Codification. Notably, ASU 2025-12 clarifies that when an entity has a loss from continuing operations and a contract that may be settled in stock or cash that is reported as an asset or liability for accounting purposes, the entity should consider whether including the potential common shares has a dilutive effect on the diluted earnings per share (EPS) computation by evaluating the combined effect of the adjustments to the numerator and the denominator. ASU 2025-12 is effective for the Company for fiscal years beginning after December 15, 2026. The Company expects that these amendments will not have a material impact on its consolidated financial statements.
In January 2025, the FASB issued ASU 2025-01, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date” (“ASU 2025-01”). ASU 2025-01 amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. ASU 2024-03 improves financial reporting by requiring companies to disclose additional information about purchases of inventory, employee compensation, depreciation and amortization, in the notes to the financial statements. The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements.
NOTE 3 – BASIC AND DILUTED NET INCOME (LOSS) PER SHARE
Net income (loss) per common share is calculated in accordance with ASC 260, Earnings Per Share. Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of Common Stock outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of shares of Common Stock outstanding plus the dilutive effect of unvested restricted stock units (“RSUs”), and outstanding warrants and options. For the periods presented with a net loss, the computation of diluted net loss per share does not include dilutive Common Stock equivalents in the weighted average shares outstanding, as they would be anti-dilutive.
Securities that could potentially dilute net income per share in the future but were excluded in the computation of net loss per share, as of June 30, 2026 and 2025, are as follows:
| As of June 30, | ||||||||
| 2026 | 2025 | |||||||
| Warrants to purchase Common Stock | ||||||||
| Options to purchase Common Stock | ||||||||
| RSUs issued under a management equity plan | ||||||||
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NOTE 4 – LEASES
The Company’s operating leases are for digital asset mining sites and its finance leases are primarily for related plant and equipment.
The Company’s lease costs recognized in the consolidated condensed statements of operations consist of the following:
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Operating lease charges (1) | $ | $ | $ | $ | ||||||||||||
| Finance lease charges: | ||||||||||||||||
| Amortization of right-of-use assets | $ | $ | $ | $ | ||||||||||||
| Interest on lease obligations | $ | $ | $ | $ | ||||||||||||
| (1) | Included in selling, general, and administrative expenses. |
The following is a schedule of the Company’s lease liabilities by contractual maturity as of June 30, 2026:
| Operating leases | Finance leases | |||||||
| 2026 | $ | $ | ||||||
| 2027 | - | |||||||
| 2028 | - | |||||||
| 2029 | - | |||||||
| 2030 | - | |||||||
| Total undiscounted lease obligations | ||||||||
| Less: imputed interest | ( | ) | ( | ) | ||||
| Total present value of lease liabilities | ||||||||
| Less: current portion of lease liabilities | ||||||||
| Non-current lease liabilities | $ | $ | - | |||||
Other lease information as of and for the period ended June 30, 2026:
| Operating leases | Finance leases | |||||||
| Cash out flows from leases | $ | $ | ||||||
| Weighted-average remaining lease term (years) | ||||||||
| Weighted-average discount rate (%) | % | % | ||||||
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NOTE 5 – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, net, consisted of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Plant and equipment | $ | $ | ||||||
| Computer equipment | ||||||||
| Processing machines (Miners) | ||||||||
| Modular data center | ||||||||
| Motor Vehicles | ||||||||
| Transformers | ||||||||
| Low-cost assets | ||||||||
| Leasehold improvements | ||||||||
| Total | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Property, plant and equipment, net | $ | $ | ||||||
The Company incurred depreciation and amortization expense in the amounts of $
NOTE 6 – INCOME TAXES
The Company records income taxes using the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax effects attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and operating loss and tax credit carryforwards. The Company establishes a valuation allowance if management believes it is more likely than not that the deferred tax assets will not be recovered based on an evaluation of objective verifiable evidence. Management has considered the Company’s history of book and tax income and losses incurred since inception, and the other positive and negative evidence, and has concluded that it is more likely than not that the Company will not realize the benefits of the net deferred tax assets as of June 30, 2026.
The Company recorded income tax benefit (expense) of approximately (
| For the three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Effective income tax rate | ( | )% | % | |||||
The Company recorded income tax benefit (expense) of approximately (
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Effective income tax rate | ( | )% | ( | )% | ||||
As of June 30, 2026, the Company had no unrecognized tax benefits and does not anticipate any significant change to the unrecognized tax benefit balance.
19
NOTE 7 – LOANS
Revolving Line of Credit
On May 28, 2026, the Company and Endeavor entered into the Revolver as discussed in Note 1.
Pursuant to the Revolver, each revolving loan bears interest at a fixed rate of
The Revolver contains customary representations, warranties, covenants, events of default and security arrangements. Borrower is also subject to restrictions on incurring additional indebtedness and additional liens on the collateral. The Revolver provides for customary events of default, including, among others, failure to pay principal or interest, breach of representations and warranties, violation of covenants, bankruptcy or insolvency events. As of June 30, 2026, the Company was in compliance with the covenants in the Revolver.
The Company may at any time, and without penalty, prepay outstanding amounts under the revolving loans, or if there are no outstanding amounts, terminate the Revolver. The outstanding balance including interest is $
Marshall Loan
The Company is included as a guarantor of the Marshall Loan. The loan matured in February 2024 and bears interest at a rate of
W Capital Loan
The Company is included as a guarantor of a Secured Loan Facility Agreement (the “W Capital Loan”) for working capital by Mawson PL with W Capital Advisors Pty Ltd for the W Capital Advisors Fund (collectively, “W Capital”). As of June 30, 2026, AUD $
Celsius Promissory Note
On February 23, 2022, Luna Squares entered into a Digital Colocation Agreement (the “Digital Colocation Agreement”) with Celsius Mining LLC. In connection with this agreement, Celsius Mining LLC loaned Luna Squares a principal amount of $
Convertible Notes
On July 8, 2022, the Company issued secured convertible promissory notes (the “Secured Convertible Promissory Notes”) to investors in exchange for cash. The outstanding balance relates to the interest on the Secured Convertible Promissory Notes which has been accrued from July 2022 onwards and therefore the outstanding balance is $
20
NOTE 8 – COMMITMENTS AND CONTINGENCIES
The Company accounts for its contingent liabilities in accordance with ASC 450 Contingencies. A provision is recorded when it is both probable that a liability has been incurred, and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. Legal costs incurred in connection with loss contingencies are expensed as incurred.
The Company is subject to the various legal proceedings and claims discussed below (and in Note 1) that have not been fully resolved and that have arisen in the ordinary course of business. In the opinion of management, there was not at least a reasonable possibility the Company may have incurred a material loss, or a material loss in excess of a recorded accrual, with respect to loss contingencies. However, the outcome of legal proceedings and claims brought against the Company is subject to significant uncertainty. Therefore, although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters are resolved against the Company in a reporting period for amounts in excess of management’s expectations, the Company’s consolidated financial statements for that reporting period could be materially adversely affected.
Marshall Loan and W Capital Loan
The Marshall Loan was entered into with an Australian entity MIG No.1, which was placed into a court appointed liquidation and wind-up process and was deconsolidated from the Group on March 19, 2024. On March 19, 2024, Marshall appointed receivers and managers in Australia under the terms of their security relating to their secured loan facility. The direct assets that secure this loan include 5,372 Miners and 8 modular data centers (“MDCs”). These assets are held by MIG No.1 and therefore were included in the deconsolidation. The receiver’s statutory duty includes the obligation to sell the secured assets at market value or, if market value is not known, at the best price reasonably obtainable to maximize the prospects of there being sufficient proceeds available to satisfy the balance of the outstanding secured debt. It is therefore expected that this loan balance will be offset in the future by the amount received from the sale of these Miners and MDCs. On June 25, 2024, Marshall inspected and inventoried the Miners and MDCs located at the Company’s Midland facilities. The Company is currently not utilizing these Miners or MDCs for its operations and has asked Marshall to take these assets out of the Company’s storage. Marshall has not responded to the Company’s request for these Miners and MDCs to be removed from the Company’s storage. The Company is reserving all its rights and remedies against Marshall.
The W Capital Loan was originally with Mawson Infrastructure Group Pty Ltd (“Mawson PL”), and this Australian entity was placed into Australian voluntary administration on October 30, 2023. On November 3, 2023, W Capital appointed receivers and managers in Australia under the terms of their security relating to their working capital facility. The Company has corresponded with W Capital and/or its representatives, the Company’s ongoing significant concerns about W Capital and James Manning, a former board director and Chief Executive Officer of the Company (“Manning”), being related parties. W Capital has not responded to the Company’s concerns in a manner satisfactory to the Company.
On October 3, 2024, a proceeding was filed by W Capital and Marshall against the Company before the Federal Court of Australia, New South Wales, in the matter entitled, “W Capital Advisors Pty Ltd, in its capacity as Trustee for the W Capital Advisors Fund, v. Mawson Infrastructure Group, Inc.”, No. NSD 1395/2024. In an effort to force the Company to pay the W Capital Loan and Marshall Loan, W Capital and Marshall sought to have the Company declared insolvent under Australian law on the grounds that the Company failed to pay W Capital the sums it claims the Company owed it under the aforesaid Australian judgment. On February 11, 2025, the Australian Court declared that Mawson be “wound up” under Australian law. However, Mawson has no assets, revenue or other business in Australia subject to Australian jurisdiction. It is unclear as to any adverse effect this ruling has on Mawson in the U.S. This Australian ruling completely disregarded the automatic stay in place as established by the Involuntary Petition (defined below). The Company has communicated its objections and concerns to these Australian liquidator and entities, the Australian Court, and to the U.S. Bankruptcy Court.
21
NOTE 8 – COMMITMENTS AND CONTINGENCIES (Cont.)
