Bit Digital (NASDAQ: BTBT) posts steep Q2 loss as ETH, AI bets grow
Bit Digital, Inc. continued its transition from bitcoin mining toward ETH staking and AI/HPC data center services through majority-owned WhiteFiber. For the quarter ended June 30, 2026, revenue rose to $32.1 million from $25.7 million, driven mainly by cloud services and colocation, while digital asset mining declined.
Despite growth, profitability deteriorated sharply. Operating results swung to a loss, with a quarterly operating loss of $82.6 million and net loss of $111.7 million, and a six‑month net loss of $261.9 million versus $42.8 million a year earlier. Key drivers included $46.0 million of impairment on digital intangible assets, $28.8 million losses on digital assets, higher general and administrative expenses, and increased interest and derivative fair value losses.
Total assets were $1.24 billion, including $667.6 million of property, plant and equipment, $120.1 million of digital assets, and a $105.6 million digital asset collateral receivable. Total liabilities climbed to $703.8 million, reflecting $336.2 million in convertible notes, new debt and higher deferred revenue. Operating activities generated $46.8 million of cash, but the company invested $344.7 million in infrastructure and raised substantial financing, including purchasing a $120.0 million zero‑strike call option linked to its convertible notes.
Positive
- Total revenues grew to $60.0 million for the first half of 2026 from $50.8 million, led by expansion in cloud and colocation services.
- Net cash provided by operating activities increased to $46.8 million for the first half of 2026, up from $35.1 million.
- Deferred revenue and related contract liabilities rose to $143.1 million, indicating a larger base of contracted future services.
- ETH staking scaled meaningfully, generating $3.2 million in staking revenue for the first half of 2026 versus $0.9 million a year earlier.
Negative
- Net loss for the first half of 2026 widened to $261.9 million from $42.8 million, with a quarterly net loss of $111.7 million.
- The company recorded substantial non‑cash charges, including $149.9 million losses on digital assets and a $46.0 million impairment on digital intangible assets in the first half.
- Total liabilities more than doubled to $703.8 million, driven by $336.2 million of convertible notes and new debt borrowings.
- Capital expenditures were heavy at $344.7 million for property, plant and equipment in the first half, contributing to a net decrease in cash despite strong operating cash flow.
Filing Explained
The quarter issued 22,997,224 ATM shares, diluting existing holders, while LsETH-backed borrowings remained callable on seven days’ notice.
This unaudited Form 10-Q reports interim financial statements and liquidity updates for the quarter ended
Ordinary shares outstanding were 354,799,305 at
An at-the-market program permits gradual sales of new shares into the open market at prevailing prices rather than one single priced deal; the filing reports issuance under that mechanism, not merely registration. The filing also reports collateralized borrowings secured by LsETH:
The collateralized borrowing arrangements may be called by the lender on seven days’ notice, making the current-debt line item and the disclosed collateral receivable the specific financing items to track in subsequent filings.
Key Figures
Key Terms
digital asset collateral receivable financial
LsETH financial
zero-strike call option financial
sales-type lease financial
current expected credit losses (CECL) financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For the quarterly period ended
For the transition period from __________ to __________
Commission file number:
| (Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
|
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number:
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
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.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company | |||
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Applicable only to Corporate Issuers:
Indicate the number of shares outstanding of each of the issuers’ classes of common stock, as of the latest practicable date:
TABLE OF CONTENTS
| Page | ||
| CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS | ii | |
| PART I | ||
| Item 1. | Financial Statements. | 1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 55 |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk. | 90 |
| Item 4. | Controls and Procedures. | 91 |
| PART II | 92 | |
| Item 1. | Legal Proceedings. | 92 |
| Item 1A. | Risk Factors. | 93 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 94 |
| Item 3. | Defaults Upon Senior Securities. | 94 |
| Item 4. | Mine Safety Disclosures. | 94 |
| Item 5. | Other Information. | 94 |
| Item 6. | Exhibits. | 95 |
| SIGNATURES | 96 | |
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions.
We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. In particular, information included under “Risk Factors,” “Business,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other sections of this report contain forward-looking statements. Where, in any forward-looking statement, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of Bit Digital, Inc.’s (“Bit Digital”) management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. Whether any such forward-looking statements are in fact achieved will depend on future events, some of which are beyond Bit Digital’s control. Except as may be required by law, Bit Digital undertakes no obligation to modify or revise any forward-looking statements to reflect new information, events or circumstances occurring after the date of this report. Comparisons of results for current and any prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed as historical data.
Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the U.S. Securities and Exchange Commission (the “SEC”).
ii
Item 1. Financial Statements and Supplementary Data
BIT DIGITAL, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2026 and December 31, 2025
(Expressed in thousands, except for the number of shares)
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (audited) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable, net | ||||||||
| USDC | ||||||||
| Net investment in lease – current, net | ||||||||
| Loans receivable | ||||||||
| Digital asset collateral receivable | - | |||||||
| Other current assets, net | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Deposits for property, plant, and equipment | ||||||||
| Property, plant, and equipment, net | ||||||||
| Goodwill | ||||||||
| Digital assets | ||||||||
| Digital intangible assets | - | |||||||
| Intangible assets, net | ||||||||
| Operating lease right of use assets, net | ||||||||
| Finance lease right of use assets, net | - | |||||||
| Net investment in lease - non-current, net | ||||||||
| Investment securities | ||||||||
| Deferred tax assets | ||||||||
| Other non-current assets, net | ||||||||
| Total Non-Current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Current portion of deferred revenue | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Current portion of finance lease liabilities | - | |||||||
| Short-term debt and current portion of long-term debt, net | - | |||||||
| Income tax payable | ||||||||
| Other payables and accrued liabilities | ||||||||
| Total Current Liabilities | ||||||||
| Non-Current Liabilities | ||||||||
| Non-current portion of deferred revenue | ||||||||
| Non-current portion of operating lease liabilities | ||||||||
| Long-term debt, net | - | |||||||
| Convertible notes payable, net | ||||||||
| Derivative liability | ||||||||
| Deferred tax liabilities | ||||||||
| Other long-term liabilities | - | |||||||
| Total Non-Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies – Note 22 | ||||||||
| Bit Digital Shareholders’ Equity | ||||||||
| Preference shares, $ | ||||||||
| Ordinary shares, $ | ||||||||
| Treasury stock, at cost, | ( | ) | ( | ) | ||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive (loss) income | ( | ) | ||||||
| Total Bit Digital Shareholders’ Equity | ||||||||
| Non-controlling Interests | ||||||||
| Total Equity | ||||||||
| Total Liabilities and Equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
BIT DIGITAL, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 2026 and 2025
(Expressed in thousands, except for the number of shares)
| For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues | ||||||||||||||||
| Digital asset mining | $ | $ | $ | $ | ||||||||||||
| Cloud services | ||||||||||||||||
| Colocation services | ||||||||||||||||
| ETH staking | ||||||||||||||||
| Other | ||||||||||||||||
| Total revenues | ||||||||||||||||
| Operating costs and expenses | ||||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization shown below) | ||||||||||||||||
| Digital asset mining | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Cloud services | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Colocation services | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| ETH staking | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Depreciation and amortization expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Impairment of capitalized software assets | ( |
) | - | ( |
) | - | ||||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| (Losses) gains on digital assets | ( | ) | ( | ) | ( | ) | ||||||||||
| Gains on digital intangible assets | - | - | ||||||||||||||
| Impairment on digital intangible assets | ( | ) | - | ( | ) | - | ||||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| (Loss) income from operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Net gain (loss) from disposal of property and equipment | - | - | ( | ) | ||||||||||||
| Change in fair value of derivative liability | ( | ) | - | ( | ) | - | ||||||||||
| Interest expense | ( | ) | - | ( | ) | - | ||||||||||
| Other (expense) income, net | ( | ) | ( | ) | ||||||||||||
| Total other (expense) income, net | ( | ) | ( | ) | ||||||||||||
| (Loss) income before income taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| Income tax benefit (expenses) | ( | ) | ( | ) | ||||||||||||
| Net (loss) income | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Net loss attributable to noncontrolling interest | ( | ) | - | ( | ) | - | ||||||||||
| Net (loss) income attributable to Bit Digital shareholders | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Weighted average number of ordinary share outstanding | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
| (Loss) earnings per share | ||||||||||||||||
| Basic | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Diluted | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
BIT DIGITAL, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
For the Three and Six Months Ended June 30, 2026 and 2025
(Expressed in thousands, except for the number of shares)
| For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net (loss) income | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Other comprehensive (loss) income | ||||||||||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||||||||||
| Comprehensive (loss) income | ( | ) | ( | ) | ( | ) | ||||||||||
| Comprehensive loss attributable to noncontrolling interests | ( | ) | - | ( | ) | - | ||||||||||
| Comprehensive (loss) income attributable to Bit Digital shareholders | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
BIT DIGITAL, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
For the Three and Six Months Ended June 30, 2026 and 2025
(Expressed in thousands, except for the number of shares)
| Preference Shares | Ordinary Shares | Treasury | Additional paid-in |
Retained Earnings (Accumulated |
Accumulated other comprehensive |
Noncontrolling | Total Stockholders’ |
|||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Par Value | Shares | Amount | capital | deficit) | (loss) income | interest | Equity | ||||||||||||||||||||||||||||||||||
| Balances, December 31, 2024 | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | - | $ | |||||||||||||||||||||||||||
| Share-based compensation expense | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares/At-the-market offering, net of offering costs | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to employees | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to consultants | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to director | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | - | - | - | - | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | ( | ) | - | - | ( | ) | |||||||||||||||||||||||||||||||
| Balances, March 31, 2025 | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | - | $ | |||||||||||||||||||||||||||
| Share-based compensation expense | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares/At-the-market offering, net of offering costs | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares/public offering, net of offering costs | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to consultants | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to employees | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Other comprehensive income | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Net income | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Balances, June 30, 2025 | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | - | $ | |||||||||||||||||||||||||||||
| Balances, December 31, 2025 | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||||
| Share-based compensation expense | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares/At-the-market offering, net of offering costs | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Declaration of dividends to preferred shareholders | - | - | - | - | - | - | - | ( | ) | - | - | ( | ) | |||||||||||||||||||||||||||||||
| Changes in ownership interests in a subsidiary - settlement of subsidiary RSUs | - | - | - | - | - | - | ( | ) | - | - | - | |||||||||||||||||||||||||||||||||
| Purchase of zero-strike call options in connection with issuance of convertible notes | - | - | - | - | - | - | ( | ) | - | - | - | ( | ) | |||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to employees | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to director | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | - | - | - | - | - | - | - | - | ( | ) | (576 | ) | ( | ) | ||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | ( | ) | - | (3,610 | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balances, March 31, 2026 | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||||
| Share-based compensation expense | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares/At-the-market offering, net of offering costs | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Changes in ownership interests in a subsidiary - settlement of subsidiary RSUs | - | - | - | - | - | - | ( | ) | - | - | - | |||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to consultants | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to employees | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to director | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | ( | ) | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balances, June 30, 2026 | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
BIT DIGITAL, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2026 and 2025
(Expressed in thousands, except for the number of shares)
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization expenses | ||||||||
| Impairment of capitalized software assets | - | |||||||
| (Gain) Loss from disposal of property, plant, and equipment | ( | ) | ||||||
| Amortization of discount on debts issued | - | |||||||
| Losses on digital assets | ||||||||
| Share-based compensation expenses | ||||||||
| Changes in fair value of investment security | ||||||||
| Changes in fair value of derivative liability | - | |||||||
| Current expected credit losses | - | |||||||
| Digital assets mined | ( | ) | ( | ) | ||||
| Digital assets earned from staking | ( | ) | ( | ) | ||||
| Impairment of digital intangible assets | - | |||||||
| Gain on digital intangible assets | ( | ) | - | |||||
| Changes in operating assets and liabilities: | ||||||||
| Digital assets and stable coins | ( | ) | ||||||
| Right-of-use assets | ||||||||
| Deferred revenue | ( | ) | ||||||
| Lease liabilities | ( | ) | ( | ) | ||||
| Other current assets | ||||||||
| Other non-current assets | ( | ) | ||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ||||||
| Other payables and accrued liabilities | ||||||||
| Net investment in lease | ||||||||
| Other long-term liabilities | ( | ) | ||||||
| Income tax payable | ( | ) | ||||||
| Deferred tax liabilities | ( | ) | ||||||
| Net Cash Provided by Operating Activities | ||||||||
| Cash Flows from Investing Activities: | ||||||||
| Purchases of and deposits made for property, plant and equipment | ( | ) | ( | ) | ||||
| Investment in equity securities | - | ( | ) | |||||
| Proceeds from disposal of property, plant and equipment | ||||||||
| Proceeds from disposal of digital assets | - | |||||||
| Net Cash Used in Investing Activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Net proceeds from issuance of ordinary shares for public offering | - | |||||||
| Net proceeds from issuance of ordinary shares/At-the-market offering | ||||||||
| Net proceeds from issuance of convertible debts | - | |||||||
| Net proceeds from issuance of debts | - | |||||||
| Purchase of zero-strike call option | ( | ) | - | |||||
| Payment of dividends | ( | ) | ( | ) | ||||
| Repayment of finance lease liabilities | ( | ) | - | |||||
| Net Cash Provided by Financing Activities | ||||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | ( | ) | ||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ) | ||||||
| Cash, cash equivalents and restricted cash, beginning of period | ||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | ||||||
| Supplemental Cash Flow Information | ||||||||
| Cash paid for interest expense | $ | $ | - | |||||
| Cash paid for income taxes, net of (refunds) | $ | $ | ||||||
| Non-cash Transactions of Investing and Financing Activities | ||||||||
| Right of use assets exchanged for operating lease liabilities | $ | $ | ||||||
| Reclassification of deposits to property, plant and equipment | $ | $ | ||||||
| Issuance of subsidiary shares to employees in settlement of RSUs | $ | $ | - | |||||
| Net investment in sales-type lease of equipment | $ | $ | - | |||||
| Construction in progress included in other payables and accrued liabilities | $ | ( | ) | $ | - | |||
| Digital assets, pledged as collateral | $ | $ | - | |||||
| ETH exchanged for LsETH | $ | $ | - | |||||
| Extinguishment of financing lease by acquiring underlying assets | $ | $ | - | |||||
Reconciliation of cash, cash equivalents and restricted cash
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Cash, cash equivalents and restricted cash | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
5
BIT DIGITAL, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND PRINCIPAL ACTIVITIES
Bit Digital, Inc. (“BTBT” or the “Company”), is a holding company incorporated on
On August 15, 2024, WhiteFiber, Inc. (f/k/a Celer, Inc.) (“WhiteFiber”) was incorporated to support the Company’s generative artificial intelligence (“AI”) workstreams. WhiteFiber was
On August 8, 2025, WhiteFiber completed its initial public offering (“IPO”) of its ordinary shares. Prior to the consummation of the IPO, the Company entered into a contribution agreement (the “Contribution Agreement”) with WhiteFiber, pursuant to which the Company contributed (the “Contribution”) its HPC business through the transfer of
On November 28, 2025, the Company acquired all the shares of Financière Louis David (“FLD”), a France-based company structured as a Société par Actions Simplifiée (SAS), is a holding/management company that primarily engages in business consulting and management advisory activities. FLD is the general partner (associé commandité) of Financière Marjos SCA (“Financière Marjos” or “FM”), a France-based company listed on the Euronext Paris stock exchange (Euronext: FINM), is a holding and investment company that creates, acquires, and manages diverse businesses and provides financial and administrative services through subsidiaries and holdings. FLD then held
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The accompanying unaudited condensed consolidated financial statements reflect the activities of the Company and each of the following entities:
| Name | Background | Ownership | |||
| Bit Digital USA, Inc. (“BT USA”) | ● | ||||
| ● | Incorporated on | ||||
| ● | |||||
| Bit Digital Capital, Inc. (“BT Capital”) | ● | ||||
| ● | Incorporated on | ||||
| ● | |||||
| Bit Digital Canada, Inc. (“BT Canada”) | ● | ||||
| ● | Incorporated on | ||||
| ● | |||||
| Bit Digital Hong Kong Limited (“BT HK”) | ● | ||||
| ● | Acquired on | ||||
| ● | |||||
| Bit Digital Strategies Limited (“BT Strategies”) | ● | ||||
| ● | Incorporated on | ||||
| ● | |||||
| Bit Digital Singapore Pte. Ltd. (“BT Singapore”) | ● | ||||
| ● | Incorporated on | ||||
| ● | |||||
| Bit Digital Europe Holding | ● | ||||
| (formerly known as Financière Louis David (“FLD”)) | ● | Incorporated on | |||
| Financière Marjos SCA | ● | ||||
| (“Financière Marjos” or “FM”) | ● | Incorporated on | |||
| WhiteFiber, Inc. (f/k/a Celer, Inc.) | ● | ||||
| (“WhiteFiber”) | ● | Incorporated on | |||
| ● | |||||
| (1) |
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation and principles of consolidation
The interim unaudited condensed consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States (“US GAAP”). Unless otherwise indicated, amounts are stated in thousands of U.S. dollars, except for share, per share data, miner quantities; digital assets quantities and prices.