Concurrently with the above Australian litigation, on December 4, 2024, Marshall, W Capital, and Rayra Pty Ltd, as Trustee for the Mountainview Trust (“Rayra” and together with Marshall and W Capital, collectively, the “Original Petitioners”), all Australian entities, filed an involuntary petition (the “Involuntary Petition”) in the matter entitled In Re Mawson Infrastructure Group, Alleged Debtor, Case No. 1:24-bk-12726, under chapter 11 (“Chapter 11”) of title 11, 11 U.S.C. § 101 through 1330 (the “Bankruptcy Code”), seeking a determination of the court to force the Company into a Chapter 11 proceeding. Subsequently, Liam Healy and Quentin Olde, in their capacity as Receivers and Managers of MIG No. 1 Pty Ltd (in Liq.), and John McInerney and Philip Campbell-Wilson of Grant Thornton Australia Limited, in their capacity as Joint and Several Liquidators of Mawson Services Pty Ltd. (In Liq.), later joined the Involuntary Petition as additional petitioning creditors (together with the Original Petitioners, collectively, the “Petitioning Creditors”). The Company disputed the validity of the Involuntary Petition and the Petitioning Creditors’ debt claims, and filed responsive pleadings and other remedies against the Petitioning Creditors for bad faith, pursue sanctions, and other damages as is allowed by applicable law.
During the course of this matter, the Company continued to operate in the ordinary course of business as authorized under 11 U.S.C. § 303(f). Nonetheless, under applicable federal law, all collection efforts by the Company’s creditors, including all of the Petitioning Creditors, continued to be stayed pending final resolution of the Involuntary Petition.
The parties filed pretrial motions seeking various remedies, including dismissal prior to trial, sanctions and attorneys’ fees. On May 5, 2025, the Company filed a motion for sanctions against the Petitioning Creditors seeking, among other things, compelling discovery against the Petitioning Creditors, sanctions for bad faith, and payment of the Company’s legal fees. The motions were heard by the Bankruptcy Court on August 11, 2025, wherein the Court ruled from the bench to sanction the Petitioning Creditors, required them to pay the Company’s attorney’s fees incurred to date and further ordered the Petitioning Creditors to post a cash bond of $
On December 29, 2025, the Company filed an adversary proceeding in the United States Bankruptcy Court for the District of Delaware against the Petitioning Creditors, seeking general and punitive damages, sanctions attorneys’ fees and costs against the Petitioning Creditors.
22
NOTE 8 – COMMITMENTS AND CONTINGENCIES (Cont.)
The Company learned that on or about October 20, 2025, one of the Australian Petitioning Creditors, W Capital, filed for commencement of Australian Insolvency Proceedings placing W Capital under receivership and ultimate liquidation in Australia. The Company is one of W Capital’s largest creditors. The Company expects to avail itself of all legal rights and remedies to which it may be entitled to recover from W Capital under applicable Australian and US laws.
Celsius Promissory Note and Celsius Colocation Agreement
Luna Squares has not repaid the Celsius Promissory Note by its stated maturity date and is claimed by Celsius to be in default. Celsius Mining LLC transferred the benefit of the Celsius Promissory Note to Celsius Network Ltd. and Celsius Network Ltd has notified Luna Squares that the default interest is payable.
On July 18, 2024, Celsius Network, LLC filed for arbitration of its claims against the Company with the American Arbitration Association in the matter entitled Celsius Network Ltd., Celsius Mining LLC and Ionic Digital Mining LLC (“Ionic”) v. Mawson Infrastructure Group, Luna Squares LLC and Cosmos Infrastructure LLC - Case 01-24-0006-4462. On January 23, 2025, the arbitrator issued a Partial Final Award (the “Partial Final Award”) granting in part Celsius’ claim against Luna Squares on the outstanding promissory note executed by Luna Squares in favor of Celsius. The Partial Final Award granted Celsius monetary damages in the amount of $
Celsius filed a motion seeking a partial award from the arbitrator against the Company based on its corporate guarantee. The arbitrator granted this partial award in favor of Celsius.
On October 7, 2025, Celsius filed a petition with the U.S. District Court of New York to confirm its partial arbitration award against Mawson. Following this, on November 6, 2025, both parties agreed to jointly file a consent judgment and execute a forbearance agreement, which provided additional time for the parties to continue their discussions toward an amicable settlement of all outstanding matters. The Court signed the consent judgment on November 10, 2025.
On February 5, 2026, Celsius took formal steps to domesticate the judgment outside of New York. Currently, the parties are engaged in negotiations to resolve the ongoing litigation. On or about March 6, 2026, Celsius announced that it would voluntarily dismiss its arbitration claims against the Company. On March 30, 2026, Celsius filed a Rule 34 dispositive motion to dismiss Mawson’s claims and counterclaims in the arbitration. On June 1, 2026, the arbitrator granted Celsius relief under its Rule 34 motion filed dismissing Mawson’s claims and counterclaims in the arbitration.
Ionic and Other Settlements
During the three months ended March 31, 2026, the Company reached a confidential settlement with Ionic to resolve all claims Ionic brought against the Company and two of its subsidiaries related to the Celsius Colocation Agreement, all settlement amounts have already been paid. On January 29, 2026, the $
23
NOTE 8 – COMMITMENTS AND CONTINGENCIES (Cont.)
Blockware
On April 19, 2024, a civil suit entitled Blockware Solutions, LLC v. Mawson Bellefonte LLC and Mawson Infrastructure Group, Inc. was filed in the United States District Court, Southern District of New York. The matter remains ongoing. However, the parties are actively pursuing informal settlement discussions.
CleanSpark
On July 16, 2024, the Company filed a civil lawsuit for its claims against CleanSpark, Inc. and CSRE Properties Sandersville, LLC with the United States District Court for the Southern District of New York in the matter entitled “Mawson Infrastructure Group, Inc. and Luna Squares, LLC v. CleanSpark, Inc. and CSRE Properties Sandersville, LLC”, Civil Action No. 1:24-cv-5379, for at least $
Vertua
On March 16, 2022, Luna Squares entered into a lease with respect to a property in the City of Sharon, Mercer County, Pennsylvania (the “Sharon Lease”) with Vertua, a subsidiary entity in which Vertua Ltd has a
On October 17, 2024, the Company filed several claims in the matter captioned “Luna Squares Property, LLC v. Vertua Property, Inc.”, Court of Common Pleas of Mercer County, Pennsylvania, Case No. 2024-2332 against Vertua, including claims for breach of the lease agreement and wrongful termination of the lease, as well as for tortious interference with a business relationship. The Company is seeking reinstatement of the lease, compensatory damages, disgorgement of revenue, and exemplary and punitive damages, as well as reimbursement for its costs and litigation expenses. Vertua is a company related to Manning and also affiliated with Darron Wolter of W Capital. The matter remains ongoing.
Mewawalla Actions
On July 8, 2025, the Company filed a complaint in the Court of Chancery of the State of Delaware against the Company’s former CEO and President, Rahul Mewawalla captioned Mawson Infrastructure Group Inc. v. Rahul Mewawalla, No. 2025-0789-JTL (the “Mewawalla Action”). The Mewawalla Action seeks to recover damages from Mr. Mewawalla arising out of his alleged breach of fiduciary duties as a director, as well as alleged fraud. Mr. Mewawalla has not filed an answer to the Mewawalla Action, but after an amended complaint was filed by the Company, Mr. Mewawalla filed a motion to dismiss on November 6, 2025. After hearing on the motion, the Delaware action against Rahul Mewawalla was dismissed without prejudice on June 1, 2026.
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NOTE 8 – COMMITMENTS AND CONTINGENCIES (Cont.)
Mewawalla Actions (Cont.)
On December 8, 2025, Mr. Mewawalla filed a complaint in the King County Superior Court of Washington State against the Company, Ryan Costello, Steven Soles, and Jonathan Sites (the “Washington State Action”), asserting claims for alleged retaliation, breach of contract, wage violations, discrimination-related retaliation, whistleblower retaliation, and other statutory claims arising from his employment and the termination of his employment with the Company. Messrs. Costello and Soles were subsequently dismissed from the action for lack of personal jurisdiction. The remaining defendants categorically deny the allegations asserted in the Washington State Action and continue to vigorously defend against the claims.
Endeavor Blockchain, LLC Investor Group
On January 20, 2026, the Company filed a Complaint for Violation of Securities Laws, as well as a Motion for Expedited Injunctive Relief, in the United States District Court for the District of Delaware against Endeavor Blockchain, LLC (“Endeavor”), Joshua Kilgore, PM Squared, LLC, Cody Smith, and Phillip Stanley (collectively, the “Defendants”) asserting violation of Sections 13(d) and 10(b) of the Securities Exchange Act of 1934 and Rules 13d-1 and 10b-5 of the Securities and Exchange Commission. On March 2, 2026, the Complaint, as amended, was dismissed, as was the Motion for Expedited Injunctive Relief and Temporary Restraining Order, as amended, and the case was subsequently closed. Subsequently, on April 6, 2026, the parties settled their disputes entering into a Cooperation Agreement that implemented an immediate change in board control and governance at the Company, immediately removing the prior board members, Ryan Costello, Kathryn Schellenger, and Steven Soles, replacing them with a new board. Simultaneously, the Company appointed: Three independent directors: Kyle B. Danges, Rodger Davis, and Lisa R. Hough, two Endeavor-affiliated directors: Cody Smith and Phillip Stanley, resulting in a five-member board. Subsequently, Josh Kilgore and Daniel J. Morrison were added to the board resulting in a seven-member board.
NOTE 9 – STOCKHOLDERS’ EQUITY
Series D Convertible Preferred Stock and Warrant
On June 30, 2026, the Company entered into the Purchase Agreement with Six Thirty AI, LLC (“Six Thirty”), pursuant to which the Company issued and sold to the Purchaser an aggregate of
Six Thirty acquired the Series D Preferred Stock using borrowed funds. Concurrently with the execution of the Purchase Agreement, the Company entered into a letter agreement with Six Thirty and YA II PN, LTD, the administrative and collateral agent for the lenders (the “Agent”), pursuant to which the Company consented to (i) Six Thirty’s pledge of the shares of Series D Preferred Stock to the Agent for the ratable benefit of the lenders; (ii) Six Thirty’s assignment of the Warrant to the lenders as a commitment fee under the loan facility; and (iii) the lenders’ right to exchange all or any portion of the outstanding obligations under the loan and guaranty agreement for shares of the Series D Preferred Stock and settlement using the Series D Preferred Stock or Conversion Shares.