The unaudited condensed consolidated financial information as of June 30, 2026 and for the three and six months ended June 30, 2026 and 2025 has been prepared without audit, pursuant to the rules and regulations of the SEC and pursuant to Regulation S-X. Certain information and footnote disclosures, which are normally included in annual financial statements prepared in accordance with US GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim financial information should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 10-K for the fiscal year ended December 31, 2025, which was filed with the SEC on March 27, 2026.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which are necessary for a fair presentation of financial results for the interim periods presented. The Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements have been prepared using the same accounting policies as used in the preparation of the Company’s consolidated financial statements for the year ended December 31, 2025. The results of operations for the three and six months ended June 30, 2026, and 2025 are not necessarily indicative of the results for the full years.
Initial Public Offering of WhiteFiber
On August 8, 2025, WhiteFiber closed its initial public offering (IPO) of
On September 2, 2025, the Underwriters fully exercised their option to purchase the additional
Following the IPO (including the underwriters’ exercise of their option to purchase additional ordinary shares), the Company owned approximately
Use of estimates
In preparing the condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the condensed consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of digital assets and other current assets, useful lives of property, plant, and equipment, impairment of long-lived assets, intangible assets and goodwill, valuation of assets and liabilities acquired in business combinations, provision necessary for contingent liabilities and realization of deferred tax assets. Actual results could differ from those estimates.
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Fair value of financial instruments
ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. 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. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
| ● | Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| ● | Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data. |
| ● | Level 3 - inputs to the valuation methodology are unobservable. |
Fair value of digital assets is based on Level 1 inputs as these were based on observable quoted prices in the Company’s principal market for identical assets. The fair value of the Company’s other financial instruments, including cash and cash equivalents, restricted cash, loans receivable, deposits, accounts receivable, other receivables, accounts payable, and other payables, approximate their fair values because of the short-term nature of these assets and liabilities. Non-financial assets, such as intangible assets, right-of-use assets, and property, plant and equipment, are adjusted to fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only upon recognition of an impairment charge.
Fair value of the Company’s convertible notes payable was estimated using quoted market prices for the notes in markets that are not considered active, which represent Level 2 measurements within the fair value hierarchy.
Fair value of the embedded conversion feature at issuance of the convertible notes and each reporting period was estimated based on significant inputs that are unobservable in the market, which represent Level 3 measurements within the fair value hierarchy.
Cash and cash equivalents
Cash includes cash on hand and demand deposits in accounts maintained with commercial banks. The Company considers all highly liquid investment instruments with an original maturity of three months or less from the date of purchase to be cash equivalents.
Restricted cash
Restricted cash represents cash balances that support an outstanding letter of credit to third parties related to security deposits and other purposes and are restricted from withdrawal.
USDC
USD Coin (“USDC”) is accounted for as a financial instrument that can be redeemed one USDC for one U.S. dollar on demand from the issuer. While not accounted for as cash or cash equivalents, we treat our USDC holdings as a liquidity resource.
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Accounts receivable, net
Accounts receivable consist of amounts due from our customers. Receivables are recorded at the invoiced amount less current expected credit losses for any potentially uncollectable accounts under the current expected credit loss (“CECL”) impairment model and presents the net amount of the financial instrument expected to be collected. The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, that considers forecasts of future economic conditions in addition to information about past events and current conditions. In accordance with ASC 326, Measurement of Credit Losses on Financial Instruments (“ASC 326”), the Company evaluates the collectability of outstanding accounts receivable balances to determine current expected credit losses that reflects its best estimate of the lifetime expected credit losses. Uncollectible accounts are written off against the current expected credit losses when collection does not appear probable.
In determining the amount of the current expected credit losses, the Company considers historical collection history based on past due status, the current aging of receivables, customer-specific credit risk factors, including their current financial condition, current market conditions, and probable future economic conditions which inform adjustments to historical loss patterns. Credit loss expense, inclusive of credit loss expense on all categories of financial assets, is recorded within General and administrative expenses in the condensed consolidated statements of operations.
Digital assets holdings
The Company’s digital assets primarily include bitcoin and ETH. Digital assets are included in non-current assets on consolidated balance sheets due to the Company’s intent to retain and hold the majority of its digital assets on a long-term basis. The Company distinguishes between digital assets which fall within the scope of ASC 350-60 and those which do not. The Company refers to digital assets which fall within the scope of ASC 350-60 (e.g., bitcoin and ETH) as “crypto assets.” Digital assets which do not fall within the scope of ASC 350-60, Accounting for and Disclosure of Crypto Assets, are referred to as “digital intangible assets.”
Digital intangible assets comprised of LsETH that are intangible assets outside the scope of ASC 350-60. A receipt token, in general and by design, entitles the holder to redeem the crypto intangible asset(s) for which it was exchanged. Therefore, it fails the ‘other goods and services criterion’ in paragraph 350-60-15-1(b), and thus is outside the scope of Subtopic 350-60. These digital intangible assets are recorded at cost, less impairment within digital intangible assets on the consolidated balance sheets in accordance with ASC 350-30. The Company tests digital intangible assets for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. The test for impairment consists of a comparison of the fair value of the digital intangible assets with their carrying amounts. Refer to Note 6, Digital Assets Holdings for additional information.
Digital assets purchased are recorded at cost and digital assets awarded to the Company through its mining activities and staking activities are accounted for in accordance with the Company’s revenue recognition policy disclosed below.
Effective January 1, 2024, the Company early adopted ASU 2023-08, which requires entities to measure certain cryptocurrencies at fair value, with changes in fair value recorded in net income in each reporting period. The Company’s digital assets are within the scope of ASU 2023-08 and the transition guidance requires a cumulative-effect adjustment as of the beginning of the current fiscal year for any difference between the carrying amount of the Company’s digital assets and fair value.
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ASC 820 defines “principal market” as the market with the greatest volume and level of activity for the asset or liability. The determination of the principal market (and, as a result, the market participants in the principal market) is made from the perspective of the reporting entity. The digital assets held by the Company are traded on a number of active markets globally. The Company uses both exchanges and Amber Group’s OTC desk to buy and sell digital assets, including transactions involving U.S. dollars or exchanges between different types of digital assets. Prior to April 1, 2025, the Company considered CoinMarketCap to be its principal market. Effective April 1, 2025, the Company determined that Coinbase is its principal market as it provides the most reliable and greatest volume and level of activity for bitcoin and ETH for which the Company can access.
The Company recognizes mining revenue by utilizing the spot price of Bitcoin determined using Coinbase at 0:00:00 UTC on the date of contract inception. The Company recognizes staking revenue at the fair value of the ETH received at contract inception, measured using quoted prices on the Coinbase exchange.
Purchases and sales of digital assets by the Company are included within investing activities on the accompanying consolidated statements of cash flows and digital assets awarded to the Company through its mining activities and staking activities are included within operating activities on the accompanying consolidated statements of cash flows. Deposits of ETH into liquid staking, receipt of ETH from unstaking and redemption of receipt tokens, are presented as within non-cash investing activities in the condensed statements of cash flows. The changes of digital assets are included within operating activities in the accompanying consolidated statements of cash flows. After adopting ASU 2023-08, changes in fair value and realized gains or losses are now reported as “gains (losses) on digital assets” in the consolidated statements of operations. Prior to this adoption, realized gains or losses were reported as “realized gains (losses) on exchange of digital assets” in the consolidated statements of operations. The Company accounts for its gains or losses in accordance with the first-in first-out method of accounting.
Digital Asset Collateral Receivable
The Digital Asset Collateral Receivable represents the Company’s contractual right to receive an equivalent quantity and type of digital assets pledged as collateral under borrowing arrangements in which the counterparty has the contractual right to sell, pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose of the pledged digital assets during the term of the arrangement. Upon transfer of the collateral, the Company derecognizes the pledged digital assets as control has transferred to the counterparty and recognizes a Digital Asset Collateral Receivable representing its contractual right to receive fungible digital assets of the same type upon settlement of the related borrowing arrangement.
The Digital Asset Collateral Receivable is initially measured at the fair value of the digital assets transferred as collateral on the transfer date. Any difference between the carrying amount of the transferred digital assets and the initial measurement of the receivable is recognized in the consolidated statements of operations as an impairment loss or realized gain on transfer, as applicable. Thereafter, the Digital Asset Collateral Receivable is measured at amortized cost. The value and activity relating to the Digital Asset Collateral Receivable are disclosed in Note 7 – Digital Asset Collateral Receivable.
The Digital Asset Collateral Receivable is classified as current or non-current based on the expected timing of settlement under the related borrowing arrangement. For borrowing arrangements that are repayable on demand or otherwise expected to be settled within twelve months, the Digital Asset Collateral Receivable is classified as a current asset.
At inception and throughout the term of the arrangement, the Company evaluates the collectability of the Digital Asset Collateral Receivable in accordance with ASC 326, Financial Instruments—Credit Losses. The Digital Asset Collateral Receivable is presented net of any allowance for expected credit losses. The Company applies the current expected credit loss (“CECL”) model and estimates lifetime expected credit losses by considering the creditworthiness of the counterparty, the contractual terms of the borrowing arrangement, current economic conditions, reasonable and supportable forecasts, and other qualitative and quantitative factors relevant to the collectability of the receivable. Based on these assessments, management records an allowance for expected credit losses when necessary. For the periods presented, no allowance for expected credit losses was considered necessary.
Deposits for property, plant, and equipment
The deposits for property, plant, and equipment (“PP&E”) represented advance payments for purchases of miner, high performance computing equipment and other equipment used in our colocation services. The Company initially recognizes deposits for PP&E when cash is advanced to our suppliers. Subsequently, the Company derecognizes and reclassifies deposits for PP&E to PP&E when control is transferred to and obtained by the Company.
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Below is the roll forward of the balance of deposits for PP&E for the six months ended June 30, 2026 and for the year ended December 31, 2025 respectively.
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Opening balance | $ | $ | ||||||
| Reclassification to PP&E | ( | ) | ( | ) | ||||
| Addition of deposits for PP&E | ||||||||
| Ending balance | $ | $ | ||||||
Property, plant, and equipment, net
Property, plant, and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets or declining-balance method. Direct costs related to developing or obtaining software for internal use are capitalized as property, plant, and equipment. Capitalized software costs are amortized over the software’s useful life when the software is placed in service.
| Estimated Useful Life | ||
| Digital asset miners | ||
| Cloud service equipment | ||
| Colocation service equipment | ||
| Building | ||
| Leasehold improvements | ||
| Purchased and internally developed software | ||
| Vehicle | ||
| Other property and equipment |
Land acquired by the Company has an unlimited useful life and therefore is not depreciated.
Impairment of long-lived assets
Management reviews long-lived assets, including finite-lived intangible assets, 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 undiscounted future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is not subject to amortization, and instead, assessed for impairment annually at the end of each fiscal year, or more frequently when events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount in accordance with ASC 350 - Intangibles - Goodwill and Other.
The impairment assessment involves an option to first assess qualitative factors to determine whether events or circumstances exist that lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment is not performed, or after assessing the totality of the events or circumstances, we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative assessment for potential impairment is performed.
The quantitative goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not impaired. An impairment loss is recognized for any excess of the carrying amount of the reporting unit over its fair value up to the amount of goodwill allocated to the reporting unit.
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Finite-lived intangible assets
Intangible assets are recorded at cost less any accumulated amortization and any accumulated impairment losses. Intangible assets acquired through business combinations are measured at fair value at the acquisition date.
Intangible assets with finite lives are comprised of customer relationships and are amortized on a straight-line basis over their estimated useful lives. The Company assesses the appropriateness of finite-lived classification at least annually. Additionally, the carrying value and remaining useful lives of finite-lived assets are reviewed annually to identify any circumstances that may indicate potential impairment or the need for a revision to the amortization period. A finite-lived intangible asset is considered to be impaired if its carrying value exceeds the estimated future undiscounted cash flows expected to be generated from it. We apply judgment in selecting the assumptions used in the estimated future undiscounted cash flow analysis. Impairment is measured by the amount that the carrying value exceeds fair value. The useful lives of customer relationships is
Business combinations
The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805 - Business Combinations, by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, measured at the acquisition date fair value. The determination of fair value involves assumptions, estimates, and judgments. The initial allocation of the purchase price is considered preliminary and therefore subject to change until the end of the measurement period (up to one year from the acquisition date). Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net assets acquired.
Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.
Investment securities
As of June 30, 2026 and December 31, 2025, investment securities represent the Company’s investments in three funds, a privately held company via a simple agreement for future equity (“SAFE”), four privately held companies, and a publicly traded company over which the Company neither has control nor significant influence through investments in ordinary shares or preferred shares.
Investment in equity method investee
In accordance with ASC 323, Investments - Equity Method and Joint Ventures, the Company accounts for the investment in one privately held company using equity method, because the Company has significant influence but does not own a majority equity interest or otherwise control over the equity investee.
Under the equity method, the Company initially records its investment at cost and prospectively recognizes its proportionate share of each equity investee’s net income or loss into its consolidated statements of operations. When the Company’s share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee.
The Company continually reviews its investment in the equity investee to determine whether a decline in fair value below the carrying value is other-than-temporary. The primary factors the Company considers in its determination include the financial condition, operating performance and the prospects of the equity investee; other company specific information such as recent financing rounds; the geographic region, market and industry in which the equity investee operates; and the length of time that the fair value of the investment is below its carrying value. If the decline in fair value is deemed to be other-than-temporary, the carrying value of the equity investee is written down to fair value.
Investment in funds
Equity securities not accounted for using the equity method are carried at fair value with unrealized gains and losses recorded in the consolidated income statements, according to ASC 321, Investments - Equity Securities. As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the fund. NAV is primarily determined based on information provided by the fund administrator.
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Investment in privately held company
Equity securities not accounted for using the equity method are carried at fair value with unrealized gains and losses recorded in the consolidated income statements, according to ASC 321, Investments - Equity Securities. The Company elected to record the equity investments in privately held companies using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer.
Equity investments in privately held companies accounted for using the measurement alternative are subject to periodic impairment reviews. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of these equity securities. In computing realized gains and losses on equity securities, the Company calculates cost based on amounts paid using the average cost method. Dividend income is recognized when the right to receive the payment is established.
Investment in a publicly traded company
The Company’s equity investments consist of minority interests in a publicly traded company over which the Company does not have significant influence. These investments are classified as equity securities and are measured at fair value in accordance with ASC 321, Investments — Equity Securities.
Equity securities with readily determinable fair values are measured at fair value, with changes in fair value recognized in earnings and presented within other income, net in the consolidated statements of operations. The fair value of publicly traded equity securities is determined using quoted market prices in active markets and is classified as Level 1 inputs within the fair value hierarchy.
Investment in SAFE
SAFE investments provide the Company with the right to participate in future equity financing of preferred stock. The Company accounted for this investment under ASC 320, Investments - Debt Securities and elected the fair value option for the SAFE investment under ASC 825, Financial Instruments, which requires financial instruments to be remeasured to fair value each reporting period, with changes in fair value recorded in the condensed consolidated statements of operations. The fair value estimate includes significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.
Investment in Innovation Fund/Digital assets held in fund
On October 1, 2023, the Company made an investment of
The Fund qualified and operated as an investment company for accounting purposes pursuant to the accounting and reporting guidance under ASC 946, “Financial Services – Investment Companies” (“ASC 946”), which requires fair value measurement of the Fund. The Company retains the Fund’s investment company specific accounting principles under ASC 946 upon consolidation. The digital assets held by the Fund were traded on a number of active markets globally. A fair value measurement under ASC 820, “Fair Value Measurement” (“ASC 820”) for an asset assumes that the asset is exchanged in an orderly transaction between market participants either in the principal market for the asset or, in the absence of a principal market, the most advantageous market for the asset (ASC 820-10-35-5). The fair value of the assets within the Fund was primarily determined using the price from CoinMarketCap. Any changes in the fair value of the assets were recorded in Other income (expense), net in the consolidated statements of operations.