Concurrently with the execution of the Purchase Agreement, the Company entered into a registration rights agreement, pursuant to which the Company is obligated to file and maintain the effectiveness of one or more resale registration statements with the SEC registering the resale of the Conversion Shares and Warrant Shares on a continuous basis under Rule 415 of the Securities Act. The Company filed the initial registration statement for such purposes on July 20, 2026, and the Company is obligated to have such registration statement declared effective by the SEC no later than August 29, 2026 (or in the event of a “full review” by the SEC, no later than September 28, 2026).
The Series D Preferred Stock ranks senior to all other classes and series of the Company’s capital stock.
The Series D Preferred Stock accrues cumulative dividends at
Each holder of Series D Preferred Stock may convert all, or any part, of its shares of Series D Preferred Stock, at any time on or after August 30, 2026, into the Conversion Shares at the Conversion Price equal to
The Series D Preferred Stock is non-voting, except as required by applicable law or as expressly set forth in the Certificate of Designations.
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NOTE 9 – STOCKHOLDERS’ EQUITY (Cont.)
Series D Convertible Preferred Stock and Warrant (Cont.)
The Company may redeem the Series D Preferred Stock at any time, in whole or in part, at a cash price equal to
Among other negative covenants, and subject to customary exceptions, so long as the Series D Preferred Stock is outstanding, the Company will not, and will cause its subsidiaries not to, (i) redeem, repurchase or declare or pay any cash dividend or distribution on any of its capital stock; (ii) incur indebtedness or create liens, except for customary permitted indebtedness and permitted liens; or (iii) enter into any variable rate transaction.
Under the Purchase Agreement, the Company also issued the Warrant exercisable for five years to purchase
Conversion of the Series D Preferred Stock and exercise of the Warrant are subject in the aggregate to a
Common Stock
ATM Program
On October 16, 2025, the Company entered into the Sales Agreement with Wainwright to sell Shares of our Common Stock having an aggregate sales price of up to $
During the six months ended June 30, 2026, the Company has sold
Restricted Stock Units
During the six months ended June 30, 2026, vested and outstanding RSUs were settled into
Common Stock Warrants
The Company’s outstanding and exercisable stock warrants as of June 30, 2026, vested and unvested, are exercisable for
Equity plans
On April 9, 2024, the Board approved the 2024 Omnibus Equity Plan (the “2024 Plan”) which provides an initial
As of June 30, 2026, the number of shares allocated and available under the 2024 Plan were
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NOTE 9 – STOCKHOLDERS’ EQUITY (Cont.)
Common Stock (Cont.)
Adoption of Rights Agreement
On February 1, 2026, the Board of the Company authorized and declared a dividend distribution of one right (each, a “Right”) for each outstanding share of Common Stock to stockholders of record as of the close of business on February 12, 2026. Each Right entitled the registered holder to purchase from the Company one one-thousandth of a share of Series C Junior Participating Preferred Stock, par value $
The Board adopted the Rights Agreement to protect the interests of Company stockholders at the time. In general terms, subject to certain enumerated exceptions, it worked by imposing significant dilution upon any person or group that acquires beneficial ownership of
Termination of Rights Agreement
On June 5, 2026, the Company and Computershare executed Amendment No. 1 (the “Amendment”) to the Rights Agreement.
The Amendment accelerated the expiration date of the Rights Agreement to the earlier of June 8, 2026, and the Redemption Date (as defined in the Rights Agreement). At the time of the termination of the Rights Agreement, all of the Rights expired that were previously distributed to holders of the Company’s issued and outstanding common stock pursuant to the Rights Agreement. In deciding to accelerate the expiration date to June 8, 2026, the Company’s Board determined that an active Rights Agreement is no longer needed to protect stockholder value at this time.
Stock-Based Compensation:
The Company recognized stock-based compensation expense during the three and six months ended June 30, 2026 and 2025, as follows:
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Service -based restricted stock awards | $ | $ | $ | $ | ||||||||||||
| Total stock-based compensation | $ | $ | $ | $ | ||||||||||||
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NOTE 9 – STOCKHOLDERS’ EQUITY (Cont.)
Stock-Based Compensation: (Cont.)
Performance-based awards
Performance-based awards generally vest over a three-year performance period upon the successful completion of specified market and performance conditions.
The Company granted
The following table presents a summary of the Company’s performance-based restricted stock awards activity:
| Number of shares | Weighted Average Remaining Contractual Life (in years) | |||||||
| Outstanding as of December 31, 2025 | ||||||||
| Issued | - | |||||||
| Exercised | ( | ) | - | |||||
| Expired/forfeited | ( | ) | - | |||||
| Outstanding as of June 30, 2026 | ||||||||
| Exercisable as of June 30, 2026 | ||||||||
Service-based restricted stock awards
Service-based awards generally vest over a one-year service period or as otherwise defined.
The following table presents a summary of the Company’s service-based awards activity:
| Number of shares | Weighted Average Remaining Contractual Life (in years) | |||||||
| Outstanding as of December 31, 2025 | ||||||||
| Exercised | ( | ) | - | |||||
| Expired/forfeited | ( | ) | - | |||||
| Outstanding as of June 30, 2026 | ||||||||
| Exercisable as of June 30, 2026 | ||||||||
As of June 30, 2026, there was no unrecognized compensation costs related to the service-based restricted stock awards.
Stock option awards
Stock option awards vest upon the successful completion of specified market conditions.
The following table presents a summary of the Company’s Stock option awards activity:
| Number of shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (in years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding as of December 31, 2025 | $ | $ | - | |||||||||||||
| Outstanding as of June 30, 2026 | $ | $ | - | |||||||||||||
| Exercisable as of June 30, 2026 | $ | $ | - | |||||||||||||
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NOTE 10 – RELATED PARTY TRANSACTIONS
Joint Mining Agreement
In April 2026, the Company entered into a Joint Mining Agreement (the “Colocation Agreement”) with Big Digital Energy, LLC (now Six Thirty AI, LLC), an affiliate of the Endeavor Group (“Six Thirty AI”). Under the terms of the Colocation Agreement, Six Thirty AI will purchase and deliver approximately
Revolving Line of Credit
As more fully set forth in Note 1, on May 28, 2026, the Company and Endeavor entered into the Revolver. Endeavor is wholly owned by Josh Kilgore.
Pursuant to the Revolver, each revolving loan bears interest at a fixed rate of
The Revolver contains customary representations, warranties, covenants, events of default and security arrangements. Borrower is also subject to restrictions on incurring additional indebtedness and additional liens on the collateral. The Revolver provides for customary events of default, including, among others, failure to pay principal or interest, breach of representations and warranties, violation of covenants, bankruptcy or insolvency events. The Borrower may at any time, and without penalty, prepay outstanding amounts under the revolving loans, or if there are no outstanding amounts, terminate the Revolver. The outstanding balance including interest is $
Series D Convertible Preferred Stock and Warrant
As more fully set forth in Note 1 and Note 9, on June 30, 2026, the Company entered into the Purchase Agreement with Six Thirty AI, pursuant to which the Company issued and sold to the Purchaser an aggregate of
The Series D Preferred Stock ranks senior to Common Stock, accrues cumulative dividends at
The Warrant is exercisable immediately, at an exercise price of $
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NOTE 11 – SUBSEQUENT EVENTS
Litigation
For updates subsequent to June 30, 2026, regarding the Marshall Loan, W Capital Loan, Celsius Promissory Note and Celsius Colocation Agreement, Mewawalla Washington State Actions, and CleanSpark, see Note 8 – Commitments and Contingencies.
Hood County Site Acquisition
On July 14, 2026 and July 15, 2026, the Company entered into and closed on a series of definitive agreements with 10NetZero, Inc. (“10NZ”) as joint venture partners, including (i) the Operating Agreement of Texas Load House, LLC (the “Operating Agreement”), (ii) a Loan and Security Agreement between the joint venture partners (the “Loan and Security Agreement”), and (iii) a Side Agreement regarding the Interim Management of Texas Load House, LLC (the “Side Agreement,” and collectively with the other definitive agreements, the “Joint Venture Agreements”), to establish a joint venture for the acquisition, ownership, and development of certain real property located in Hood County, Texas (the “Hood County Site”). Subject to the terms of the Joint Venture Agreements, the Company initially owns a
On July 15, 2026, the joint venture acquired
In connection with the acquisition of the Hood County Site, the Company also entered into the Loan and Security Agreement with 10NZ pursuant to which the Company agreed to provide $
Under the terms of the Operating Agreement, 10NZ’s
Except for the limited protective approval rights expressly set forth in the Operating Agreement, according to the Side Agreement, the business, affairs, activities, policies and operations of the joint venture shall be managed exclusively by or under the direction of the Company, as the sole Manager of Texas Load House, LLC, until such time as 10NZ shall have paid the JV Loan in full, at which time 10NZ will assume the role of sole Manager of Texas Load House, LLC. Certain significant actions require the approval of both the Company and 10NZ as members.
Equity Plan
On July 20, 2026, the Company filed a Registration Statement on Form S-8 to register an additional
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Management’s Discussion and Analysis of Financial Condition and Results of Operations analyzes the major elements of our balance sheets, statements of operations and cash flows. The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited consolidated condensed financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes as disclosed in the 2025 Form 10-K. All amounts are in U.S. dollars.
Throughout this report, unless otherwise designated, the terms “we,” “us,” “our,” the “Company,” and “Big Digital,” refer to Big Digital Energy, Inc., a Delaware corporation, Cosmos Infrastructure LLC, Luna Squares LLC, Mawson Bellefonte LLC, Luna Squares Repairs LLC, Luna Squares Property LLC, Mawson Midland LLC, Mawson Ohio LLC, Mawson Hosting LLC, Mawson Mining LLC and Mawson Capital LLC.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements about our expectations, beliefs or intentions regarding, among other things, our product development efforts, business, financial condition, results of operations, strategies or prospects. Forward-looking statements can be identified by the use of forward-looking words such as “believe”, “expect”, “intend”, “plan”, “may”, “should”, “could” or “anticipate” or their negatives or other variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical or current matters. These forward-looking statements may be included in, but are not limited to, various filings made by us with the United States Securities and Exchange Commission (the “SEC”), press releases or oral statements made by or with the approval of one of our authorized executive officers. Forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including, but not limited to, the factors summarized below.