On July 1, 2024, the Company entered into a share purchase agreement with Pleasanton Ventures Limited (“Pleasanton Ventures”) for the disposition of Bit Digital Innovation Master Fund SPC Ltd and Bit Digital Investment Management Limited. Upon the disposition, the Company no longer has a controlling financial interest in the Fund and therefore deconsolidated the Fund in accordance with ASC 810 – “Consolidation” (“ASC 810”). The Company did not record any gain or loss upon deconsolidation as the digital assets in the Fund were measured at fair value. Subsequently, the investment in the Fund is included under the caption “Investment securities” as Investment in Innovation Fund. Refer to Note 11. Investment Securities for more information.
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Leases
The Company determines whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the term of such lease is assessed based on the date on which the underlying asset is made available for the Company’s use by the lessor. The Company’s assessment of the lease term reflects the non-cancellable term of the lease, inclusive of any rent-free periods and/or periods covered by early-termination options which the Company is reasonably certain of not exercising, as well as periods covered by renewal options which the Company is reasonably certain of exercising. The Company also determines lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition and the presentation reflected in the condensed consolidated statements of operations over the lease term.
For leases with a term exceeding 12 months, a lease liability is recorded on the Company’s condensed consolidated balance sheet at lease commencement reflecting the present value of its fixed minimum payment obligations over the lease term, and the purchase price if the Company is reasonably certain to exercise a purchase option. A corresponding lease right-of-use asset equal to the initial lease liability is also recorded, adjusted for any prepayment and/or initial direct costs incurred in connection with execution of the lease and reduced by any lease incentives received. For purposes of measuring the present value of its fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in its leasing arrangements are typically not readily determinable. The Company’s incremental borrowing rate reflects the rate it would pay to borrow on a secured basis and incorporates the term and economic environment of the associated lease. Variable lease costs are recognized in the period in which the obligation for those payments is incurred and not included in the measurement of right-of-use assets and lease liabilities.
For the Company’s operating leases, fixed lease payments are recognized as lease expense on a straight-line basis over the lease term. For leases with a term of 12 months or less, any fixed lease payments are recognized on a straight-line basis over the lease term and are not recognized on the Company’s condensed consolidated balance sheet as an accounting policy election. Leases qualifying for the short-term lease exception were insignificant.
For finance leases where the Company is the lessee, the Company recognizes a right-of-use assets and a corresponding lease liability at lease commencement, measured in a manner consistent with operating leases. Subsequently, fixed lease payments are recognized as amortization of the right-of-use asset and interest expense is recognized on the outstanding lease liability using the effective interest method. Finance lease right-of-use assets are amortized into depreciation and amortization expense on a straight-line basis over the lease term or, if the lease transfers ownership of the underlying asset to the Company, the life of the leased asset.
For sales-type leases where the Company is the lessor, the Company recognizes a net investment in lease, which comprises of the present value of the future lease payments and any unguaranteed residual value. Interest income is recognized over the lease term at a constant periodic discount rate on the remaining balance of the lease net investment using the rate implicit in the lease and is included in “Revenue – other”. Sales-type leases result in the recognition of gain or loss at the commencement of the lease, which will be recorded in “Other income, net.”
For the operating sublease where the Company is the lessor, the Company recognizes lease payments in income over the lease term on a straight-line basis and is included in “Other income, net”.
Debt
Notes and Loans Payable (short-term and long-term debt)
Notes and loans payable are presented as short-term and long-term debt in the consolidated balance sheet and recognized initially at the amount of proceeds received, net of related debt discount and debt issuance costs, and are subsequently measured at amortized cost using the effective interest method. Interest expense is recognized in the condensed consolidated statements of operations over the term of the related debt. Notes and loans payable are classified as current or long-term debt liabilities based on their contractual maturities, or earlier if a default, cross-default, or other contractual provision entitles the lender to accelerate repayment within twelve months of the balance sheet date.
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Convertible notes payable
The Company accounts for its convertible note under ASC 470-20, Debt with Conversion and Other Options and ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity and/or ASC 815, depending on the specific terms of the debt agreement.
For convertible notes for which the embedded conversion feature is determined not to be clearly and closely related to the debt host and does not qualify for the scope exception under ASC 815-40, the Company bifurcates the embedded conversion feature and accounts for it separately as a derivative liability. Such derivative liabilities are initially measured at fair value, with subsequent changes in fair value recognized in the condensed consolidated statements of operations. The remaining proceeds are allocated to the debt host, which is recorded as convertible notes, net of debt discount and issuance costs.
For convertible notes for which the embedded conversion feature is determined to be clearly and closely related to the debt host and does qualify for the scope exception under ASC 815-40, the Company records the entire convertible notes at face value net of debt issuance costs.
If any of the conditions to the convertibility of the convertible notes are satisfied, or the convertible notes become due within one year, then the Company may be required under applicable accounting standards to reclassify the carrying value of the convertible senior notes as a current, rather than a long-term liability.
Debt issuance costs related to the convertible notes were capitalized and recorded as a contra-liability and are presented net against the balance of the convertible notes on the condensed consolidated balance sheet. Debt issuance costs consist of underwriting, legal and other direct costs related to the issuance of the convertible notes and are amortized to interest expense over the term of the convertible notes using the effective interest method.
Zero-strike call
The Company accounts for the zero-strike call option as either equity instruments or liabilities in accordance with ASC 480 and/or derivative liabilities in accordance ASC 815, depending on the specific terms of the agreement. The Company evaluates the terms of such instruments to determine whether they are indexed to the Company’s own stock and qualify for equity classification under ASC 815-40. To the extent these criteria are met, the Zero-strike call option is equity-classified, which is not remeasured each reporting period and is recorded as a reduction to additional paid-in-capital within shareholders’ equity when purchased. The transaction is accounted for separately from the convertible notes and does not impact the accounting for convertible notes.
Collateralized borrowings
Collateralized borrowings represent financing arrangements under which the Company obtains funding secured by its liquid staked ETH (“LsETH”). Upon inception of a collateralized borrowing arrangement, the Company recognizes a loan payable equal to the proceeds received, net of any applicable debt issuance costs.
Subsequent to initial recognition, the loan payable is measured at amortized cost using the effective interest method. Interest expense, including the amortization of any debt discount or debt issuance costs, is recognized over the period the borrowing is outstanding. Accrued but unpaid interest is recognized as interest payable until settlement.
The Company’s collateralized borrowings are secured by LsETH pledged to the lender. When the Company determines that control of the pledged collateral has transferred to the lender, the pledged LsETH is derecognized and a collateral receivable is recognized in accordance with the Company’s accounting policy for pledged digital assets. Changes in the accounting for the pledged collateral do not affect the recognition, measurement or presentation of the related loan payable.
The Company’s collateralized borrowing arrangements may require the Company to maintain collateral at specified contractual collateralization levels. Accordingly, the Company may be required to pledge additional collateral or may receive the return of previously pledged collateral based on changes in the fair value of the pledged digital assets.
The Company’s collateralized borrowings are evergreen facilities that may be called by the lender upon seven days’ notice or repaid by the Company at any time in accordance with the applicable loan agreements. Because the Company does not have an unconditional right to defer settlement of these borrowings for at least one year after the balance sheet date, the related loan payable is classified as a current liability in the consolidated balance sheets.
Revenue recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. Refer to Note 3. Revenue from Contracts with Customers for further information.
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Contract costs
Capitalized contract costs represent the costs directly related and incremental to the origination of new contracts, including commissions that are incurred directly related to obtaining customer contracts. We amortize the deferred contract costs on a straight-line basis over the expected period of benefit. These amounts are included in the accompanying condensed consolidated balance sheets, with the capitalized costs to be amortized to commission expense over the expected period of benefit included in Other current assets and non-current assets and commission expense payable included in Other current liabilities and Other long-term liabilities.
Deferred revenue
Deferred revenue primarily pertains to prepayments received from customers for services that have not yet commenced as of June 30, 2026. Deferred revenues are recognized as revenue when recognition criteria have been met.
Remaining performance obligation
Remaining performance obligations represent the transaction price of contracts for work that have not yet been performed. The amount represents estimated revenue expected to be recognized in the future related to the unsatisfied portion of the performance obligation.
Cost of revenue
The Company’s cost of revenue consists primarily of (i) direct production costs related to mining operations, including electricity costs, profit-sharing fees/variable performance fees and/or other relevant costs paid to our hosting facilities, (ii) direct production costs related to our cloud services, including electricity costs, data center lease costs, data center employees’ wage expenses and other relevant costs, (iii) direct production costs related to our colocation services, including electricity costs, lease costs, and other relevant costs, and (iv) direct costs related to ETH staking business, including service fees payable to the service provider.
Cost revenue excludes depreciation expenses, which are separately stated in the Company’s condensed consolidated statements of operations.
Foreign currency
Accounts expressed in foreign currencies are translated into U.S. dollars. Functional currency assets and liabilities are translated into U.S. dollars generally using rates of exchange prevailing at the balance sheet date of each respective subsidiary and the related translation adjustments are recorded as a separate component of accumulated other comprehensive income, net of any related taxes, in total shareholders’ equity. Income statement accounts expressed in functional currencies are translated using average exchange rates during the period. Functional currencies are generally the currencies of the local operating environment. Financial statement accounts expressed in currencies other than the functional currency of a consolidated entity are remeasured into that entity’s functional currency resulting in exchange gains or losses recorded in other income (expense), net.
Operating segments
Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance.
Income taxes
We account for current and deferred income taxes in accordance with the authoritative guidance, which requires that the income tax impact to be recognized in the period in which the law is enacted. Current income tax expense represents taxes paid or payable for the current period. Deferred tax assets and liabilities are recognized using enacted tax rates for the future tax impact of temporary differences between the financial statement and tax bases of recorded assets and liabilities. A valuation allowance is recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized based on historical and projected future taxable income over the periods in which the temporary differences are expected to be recovered or settled on each jurisdiction.
In accordance with the authoritative guidance on accounting for uncertainty in income taxes, we recognize liabilities for uncertain tax positions based on the two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained in audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than
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Earnings (loss) per share
Basic earnings (loss) per share is computed by dividing net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares or resulted in the issuance of ordinary share participating in the earnings of the entity.
Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares. Potentially dilutive securities include, but are not limited to, convertible debt instruments, share-based compensation awards, warrants, and other equity-linked instruments.
The Company applies the treasury stock method or the if-converted method, as applicable, to determine the dilutive effect of these instruments.
For periods in which the Company reports a net loss, all potentially dilutive securities are excluded from the computation of diluted loss per share, as their inclusion would be anti-dilutive. In addition, potentially dilutive securities are excluded from the calculation of diluted earnings per share when their effect would be anti-dilutive.
Commitments and contingencies
In the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business, which cover a wide range of matters. Liabilities for contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
If the assessment of a contingency indicates that it is probable that a material loss is incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.
The Company may also enter into contractual arrangements that result in commitments, including purchase obligations. In addition, the Company may be subject to contingent consideration obligations related to asset acquisitions, which involve potential future payments contingent upon the achievement of specified conditions or milestones.
Share-based compensation
The Company expenses stock-based compensation to employees and non-employees over the requisite service period based on the grant-date fair value of the awards. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and 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 dividend yield on the underlying stock. Expected volatility is calculated based on the historical volatility of the Company’s ordinary shares over the expected term of the option. Risk-free interest rates are calculated based on risk–free rates for the appropriate term. The Company has elected to account for forfeitures of awards as they occur.
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The Company has granted RSUs to certain employees and non-employees. Some of the RSUs contain a performance condition, and vesting is determined based on achievement of a performance metric. Compensation expense is recognized on a straight-line basis over the service period based on the expected attainment of a performance metric. At each reporting period, the Company reassesses the probability of the achievement of the performance metric, and any increase or decrease in share-based compensation expense resulting from an adjustment in the number of shares expected to vest is treated as a cumulative catch-up in the period of adjustment.
Treasury stock
The Company accounts for treasury stocks using the cost method. Under this method, the cost incurred to purchase the shares is recorded in the treasury stocks account on the consolidated balance sheets.
The Company treats shares withheld for tax purposes on behalf of employees in connection with the vesting of restricted share grants as ordinary share repurchases because they reduce the number of shares that would have been issued upon vesting.
Reclassification
Certain items in the financial statements of the comparative period have been reclassified to conform to the financial statements for the current period. The reclassification has no impact on the total assets and total liabilities as of June 30, 2026 or on the statements of operations for the three and six months ended June 30, 2026.
Recent accounting pronouncements
The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its condensed consolidated financial statements and assures that there are proper controls in place to ascertain that the Company’s condensed consolidated financial statements properly reflect the change.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 requires, in the notes to the financial statements, disclosures of specified information about certain costs and expenses specified in the updated guidance. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact the updated guidance will have on its disclosures.
In May 2025, FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (“ASU 2025-03”), which amends the guidance for identifying the accounting acquirer in transactions involving the acquisition of a variable interest entity that meets the definition of a business. The new standard is effective for the Company for its annual periods beginning January 1, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard.
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3. Revenue from Contracts with Customers
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).
To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.
The Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange.
The Company is a strategic asset company (SAC) focused on active participation in Ethereum (ETH) infrastructure while winding down its digital asset mining business and through its majority-owned subsidiary, WhiteFiber, high performance computing (“HPC”) business, including cloud services and colocation services through its operation of HPC data centers.
In June 2025, the Company announced that it had initiated a strategic transition to become a pure play ETH staking and treasury company. In connection with the transition, the Company intends to convert its BTC holdings into ETH over time and has commenced a strategic alternatives process for its bitcoin mining operations, which is expected to result in a sale or wind-down, with any net proceeds to be re-deployed into ETH.
Disaggregation of revenues
Revenue disaggregated by reportable segment is presented in Note 20. Segment Reporting.
Cloud services
The Company provides cloud services to support customers’ generative AI workstreams. We have determined that cloud services are a single continuous service comprised of a series of distinct services that are substantially the same and have the same pattern of transfer (i.e. distinct days of service).
These services are consumed as they are received, and the Company recognizes revenue over time using the variable allocation exception as it satisfies performance obligations. We apply this exception because we concluded that the nature of our obligations and the variability of the payment terms based on the number of GPUs providing HPC services are aligned and uncertainty related to the consideration is resolved on a daily basis as we satisfy our obligations. The Company recognizes revenue net of consideration payable to customers, such as service credits, and accounted for as a reduction of the transaction price in accordance with guidance in ASC 606-10-32-25.
The Company’s cloud services revenue has been generated from Iceland. Beginning in March 2026, the Company generated an immaterial amount of revenue in Canada, representing a small portion of total revenue, through services provided to a third-party customer following the deployment of the GPU server in one of its Canadian data centers.
Data center/Colocation services
Colocation services generate revenue from Canada by providing customers with physical space, power, and cooling within the data center facility.
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Our revenue is primarily derived from recurring revenue streams, mainly (1) colocation, which is the leasing of cabinet space and power and (2) connectivity services, which includes cross-connects. Additionally, the remainder of our revenue is from non-recurring revenue, which primarily includes installation services related to a customer’s initial deployment.
Revenues from recurring revenue streams are billed monthly and recognized ratably over the term of the contract, generally one to five years for data center colocation customers. Non-recurring installation fees, although generally paid upfront upon installation, are deferred and recognized ratably over the contract term.
We guarantee certain service levels, such as uptime, as outlined in individual customer contracts. If these service levels are not achieved due to any failure of the physical infrastructure or offerings, or in the event of certain instances of damage to customer infrastructure within our data center, we would reduce revenue for any credits or cash payments given to the customer.
Digital asset mining
The Company enters in contracts with mining pool operators to provide computing power to digital asset mining pools. Providing computing power for digital asset transaction verification services is an output of the Company’s ordinary activities. The provision of such computing power is the only performance obligation in the Company’s contracts with mining pool operators.
Contract inception and the Company’s enforceable right to consideration begin when the Company commences providing hash calculation services to the mining pool operators. Each party to the contract has the unilateral right to terminate the contract at any time without any compensation to the other party for such termination. As such, the duration of a contract is less than 24 hours (one day) and may be continuously renewed throughout the day. The implied renewal option is not a material right because there are no upfront or incremental fees in the initial contract, and the rate of payments remains the same upon each implied renewal, as the Full-Pay-Per-Share (FPPS) formula remains the same. The Company is entitled to compensation once it begins to perform hash calculations for the pool operator in accordance with the operator’s specifications over a 24-hour period beginning 00:00:00 UTC and ending 23:59:59 on a daily basis. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed digital assets award the mining pool operator receives, for successfully adding a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. The Company is entitled to its relative share of consideration even if a block is not successfully placed.