The 2025 Form 10-K and subsequent Quarterly Reports on Form 10-Q identify important factors which could cause our actual results to differ materially from those indicated by the forward-looking statements, including those set forth under Item 1A. “Risk Factors” below.
The risk factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Given these uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The following important factors, among others, could affect future results and events, causing those results and events to differ materially from those expressed or implied in our forward-looking statements:
| - | continued evolution and uncertainty related to technologies and digital infrastructure; |
| - | our ability to continue as a going concern; | |
| - | our ability to maintain the listing of our common stock on Nasdaq; | |
| - | our need to, and difficulty in, raising additional debt or equity capital and the availability of financing opportunities, including through our “at the market” offering program; | |
| - | access to reliable and reasonably priced electricity sources; | |
| - | operational, maintenance, repair, safety, and construction risks; |
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| - | the failure or breakdown of mining equipment, or internet connection failure; |
| - | our reliance on key management personnel and employees; | |
| - | our ability to attract or retain the talent needed to sustain or grow the business; |
| - | our ability to develop and execute on our business strategy and plans; |
| - | counterparty risks related to our customers, agreements and/or contracts; | |
| - | the loss of a significant digital colocation customer; |
| - | adverse actions by creditors, debt providers, or other parties; |
| - | continued evolution and uncertainty related to growth in blockchain and Bitcoin and other digital assets’ usage; |
| - | the evolution of AI and HPC markets and changing technologies; | |
| - | high volatility in Bitcoin and other digital assets’ prices and in value attributable to our business; | |
| - | the slower than expected growth in demand for AI, HPC and other accelerated computing technologies; | |
| - | the ability to timely implement and execute on AI and HPC digital infrastructure contracts or deployment; |
| - | failure to maintain required compliance to remain eligible for the most cost-effective forms of raising additional equity capital; |
| - | the ability to timely complete the digital infrastructure build-out in order to achieve our revenue expectations for the periods mentioned; |
| - | downturns in the digital assets industry; |
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| - | counterparty risks and risks of delayed or delinquent payments from customers and others; |
| - | inflation, economic or political environment; |
| - | cyber-security threats; |
| - | our ability to obtain proper insurance; |
| - | banks and other financial institutions ceasing to provide services to our industry; |
| - | changes to the Bitcoin and/or other networks’ protocols and software; |
| - | the decrease in the incentive or increased network difficulty to mine Bitcoin; |
| - | the increase in transaction fees related to digital assets; |
| - | the fraud or security failures of large digital asset exchanges; |
| - | the regulation and taxation of digital assets like Bitcoin; |
| - | our ability to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act of 2002; and |
| - | material litigation, investigations, or enforcement actions, including by regulators and governmental authorities. |
All forward-looking statements attributable to us or persons acting on our behalf speak only as of the date of this report and are expressly qualified in their entirety by the cautionary statements included in this report. We undertake no obligation to update or revise forward-looking statements to reflect events or circumstances that arise after the date they are made or to reflect the occurrence of unanticipated events. In evaluating forward-looking statements, you should consider these risks and uncertainties.
Company Overview
We are a technology company focused on digital infrastructure platforms.
The Company designs, builds and operates next-generation digital infrastructure platforms for enterprise customers and for its own purposes. The Company provides services spanning AI, HPC, digital assets including Bitcoin mining, and other intensive computer applications. The Company delivers both self-mining operations and colocation services to enterprise customers with a vertically integrated infrastructure model built for scalability and efficiency. The Company also has an energy management business, which utilizes software and analysis, to generate revenue when the Company participates in energy management programs related to the real-time needs of the power grid.
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 to support the rapid growth of the digital economy in an environmentally sustainable way.
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The Company manages and operates digital infrastructure platforms and data centers delivering a total current capacity of approximately 129 MW with its current operational sites, with additional future capacity under development, all strategically located in locations served by the PJM Energy Market in the United States. The PJM Energy Market is among the largest wholesale power markets in North America.
Recent Developments
During the three months ended June 30, 2026, the Company established a revolving line of credit and issued Series D Preferred Stock and a related Warrant, which are discussed under “Liquidity and Capital Resources.”
GPU Pilot Program
Our graphics processing unit (“GPU”) pilot program that launched in October 2025 on a leading decentralized AI network continues to advance our strategy of expanding the Company’s AI infrastructure capabilities. The pilot remains operational and has performed in line with, and in several key operational areas above, our initial expectations.
Since its inception, the program has provided valuable operational and commercial insights across infrastructure performance, workload optimization, marketplace dynamics, and deployment methodologies. These results have strengthened our technical capabilities and validated key assumptions underlying the development of a scalable AI infrastructure platform. The pilot has also demonstrated consistent operational performance while allowing the Company to further refine its provisioning, pricing, and utilization strategies.
The Company continues to evaluate the pilot as part of its broader AI infrastructure initiative, with ongoing efforts focused on expanding certification coverage, optimizing deployment processes, and assessing additional opportunities for future GPU capacity. The operational data and experience gained through the program continue to support management’s confidence in the scalability of the platform and its potential to contribute to the Company’s long-term infrastructure strategy.
Joint Mining Agreement
On April 27, 2026, the Company entered into a Joint Mining Agreement (the “Six Thirty AI Colocation Agreement”) with Big Digital Energy, LLC (now Six Thirty AI, LLC), an affiliate of the Endeavor Group (“Six Thirty AI”). Under the terms of the Colocation Agreement, Six Thirty AI will purchase and deliver approximately 25,000 s19xp mining computers, and the Company will provide Six Thirty AI with approximately 75MW of computing capacity at its facility in Midland, PA. The Parties will operate under a 50%/50% profit-sharing structure, pursuant to which Big Digital will receive all cash net proceeds from the mining operations. The cash revenue will be used for general corporate purposes and asset purchases to ensure the Company’s use of all available power across its facility locations. As its share of the profit-sharing structure, Six Thirty AI will receive monthly grants consisting of a combination of (i) shares of Common Stock, where the number of shares will equal 20% of its share of the monthly cash net proceeds divided by 30-day volume weighted average price of the Common Stock on the grant date, and (ii) warrants to purchase Common Stock, where the number of underlying shares will equal 80% of its share of the monthly cash net proceeds divided by $20. The prefunded warrants will allow Six Thirty AI to purchase the Common Stock at an exercise price of $20 per share and will have a five-year term. Six Thirty AI is deemed an affiliate of the Company because it is owned and/or controlled by Joshua Kilgore, the Company’s Executive Chairman, Phillip Stanley, the Company’s CEO, and Cody Smith, the Company’s COO, who also serve as members of the Company’s Board of Directors.
Termination of Rights Plan
On June 5, 2026, Company and Computershare Trust Company, N.A., as Rights Agent, executed Amendment No. 1 (the “Amendment”) to the Rights Agreement dated as of February 2, 2026. The Amendment accelerated the expiration date of the Rights Agreement to the earlier of June 8, 2026, and the Redemption Date (as defined in the Rights Agreement). At the time of the termination of the Rights Agreement, all of the Rights expired that were previously distributed to holders of the Company’s issued and outstanding common stock pursuant to the Rights Agreement. In deciding to accelerate the expiration date to June 8, 2026, the Company’s Board of Directors determined that an active Rights Agreement is no longer needed to protect stockholder value at this time.
Nasdaq Listing Rules Compliance
On June 16, 2026, the Company received written notice from Nasdaq’s Listing Qualifications Hearings Department confirming that the Company had regained compliance with the Nasdaq Listing Rules. Nasdaq’s determination is subject to the Company maintaining stockholders’ equity of at least $5 million in each quarter for a twelve-month period, beginning with the quarter ending June 30, 2026, and promptly notifying Nasdaq of any significant events that could affect the Company’s compliance with that requirement. As previously disclosed, the Company was notified by Nasdaq that the Company was in violation of the minimum equity standard under Listing Rule 5550(b)(1), as of December 19, 2025, which requires $2.5 million in stockholders’ equity.
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Hood County Site Acquisition
On July 14, 2026 and July 15, 2026, the Company entered into definitive agreements with 10NetZero, Inc. to form a 50/50 joint venture, and on July 15, 2026 the joint venture acquired 30 acres of a site in Hood County, Texas for approximately $10 million in cash, with an option to purchase the remainder of the site for an additional $600,000. In connection with the acquisition, the Company provided a $4.9 million loan to 10NetZero to fund a portion of its capital contribution required for the acquisition of the Hood County Site. The loan bears interest at the short-term applicable federal rate and matures on October 13, 2026; interest and principal are due at maturity. 10NetZero’s 50% ownership interest in the joint venture is transferable to the Company at a rate of 10% ownership interest per month, prorated daily, for each month past the maturity date that 10NZ fails to repay the entire loan, so that 10NetZero’s entire ownership interest shall have transferred in full to the Company if the loan is not paid in full within five months of the maturity date.
Results of Operations – Three months ended June 30, 2026 compared to the three months ended June 30, 2025
| For the three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenues: | ||||||||
| Digital colocation revenue | $ | 3,505,814 | $ | 3,660,298 | ||||
| Energy management revenue | 2,613,936 | 5,130,712 | ||||||
| Digital assets mining revenue | 33,469 | 742,173 | ||||||
| Total revenues | 6,153,219 | 9,533,183 | ||||||
| Less: Cost of revenues (excluding depreciation) | 4,544,735 | 5,599,553 | ||||||
| Gross Profit | 1,608,484 | 3,933,630 | ||||||
| Selling, general and administrative | 6,027,299 | 5,925,308 | ||||||
| Stock based compensation | 677,043 | 978,261 | ||||||
| Depreciation and amortization | 1,097,390 | 1,466,119 | ||||||
| Change in fair value of derivative asset | 105,608 | 2,137,052 | ||||||
| Total operating expenses | 7,907,340 | 10,506,740 | ||||||
| Loss from operations | (6,298,856 | ) | (6,573,110 | ) | ||||
| Non-operating income (expense): | ||||||||
| Loss on foreign currency transactions | (36,994 | ) | (689,952 | ) | ||||
| Interest expense | (1,011,808 | ) | (827,336 | ) | ||||
| Other income | 8,933 | 60,646 | ||||||
| Other expenses | (7,095 | ) | (9,614 | ) | ||||
| Total non-operating expense, net | (1,046,964 | ) | (1,466,256 | ) | ||||
| Loss before income taxes | (7,345,820 | ) | (8,039,366 | ) | ||||
| Income tax benefit (expense) | (29,920 | ) | 17,933 | |||||
| Net Loss | $ | (7,375,740 | ) | $ | (8,021,433 | ) | ||
Revenues
Digital colocation revenues for the three months ended June 30, 2026 and 2025, were $3.5 million and $3.7 million, respectively. This represented a 4% decrease or a decrease of $0.2 million, compared to the same period in 2025. Digital colocation revenues for the three months ended June 30, 2026 include profit share revenues earned from our new joint mining agreement with Six Thirty AI which partially offset decreases in revenue due to reductions in both the number of customers and the average contract size as compared to the 2025 period.