The transaction consideration the Company receives, if any, is noncash consideration in the form of digital assets, net of pool fees charged by the mining pool operator. The Company estimates the fair value of noncash consideration at contract inception. This non-cash consideration is variable since the amount of block reward earned depends on the Company’s hash rate provided and transaction fees depend on the actual Bitcoin Network transaction fees. While the non-cash consideration is variable, the payout is settled the next day on a daily basis and the Company has the ability to estimate the variable consideration with reasonable certainty, without the risk of significant revenue reversal because it is probable that a significant reversal in the amount of revenue recognized from the contract will not occur when the uncertainty is subsequently resolved.
Revenue is recognized on the same day that control of the contracted service transfers to the mining pool operator, which is the same day as contract inception. Revenue is estimated and recognized based on the spot price of Bitcoin determined using the Company’s Principal Market at 0:00:00 UTC on the date of contract inception.
Below table presents the Company’s revenues generated from digital asset mining business from Foundry USA Pool by country:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| United States | $ | $ | $ | $ | ||||||||||||
| Iceland | - | |||||||||||||||
| $ | $ | $ | $ | |||||||||||||
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ETH staking business
The Company generates revenue through ETH staking rewards. The Company commenced both native staking business and liquid staking business in 2022. In the first quarter of 2024, the Company terminated its liquid staking business. In July 2025, we resumed liquid staking through Liquid Collective protocol with
With the introduction of staked ETH withdrawals in April 2023, we have reassessed our Ethereum network staking approaches, weighing the advantages of traditional staking against liquid staking solutions. The withdrawal feature in native staking, coupled with yields that are on par with those of liquid staking, has encouraged us to expand our collaborations with other service providers in this domain. As a result, we have terminated all liquid staking activities with StakeWise and Liquid Collection in the third quarter of 2023 and in the first quarter of 2024, respectively, reclaiming all staked Ethereum along with the accumulated rewards. In the fourth quarter of 2023, the Company terminated the native staking activities and reclaimed all staked Ethereum with Blockdaemon. Subsequently, we have ceased our native staking with MarsLand in the first quarter of 2024 and initiated our native staking with Figment Inc.
(a) Native staking
The Company participates in native staking solely as a delegator through a third-party validator. Under this arrangement, the Company delegates ETH directly to the validator, which operates nodes on the Ethereum network to validate transactions and propose new blocks. In exchange for participating in the staking process, the Company is entitled to receive staking rewards, consisting of newly issued ETH and transaction fees, generally based on the amount of ETH delegated by the Company.
To participate in native staking, the Company’s ETH is deposited into the Ethereum staking deposit smart contract in accordance with the protocol requirements. Although the ETH is committed to the staking protocol, the Company retains control of the underlying digital assets. The deposited ETH is not transferred to the validator or any other counterparty, and neither the validator nor any other party obtains the ability to sell, pledge, lend, or otherwise direct the use of the Company’s staked ETH.
The withdrawal credentials associated with the staked ETH are designated to the Company’s custodian holds the Company’s digital assets solely for the Company’s benefit and does not obtain control over those assets through its custodial services. Accordingly, the Company concludes that native staked ETH continue to meet the criteria for recognition as its assets and are not derecognized upon deposit into the Ethereum staking deposit contract.
Rewards earned from native staking activities are recognized as revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company’s delegation of ETH to the validator represents an output of its ordinary activities. Under the staking arrangement, the Company provides the validator with the right to use the Company’s delegated ETH in the validation process and, in exchange, is entitled to receive variable consideration in the form of ETH. The noncash consideration is measured at the fair value of ETH at contract inception using quoted prices on the Coinbase exchange, which the Company has determined to be its principal market.
Revenue is recognized at the point in time when the Ethereum network confirms completion of the validation activities and the Company’s right to the staking rewards is established. The amount of revenue recognized reflects the protocol rewards to which the Company is entitled under the staking arrangement.
As of June 30, 2026 and December 31, 2025, the Company had native staked
For the six months ended June 30, 2026, the Company earned
For the six months ended June 30, 2025, the Company earned
(b) Liquid staking
The Company also participates in liquid staking arrangements through Liquid Collective. Under this arrangement, the Company contributes ETH to the Liquid Collective staking protocol, and LsETH is minted and received in return. LsETH represents the Company’s interest in the underlying staked ETH and the related staking rewards.
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LsETH is accounted for as an indefinite-lived intangible asset in accordance with ASC 350-30, changes in LsETH’s fair value while the Company remains staked with the liquid staking, are not recognized. There is no ongoing performance obligation following the staking of ETH through the liquid staking. LsETH is a non-rebasing token, and accordingly, the quantity of LsETH held by the Company does not increase as staking rewards accrue.
Staking rewards associated with LsETH are recognized only upon redemption of LsETH for the underlying ETH, at which time the Company becomes entitled to the accumulated staking rewards. The noncash consideration is measured at the fair value of ETH at contract inception, which corresponds to the date the underlying ETH was initially contributed to the Liquid Collective staking arrangement. Staking rewards recognized upon redemption of LsETH are presented within “other (expense) income, net” in the Company’s condensed consolidated statements of operations. For the six months ended June 30, 2026 and 2025, the Company generated revenues of $nil and $nil, respectively, from the liquid staking.
Upon staking ETH through the liquid staking protocol, the ETH is derecognized because the protocol obtains the ability to deploy and direct its use, and the LsETH token is received and recognized concurrently. Any gain or loss on the staking transaction is recognized in accordance with ASC 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”), based on the difference between the carrying amount of the ETH staked and the fair value of the LsETH received, and is included in “Gains (losses) on digital assets” in the Company’s condensed consolidated statements of operations. For the six months ended June 30, 2026, the Company liquid staked ETH and received LsETH and recognized a realized gain of $
Contract costs
The Company capitalizes commission expenses directly related to obtaining customer contracts, which would not have been incurred if the contract had not been obtained. As of June 30, 2026, capitalized costs to obtain a contract totaled $
Contract assets
Contract assets primarily consist of revenue allocated to complimentary services provided to customers as part of contractual arrangements. As of June 30, 2026 and December 31, 2025, there were no contract assets.
Contract liabilities
The Company’s contract liabilities consist of deferred revenue and customer deposits. As of June 30, 2026 and December 31, 2025, contract liabilities were $
During the three months ended June 30, 2026 and 2025, $
Remaining performance obligation
The following table presents estimated revenue expected to be recognized in the future related to the unsatisfied portion of the performance obligation as of June 30, 2026:
| 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Total | ||||||||||||||||||||||
| Colocation Services | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Cloud Services | - | - | - | |||||||||||||||||||||||||
| Total remaining performance obligations | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
The amounts presented in the table above exclude variable consideration allocated entirely to wholly unsatisfied performance obligations. Such amounts have been excluded from the disclosure of remaining performance obligations in accordance with ASC 606, as the consideration is not fixed and determinable.
During the three months ended June 30, 2026 and 2025, $
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4. Acquisitions
Real Estate Acquisition – Madison, North Carolina
On May 20, 2025, the Company, through WhiteFiber, acquired the building and land, together with all the related improvements owned by Unifi Manufacturing, Inc. (“Unifi Transaction”) that were located in Madison, North Carolina. The total consideration consisted of $
The acquired set of assets did not meet the definition of a business as defined in ASC 805, Business Combinations, as no substantive processes or employees were acquired. The assets acquired consisted primarily of land, building and related equipment, which are included in Property, plant, and equipment, net on the condensed consolidated balance sheets. The fair value of the tangible assets acquired was estimated to be $
In connection with the agreement, additional contingent consideration may become payable to the seller based on the timing and availability of power at the site (see Note 22. Commitments and Contingencies).
Real Estate Acquisition – Saint-Jérôme, Québec
On May 8, 2026, the Company, through WhiteFiber, acquired the land and building comprising its MTL-3 facility in Saint-Jérôme, Québec, for a fixed purchase price of CAD $24.2 million, including related transaction costs of CAD $0.5 million, totaling CAD $
The acquired set of assets did not meet the definition of a business as defined in ASC 805, Business Combinations, as no substantive processes or employees were acquired. The assets acquired consisted primarily of land, building and related equipment, which are included in Property, plant, and equipment, net on the condensed consolidated balance sheets. The fair value of the tangible assets acquired was estimated to be $
Financière Louis David and Financière Marjos Asset Acquisition
On November 28, 2025, the Company acquired a
The total consideration transferred consisted of approximately $
FLD and FM did not meet the definition of a business as defined in ASC 805, Business Combinations, as no substantive processes or employees were acquired. Accordingly, the transactions were accounted for as asset acquisitions. In accordance with ASC 810-10-15-14 and ASC 810-10-25-38A, FM is considered a variable interest entity (“VIE”). Because the Company owns
Through December 31, 2025, the Company recognized approximately $
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5. USDC
| June 30, 2026 | December 31, 2025 | |||||||
| USDC | $ | $ | ||||||
The following table presents additional information about USDC for the six months ended June 30, 2026 and December 31, 2025, respectively:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Opening balance | $ | $ | ||||||
| Receipt of USDC from sales of other digital assets | ||||||||
| Payment of USDC for other expenses | ( | ) | ( | ) | ||||
| Receipt of USDC from cash | - | |||||||
| Receipt of USDC from other income | - | |||||||
| Refund of advance payment | ( | ) | - | |||||
| Ending balance | $ | $ | ||||||
6. DIGITAL ASSETS HOLDINGS
Digital Assets
Effective January 1, 2024, the Company early adopted ASU 2023-08, which requires entities to measure crypto assets at fair value with changes recognized in net income each reporting period. The Company’s digital assets are within the scope of ASU 2023-08 and the transition guidance requires a cumulative-effect adjustment as of the beginning of the current fiscal year for any difference between the carrying amount of the Company’s digital assets and fair value. As a result of the Company’s early adoption of ASU 2023-08, the Company recorded a $
The following table presents the Company’s significant digital assets holdings as of June 30, 2026:
| Quantity | Cost Basis | Fair Value | ||||||||||
| BTC | $ | $ | ||||||||||
| ETH | ||||||||||||
| Total digital assets held as of June 30, 2026 | $ | $ | ||||||||||
The cost basis is equal to the post-impairment value of all BTC and ETH held as of the adoption of ASU 2023-08 on January 1, 2024. For BTC and ETH earned subsequent to the adoption of ASU 2023-08, the cost basis of the BTC and ETH represents the valuation at the time the Company determined for revenue recognition purposes.
The following table presents a roll-forward of BTC for the six months ended June 30, 2026, based on the fair value model under ASU 2023-08:
| Fair value | ||||
| BTC fair value as of December 31, 2025 | $ | |||
| Receipt of BTC from mining services | ||||
| Sales of BTC in exchange of cash | ( | ) | ||
| Sales of BTC in exchange of USDC | ( | ) | ||
| Payment of BTC for service charges from mining facilities | ( | ) | ||
| Payment of BTC for other expenses | ( | ) | ||
| Change in fair value of BTC | ( | ) | ||
| BTC fair value as of June 30, 2026 | $ | |||
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For the additions of BTC generated by the Company’s mining business, see Note 3. Revenue from Contracts with Customers.
Bitcoin is sold on a FIFO basis. For the six months ended June 30, 2026, losses from the sales of bitcoin are included in change in fair value of BTC which is included in the consolidated statements of operations under the caption “Losses on digital assets”.
The following table presents a roll-forward of ETH for the six months ended June 30, 2026, based on the fair value model under ASU 2023-08:
| Fair value | ||||
| ETH fair value as of December 31, 2025 | $ | |||
| Receipt of ETH from native staking business | ||||
| Receipt of ETH from exchange of cash | ||||
| Sales of ETH in exchange of LsETH | ( | ) | ||
| Sales of ETH in exchange of cash | ( | ) | ||
| Change in fair value of ETH | ( | ) | ||
| ETH fair value as of June 30, 2026 | $ | |||
For the additions of ETH generated by the Company’s ETH staking business, see Note 3. Revenue from Contracts with Customers.
ETH is sold on a FIFO basis. For the six months ended June 30, 2026, losses from the sales of ETH are included in change in fair value of ETH which is included in the consolidated statements of operations under the caption “Losses on digital assets”.
Digital Intangible Assets
The following table presents the Company’s digital intangible assets holdings as of June 30, 2026.
| Quantity | Cost | Impairment | Carrying Value | |||||||||||||
| LsETH | $ | $ | ( | ) | $ | |||||||||||
| Total digital intangible assets held as of June 30, 2026 | $ | $ | ( | ) | $ | |||||||||||
The impairment amount represents the cumulative impairment loss attributable to the LsETH balance held as of June 30, 2026 and is included within the total impairment loss of $
The following table presents a roll-forward of our LsETH holdings for the six months ended June 30, 2026, based on the cost less impairment model in accordance with ASC 350-30.
| Carrying Value | ||||
| LsETH cost as of December 31, 2025 | $ | - | ||
| Receipt of LsETH in exchange of ETH | ||||
| Receipt of LsETH from collateral receivable | ||||
| Transfer from LsETH to collateral receivable | ( | ) | ||
| Gain from exchange of LsETH | ||||
| Impairment loss | ( | ) | ||
| LsETH carrying value as of June 30, 2026 | $ | |||
For the three months ended June 30, 2026 and June 30, 2025, the Company recognized an impairment loss of $nil and $nil, respectively. For the six months ended June 30, 2026 and June 30, 2025, the Company recognized an impairment loss of $
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7. DIGITAL ASSET COLLATERAL RECEIVABLE
The Company entered into collateralized borrowing arrangements in which LsETH is transferred to lending counterparties as collateral for U.S. dollar borrowings. Under the terms of these arrangements, the lending counterparties have the right to sell, pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose of the transferred LsETH during the term of the borrowing. During the term of these arrangements, the Company retains a contractual right to receive an equivalent quantity of LsETH upon settlement of the related borrowing.
During the ordinary course of these arrangements, the Company may transfer additional LsETH to satisfy collateral maintenance requirements or receive returned collateral as collateral requirements change or upon repayment of the related borrowing.
The following table summarizes the Company’s digital asset collateral receivable:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Opening balance | $ | - | $ | - | ||||
| Initial digital asset collateral transferred | - | |||||||
| Additional digital asset collateral transferred | - | |||||||
| Digital asset collateral returned | ( | ) | - | |||||
| Ending balance | $ | $ | - | |||||
8. OTHER CURRENT ASSETS, NET
Other current assets were comprised of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Deposits (a) | $ | $ | ||||||
| Prepaid director and officer insurance expenses | ||||||||
| Prepaid consulting service expenses | ||||||||
| Deposit for lease | ||||||||
| Deferred contract costs | ||||||||
| Prepayment to third parties (b) | ||||||||
| Receivable from third parties | ||||||||
| Funds held in escrow | ||||||||
| Others | ||||||||
| Less: Current expected credit losses | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
| (a) |
| (b) |
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9. LEASES
Lease as Lessee
The Company leases for data center capacity, cloud infrastructure, office space and general and administrative purposes under non-cancelable lease arrangements. These leases, including a data center lease acquired as part of the Enovum acquisition in 2024, generally have terms ranging from approximately
On April 11, 2025, the Company entered into a 20-year data center lease agreement in Saint-Jérôme for its data center colocation services, with two five-year extension options and a fixed-price purchase option exercisable until December 31, 2025. In December 2025, the Company became reasonably certain to exercise the purchase option and remeasured the lease as a finance lease as of December 1, 2025. As a result of the remeasurement of the lease liability, there was a reduction of approximately $
As of June 30, 2026 and December 31, 2025, right-of-use asset and lease liabilities consisted of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Operating right-of-use assets | $ | $ | ||||||
| Finance right-of-use assets | - | |||||||
| Total right-of-use-assets | $ | $ | ||||||
| Operating lease liabilities | ||||||||
| Finance lease liabilities | - | |||||||
| Total lease liabilities | $ | $ | ||||||
Operating right-of-use assets are recorded net of accumulated amortization of $
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Finance lease right-of-use asset is recorded net of accumulated amortization of $
For the three months ended June 30, 2026 and 2025, the Company’s amortization on the operating lease right-of-use assets totaled $
For the six months ended June 30, 2026 and 2025, the Company’s amortization on the operating lease right-of-use assets totaled $
For the three months ended June 30, 2026, the Company’s interest expense and amortization on the finance lease were $
For the six months ended June 30, 2026, the Company’s interest expense and amortization on the finance lease were $
The following table presents the components of the Company’s lease expense. GPU lease expenses and data center lease expenses related to operational data centers are included in cost of revenue; data center lease expenses incurred during construction and office lease expenses are included in general and administrative expenses:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Operating lease costs | $ | $ | $ | $ | ||||||||||||
| Finance lease costs | - | - | ||||||||||||||
| Short-term lease costs | ||||||||||||||||
| Sublease income | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total lease costs | $ | $ | $ | $ | ||||||||||||
Additional information regarding the Company’s leasing activities as a lessee is as follows:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Operating cash outflows from operating leases | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Operating cash outflows from finance lease | ( | ) | - | ( | ) | - | ||||||||||
| Financing cash outflows from finance lease | $ | ( | ) | $ | - | $ | ( | ) | $ | - | ||||||
| Weighted average remaining lease term – operating leases | ||||||||||||||||
| Weighted average discount rate – operating leases | % | % | % | % | ||||||||||||
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The following table represents our future minimum operating lease payments as of June 30, 2026:
| Year | Amount | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total undiscounted lease payments | ||||
| Less: present value discount | ( | ) | ||
| Present value of operating lease liabilities | $ | |||
The Company entered into a GPU server lease agreement effective January 2024 for its cloud services designed to support generative AI workstreams. The lease payment depends on the usage of the GPU servers and the Company concludes that the lease payments are variable and will be recognized when they are incurred. For the three months ended June 30, 2026 and 2025, the GPU server lease expense amounted to $
Lease as Lessor
The Company enters into sales-type leases for data storage and cloud service equipment. These leases typically have terms ranging from approximately
The Company also enters into sublease arrangements for portions of its leased data center capacity. These subleases generally include fixed payments with automatic renewal options, unless sub-tenant provides at least
Lease income from sales-type leases is primarily recognized as interest income over the lease term. The Company’s exposure to credit risk is limited to net investment in leases.
The components of lease income for the sales-type lease were as follows:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Interest income related to net investment in lease | $ | $ | $ | $ | ||||||||||||
Interest income is included in the condensed consolidated statements of operations under the caption “Revenue – Other”.
The components of net investment in sales-type leases were as follows:
| June 30, 2026 | December 31, 2025 | |||||||
| Net investment in lease - lease payment receivable | $ | $ | ||||||
In the second quarter of 2026, the Company terminated an existing sales-type lease with a customer, derecognizing $
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The following table illustrates the Company’s future minimum receipts for sales-type lease as of June 30, 2026:
| Year | Sales-Type Lease | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Total future minimum receipts | ||||
| Unearned interest income | ( | ) | ||
| Less: Current expected credit losses | ( | ) | ||
| Net investment in lease, net | $ | |||
The present value of minimum sales-type receipts of $
The following table illustrates the future lease payments to be received from the Company’s sublease tenant as of June 30, 2026 were as follows:
| Year | Operating Lease | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total future receipts | $ | |||
10. PROPERTY, PLANT, AND EQUIPMENT, NET
Property, plant and equipment, net was comprised of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Miners for Bitcoin | $ | $ | ||||||
| Cloud service equipment | ||||||||
| Colocation service equipment | ||||||||
| Purchased and internally developed software | ||||||||
| Land | ||||||||
| Building | - | |||||||
| Leasehold improvements | ||||||||
| Vehicle | ||||||||
| Other property and equipment | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Construction in progress | ||||||||
| Property, plant, and equipment, net | $ | $ | ||||||
For the three months ended June 30, 2026 and 2025, depreciation and amortization expenses for property, plant and equipment were $
For the three and six months ended June 30, 2026 we had an impairment charge of $
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During 2024 and 2025, the Company purchased data storage and network equipment that was subsequently derecognized from property, plant and equipment upon entering into sales-type lease arrangements, with the related assets recorded as net investments in leases, totaling approximately $
On May 8, 2026, the Company acquired the MTL-3 property following the exercise of the purchase option under the related data center lease agreement (refer to Note 9. Leases). The purchase price of CAD $
Disposals of Property, Plant and Equipment
For the six months ended June 30, 2026, the Company sold 126 H200s GPU for a total consideration of approximately $
During the six months ended June 30, 2026, the Company determined that it would discontinue further investment in, and use of, its internally-developed software platform. As a result of this decision, effective June 4, 2026, the Company recorded an impairment charge of the remaining book value of $
11. INVESTMENT SECURITIES
Investment securities were comprised of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Investment in Digital Future Alliance Limited (“DFA”) (a) | $ | $ | ||||||
| Investment in Nine Blocks Offshore Feeder Fund (“Nine Blocks”) (b) | ||||||||
| Investment in Auros Global Limited (c) | ||||||||
| Investment in Ingonyama Ltd (d) | ||||||||
| Investment in Cysic Inc. (e) | ||||||||
| Investment in a SAFE (f) | ||||||||
| Investment in AI Innovation Fund I (“AI fund”) (g) | ||||||||
| Investment in Innovation Fund I (“Innovation fund”) (h) | ||||||||
| Investment in Odiot Holding (i) | ||||||||
| Total | $ | $ | ||||||
(a) Investment in Digital Future Alliance Limited (“DFA”)
DFA is a privately held company, over which the Company has neither control nor significant influence through investment in ordinary shares. The Company accounted for the investment in DFA using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer.
For the three and six months ended June 30, 2026 and 2025, the Company did not record upward adjustments or downward adjustments on the investment. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security. As of June 30, 2026 and December 31, 2025, the Company did not recognize impairment against the investment security.
(b) Investment in Nine Blocks Offshore Feeder Fund (“Nine Blocks”)
On August 1, 2022, the Company entered into a subscription agreement with Nine Blocks for investment of $
As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the fund. For the three months ended June 30, 2026 and 2025, the Company recorded cumulative downward adjustments of $
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(c) Investment in Auros Global Limited (“Auros”)
On February 24, 2023, the Company closed an investment of $
For the three and six months ended June 30, 2026 and 2025, the Company did not record upward adjustments or downward adjustments on the investment. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security. As of June 30, 2026 and December 31, 2025, the Company did not recognize impairment against the investment security.
(d) Investment in Ingonyama Ltd. (“Ingonyama”)
In September 2023, the Company closed an investment of $
For the three and six months ended June 30, 2026 and 2025, the Company did not record upward adjustments or downward adjustments on the investment. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security. As of June 30, 2026 and December 31, 2025, the Company did not recognize impairment against the investment security.
(e) Investment in Cysic Inc (“Cysic”)
On April 2, 2024, the Company closed an investment of $
For the three and six months ended June 30, 2026 and 2025, the Company did not record upward adjustments or downward adjustments on the investment. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security. As of June 30, 2026 and December 31, 2025, the Company did not recognize impairment against the investment security.
(f) Investment in a SAFE
On June 30, 2024 (the “Effective Date”), the Company entered into a simple agreement for future equity (“SAFE”) agreement for an initial investment amount of $
The Company accounted for this investment under ASC 320, Investments - Debt Securities and elected the fair value option for the SAFE investment pursuant to ASC 825, Financial Instruments, which requires financial instruments to be remeasured to fair value each reporting period, with changes in fair value recorded in the condensed consolidated statements of operations. The fair value estimate includes significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The decision to elect the fair value option is determined on an instrument-by-instrument basis on the date the instrument is initially recognized, is applied to the entire instrument, and is irrevocable once elected. For instruments measured at fair value, embedded conversion or other features are not required to be separated from the host instrument. Issuance costs related to convertible securities carried at fair value are not deferred and are recognized as incurred on the condensed consolidated statements of operations.
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On June 30, 2026, the Company performed a qualitative assessment to identify if events or circumstances indicate that the investment is impaired or that an observable price change has occurred. We considered available information about Canopy’s operations and industry conditions. No events or circumstances were identified that would indicate the investment is impaired or that an observable price change occurred. The Company did not recognize any upward or downward adjustment to the value of the investment for the three or six months ended June 30, 2026.
The SAFE agreement was replaced and superseded, in its entirety, by that certain Simple Agreement for Future Equity instrument of Canopy dated as of June 30, 2024 (the “New SAFE”) between the Canopy and WhiteFiber HPC, Inc. Pursuant to that certain Surrender and Termination Agreement, dated as of August 10, 2026, by and among Canopy, WhiteFiber HPC, Inc. and WhiteFiber AI, Inc., the New SAFE was surrendered to Canopy and terminated on the same date.
(g) Investment in AI Innovation Fund I (“AI fund”)
On July 15, 2024, the Company entered into a subscription agreement with Pleasanton Ventures Innovation Master Fund SPC Limited for investment of $
As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the fund. For the three and six months ended June 30, 2026, the Company recorded cumulative downward adjustments of $
(h) Investment in Innovation Fund I (“Innovation fund”)
After the Company disposed its BVI entities for its previous fund operation, the Company no longer consolidates the investment in the fund. As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the fund.
In March 2025, the Company invested an additional
In August 2025, the Company invested an additional
For the three months ended June 30, 2026 and 2025, the Company recorded cumulative downward adjustments of $
For the six months ended June 30, 2026 and 2025, the Company recorded cumulative downward adjustments of $
(i) Investment in Odiot Holding (“Odiot Holding”)
In connection with the acquisition of Bit Digital Europe Holding (“BDEH”) on November 28, 2025, the Company acquired an indirect minority equity interest in Odiot Holding, a publicly traded company in France. The Company does not have control or significant influence over Odiot Holding.
Accordingly, the investment is accounted for as an equity security under ASC 321, Investments — Equity Securities, The investment was initially recorded at fair value on the acquisition date and is subsequently measured at fair value using quoted market prices in an active market (Level 1 inputs), with changes in fair value recognized in earnings.
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For the three and six months ended June 30, 2026, the Company recorded cumulative downward adjustments of $
(j) PIPE Investment
On August 10, 2026, WhiteFiber entered into the PIPE Share Purchase Agreement with SAIHEAT Limited, an exempted company incorporated under the laws of the Cayman Islands (“SAIHEAT”). Pursuant to the PIPE Share Purchase Agreement, WhiteFiber purchased from SAIHEAT, an aggregate of
The closing of the PIPE investment transaction is contingent upon the closing of the merger transaction by and among SAIHEAT, Canopy Wave Inc., a Delaware corporation (“Canopy”) and the Canopy stockholders (the “Merger Transaction”). The Merger Transaction requires approval from Nasdaq before any such closing could take place.
12. OTHER NON-CURRENT ASSETS, NET
Other non-current assets were comprised of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Deposits (a) | $ | $ | ||||||
| Deferred contract costs | ||||||||
| Deferred financing costs | - | |||||||
| Prepayment to third parties | - | |||||||
| Others | ||||||||
| Less: Current expected credit losses | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
| (a) |
13. DEBT
2030 Convertible notes
In October 2025, we issued $
The Notes were issued pursuant to, and are governed by, an indenture (the “Base Indenture”), dated as of October 2, 2025, between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), as supplemented by a first supplemental indenture (the “Supplemental Indenture,” and the Base Indenture, as supplemented by the Supplemental Indenture, the “Indenture”), dated as of October 2, 2025, between the Company and the Trustee. The net proceeds from the 2030 Notes offering, after deducting underwriting discounts and commissions and estimated offering expenses, were approximately $
The 2030 Notes are senior and unsecured obligations and bear interest at a coupon rate of
Noteholders may convert their 2030 Notes at their option prior to the close of business on the second scheduled trading day immediately preceding the maturity date. The conversion rate is initially
Holders of the 2030 Notes have a one-time noncontingent right to require the Company to repurchase for cash all or any portion of their respective notes at a repurchase price equal to
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Under the interest make-whole conversion rate adjustment, the holders of the 2030 Notes are able to convert at any time during the period from, and including, the date that is six months after the last date of original issuance of the notes until the close of business on the business day immediately preceding September 15, 2028 (other than a conversion in connection with a make-whole fundamental change), the Company will increase the conversion rate per US$
We may not redeem the 2030 Notes prior to October 6, 2028. We may redeem for cash all or any portion of the 2030 Notes, at our option, on or after October 6, 2028 and prior to the 31st scheduled trading day immediately preceding the maturity date, if the last reported sale price of our ordinary shares has been at least
If a “Fundamental Change” (as defined in the Indenture) occurs, then, subject to certain conditions and except as set forth in the Indenture, noteholders may require the Company to repurchase their 2030 Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition in the Indenture of a Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the ordinary shares.
The Indenture contains customary terms and covenants, including that upon certain events of default either the Trustee or the holders of at least
The conversion features embedded in the 2030 Notes met the criteria to be bifurcated from the debt host contract under ASC 815 and recognized separately at fair value. The total proceeds received were first allocated to the fair value of the derivative liability, and the remaining proceeds allocated to the host. The host is subsequently measured using the effective interest method, and the derivative liability is measured at fair value, with changes in fair value recorded as derivative loss in the consolidated statements of operations. The estimated fair value of the entire 2030 Notes was determined to be approximately $
2031 Convertible notes
On January 26, 2026, WhiteFiber issued $
The net proceeds from the 2031 Notes offering, after deducting initial purchasers’ discounts and offering expenses, were approximately $
Noteholders may convert their 2031 Notes at their option prior to the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, WhiteFiber will satisfy its conversion obligation by paying or delivering, as the case may be, cash, its ordinary shares, or a combination of cash and ordinary shares, at WhiteFiber’s election, in the manner and subject to the terms and conditions set forth in the Indenture. The conversion rate is initially
On February 6, 2029, and if WhiteFiber undergoes a “Fundamental Change” (as defined in the Indenture), then, subject to certain conditions and except as set forth in the Indenture, noteholders may require WhiteFiber to repurchase for cash all or any portion of their 2031 Notes at a repurchase price equal to
36
WhiteFiber may not redeem the 2031 Notes prior to February 6, 2029. WhiteFiber may redeem for cash all or any portion of the 2031 Notes, at its option, on or after February 6, 2029 and prior to the 41st scheduled trading day immediately preceding the maturity date, if the last reported sale price of WhiteFiber’s ordinary shares has been at least
The Indenture contains customary terms and covenants, including certain bankruptcy and insolvency-related events of default, the occurrence of which will result in the outstanding 2031 Notes automatically becoming due and payable, and certain non-bankruptcy and insolvency-related events of default, upon the occurrence of which either the Trustee or the holders of at least
WhiteFiber accounts for the 2031 Notes as a single instrument. As of June 30, 2026, none of the conditions permitting the holders of the 2031 Notes to convert their notes early had been met, and to require WhiteFiber to repurchase the 2031 Notes for cash. Therefore, the 2031 Notes are classified as long-term.
Zero-Strike Call Option Transaction
In connection with the issuance of the 2031 Notes, WhiteFiber entered into a zero-strike call option transaction (“Zero-Strike Call Option”) with one of the initial purchasers or its affiliate (the “Option Counterparty”). Pursuant to the Call Option Transaction, WhiteFiber paid a premium equal to approximately $
The following table summarizes the balances of the convertible notes:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| 2030 Convertible notes | $ | $ | ||||||
| 2031 Convertible notes | - | |||||||
| Less: unamortized debt issuance costs and debt discount | ( | ) | ( | ) | ||||
| Subtotal | ||||||||
| Less: Current portion | - | - | ||||||
| Convertible notes, net of current portion | $ | $ | ||||||
| Accrued cumulative interest | $ | $ | ||||||
Included in the unamortized debt issuance costs and debt discount as of June 30, 2026 was approximately $
37
The following table summarizes the balances of the Company’s other short-term and long-term debts:
| Principal Amount | Unamortized Debt Discount and Issuance Costs | Net Carrying Amount | ||||||||||
| Short-Term Debt: | ||||||||||||
| Collateralized borrowing | $ | $ | - | $ | ||||||||
| B. Riley Facility | ( | ) | ||||||||||
| Iceland Facility - Current | 9,000 | - | 9,000 | |||||||||
| Long-Term Debt: | ||||||||||||
| Iceland Facility – Non-current | ( | ) | ||||||||||
| Royal Bank of Canada Facility | ( | ) | ||||||||||
| Total term debt | $ | |||||||||||
Iceland Facility
On March 25, 2026, WhiteFiber Iceland ehf. (the “Borrower”), a subsidiary of the Company, entered into a secured term loan facility agreement (the “Facility”) with Landsbankinn hf, which provides for borrowings of up to $
No separate guarantee liability is recognized in the consolidated financial statements as the guarantees provided by the Guarantors are intercompany arrangements that are eliminated upon consolidation under ASC 810-10-45-18. The guarantees are disclosed herein pursuant to the disclosure requirements of ASC 460-10-50-4.
Borrowings under the Facility bear interest at a floating rate per annum equal to the sum of (i) three month CME Term SOFR (or any successor benchmark), and (ii) an applicable margin of
The Facility is secured by first-ranking security over (i)
The Facility may be drawn in multiple tranches during an availability period, with up to two drawdowns permitted and a minimum draw amount of $
In connection with the entry into the Facility, the Borrower paid an arrangement fee of $
The Facility permits voluntary prepayments, subject in certain cases to prepayment fees, and includes mandatory prepayment provisions in connection with specified events, including certain asset disposals and insurance proceeds, all as set out in the facility agreement.