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Energy management revenues for the three months ended June 30, 2026 and 2025, were $2.6 million and $5.1 million, respectively. This represented a 49% decrease or a decrease of $2.5 million, compared to the same period in 2025. The decrease was primarily attributable to changes to miner specification requirements for curtailment program participation beginning in 2026, in which the Company’s mining fleet did not achieve the target life expectancy. The Company also realized lower curtailment earnings due to fewer customers and reductions in the average size of customer contracts. These decreases were partially offset by higher payments received for the sale of excess energy capacity.
Digital assets mining revenues from self-mining of Bitcoin for the three months ended June 30, 2026 and 2025, were $0.03 million and $0.7 million, respectively. The decline was driven by the reallocation of our self-mining fleet capacity at our facilities in Midland and Bellefonte to customer fleets from our new joint mining agreement.
Cost of revenues
Our cost of revenues consists primarily of direct power costs related to colocation services.
Cost of revenues for the three months ended June 30, 2026 and 2025, were $4.5 million and $5.6 million, respectively. This decrease of $1.1 million, or 19%, in cost of revenues compared to the same period in 2025 was attributable to lower energy consumption from reduced digital colocation services and digital asset mining from self-mining, partially offset by higher average energy prices during the 2026 period.
Operating Expenses
Our operating expenses include: selling, general and administrative expenses; stock-based compensation; depreciation and amortization; and change in fair value of derivative asset.
Selling, general and administrative
Our selling, general and administrative expenses consist primarily of audit, legal, and other professional fees, employee compensation, director fees, equipment repairs, marketing, freight, insurance, consultant fees, lease amortization and general expenses.
Selling, general and administrative expenses for the three months ended June 30, 2026 and 2025 were $6.0 million and $5.9 million, respectively, an increase of $0.1 million, or 2%, from period to period. The increase was primarily due to higher insurance expenses, partially offset by lower bonus-related expenses.
Stock-based compensation
Stock-based compensation expenses for the three months ended June 30, 2026 and 2025 were $0.7 million and $1.0 million, respectively. The decrease was primarily due to a reduction in new award issuances and the completion of service-based vesting conditions from awards issued over the prior two years. Stock-based compensation expense for the three months ended June 30, 2026 includes the acceleration of expense from outstanding service-based awards due to the April 6, 2026 change in the Company’s Board of Directors.
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Depreciation and amortization
Depreciation consists primarily of depreciation of energy equipment, transformers and MDC equipment.
Depreciation and amortization for the three months ended June 30, 2026 and 2025, were $1.1 million and $1.5 million, respectively. The lower depreciation and amortization expense is due to an increase in the amount of fully depreciated equipment compared to prior periods.
Change in fair value of derivative asset
During the three months ended June 30, 2026 and 2025, there was a loss on the fair value of the derivative asset of $0.1 million and $2.1 million, respectively. The change in fair value is primarily due to decreasing volatility in fair value due to the shorter remaining term of the power supply agreement.
Non-operating income (expense)
Non-operating income (expense) consists primarily of interest expenses, gain (loss) on foreign currency transactions, and other income and expenses.
Interest expenses for the three months ended June 30, 2026 and 2025, were $1.0 million and $0.8 million, respectively. The higher amount of interest expense recognized in 2026 compared to 2025 is due to interest accreting to the total outstanding debt.
During the three months ended June 30, 2026, loss on foreign currency transactions was $0.04 million. During the three months ended June 30, 2025, loss on foreign currency transactions was $0.7 million. The difference is due to the impact of changes in the US Dollar and Australian Dollar exchange rate on intercompany transactions.
Income tax benefit (expense)
The Company recorded income tax expense of $30,000 and an income tax benefit of $18,000 for the three months ended June 30, 2026 and 2025, respectively. The income tax expense for the three months ended June 30, 2026 versus the income tax benefit for the three months ended June 30, 2025 relates mainly to differences in estimated interest and penalty accruals included in the current income tax payable for each of those periods, as well as changes in estimates regarding the realizability of deferred tax balances that impact the Company’s deferred tax expense.
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Results of Operations – Six months ended June 30, 2026 compared to the six months ended June 30, 2025
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenues: | ||||||||
| Digital colocation revenue | $ | 7,016,843 | $ | 14,089,171 | ||||
| Energy management revenue | 3,803,790 | 8,195,587 | ||||||
| Digital assets mining revenue | 152,889 | 1,062,798 | ||||||
| Total revenues | 10,973,522 | 23,347,556 | ||||||
| Less: Cost of revenues (excluding depreciation) | 8,358,544 | 13,489,996 | ||||||
| Gross Profit | 2,614,978 | 9,857,560 | ||||||
| Selling, general and administrative | 13,645,437 | 11,703,716 | ||||||
| Stock based compensation | 1,103,405 | 3,078,765 | ||||||
| Depreciation and amortization | 2,291,654 | 2,994,032 | ||||||
| Change in fair value of derivative asset | 24,580 | (1,922,521 | ) | |||||
| Total operating expenses | 17,065,076 | 15,853,992 | ||||||
| Loss from operations | (14,450,098 | ) | (5,996,432 | ) | ||||
| Non-operating income (expense): | ||||||||
| Loss on foreign currency transactions | (401,425 | ) | (777,290 | ) | ||||
| Gain on legal settlements | 10,157,593 | - | ||||||
| Interest expense | (1,967,906 | ) | (1,612,201 | ) | ||||
| Other income | 65,381 | 164,758 | ||||||
| Other expenses | (7,095 | ) | (18,955 | ) | ||||
| Total non-operating income (expense), net | 7,846,548 | (2,243,688 | ) | |||||
| Loss before income taxes | (6,603,550 | ) | (8,240,120 | ) | ||||
| Income tax expense | (162,387 | ) | (92,176 | ) | ||||
| Net Loss | $ | (6,765,937 | ) | $ | (8,332,296 | ) | ||
Revenues
Digital colocation revenues for the six months ended June 30, 2026 and 2025, were $7.0 million and $14.1 million, respectively. This represented a 50% decrease or a decrease of $7.1 million, compared to the same period in 2025. The decrease in revenue was primarily attributable to a reduction in both the number of customers and the average contract size as compared to the 2025 period. One customer, Consensus Technology Group LLC, accounted for $7.0 million of the decrease. Digital colocation revenues for the six months ended June 30, 2026 include profit share revenues from our new joint mining agreement with Six Thirty AI.
Energy management revenues for the six months ended June 30, 2026 and 2025, were $3.8 million and $8.2 million, respectively. This represented a 54% decrease or a decrease of $4.4 million, compared to the same period in 2025. The decrease was primarily attributable to changes to miner specification requirements for curtailment program participation beginning in 2026, in which the Company’s mining fleet did not achieve the target life expectancy. The Company also realized lower curtailment earnings due to fewer customers and reductions in the average size of customer contracts. These decreases were partially offset by higher payments received for the sale of excess energy capacity.
Digital assets mining revenues from self-mining of Bitcoin for the six months ended June 30, 2026 and 2025, were $0.2 million and $1.1 million, respectively. This represented an 86% decrease or a decrease of $0.9 million compared to the same period in 2025. The decline was primarily driven by industry-wide conditions, including higher overall energy costs and an increase in global network difficulty, both of which contributed to lower Bitcoin production from self-mining activities. The decline was also driven by the reallocation of our self-mining fleet capacity at our facilities in Midland and Bellefonte to customer fleets from our new joint mining agreement.
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Cost of revenues
Our cost of revenues consists primarily of direct power costs related to digital asset mining and colocation services and cost of mining equipment sold.
Cost of revenues for the six months ended June 30, 2026 and 2025, were $8.4 million and $13.5 million, respectively. This decrease of $5.1 million, or 38%, in cost of revenues compared to the same period in 2025 was attributable to lower energy consumption from reduced digital colocation services and digital asset mining from self-mining, partially offset by higher average energy prices during the 2026 period.
Operating Expenses
Our operating expenses include: selling, general and administrative expenses; stock-based compensation; depreciation and amortization; and change in fair value of derivative asset.
Selling, general and administrative
Our selling, general and administrative expenses consist primarily of audit, legal, and other professional fees, employee compensation, director fees, equipment repairs, marketing, freight, insurance, consultant fees, lease amortization and general expenses.
Selling, general and administrative expenses for the six months ended June 30, 2026 and 2025 were $13.6 million and $11.7 million, respectively, an increase of $1.9 million, or 17%, from period to period. The increase was primarily due to higher insurance, legal and professional fees, partially offset by lower bonus-related expenses.
Stock-based compensation
Stock-based compensation expenses for the six months ended June 30, 2026 and 2025 were $1.1 million and $3.1 million, respectively. The decrease was primarily due to a reduction in new award issuances and the completion of service-based vesting conditions from awards issued over the prior two years. Stock-based compensation expense for the six months ended June 30, 2026 includes the acceleration of expense from outstanding service-based awards due to the April 6, 2026 change in the Company’s Board of Directors.
Depreciation and amortization
Depreciation consists primarily of depreciation of energy equipment, transformers and modular data center (“MDC”) equipment.
Depreciation and amortization for the six months ended June 30, 2026 and 2025, were $2.3 million and $3.0 million, respectively. The lower depreciation and amortization expense is due to an increase in the amount of fully depreciated equipment compared to prior periods.
Change in fair value of derivative asset
During the six months ended June 30, 2026, and 2025, there was a loss on the fair value of the derivative asset of $0.02 million and a gain on the fair value of the derivative asset of $1.9 million, respectively. The change in fair value is primarily due to decreasing volatility in fair value due to the shorter remaining term of the power supply agreements.