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As of June 30, 2026, the Facility had an effective interest rate of
Royal Bank of Canada Facility
On June 18, 2025, the Company entered into a non-recourse credit facility (“Credit Facility”) with the Royal Bank of Canada (“RBC”). The Credit Facility provides for an aggregate of up to approximately CAD
The agreement is non-recourse and comprised of three separate facilities:
| ● | Non-revolving three-year lease facility in the amount of $ |
| ● | Non-revolving term loan facility in the amount of $ |
| ● | Revolver by way of letters of credit and letters of guaranty with fees to be determined on a transaction-by-transaction basis. This facility was available for the 36-month term subject to the issuance of the EDC (Export and Development Canada) Performance Security Guaranty in the amount of $ |
The company agreed to certain financial covenants included maintaining on a combined basis between MTL-1 and MTL-2: fixed charge coverage of not less than 1.20:1 and a ratio of Net Funded Debt to EBITDA of not greater than 4.25:1 and decreasing to 3.50:1 from December 31, 2027. The facilities had not been authorized for use by the lender, as certain conditions precedent had not yet been satisfied. Accordingly, no amounts were drawn, and no borrowings were available under this facility.
On April 27, 2026, the Company entered into an amended credit agreement (“Amended Credit Agreement”) with RBC. This agreement replaces the original Credit Agreement dated June 18, 2025, as subsequently amended on July 4, 2025. The Amended Credit Agreement provides for an authorized credit facility of CAD $
Borrowings under the facility bore interest, at the Company’s option, at either (i) Daily Simple CORRA plus
Additionally, RBC provided a CAD $
The Company has agreed to certain financial covenants, including a minimum debt service coverage ratio and a maximum Net funded debt to EBITDA ratio. As of June 30, 2026, the Company was in compliance with all financial covenants under the credit facility.
On July 15, 2026, the Amended Credit agreement was repaid in full and refinanced through the Syndicated RBC Credit Facility agreement. The revolving facility from the Amended credit agreement in the form of Letters of Credit and Letters of Guarantee remains in place.
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Syndicated RBC Credit Facility Agreement
On July 6, 2026, WhiteFiber’s wholly-owned subsidiary, Enovum Data Center Corp. entered into a syndicated credit agreement (“Syndicated RBC Credit Facility Agreement”). The Syndicated Credit Facility Agreement provides for an aggregate of up to approximately CAD $
Borrowings under the Syndicated Credit Facility Agreement bear interest, at the Company’s option, at either (i) the CORRA-based benchmark rate for such interest period, plus
The Syndicated Credit Facility is secured by first-ranking security interests over substantially all present and future personal property and assets of the borrower and the guarantors, together with first-ranking mortgages on certain owned real estate, including the Company’s MTL-2 and MTL-3 properties and related improvements and equipment.
The Company has agreed to certain financial covenants, including a minimum debt service coverage ratio and a maximum Net funded debt to EBITDA ratio.
On July 15, 2026, the Company drew a CORRA loan amount of CAD $
B. Riley Facility
On May 26, 2026, the Company assigned to B. Riley a $
As of June 30, 2026, the B. Riley Facility had an effective interest rate of
Collateralized borrowing
On March 27, 2026, the Company entered into a collateralized borrowing arrangement with Galaxy Digital LLC (“Galaxy”). The Galaxy Loan Agreement provides for loans to the Company from time to time, with each loan amount, collateral and other terms determined and agreed upon by the Company and Galaxy pursuant to individual Loan Term Sheets. Collateral for each loan may consist of Dollars or Digital Currency, as agreed by the parties. The Loans may be either: an Open Loan, without a Maturity Date, where the Borrower may repay and Lender may recall the Borrowed Asset at any time, or a Term Loan with a predetermined Maturity Date, where the Lender has no right to demand a return of the Borrowed Asset before the Maturity Date. The Borrow Fee for each loan is as agreed upon in the relevant Loan Term Sheet.
On May 20, 2026, the Company completed an initial draw of $
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The borrowing is an evergreen facility that may be recalled by the lender upon seven days’ notice in accordance with the terms of the loan agreement. As the Company does not have an unconditional right to defer settlement of the borrowing for at least one year after the balance sheet date, the related loan payable is classified as a current liability in the condensed consolidated balance sheets.
The Company’s outstanding borrowing under the facility is an evergreen loan arrangement that may be repaid at any time by the Company and may be recalled by Galaxy upon seven days’ notice. The Galaxy Loan Agreement has an initial term of one year and automatically renews for successive one-year periods unless terminated in accordance with its terms.
Because the Company does not have an unconditional right to defer settlement of the borrowing for at least one year after the balance sheet date, the related loan payable has been classified as a current liability in the condensed consolidated balance sheets.
14. FAIR VALUE OF FINANCIAL INSTRUMENTS
In connection with the issuance of the 2030 Notes, the Company recognized a derivative liability related to the embedded conversion feature. See Note 13. Debt for further details on the accounting treatment of the 2030 Notes and associated derivative liability.
The fair value of the embedded conversion feature at issuance of the 2030 Notes and each reporting period was estimated based on significant inputs not observable in the market, which represent Level 3 measurements within the fair value hierarchy.
The fair value of the derivative liability was determined using the Black-Scholes model. The model incorporates the following key inputs and assumptions:
| At June 30, 2026 | At December 31, 2025 | |||||||
| Maturity date | 2030 | 2030 | ||||||
| Debt price | ||||||||
| Volatility rate | % | % | ||||||
| Share price | $ | $ | ||||||
| Dividend yield | % | % | ||||||
| Stock borrow cost | % | % | ||||||
| Credit Spread | % | % | ||||||
The following table provides a roll forward of the aggregate fair values of the derivative liability for the six months ended June 30, 2026:
| Embedded Derivative | ||||
| Balance as of January 1, 2026 | $ | |||
| Change in fair value | ||||
| Balance as of June 30, 2026 | $ | |||
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15. SHARE-BASED COMPENSATION
Share-based compensation such as restricted stock units (“RSUs”), incentive and non-statutory stock options, restricted shares, share appreciation rights and share payments may be granted to any directors, employees and consultants of the Company or affiliated companies under the 2021 Omnibus Equity Incentive Plan (“2021 Plan”), 2021 Second Omnibus Equity Incentive Plan (“2021 Second Plan”), 2023 Omnibus Equity Incentive Plan (“2023 Plan”), and 2025 Omnibus Equity Incentive Plan (“2025 Plan”) (collectively, “Bit Digital Incentive Plan”). An aggregate of
On May 27, 2026, the Board of Directors of Bit Digital adopted the 2026 Omnibus Equity Incentive Plan (the “Bit Digital 2026 Plan”) which was approved by the Company’s shareholders on July 29, 2026. The Bit Digital 2026 Plan provides share-based compensation such as RSUs, incentive and non-statutory stock options, restricted shares, share appreciation rights and share payments may be granted to any directors, employees and consultants of the Company or affiliated companies and up to
On February 6, 2025, the Board of Directors of WhiteFiber adopted the 2025 Omnibus Equity Incentive Plan (the “WhiteFiber 2025 Plan”) which provides share-based compensation such as RSUs, incentive and non-statutory stock options, restricted shares, share appreciation rights and share payments may be granted to any directors, employees and consultants of the Company or affiliated companies and up to
From time to time, WhiteFiber grants equity awards under the WhiteFiber 2025 Plan to employees of the Company as consideration for services rendered to WhiteFiber. These awards are settled in shares of WhiteFiber’s ordinary shares and are accounted for as share-based compensation to non-employee consultants and included within general and administrative expenses.
Restricted Stock Units (“RSUs”)
As of December 31, 2025, the Company had
On February 19, 2026, the Company granted
On March 25, 2026, the Company granted
On March 25, 2026, the Company granted
On June 30, 2026, the Company granted
As of June 30, 2026, the Company had
For the three months ended June 30, 2026 and 2025, the Company recognized share-based compensation expenses of $
As of June 30, 2026, the Company had $
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Share Options
For the three months ended June 30, 2026 and 2025, the Company did not grant any options.
The Company recognizes compensation expenses related to options on a straight-line basis over the vesting periods. For the three months ended June 30, 2026 and 2025, the Company recognized share-based compensation expenses of $nil and $
Other share-based compensation
Bit Digital Equity Incentive Plan
For the three months ended June 30, 2026 and 2025, the Company recognized share-based compensation expenses of $
In March 2026, the Company granted
For the three months ended June 30, 2026 and 2025, WhiteFiber recognized share-based compensation expenses of $nil and $nil, respectively and for the six months ended June 30, 2026 and 2025, WhiteFiber recognized share-based compensation expenses of $
WhiteFiber Equity Incentive Plan
For the three months ended March 31, 2026, WhiteFiber granted
In May 2026, WhiteFiber granted
For the three months ended June 30, 2026 and 2025, WhiteFiber recognized total share-based compensation expenses of $
As of June 30, 2026, WhiteFiber had
16. SHARE CAPITAL
Ordinary shares
As of December 31, 2025, there were
In May 2022, the Company entered into an At-the-Market Offering Agreement with H.C. Wainwright & Co., LLC relating to the Company’s ordinary shares. In accordance with the terms of the sales agreement, the Company may offer and sell ordinary shares having an aggregate offering price of up to $
On April 29, 2025, the Company filed a registration statement on Form S-3 (No. 333-286841) to register up to $
In June 2025, the Company completed an underwritten public offering of its ordinary shares registered under the Registration Statement. In accordance with the terms of the underwriting agreement entered into with B. Riley Securities, Inc., as representative of the several underwriters, the Company sold
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In July, 2025, the Company entered into a placement agency agreement (the “Placement Agent Agreement”) with B. Riley Securities, Inc. (the “Placement Agent”), pursuant to which the Placement Agent agreed to serve as the sole placement agent for the Company in connection with a registered direct offering (the “Registered Direct Offering”) of an aggregate of
On September 29, 2025, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Barclays Capital Inc., Cantor Fitzgerald & Co. and B. Riley Securities, Inc. as representatives of the several underwriters named in Schedule I thereto, in connection with the issuance and sale of $
On October 2, 2025, the Company issued the Notes. The Notes were issued pursuant to, and are governed by, an indenture (the “Base Indenture”), dated as of October 2, 2025, between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), as supplemented by a supplemental indenture (the “Supplemental Indenture,” and the Base Indenture, as supplemented by the Supplemental Indenture, the “Indenture”), dated as of October 2, 2025, between the Company and the Trustee.
During the six months ended June 30, 2026,
As of June 30, 2026, there were
Preferred shares
As of June 30, 2026 and December 31, 2025, there were
The preference shares are entitled to the following preference features: 1) an annual dividend of
On December 20, 2024, the Board of Directors declared an
On February 19, 2026, the Board of Directors declared an eight (
Treasury stock
The Company treats ordinary shares withheld for tax purposes on behalf of employees in connection with the vesting of restricted share grants as ordinary share repurchases because they reduce the number of ordinary shares that would have been issued upon vesting. For the six months ended June 30, 2026 and 2025, the Company withheld nil ordinary shares that were surrendered to the Company for withholding taxes related to restricted stock vesting valued at $nil, based on fair value of the withheld shares on the vesting date.
As of June 30, 2026 and December 31, 2025, the Company had treasury stock of $
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17. GOODWILL AND INTANGIBLE ASSETS
Goodwill
The components of goodwill as of June 30, 2026 are as follows:
| As of June 30, 2026 | ||||
| Enovum Data Centers Corp. | $ | |||
| Total goodwill | $ | |||
Finite-lived intangible assets
Finite-lived intangible assets consist of customer relationships. Intangible assets with definite lives are amortized over their estimated useful lives.
The following table presents the Company’s finite-lived intangible assets as of June 30, 2026:
| As of June 30, 2026 | ||||||||||||
| Cost | Accumulated amortization | Net | ||||||||||
| Customer relationships | $ | $ | ( | ) | $ | |||||||
| Total | $ | $ | ( | ) | $ | |||||||
The following table presents the Company’s finite-lived intangible assets as of December 31, 2025:
| As of December 31, 2025 | ||||||||||||
| Cost | Accumulated amortization | Net | ||||||||||
| Customer relationships | $ | $ | ( | ) | $ | |||||||
| Total | $ | $ | ( | ) | $ | |||||||
The following table presents the Company’s estimated future amortization of finite-lived intangible assets as of June 30, 2026:
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ |
Amortization expense for finite-lived intangible assets for the three months ended June 30, 2026 and June 30, 2025 was $
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18. INCOME TAXES
The following table provides details of income taxes:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| (Loss) income before income taxes | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| (Benefit from) Provision for income taxes | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| Effective tax rate | % | % | % | ( | )% | |||||||||||
The effective tax rate was
19. (LOSS) EARNINGS PER SHARE
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net (loss) income attributable to Bit Digital shareholders | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Adjustment (a) | - | - | ( | ) | - | |||||||||||
| Net (loss) income attributable to Bit Digital common shareholders | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Weighted average number of ordinary share outstanding | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
| (Loss) earnings per share | ||||||||||||||||
| Basic | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Diluted | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| (a) | Includes a $ |
Basic (loss) earnings per share is computed by dividing net (loss) income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. The computation of diluted net (loss) income per share does not include dilutive ordinary share equivalents in the weighted average shares outstanding, as they would be anti-dilutive.
For the three and six months ended June 30, 2026,
For the three and six months ended June 30, 2026, approximately
For the three and six months ended June 30, 2025,
20. SEGMENT REPORTING
The Company has
Gross profit (loss) is the segment performance measure the chief operating decision maker (“CODM”) uses to assess the Company’s reportable segments.
The digital asset mining segment generates revenue from the bitcoin the Company earns through its mining activities. Cost of revenue consists primarily of direct production costs of mining operations, including electricity, management fee and maintenance cost but excluding depreciation and amortization.
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The cloud services segment generates revenue from providing high performance computing services to support generative AI workstreams. Cost of revenue consists of direct production costs, including electricity costs, data center lease expense, GPU servers lease expense, third-party customer support fees and other relevant costs, but excluding depreciation and amortization.
Colocation services generate revenue by providing customers with physical space, power and cooling within the data center facility. Cost of revenue consists of direct production costs related to our HPC data center services, including electricity costs, lease costs, data center employees’ wage expenses and other relevant costs, but excluding depreciation and amortization.
The Ethereum staking segment generates revenue from both native staking and liquid staking. Cost of revenue consists of direct cost related to ETH staking business including service fee and reward-sharing fees to the service providers.
The CODM analyzes the performance of the segments based on reportable segment revenue and reportable segment cost of revenue. No operating segments have been aggregated to form the reportable segments.
Other than the $
All Other revenue is generated from equipment leases with external customers.
All revenue and cost of revenue from intersegment transactions have been eliminated in the condensed consolidated statements of operations and comprehensive (loss) income.