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Non-operating income (expense)
Non-operating income (expense) consists primarily of interest expenses, gain (loss) on foreign currency transactions, gain on legal settlements, and other income and expenses.
Interest expenses for the six months ended June 30, 2026 and 2025, were $2.0 million and $1.6 million, respectively. The higher amount of interest expense recognized in 2026 compared to 2025 is due to interest accreting to the total outstanding debt.
During the six months ended June 30, 2026, loss on foreign currency transactions was $0.4 million. During the six months ended June 30, 2025, loss on foreign currency transactions was $0.8 million. The difference is due to the impact of changes in the US Dollar and Australian Dollar exchange rate on intercompany transactions.
During the six months ended June 30, 2026, we reached a confidential settlement with Ionic Digital Mining LLC (“Ionic”) to resolve all claims Ionic brought against us and two of our subsidiaries related to the Celsius Colocation Agreement. In addition, the Company entered a separate, unrelated settlement to resolve a customer dispute over a hosting arrangement. These two settlements resulted in the Company recognizing gains on legal settlements of $10.2 million.
Income tax expense
The Company recorded income tax expense of $162 thousand and $92 thousand for the six months ended June 30, 2026 and 2025, respectively. The difference in the income tax expense for the six months ended June 30, 2026 versus the six months ended June 30, 2025 relates mainly to differences in estimated interest and penalty accruals included in the current payable for each of those periods, as well as changes in estimates regarding the realizability of deferred tax balances that impact the Company’s deferred tax expense.
Liquidity and Capital Resources
General
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures. For the six months ended June 30, 2026, we financed our operations primarily through cash from operations, proceeds from our ATM Program, the Revolver, as defined below, and other cash reserves.
ATM Program
On October 16, 2025, the Company entered into an At the Market Offering Agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) to sell shares (the “Shares”) of our Common Stock having an aggregate sales price of up to $9.6 million, from time to time, through an “at-the-market” offering program (the “ATM Program”) under which Wainwright will act as sales agent. On December 11, 2025, the Company filed a prospectus supplement (the “Prospectus Supplement”) with the SEC to increase the capacity of the ATM Program by $40 million.
During the six months ended June 30, 2026, the Company has sold 1,693,968 shares of Common Stock under the Sales Agreement at an average price of approximately $4.43 per share, which has resulted in cash proceeds to the Company of $7.3 million, net of issuance costs.
Revolving Line of Credit
On May 28, 2026, the Company and Endeavor Blockchain, LLC, an Arkansas limited liability company (“Endeavor” and the “Noteholder”), entered into a promissory note providing for a revolving line of credit, with the aggregate principal sum of all revolving loans advanced from time to time by the Noteholder to the Company not to exceed forty million dollars ($40,000,000) (the “Revolver”). Endeavor is wholly owned by Josh Kilgore, the Company’s Executive Chairman.
Pursuant to the Revolver, each revolving loan bears interest at a fixed rate of 12% per annum, with principal and interest payable upon demand. The revolving line of credit is secured by assets of the Company listed in the Revolver.
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The Revolver contains customary representations, warranties, covenants, events of default and security arrangements. The Company is also subject to restrictions on incurring additional indebtedness and additional liens on the collateral. The Revolver provides for customary events of default, including, among others, failure to pay principal or interest, breach of representations and warranties, violation of covenants, bankruptcy or insolvency events. As of June 30, 2026, the Company was in compliance with covenants under the Revolver.
The Company may at any time, and without penalty, prepay outstanding amounts under the revolving loans, or if there are no outstanding amounts, terminate the Revolver. The outstanding balance including interest is $2.5 million as of June 30, 2026, all of which is classified as a current liability.
Joint Mining Agreement
On April 27, 2026, the Company entered into the Six Thirty AI Colocation Agreement, which is described under “Recent Developments” of Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The total amount of cash the Company will receive from the Six Thirty AI Colocation Agreement will be largely dependent on the economics of mining during the term of the Agreement. The Agreement has a twelve-month term and may be terminated upon 30 days’ notice, subject to its conditional terms.
Series D Convertible Preferred Stock and Warrant
On June 30, 2026, the Company entered into a Securities Purchase Agreement, pursuant to which it issued and sold 16,700 shares of newly designated Series D Convertible Preferred Stock, par value $0.001 per share, with a stated value of $1,000 per share, at a purchase price of $900.00 per share, for net proceeds of $14.0 million, to Six Thirty AI, LLC. See Note 9, Stockholders’ Equity, for additional information on the terms of the Series D Convertible Preferred Stock and a related warrant.
While this financing strengthened our capital position, it includes covenants that, subject to customary exceptions, limit our ability to pay dividends or repurchase shares, take on new debt or create new liens, and enter into variable-rate financing. These restrictions may limit our flexibility to raise capital or refinance certain obligations in the near term. We plan to manage liquidity within the permitted baskets, seek consents if needed, and may prioritize equity or fixed-rate structures to remain compliant.
Hood County Site Acquisition
On July 14, 2026 and July 15, 2026, the Company entered into and closed on a series of definitive agreements with 10NetZero, Inc. (“10NZ”) as joint venture partners, including (i) the Operating Agreement of Texas Load House, LLC (the “Operating Agreement”), (ii) a Loan and Security Agreement between the joint venture partners (the “Loan and Security Agreement”), and (iii) a Side Agreement regarding the Interim Management of Texas Load House, LLC (the “Side Agreement,” and collectively with the other definitive agreements, the “Joint Venture Agreements”), to establish a joint venture for the acquisition, ownership, and development of certain real property located in Hood County, Texas (the “Hood County Site”). Subject to the terms of the Joint Venture Agreements, the Company initially owns a 50% membership interest in the joint venture and 10NZ initially owns the remaining 50% membership interest.
On July 15, 2026, the joint venture acquired 30 acres of the Hood County Site from Century Oaks Independence Farms, LLC (“Century Oaks”), for an aggregate purchase price of approximately $10 million in cash, with an option to purchase the remainder of the site for an additional $600,000. The Hood County Site consists of a 50-acre site containing over 30,000 square feet of existing structures which the joint venture intends to repurpose for datacenter use as well as an administrative office which will be utilized as the command center. The Hood County Site carries 17 MW of operational power and will be expandable up to 111 MW of grid power, subject to validation by the Electric Reliability Council of Texas. On-site are two 12-inch and one 20-inch natural-gas pipelines providing the option to add behind-the-meter generation, supporting a total buildout of up to 300 MW.
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We believe our near-term working capital requirements will continue to be funded through a combination of the cash we expect to generate from future operations, our existing funds, external debt facilities that may be available to use, future issuances of shares, and other potential sources of capital, monetization, or funds. We believe a combination of these opportunities is expected to be adequate to fund our operations over the next twelve months. For our business growth, it is expected we may continue to invest in expanding and/or upgrading our infrastructure and/or other equipment and will require additional working capital in the short-term and long-term. As of June 30, 2026, we had an aggregate of $30.1 million of debt, $27.5 million of which is overdue for repayment unless we refinance, renegotiate the terms, or prevail in our disputes and/or related claims and/or counterclaims.
We will need to raise substantial additional capital to continue our operations, execute our business strategy and meet our debt service obligations. We expect to continue to consider and evaluate potential strategic options and capital-raising transactions including, among other things, dispositions of certain businesses and assets and significant equity investments in us by third parties. Any capital-raising through equity or convertible debt could result in significant dilution to existing stockholders. In addition, newly issued securities may have rights, preferences, or privileges senior to those of our common shares. We may not be able to raise adequate capital on a timely basis, on favorable terms, or at all. Our inability to raise sufficient capital would have a material adverse effect on our financial condition and business.
The process of reviewing potential strategic opportunities may be time consuming, distracting and disruptive to our business operations. Our management may devote significant time, and we may incur substantial costs in pursuing, evaluating and negotiating potential strategic options or capital-raising transactions and those efforts may not prove successful on a timely basis, or at all.
Any potential transaction may be dependent on a number of factors that may be beyond our control, for example, market conditions, industry trends or acceptable terms. We may ultimately determine that no transaction is in the best interest of our stockholders and there can be no assurance that we will pursue or enter into any transaction at all. There can be no assurance of the impact to the value of our Common Stock after the announcement or consummation of any strategic transaction. In addition, any perceived uncertainty regarding our future operations may limit our ability to retain or hire qualified personnel.
Working Capital and Cash Flows
As of June 30, 2026 and December 31, 2025, we had a cash and cash equivalent balance of $16.3 million and $13.3 million, respectively. As of June 30, 2026 and December 31, 2025, the trade receivables balance was $9.4 million and $9.6 million, respectively. As of June 30, 2026, we had $30.1 million of outstanding short-term loans, and as of December 31, 2025, we had $25.2 million of short-term loans. The short-term loans as of June 30, 2026, relate to the Celsius Promissory Note, W Capital Loan, Secured Convertible Promissory Notes and Marshall Loan (each of which is currently in default) and the revolving line of credit extended by Endeavor. Refer to “Material Cash Requirements” below for more information. As of June 30, 2026 and December 31, 2025, we had negative working capital of $13.7 million and $31.3 million, respectively.
The following table presents the major components of net cash flows (used in) provided by operating, investing and financing activities for the six months ended June 30, 2026 and 2025:
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net cash used in operating activities | $ | (20,455,174 | ) | $ | (2,588,984 | ) | ||
| Net cash used in investing activities | $ | (53,925 | ) | $ | (54,633 | ) | ||
| Net cash provided by (used in) financing activities | $ | 23,528,116 | $ | (206,588 | ) | |||
For the six months ended June 30, 2026, net cash used in operating activities was $20.5 million. We had a net loss of $6.8 million for the six months ended June 30, 2026, which included $10.2 million of gain on legal settlements, $0.1 million gain on other income, $1.1 million non-cash stock-based compensation, $2.3 million of depreciation and amortization expense and $2.0 million of interest expense. Net cash used in operating activities was also impacted by cash payments to settle outstanding income tax liabilities, totaling $0.7 million. For the six months ended June 30, 2025, net cash used in operating activities was $2.6 million. We had a net loss of $8.3 million for the six months ended June 30, 2025, which included $1.9 million of gain on derivative asset, $3.1 million of stock based compensation, $3.0 million of depreciation and amortization expense, $1.0 million of provision for doubtful accounts and $1.6 million of non-cash interest expense.
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For the six months ended June 30, 2026 and June 30, 2025, net cash used in investing activities was $0.05 million. The net cash used in investing activities during the six months ended June 30, 2026 and June 30,2025, was primarily attributable to capital expenditures and the purchase of equipment.
For the six months ended June 30, 2026, net cash provided by financing activities was $23.5 million and for the six months ended June 30, 2025, net cash used was $0.2 million. The cash provided by financing activities during the six months ended June 30, 2026, was primarily attributable to cash proceeds of $7.2 million from the issuance of our Common Stock under the ATM Program, $14.0 million from the issuance of our Series D Convertible Stock and $2.5 million from the revolving line of credit.
Material Cash Requirements
The following discussion summarizes our material cash requirements from contractual and other obligations. For more information on these matters, please see Note 8 – Commitments and Contingencies to the unaudited consolidated condensed financial statements included in Item 1. “Financial Statements” of this Quarterly Report.
The Company is included as a guarantor of the Marshall Loan. The loan matured in February 2024 and bears interest at a rate of 12% per annum (with an overdue rate provision of an additional 500bps), payable monthly with interest payments that commenced in December 2021. This loan facility is secured by direct assets of MIG No.1 and a general security agreement given by the Company. Principal repayments began during November 2022. There has been no principal and interest payments made since May 2023. The outstanding balance including interest is $14.1 million as of June 30, 2026, all of which is currently classified as a current liability.
The Company is included as a guarantor of the W Capital Loan. As of June 30, 2026, the balance was AUD $2.8 million (USD $1.9 million) representing outstanding interest, all of which is currently classified as a current liability. The W Capital Loan accrues interest daily at a rate of 12% per annum (with an overdue rate provision of an additional 800bps). The W Capital Loan expired in March 2023.
On February 23, 2022, Luna Squares entered into the Digital Colocation Agreement with Celsius Mining LLC. In connection with this agreement, Celsius Mining LLC loaned Luna Squares a principal amount of $20.0 million, for the purpose of funding the infrastructure required to meet the obligations of the Digital Colocation Agreement, for which Luna Squares issued the Celsius Promissory Note for repayment of such amount. The Celsius Promissory Note accrues interest daily at a rate of 12% per annum (with an overdue rate provision of an additional 200bps). Luna Squares is required to amortize the loan at a rate of 15% per quarter, principal repayments began at the end of September 2022. The Celsius Promissory Note had a maturity date of August 23, 2023. The outstanding balance including interest is $11.3 million as of June 30, 2026, all of which is currently classified as a current liability.
On July 8, 2022, the Company issued the Secured Convertible Promissory Notes in exchange for an aggregate of $3.6 million in cash. On September 29, 2022, the Company entered into a letter variation relating to some of the Secured Convertible Promissory Notes, with an aggregate principal amount of $3.1 million, which gave those holders the option to elect for pre-payment (including accrued interest to maturity) subject to certain conditions. All of the investors included in this letter variation elected for the pre-payment option and therefore there were $3.1 million principal repayments made during November 2022. The final convertible noteholder who was not a party to this variation opted to enter into an arrangement whereby it received pre-payment of interest but agreed that repayment of the principal was not required therefore the remaining $0.50 million had been classified as a current liability. The Secured Convertible Promissory Notes matured in July 2023. Interest has been accrued from July 2023 onwards and therefore the outstanding balance is $0.2 million as of June 30, 2026, all of which is classified as a current liability. During 2024 the principal amount outstanding of $0.50 million was repaid to the investor.
On May 28, 2026, the Company and Endeavor entered into Promissory Note. The outstanding balance including interest is $2.5 million as of June 30, 2026, all of which is classified as a current liability
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Financial condition
As of June 30, 2026, and December 31, 2025, we had current liabilities of $46.5 million and $58.8 million, respectively. As of June 30, 2026, and December 31, 2025, we had net assets of $12.4 million and negative net assets $3.1 million, respectively. As of June 30, 2026, we had an accumulated deficit of $259.2 million compared to $252.5 million as of December 31, 2025. Our cash position as of June 30, 2026, was $16.3 million in comparison to $13.3 million as of December 31, 2025.
For the six months ended June 30, 2026 and 2025, the Company generated net loss of $6.8 million and $8.3 million, respectively.
Our primary requirements for liquidity and capital are working capital, capital expenditures, public company costs and general corporate needs. In particular, we have large power usage costs, and other significant costs include our legal, lease, operational, and employee costs. We expect these capital and liquidity needs to continue as we further develop and grow our business.
We require additional capital to respond to near-term debt repayment obligations, competitive pressure, market dynamics, new technologies, customer demands, business opportunities and challenges, potential acquisitions or unforeseen circumstances, and we will likely need to engage in equity or debt financings in the short term. If we are unable to obtain adequate financing on terms satisfactory to us when we require it, our ability to continue to fund, grow or support our business model and to respond to business challenges could be significantly limited, our business, financial condition and results of operations could be adversely affected, and this may result in bankruptcy or our ceasing operations.
The Company is taking steps to preserve cash by optimizing operations, reducing costs and pursuing efficiencies. The Company has been improving its revenue generation by enhancing its operations, driving growth in business lines, adding digital colocation services customers and diversifying its businesses. The Company will continue to seek to optimize its cash flows through these and other initiatives.
Non-GAAP Financial Measures
The Company reports all financial information required in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The Company believes, however, that evaluating its ongoing operating results will be enhanced if it also discloses certain non-GAAP information. Adjusted EBITDA, which is a non-GAAP financial measure, is defined by the Company as net income (loss) plus income tax, depreciation and amortization, further adjusted by stock-based compensation, gain/loss on foreign currency, other non-operating income and expenses, change in fair value of derivative assets, gain on legal settlements, and bad debt expense.
Adjusted EBITDA should not be considered an alternative to net income, operating income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA may have material limitations as a performance measure because it excludes items that are necessary elements of our costs and operations. In addition, Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently.
| For the three months ended | For the six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Reconciliation of non-GAAP Adjusted EBITDA: | ||||||||||||||||
| Net loss: | $ | (7,375,740 | ) | $ | (8,021,433 | ) | $ | (6,765,937 | ) | $ | (8,332,296 | ) | ||||
| Depreciation and amortization | 1,097,390 | 1,466,119 | 2,291,654 | 2,994,032 | ||||||||||||
| Stock based compensation | 677,043 | 978,261 | 1,103,405 | 3,078,765 | ||||||||||||
| Losses on foreign currency transactions | 36,994 | 689,952 | 401,425 | 777,290 | ||||||||||||
| Other non-operating income | (8,933 | ) | (60,646 | ) | (65,381 | ) | (164,758 | ) | ||||||||
| Interest expense | 1,011,808 | 827,336 | 1,967,906 | 1,612,201 | ||||||||||||
| Other non-operating expenses | 7,095 | 9,614 | 7,095 | 18,955 | ||||||||||||
| Change in fair value of derivative asset | 105,608 | 2,137,052 | 24,580 | (1,922,521 | ) | |||||||||||
| Income tax (benefit) expense | 29,920 | (17,933 | ) | 162,387 | 92,176 | |||||||||||
| Provision for doubtful accounts | - | - | - | 977,755 | ||||||||||||
| Gain on legal settlements | - | - | (10,157,593 | ) | - | |||||||||||
| Adjusted EBITDA (non-GAAP) | $ | (4,418,815 | ) | $ | (1,991,678 | ) | $ | (11,030,459 | ) | $ | (868,401 | ) | ||||
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Critical accounting estimates
The preparation of the financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of income and expenses during the reporting periods. Actual results could differ from those estimates. There have been no material changes to our critical accounting policies and estimates as set forth in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the 2025 Form 10-K.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, the Company has elected not to provide the disclosure required by this item.
Item 4. Controls and Procedures
Evaluation of disclosure controls and procedures
As of the end of the period covered by this quarterly report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2026, our disclosure controls and procedures were effective to ensure the information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods prescribed by the Securities and Exchange Commission, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting that occurred during the three-month period ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company and certain of its subsidiaries are currently in disputes, which may be in or may lead to litigation. The results of these matters cannot be predicted with certainty and an unfavorable resolution of one or more of these or other matters could have a material adverse effect on our business, results of operations, financial condition and/or cash flows. For information on these matters, refer to Note 8 — Commitments and Contingencies to the unaudited consolidated condensed financial statements included in Item 1. “Financial Statements” of this Quarterly Report. The disclosure set forth in Note 8 relating to such legal matters is incorporated herein by reference.
From time to time, the Company and its subsidiaries may be involved in certain litigation related to its businesses. For example, the Company and its subsidiaries receive letters of demand for payment or other correspondence from time to time which could lead to legal proceedings.
Item 1A. Risk Factors
The information in this Form 10-Q should be read in conjunction with the risk factors and information disclosed in the 2025 Form 10-K. Except as set forth below, there have been no material changes to the primary risks related to our business and securities as described in the 2025 Form 10-K under “Risk Factors” in Item 1A.
If we fail to comply with the continued listing standards of The Nasdaq Capital Market, we may be delisted and the price of our Common Stock, our ability to access the capital markets and our financial condition could be negatively impacted.
Although our Common Stock is currently listed on The Nasdaq Capital Market, we may not be able to continue to meet the minimum listing requirements of the Nasdaq Stock Market LLC (“Nasdaq”).
On April 17, 2026, we received written notice from Nasdaq that, based on our reported stockholders’ equity as of December 31, 2025, we no longer satisfied Nasdaq Listing Rule 5550(b), and the Staff issued a delisting determination. On May 1, 2026, the Company requested a hearing before the Nasdaq Hearings Panel (the “Panel”) to present its plan to evidence compliance with the rule. On May 21, 2026, the Company attended the hearing before the Panel. On June 16, 2026, the Company received written notice from the Listing Qualifications Hearings Department of Nasdaq confirming that the Company had regained compliance with the Nasdaq Listing Rules. Nasdaq’s determination is subject to the Company maintaining stockholders’ equity of at least $5 million in each quarter for a twelve-month period, beginning with the quarter ending June 30, 2026, and promptly notifying Nasdaq of any significant events that could affect the Company’s compliance with that requirement.