The following tables present segment revenue and segment gross profit reviewed by the CODM:
Three Months Ended June 30, 2026
| Digital asset mining | Cloud services | Colocation services | ETH staking | Total | ||||||||||||||||
| Revenue from external customers | $ | $ | $ | $ | $ | |||||||||||||||
| Intersegment revenue | - | - | - | |||||||||||||||||
| Segment revenue | ||||||||||||||||||||
| Reconciliation of revenue | ||||||||||||||||||||
| Other revenue (a) | ||||||||||||||||||||
| Elimination of intersegment revenue | ( | ) | ||||||||||||||||||
| Total consolidated revenue | ||||||||||||||||||||
| Less: | ||||||||||||||||||||
| Electricity costs | - | |||||||||||||||||||
| Profit sharing fees | - | - | - | |||||||||||||||||
| Datacenter lease expense | - | - | ||||||||||||||||||
| GPU lease expense | - | - | - | |||||||||||||||||
| Wage expense | - | - | - | |||||||||||||||||
| Service costs - ETH staking | - | - | - | |||||||||||||||||
| Third-party customer support fees | - | - | - | |||||||||||||||||
| Other segment items (b) | - | |||||||||||||||||||
| Intersegment cost of revenue | - | - | - | |||||||||||||||||
| Segment cost of revenue | ||||||||||||||||||||
| Reconciliation of cost of revenue | ||||||||||||||||||||
| Elimination of intersegment cost of revenue | ( | ) | ||||||||||||||||||
| Total consolidated cost of revenue | ||||||||||||||||||||
| Segment gross profit | $ | $ | $ | $ | $ | |||||||||||||||
| (a) |
| (b) |
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Three Months Ended June 30, 2025
| Digital asset mining | Cloud services | Colocation services | ETH staking | Total | ||||||||||||||||
| Revenue from external customers | $ | $ | $ | $ | $ | |||||||||||||||
| Reconciliation of revenue | ||||||||||||||||||||
| Other revenue (a) | ||||||||||||||||||||
| Total consolidated revenue | ||||||||||||||||||||
| Less: | ||||||||||||||||||||
| Electricity costs | - | |||||||||||||||||||
| Profit sharing fees | - | - | - | |||||||||||||||||
| Datacenter lease expense | - | - | ||||||||||||||||||
| GPU lease expense | - | - | - | |||||||||||||||||
| Wage expense | - | - | - | |||||||||||||||||
| Service costs - ETH staking | - | - | - | |||||||||||||||||
| Other segment items (b) | - | |||||||||||||||||||
| Segment cost of revenue | ||||||||||||||||||||
| Segment gross profit | $ | $ | $ | $ | $ | |||||||||||||||
| (a) |
| (b) |
Six Months Ended June 30, 2026
| Digital asset mining | Cloud services | Colocation services | ETH staking | Total | ||||||||||||||||
| Revenue from external customers | $ | $ | $ | $ | $ | |||||||||||||||
| Intersegment revenue | - | - | - | |||||||||||||||||
| Segment revenue | ||||||||||||||||||||
| Reconciliation of revenue | ||||||||||||||||||||
| Other revenue (a) | 690 | |||||||||||||||||||
| Elimination of intersegment revenue | ( | ) | ||||||||||||||||||
| Total consolidated revenue | ||||||||||||||||||||
| Less: | ||||||||||||||||||||
| Electricity costs | - | |||||||||||||||||||
| Profit sharing fees | - | - | - | |||||||||||||||||
| Datacenter lease expense | - | - | ||||||||||||||||||
| GPU lease expense | - | - | - | |||||||||||||||||
| Wage expense | - | - | - | |||||||||||||||||
| Service costs - ETH staking | - | - | - | |||||||||||||||||
| Third-party customer support fees | - | - | - | |||||||||||||||||
| Other segment items (b) | - | |||||||||||||||||||
| Intersegment cost of revenue | - | - | ||||||||||||||||||
| Segment cost of revenue | ||||||||||||||||||||
| Reconciliation of cost of revenue | ||||||||||||||||||||
| Elimination of intersegment cost of revenue | ( | ) | ||||||||||||||||||
| Total consolidated cost of revenue | ||||||||||||||||||||
| Segment gross profit | $ | $ | $ | $ | $ | |||||||||||||||
| (a) |
| (b) |
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Six Months Ended June 30, 2025
| Digital asset mining | Cloud services | Colocation services | ETH staking | Total | ||||||||||||||||
| Revenue from external customers | $ | $ | $ | $ | $ | |||||||||||||||
| Reconciliation of revenue | ||||||||||||||||||||
| Other revenue (a) | 618 | |||||||||||||||||||
| Total consolidated revenue | ||||||||||||||||||||
| Less: | ||||||||||||||||||||
| Electricity costs | - | |||||||||||||||||||
| Profit sharing fees | - | - | - | |||||||||||||||||
| Datacenter lease expense | - | - | ||||||||||||||||||
| GPU lease expense | - | - | - | |||||||||||||||||
| Wage expense | - | - | - | |||||||||||||||||
| Service costs - ETH staking | - | - | - | |||||||||||||||||
| Other segment items (b) | - | |||||||||||||||||||
| Segment cost of revenue | ||||||||||||||||||||
| Segment gross profit | $ | $ | $ | $ | $ | |||||||||||||||
| (a) |
| (b) |
The following table presents the reconciliation of segment gross profit to net (loss) income before taxes:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Segment gross profit | $ | $ | $ | $ | ||||||||||||
| Reconciling Items: | ||||||||||||||||
| Other profit (a) | ||||||||||||||||
| Depreciation and amortization expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Impairment of capitalized software assets | ( | ) | - | ( | ) | - | ||||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| (Losses) gains on digital assets | ( | ) | ( | ) | ( | ) | ||||||||||
| Gains on digital intangible assets | - | - | ||||||||||||||
| Impairment of digital intangible assets | ( | ) | - | ( | ) | - | ||||||||||
| Net gain (loss) from disposal of property and equipment | - | - | ( | ) | ||||||||||||
| Other (expense) income, net | ( | ) | ( | ) | ||||||||||||
| Change in fair value of derivative liability | ( | ) | - | ( | ) | - | ||||||||||
| Interest expense | ( | ) | - | ( | ) | - | ||||||||||
| Net (loss) income before taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| (a) | Other profit is primarily attributable to equipment leasing and is therefore not included in the total for segment gross profit. |
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21. RELATED PARTIES
Related-party transactions
On December 20, 2024, the Board of Directors declared an eight (
On February 19, 2026, the Board of Directors declared an eight (
WhiteFiber AI’s subsidiary, WhiteFiber Iceland ehf, appointed Daniel Jonsson as its part-time Chief Executive Officer starting November 7, 2023, for a six-month term with a three-month probation. After the initial period, the employment shall be automatically renewed for successive period(s) of 6 months each, unless agreed otherwise in writing or unless terminated earlier in accordance with the terms of the employment agreement. His compensation includes a monthly salary of $
Corporate Restructuring and Capital Contributions
Prior to the consummation of the WhiteFiber initial public offering (the “Offering”), the Company entered into a Contribution Agreement with WhiteFiber, pursuant to which the Company contributed its HPC business through the transfer of
On August 8, 2025, WhiteFiber, a subsidiary of the Company, completed the Offering of
Transition Services Agreement
In addition, prior to the consummation of the Offering, the Company entered into a Transition Services Agreement with WhiteFiber, pursuant to which the Company will provide certain services to WhiteFiber, on a transitional basis which will generally be up to 24 months following the effective date of WhiteFiber’s IPO registration statement. The Transition Services Agreement provides for the performance of certain services by the Company for the benefit of WhiteFiber, or in some cases certain services provided by WhiteFiber for the benefit of the Company, for a limited period of time after the Offering, including certain services provided by Sam Tabar, our Chief Executive Officer, and Erke Huang, our Chief Financial Officer and a Director. During such transition period, Messrs. Tabar and Huang will continue to hold the same position with the Company as well as WhiteFiber. Messrs. Tabar and Huang have committed to provide the requisite time and effort to fulfil their responsibilities as a full-time officer of WhiteFiber, supervising a full staff and are expected to provide certain services, representing not more than approximately 30% of their working time, in respect of the Company’s operations. As of August 1, 2026, Mr. Zhu was named as the Chief Financial Officer of WhiteFiber as Mr. Huang has relinquished his position and is only serving as Chief Financial Officer of Bit Digital. The services to be provided will include financial reporting, tax, legal, human resources, information technology and other general and administrative functions. All services are to be provided at cost, except if otherwise agreed to. Following WhiteFiber’s IPO, WhiteFiber’s related intercompany balances are expected to be settled in cash or reflected as a payable arrangement, rather than the historical parent investment treatment used before WhiteFiber’s IPO. For the three and six months ended June, 30, 2026, the fees for these services were $
Guarantees
The Company previously issued a guarantee to a third party on behalf of WhiteFiber Iceland ehf, making the Company jointly and severally liable for WhiteFiber Iceland’s payment obligations related to hosting Services fees and electrical costs pursuant to a colocation agreement.
On September 25, 2025, the guarantee was assumed by WhiteFiber which became directly responsible for such obligations. Following the assumption, the Company is no longer a guarantor under the agreement.
On March 25, 2026, WhiteFiber Iceland ehf. (the “Borrower”), a subsidiary of WhiteFiber, entered into a secured term loan facility agreement (the “Facility”) with Landsbankinn hf, which provides for borrowings of up to $
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On May 20, 2026, Enovum NC-1 Venture, LLC (the “Borrower”), a subsidiary of WhiteFiber, entered into a Delayed Draw Term Loan Facility and Security Agreement (the “Delayed Draw Term Loan Facility”) with Bit Digital Capital, Inc. (the “Lender”), a subsidiary of the Company, providing up to $
On July 15, 2026 Enovum NC-Bidco, LLC (the “Principal”), a subsidiary of WhiteFiber, entered into a $
Consulting Agreement with Affiliate of Director
On June 18, 2025, the Company entered into a consulting agreement with Serotonin Inc. (“Serotonin”). Amanda Cassatt, a director of the Company, is a principal of Serotonin and has an ownership interest in the entity. Under the consulting agreement, Serotonin provides consulting and advisory services to the Company. The agreement has an initial term of six months, expiring on December 18, 2025, and automatically renews for successive six-month periods unless terminated by either party upon at least thirty (30) days’ prior written notice. The agreement may also be terminated for cause, as defined in the agreement. Pursuant to the agreement, Serotonin assigned to the Company all right, title and interest worldwide in any work product developed in connection with the services. The agreement also contains a non-solicitation provision that remains in effect for
Administrative Services Agreement with Affiliate of Management
On December 1, 2025, Financière Marjos SCA, an indirect subsidiary of the Company, entered into an administrative services agreement with Le Square SARL (“Square”). Square is wholly owned by Philippe Gellman, who also serves as the Manager of Financière Marjos, and therefore the agreement constitutes a related party transaction.
Pursuant to the agreement, Square provides administrative support services to Financière Marjos, including coordinating with external advisors, assisting with the preparation and centralization of information for financial reporting and annual closings, supporting the preparation of forecasts and budgets, monitoring relationships with banking institutions, and assisting with the management of disputes and other administrative matters. Square may perform these services directly or in coordination with the executives, employees and service providers of Financière Marjos.
In consideration for the services provided under the agreement, Square receives a monthly fee of €
The agreement became effective on December 1, 2025 and continues for an indefinite term. The agreement may be terminated by Financière Marjos at any time without prior notice or by Square upon two months’ prior written notice. The agreement also includes customary confidentiality, non-solicitation and non-disparagement provisions.
22. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
The Company from time to time may become involved in legal proceedings in the ordinary course of the Company’s business. The Company may also pursue litigation to assert its legal rights and assets, and such litigation may be costly and divert the efforts and attention of its management and technical personnel, which could adversely affect its business. Due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of such matters may materially affect the Company’s business, results of operations, financial position, or cash flows.
Although the Company cannot predict the outcome of legal or other proceedings with certainty, where there is at least a reasonable possibility that a loss may have been incurred, U.S. GAAP requires the Company to disclose an estimate of the reasonably possible loss or range of loss or make a statement that such an estimate cannot be made. The Company follows a thorough process in which it seeks to estimate the reasonably possible loss or range of loss, and only if it is unable to make such an estimate does it conclude and disclose that an estimate cannot be made. Accordingly, unless otherwise indicated below in the Company’s discussion of legal proceedings, a reasonably possible loss or range of loss associated with any individual legal proceeding cannot be estimated.
Bit Digital USA, Inc v. Blockfusion USA, Inc. – Superior Court of Delaware
On June 3, 2024, the Company filed suit in Delaware Superior Court against Blockfusion, Inc. (“Blockfusion”) alleging claims for breach of contract, conversion, and related claims in connection with, among other things, certain deposits and advances paid to Blockfusion, the return of which is owed to Bit Digital. Bit Digital was seeking in excess of $
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On March 18, 2026, the Company moved to dismiss some of the Blockfusion’s counterclaims. The Court heard argument on that motion on June 12, 2026, and the motion remains pending.
The litigation is ongoing and remains in an active pretrial phase. The parties are engaged in discovery. The Company seeks recovery of its original investment, allegedly improper invoice payments, unpaid contractual amounts, and other damages, and may seek equitable or other relief as the proceedings continue. The aggregate damages sought exceed $
At this time, the Company cannot reasonably estimate a possible loss, range of loss, or expected recovery associated with this litigation.
Bit Digital USA, Inc. v. Alex Martini-Lo Manto, et. al. – New York Supreme Court, New York County, Commercial Division
On March 4, 2026, the Company filed suit against Alex Martini-Lo Manto, CEO of Blockfusion; Blockfusion; and two Blockfusion-related entities alleging that the defendants had designed a Special Purpose Acquisition Company (“SPAC”) merger to avoid paying the Company for its prejudgment liabilities. The suit alleges claims under New York Uniform Voidable Transactions Act, as well as fraud claims against defendant Martini-Lo Manto and other related claims.
Upon filing, the Company also moved for a preliminary injunction enjoining the SPAC transaction. On April 15, 2026, the Court denied that motion. The Company appealed that ruling, and the appeal was subsequently resolved as described below.
On April 29, 2026, Defendants moved to dismiss the Company’s claims. The Company filed its opposition on May 22, 2026.
On July 23, 2026, the Court issued a decision granting the motion in part and denying it in part. The Court dismissed the Company’s claims under the New York Uniform Voidable Transactions Act but permitted the Company’s successor-liability claim against the proposed post-combination public company to proceed. With respect to the fraud claims against Mr. Martini-Lo Manto, the Court permitted the claim based on allegedly fraudulent invoices to proceed and dismissed the remaining fraud claims. The Company is evaluating whether to seek leave to replead or to appeal the dismissed claims.
The litigation is ongoing and remains in an active pretrial phase. The parties are engaged in discovery. The aggregate damages sought exceed $
At this time, the Company cannot reasonably estimate a possible loss, range of loss, or expected recovery associated with this litigation.
Bit Digital USA, Inc. v. Alex Martini-Lo Manto, et. al. – New York Supreme Court, Appellate Division, First Department
On April 22, 2026, the Company appealed the Commercial Division’s denial of the preliminary injunction. The Company also filed a request for interim appellate injunctive relief. On May 22, 2026, the Appellate Division issued an interim order, pending determination of the application by a full panel, directing the defendants to escrow $
At this time, the Company cannot reasonably estimate a possible loss, range of loss, or expected recovery associated with this litigation.
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Contingent Consideration Liabilities
Unifi Transaction
As part of the Unifi Transaction (See Note 4. Acquisition), WhiteFiber may be required to make additional contingent payments to the seller based on the timing and availability of electric service to the property, as follows:
| ● | A contingent payment of $ |
| ● | If an Electric Service Agreement for at least 99 MW is provided, or the property receives 99 MW of power within three years, WhiteFiber may instead be required to make a contingent payment of $ |
| ● | If an Electric Service Agreement is provided, or the property receives more than 99 MW of power within four years, WhiteFiber may be required to make an additional payment of $ |
As of June 30, 2026, WhiteFiber has not received an Electric Service Agreement of more than 99 MW. Thus, no contingent payment is payable as of the reporting date.
Electric Service Agreement with Duke Energy
An existing Electric Service Agreement (“ESA”) with Duke Energy Carolinas, LLC (“Duke Energy”) for the provision of electric power to the facility located at 805 Island Drive, Madison, North Carolina was assigned to WhiteFiber’s wholly owned subsidiary, Enovum NC-1 Bidco LLC, from Unifi as of August 4, 2025.
The ESA establishes a minimum monthly bill for electric service, based on Duke Energy’s Rate of $
The ESA represents a continuing commitment to purchase power at or above the established minimum levels throughout the contract term. As such, WhiteFiber is obligated to pay the minimum monthly charges regardless of operational activity.
Under the termination clause, either party may cancel the ESA with at least 60 days’ written notice. In the event of early termination, WhiteFiber remains liable for all amounts due under the ESA through the termination date and may incur additional charges associated with the Extra Facilities if service is discontinued prior to the expiration of the facilities term.
On July 15, 2026, the Company obtained a $
As of June 30, 2026, management has no present intention to reduce operations at Madison or terminate the ESA. Accordingly, no liability has been recognized in the financial statements in connection with the ESA.
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23. SUBSEQUENT EVENTS
At the market offering
Subsequent to June 30, 2026, the Company sold
Syndicated RBC Credit Facility Agreement
On July 6, 2026, WhiteFiber’s wholly-owned subsidiary, Enovum Data Center Corp. entered into a syndicated credit agreement (“Syndicated RBC Credit Facility Agreement”). See Note 13. Debt for additional information.