If we fail to comply with the continued listing standards of The Nasdaq Capital Market, we may be delisted and the price of our Common Stock, our ability to access the capital markets and our financial condition could be negatively impacted.
Features of our Series D Preferred Stock and related warrant, together with our resale registration obligations and Nasdaq limits, could result in substantial equity dilution, depress our stock price, and constrain our strategic flexibility.
The Series D Preferred Stock converts into Common Stock at a variable price equal to 95% of the lowest daily volume-weighted average price over the five consecutive trading days preceding conversion, subject to a $1.80 floor, and dividends accrue at 5% per annum (rising to 18% upon certain Triggering Events defined in the Certificate of Designations) and may be paid in kind, which can increase the number of shares outstanding over time. While the Certificate of Designations includes a 4.99% beneficial-ownership cap and a monthly conversion limit tied to trading volume or a stated-value cap, those limits do not eliminate the risk of meaningful dilution or downward pressure from resales.
So long as the Series D Preferred Stock is outstanding, negative covenants restrict certain actions, including paying cash dividends on capital stock, incurring indebtedness and entering into variable-rate transactions, which may limit our financing and strategic flexibility. We are obligated to file and maintain a resale registration statement for the Conversion Shares and Warrant Shares, reserve sufficient authorized Common Stock (and, if needed, seek to increase our authorized shares), and seek stockholder approval by our next annual meeting (no later than November 14, 2026) to permit issuances otherwise restricted by Nasdaq rules.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Information regarding the Company’s issuance on June 30, 2026, of 16,700 shares of Series D Convertible Preferred Stock and a warrant exercisable for five years to purchase 926,748 shares of Common Stock at an exercise price of $10.81 per share was previously provided in the Current Report on Form 8-K filed by the Company on July 6, 2026.
Item 3. Defaults Upon Senior Securities
Celsius Mining LLC loaned $20.0 million to Luna Squares through the Celsius Promissory Note, which had a maturity date of August 23, 2023, and a total outstanding balance as of June 30, 2026, of $11.3 million. Luna Squares has not repaid the loan as required on the maturity date and is claimed by Celsius to be in default. Celsius Mining LLC transferred the benefit of the Celsius Promissory Note to Celsius Network Ltd. Celsius Network Ltd has notified Luna Squares that default interest is payable. On November 23, 2023, Celsius filed an arbitration proceeding against Mawson, its subsidiaries Luna Squares and Cosmos, asserting various claims related to the alleged breach of the Celsius Colocation Agreement. The Company is pursuing counter claims against Celsius. See Note 8 – Commitments and Contingencies, Celsius Promissory Note and Digital Colocation Agreement to the unaudited consolidated condensed financial statements included in Item 1. “Financial Statements” of this Quarterly Report.
The Marshall Loan matured in February 2024 and the total outstanding balance was $14.1 million as of June 30, 2026. MIG No. 1, an Australian entity, has not made a payment on principal and interest since May 2023, despite such payments falling due, and is therefore alleged by Marshall to be in default under the Marshall Loan. MIG No. 1 is also in default of a number of other covenants under the terms of the loan. On March 19, 2024, MIG No.1 was placed into an Australian court appointed liquidation and wind-up process and was deconsolidated for the group from this date.
On March 19, 2024, Marshall appointed receivers and managers in Australia under the terms of their security relating to the Marshall Loan. The direct assets that secure this loan include 5,372 miners and 8 MDCs. These assets are held by MIG No.1 and therefore were included in the deconsolidation. The receiver’s statutory duty includes the obligation to sell the secured assets at market value or, if market value is not known, at the best price reasonably obtainable to maximize the prospects of there being sufficient proceeds available to satisfy the balance of the outstanding secured debt. It is therefore expected that this loan balance will be offset in the future by the amount received from the sale of these miners and MDCs. On June 25, 2024, Marshall inspected and inventoried the miners and MDCs located at the Company’s Midland facilities. The Company is currently not utilizing these miners or MDCs for its operations and has asked Marshall to take these assets out of the Company’s storage. Marshall has not responded to the Company’s request for these miners and MDCs to be removed from the Company’s storage. The Company also reserves and retains all rights against Marshall.
The Company is the guarantor of the W Capital Loan. As of June 30, 2026, AUD $2.8 million (USD $1.9 million) has been drawn down from this facility. The W Capital Loan expired in March 2023 and the Company did not extend the maturity date and has not repaid the loan amount. The Company is therefore considered by W Capital to be in default. This W Capital Loan was originally with Mawson SPL, an Australian entity which was placed into voluntary administration under Australian law on October 30, 2023, and on November 3, 2023, W Capital Advisors appointed receivers and managers in Australia under the terms of their security relating to their working capital facility.
The Company has a Secured Convertible Promissory Note (the “Convertible Note”) with W Capital Advisors Pty Ltd with an outstanding balance of $0.2 million as of June 30, 2026. The Convertible Note matured in July 2023. W Capital Advisors did not convert the note, and the Company has repaid the principal balance of the Convertible Note.
For more information on the above matters, refer to Note 8 - Commitments and Contingencies to the unaudited consolidated condensed financial statements included in Item 1. “Financial Statements” of this Quarterly Report. The disclosure set forth in Note 8 is incorporated herein by reference.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
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Item 6. Exhibits
| Incorporated by Reference | ||||||||||||||
| Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed Herewith | Furnished Herewith | |||||||
| 3.1 | Certificate of Incorporation filed February 10, 2012 | 8-K | 000-52545 | 3.1 | 4/5/2012 | |||||||||
| 3.2 | Certificate of Amendment to Certificate of Incorporation filed July 18, 2013 | 8-K | 000-52545 | 3.1 | 7/18/2013 | |||||||||
| 3.3 | Certificate of Amendment to Certificate of Incorporation filed November 15, 2017 | 8-K | 000-52545 | 3.3 | 11/21/2017 | |||||||||
| 3.4 | Certificate of Amendment to Certificate of Incorporation filed March 1, 2018 | 8-K | 000-52545 | 3.1 | 3/5/2018 | |||||||||
| 3.5 | Certificate of Amendment to Certificate of Incorporation filed March 17, 2021 | 8-K | 000-52545 | 3.1 | 3/23/2021 | |||||||||
| 3.6 | Certificate of Amendment to Certificate of Incorporation filed June 9, 2021 | 8-K | 000-52545 | 3.1 | 6/14/2021 | |||||||||
| 3.7 | Certificate of Amendment to Certificate of Incorporation filed August 11, 2021 | 8-K | 000-52545 | 3.1 | 8/16/2021 | |||||||||
| 3.8 | Certificate of Amendment to Certificate of Incorporation filed February 6, 2023 | 8-K | 001-40849 | 3.1 | 2/9/2023 | |||||||||
| 3.9 | Certificate of Amendment to Certificate of Incorporation filed November 19, 2025 | 8-K | 001-40849 | 3.1 | 11/21/2025 | |||||||||
| 3.10 | Certificate of Amendment to Certificate of Incorporation filed April 20, 2026 | 8-K | 001-40849 | 3.1 | 4/23/2026 | |||||||||
| 3.11 | Certificate of Amendment to Certificate of Incorporation filed June 8, 2026 | X | ||||||||||||
| 3.12 | Certificate of Designations of Series D Convertible Preferred Stock. | X | ||||||||||||
| 3.13 | Bylaws | 8-K | 000-52545 | 3.1 | 5/10/2013 | |||||||||
| 4.1 | Rights Agreement, dated as of February 2, 2026, by and between Big Digital Energy, Inc. and Computershare Trust Company, N.A., as Rights Agent | X | ||||||||||||
| 4.2 | Amendment No. 1 to the Rights Agreement, dated June 5, 2026, by and between Big Digital Energy, Inc. and Computershare Trust Company, N.A., as Rights Agent. | X | ||||||||||||
| 4.3 | Warrant, dated June 30, 2026, issued to YA II PN, LTD, by Big Digital Energy, Inc. | X | ||||||||||||
| 10.1 | Revolving Line of Credit Promissory Note dated May 28, 2026, issued by Big Digital Energy, Inc. to Endeavor Blockchain, LLC. | X | ||||||||||||
| 10.2 | Securities Purchase Agreement, dated June 30, 2026, by and between Big Digital Energy, Inc. and Six Thirty AI, LLC. | X | ||||||||||||
| 10.3 | Letter Agreement, dated June 30, 2026, by and among Big Digital Energy, Inc., Six Thirty AI, LLC and YA II PN, LTD. | X | ||||||||||||
| 10.4 | Registration Rights Agreement, dated June 30, 2026, by and between Big Digital Energy, Inc. and Six Thirty AI, LLC. | X | ||||||||||||
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| 10.5 | Joint Mining Agreement, dated April 27, 2026, by and between Big Digital Energy, Inc. and Six Thirty AI, LLC | X | ||||||||||||
| 10.6 | Operating Agreement of Texas Load House, LLC, dated May 28, 2026 | X | ||||||||||||
| 10.7 | Loan and Security Agreement, dated July 14, 2026, by and among Big Digital Energy, Inc., 10NetZero, Inc. and Texas Load House, LLC | X | ||||||||||||
| 10.8 | Side Agreement, dated July 14, 2026, by and among Big Digital Energy, Inc., 10NetZero, Inc. and Texas Load House, LLC | X | ||||||||||||
| 31.1 | Certification of Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002. | X | ||||||||||||
| 31.2 | Certification of Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002. | X | ||||||||||||
| 32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 | X | ||||||||||||
| 32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 | X | ||||||||||||
| 101 | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in Inline XBRL (eXtensible Business Reporting Language) includes: (i) Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025, (ii) Consolidated Statements of Operations for the three and six months ended June 30, 2026 and 2025, (iii) Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2026 and 2025, (iv) Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025, (v) Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2026 and 2025, and (vi) Notes to Consolidated Financial Statements | X | ||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | X |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Big Digital Energy, Inc. | ||
| Date: August 14, 2026 | By: | /s/ Phillip Stanley |
| Phillip Stanley | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: August 14, 2026 | By: | /s/ William Regan |
| William Regan | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) |
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