Delayed Draw Term Loan Facility and Security Agreement
On July 27, 2026, WhiteFiber drew down an additional $
Data center lease in Sydney
On July 30, 2026, WhiteFiber Australia II Pty Ltd (f/k/a Aurix Digital Pty Ltd), a subsidiary of WhiteFiber, entered into a lease of data center space in Sydney, Australia to expand our cloud services offering. The lease, which is guaranteed by WhiteFiber, Inc., is scheduled to commence in the fourth quarter of 2026, has a term of
Investment Security
On August 10, 2026, WhiteFiber entered into the PIPE Share Purchase Agreement with SAIHEAT Limited for aggregate proceeds of approximately $
Issuance of preference shares
On August 11, 2026,
Forward Looking Statements
The discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed financial statements and the related notes included elsewhere in this report. Except for the statements of historical fact, this report contains “forward-looking information” and “forward-looking statements reflecting our current expectations that involve risks and uncertainties (collectively, “forward-looking information”) that is based on expectations, estimates and projections as at the date of this Form 10-Q. All statements, other than statements of historical fact, included herein are “forward-looking statements.” These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “intends,” “expects,” or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks, uncertainties and forward-looking statements described under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 (Annual Report) and any subsequently filed Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this report.
The following discussion may contain forward-looking statements that reflect the Company’s plans, estimates and beliefs. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. If any material risk were to occur, our business, financial condition or results of operations would likely suffer. In that event, the value of our securities could decline and you could lose part of all of your investment. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. In addition, our past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results in the future. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the company does not assume a duty to update these forward-looking statements.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q for the period ended June 30, 2026 as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Form 10-K for the year ended December 31, 2025 (“Form 10-K”). This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See “Forward Looking Statements and Risk Factor Summary” for a discussion of the uncertainties, risks, and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under “Risk Factors” and elsewhere in this Quarterly Report.
Overview
Bit Digital, Inc. (“BTBT” or the “Company” or “We”), is a holding company incorporated on February 17, 2017, under the laws of the Cayman Islands. The Company is a strategic asset company focused on active participation in Ethereum (ETH)-native treasury and staking strategies. Through our majority equity stake in WhiteFiber Inc. (Nasdaq: WYFI), the Company also engages in high performance computing (“HPC”) business, including cloud services and HPC data center services.
HPC Business
The Company’s HPC business operates under the WhiteFiber brand. WhiteFiber believes it is a leading provider of artificial intelligence (“AI”) infrastructure solutions. WhiteFiber owns high-performance computing (“HPC”) data centers and provides cloud-based HPC graphics processing units (“GPU”) services, which it terms cloud services, for customers such as AI application and machine learning (“ML”) developers (the “HPC Business”). Its Tier-3 data centers provide hosting and colocation services. WhiteFiber cloud services support generative AI workstreams, especially training and inference.
WhiteFiber’s business model integrates its data center infrastructure and cloud services to provide scalable, high-performance computing solutions for enterprises, research institutions, and AI and ML driven businesses. Its integrated approach aligns specialized data center operations with GPU-focused cloud services, addressing the unique requirements of AI and ML workloads. These workloads demand greater power density, advanced cooling solutions, and robust bandwidth to handle large-scale data transfers. By operating its data centers, it is able to provide the power to support its cloud services and WhiteFiber believes it can better meet the needs of AI and ML workloads and reduce the complexity associated with procuring power and connectivity from external vendors. WhiteFiber can also design its facilities to accommodate the higher heat loads generated by modern GPUs, potentially shortening deployment timelines for customers who require rapid expansion of their computing infrastructure. From a financial standpoint, WhiteFiber’s vertically integrated solution allows it to capture additional margin for both its data center and cloud services businesses, avoiding expenses that would otherwise be due to third-party providers.
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Colocation/Data center services
WhiteFiber designs, develops, and operates data centers, through which it offers its hosting and colocation services. WhiteFiber’s operational data centers meet the requirements of the Tier-3 standard, including N+1 redundancy architecture, concurrent maintainability, uninterruptible power supply, advanced and highly reliable cooling systems, strict monitoring and management systems, 99.982% uptime and no more than 1.6 hours of downtime annually, service organization control, SOC 2 Type 2, differentiated software supporting AI workloads, high density and robust bandwidth, and infrastructure to support AI workloads.
Based on their collective industry experience, WhiteFiber’s data center team is adept at bringing new sites online on an accelerated timeline. WhiteFiber is aggressively pursuing the development pipeline and intends to achieve an estimated 70 MW (gross) of total data center capacity by the end of the fourth quarter of 2026, a target that is underpinned by assets including the MTL-2, MTL-3, and NC-1 facilities. As of June 30, 2026, its pipeline of potential data center projects represents approximately 1,500 MW (gross) under management review. WhiteFiber follows a disciplined process prioritizing projects that are backed by customer lease commitments. In select cases, WhiteFiber may pursue early-stage acquisitions based on strong customer demand signals and defined commercialization pathways. Accordingly, the foregoing timelines and capacities are subject to change based on many factors, many of which are outside of WhiteFiber’s control.
WhiteFiber uses a well-defined set of criteria to select their data center sites. WhiteFiber typically target sites with proximity to metro areas and partial infrastructure in place, where it is retrofitting rather than developing greenfield projects. Metropolitan areas are positioned for low-latency to address long-term, specialized AI computer inference needs, and smaller sites reduce risks. A retrofit entails sourcing and acquiring an existing industrial building with underutilized, in-place power connectivity. The period of time from when a site is purchased until construction can begin varies from location to location depending upon, among other things, obtaining required permits and the availability of construction supplies and contractors. Average build time for retrofits is intended to be approximately six months from commencement of construction, which WhiteFiber believes is approximately one-third to one-half of the industry average development timeline for greenfield projects. This average building time is based upon senior management’s experience at Enovum prior to its acquisition by the Company, as well as their experience prior to Enovum. WhiteFiber also prioritize sites offering opportunities to increase site power over time, enabling its data centers to grow with customer demand. In addition, WhiteFiber selectively targets certain larger opportunities with 50 MW (gross) of power or more, subject to customer demand, to drive AI-driven compute super-clusters. Finally, WhiteFiber prioritize sites powered by sustainable, green energy sources and locked-in power when available. Additionally, to enhance sustainability of certain WhiteFiber data center projects, WhiteFiber is undertaking heat repurposing projects in connection with sustainability and commercial and residential projects.
WhiteFiber acquired Enovum on October 11, 2024. The transaction included the lease of MTL-1, its 4 MW (gross) Tier-3 high-performance computing (“HPC”) data center in Montreal, Canada, which was fully operational and fully leased to customers at the time of acquisition.
On December 27, 2024, WhiteFiber acquired the real estate and building for a build-to-suit 5 MW (gross) Tier-3 data center expansion project near Montreal, Canada which it refers to as MTL-2. MTL-2, a 160,000 square foot site that was previously used as an encapsulation manufacturing facility, is located in Pointe-Claire, Quebec. WhiteFiber initially funded the purchase of CAD 33.5 million (approximately $23.3 million) with cash on hand. WhiteFiber expected to invest approximately $23.6 million to develop the site to Tier-3 standards with an initial load of 5 MW (gross). However, WhiteFiber has prioritized other builds and preserved capital for more time sensitive projects.
On April 11, 2025, WhiteFiber entered into a lease for a new data center site in Saint-Jerome, Quebec, a suburb of Montreal, MTL-3. The MTL-3 facility spans approximately 202,000 square feet on 7.7 acres and is being developed into a 7 MW (gross) Tier-3 data center. It will support current contracted capacity, with Cerebras (5 MW IT Load), with future expansion potential subject to utility approvals. The transaction was executed under a lease-to-own structure, which includes a fixed-price purchase option of CAD 24.2 million (approximately $17.3 million) exercisable by December 2025. The lease term is 20 years, with two 5-year extensions at the Company’s option. In December 2025, WhiteFiber became reasonably certain to exercise the purchase option and notified the lessor of its intent to exercise the purchase option. WhiteFiber had 90 days to complete the purchase, after which the purchase option would expire. The option was exercised on January 14, 2026 and the purchase of MTL-3 closed on May 8, 2026. The facility has been retrofitted to Tier-3 standards and was completed and operational in November 2025. The site has commenced billing Cerebras as of November 1, 2025, in the amount of CAD 1.4 million (approximately 979 thousand USD) monthly for the duration of the five-year contract.
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On May 20, 2025, WhiteFiber completed the purchase of a former industrial/manufacturing building from UMI. Pursuant to the Purchase Agreement WhiteFiber agreed to purchase from UMI, an industrial/manufacturing building together with the underlying land located in Madison, North Carolina, which WhiteFiber refers to as “NC-1”, as well as certain machinery and equipment located thereon for a cash purchase price of $45 million. The purchase price will increase by (i) $8 million, if Duke Energy actually provides, or provides an Electric Services Agreement providing for, at least 99 MW (gross) within two years of May 20, 2025, or (ii) $5 million, if Duke Energy actually provides, or provides an Electric Services Agreement providing for, at least 99 MW (gross) more than two years but less than three years after May 20, 2025. Additionally, the purchase price will increase by an additional $200 thousand per MW over 99 MW (gross) up to a maximum of $5 million if at least 99 MW (gross) are actually delivered, or Duke Energy provides an Electric Services Agreement for the provision of at least 99 MW (gross), within four years of May 20, 2025. Separately, the Company entered into a Capacity Agreement with Duke Energy pursuant to which Duke Energy agreed to use commercially reasonable efforts to achieve 24 MW (gross) of service to NC-1 by September 1, 2025, 40 MW (gross) by April 1, 2026, and 99 MW (gross) within four years of May 16, 2025. Management believes based upon its review of the site and a Duke Energy preliminary transmission study, that NC-1 may receive and support up to 200 MW (gross) of total electrical supply over an extended period of time, subject to infrastructure upgrades, such as developing new substations and other conditions. On August 4, 2025, Enovum NC-1 Bidco LLC, a subsidiary of WhiteFiber, entered into an Assignment and Assumption Agreement with Unifi Manufacturing and Duke Energy Carolinas, LLC, pursuant to which Enovum assumed Unifi’s rights and obligations under certain electric service agreements for facilities located in North Carolina. Duke Energy consented to the assignment. Refer to Note 22. Commitments and contingencies to our condensed consolidated financial statements for further detail.
As the business grows, WhiteFiber’s ability to fund its operating needs will depend on the ongoing ability to generate positive cash flow from our operations and raise capital in the capital markets. Accordingly, WhiteFiber has entered into certain credit facilities to finance these areas of growth, including the RBC Facility Agreement discussed here. Refer to Liquidity and capital resources for further discussion on this Facility and other credit facilities of WhiteFiber.
RBC Credit Facility
On June 18, 2025, WhiteFiber entered into a non-recourse credit agreement with RBC (as subsequently amended on July 4, 2025, the “original credit agreement”) providing for an aggregate of up to approximately CAD 60 million (approximately $43.8 million) of financing intended primarily to refinance the buildout of MTL-2 and to provide $5.8 million of revolving term financing. The facilities had not been authorized for use by the lender, as certain conditions precedent had not yet been satisfied, and accordingly no amounts were drawn and no borrowings were available under the original credit agreement.
On April 27, 2026, WhiteFiber entered into an amended credit agreement with RBC, replacing the original credit agreement dated June 18, 2025, as amended on July 4, 2025. The amended credit agreement provided for an authorized credit facility of CAD $28 million (approximately $20 million), the proceeds of which were used to finance the acquisition of the MTL-3 facility. The amended credit agreement also included a CAD $8 million (approximately $5.8 million) revolving facility in the form of Letters of Credit and Letters of Guarantee, available for a 12-month term. On July 15, 2026, the amended credit agreement was repaid in full and refinanced through the Syndicated RBC Credit Facility Agreement described below; the revolving Letters of Credit and Letters of Guarantee facility remains in place.
Syndicated RBC Credit Facility Agreement executed on July 6, 2026
On July 6, 2026, WhiteFiber’s wholly-owned subsidiary, Enovum Data Center Corp entered into a syndicated credit agreement with a group of lenders and RBC as administrative agent. The Syndicated Credit Facility Agreement provides for an aggregate of up to approximately CAD $115 million (approximately $80.8 million) to refinance the Amended Credit Agreement and finance its data centers business. The agreement also includes an accordion feature that permits WhiteFiber to increase by up to an additional CAD $25 million (approximately $17.7 million) to refinance the Amended Credit Agreement, subject to the satisfaction of specified conditions. The Syndicated Credit Facility Agreement is a non-revolving facility, and amounts repaid or prepaid may not be reborrowed.
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Borrowings under the Syndicated Credit Facility Agreement bear interest, at WhiteFiber’s option, at either (i) the CORRA-based benchmark rate for such interest period plus 2.45% per annum plus the credit spread adjustment for the applicable interest period (29.547 basis points for one month interest period, 32.138 basis points for a three month interest period and 0 for a daily interest period), or (ii) RBC Prime rate plus 1.00% per annum. The facility has a three-year term from the date of the initial drawdown and requires interest-only payments until the first full quarter after the date of the initial drawdown. The loan will be amortized through quarterly principal repayments based on a 15-year amortization schedule, with the outstanding principal due in full at maturity. The specific borrowing terms are established at the time of each drawdown pursuant to a borrowing request submitted by WhiteFiber and accepted by the lender.
The Syndicated Credit Facility is secured by first-ranking security interests over substantially all present and future personal property and assets of the borrower and the guarantors, together with first-ranking mortgages on certain owned real estate, including WhiteFiber’s MTL-2 and MTL-3 properties and related improvements and equipment.
WhiteFiber has agreed to certain financial covenants, including a minimum debt service coverage ratio and a maximum Net funded debt to EBITDA ratio.
On July 15, 2026, WhiteFiber drew a CORRA loan amount of CAD $36.8 million (approximately $26.2 million) under the Syndicated Credit Facility Agreement.
Nscale Services Agreement
In November 2025, WhiteFiber’s wholly owned subsidiary, Enovum NC-1 Bidco, LLC, entered into the Services Agreement with Nscale Services US Inc. and Nscale Global Holdings Limited (collectively, “Nscale”) for the provision of colocation and related services at its NC-1 facility. The agreement represents a significant commercial milestone for the high-density data center platform and provides long-term contracted revenue visibility. The initial Service Order pursuant to the Services Agreement represents approximately $865 million in total contracted revenue over a 10-year term, inclusive of contractual annual rate escalators and non-recurring installation services (“NRCs”). Electricity and certain other operating costs are structured as pass-through charges to Nscale. Billing is expected to commence during the third quarter, subject to completion of construction and commissioning. As a result, WhiteFiber expects full revenue contribution from this agreement to begin during the third quarter of 2026 as the facility reaches its contractual capacity.
Cloud Services
WhiteFiber provides specialized cloud services to support generative AI workstreams, especially training and inference, emphasizing cost-effective utility and tailor-made solutions for each client. WhiteFiber is an authorized NVIDIA Preferred Partner through the NVIDIA Partner Network (“NPN”), an authorized partner with SuperMicro Computer Inc.®, an authorized Communications Service Provider (“CSP”) with Dell (through Dell’s exclusive distributor in Iceland, Advania), an official partnership with Hewlett Packard Enterprise and a commercial relationship with Quanta Computer Inc. (“QCT”). Based on management’s knowledge of the industry, WhiteFiber is proud to be among the first service providers to offer H200, B200, and GB200 servers. WhiteFiber provides a high-standard service lease with an Uptime percentage> 99.5%.
WhiteFiber is also developing a capital-light managed services offering through which customers would fund the underlying hardware while WhiteFiber deploys and operates it on their behalf. This offering has not yet generated material revenue.
Global Data Center Infrastructure and Partnerships
WhiteFiber expects to leverage a global network of data centers for hosting capacity for its GPU business, in many instances, by negotiating with third-party providers to seamlessly integrate its cloud services at strategically located data centers. WhiteFiber’s initial data center partnership through which it leases capacity is at Blönduós Campus, Iceland, offering a world-class operations team with certified technicians and reliable engineers. The facility has a 45 kW rack density and 6 MW (gross) total capacity. WhiteFiber has executed contracts for 5.5 MW IT load at the data center. The center’s energy source is 100% renewable energy, mainly from Blanda Hydro PowerStation, the winner of an IHA Blue Planet Award in 2017. In addition, WhiteFiber has leased additional capacity to install our data center in Atlanta, Georgia, USA to expand its cloud services offering. The capacity leases commenced in February 2026. WhiteFiber also intends to lease additional capacity to expand its cloud services offering. In July 2026, WhiteFiber entered into a lease for 2.5 MW IT load Tier 3 design data center space in Sydney, Australia to expand our cloud services offering. The lease is scheduled to commence in the fourth quarter of 2026.
In April 2025, WhiteFiber received its first shipment of NVIDIA GB200 NVL72 system powered NVIDIA GB200 Grace Blackwell Superchips, from Quanta Cloud Technology, a leading provider of data center solutions. WhiteFiber believes that support with proof of concept (POC) access from Quanta will enable it to meet and exceed expectations around delivery and timeline, performance and reliability.
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Customer Base and Concentration
As of the date of this Form 10-Q, WhiteFiber has seven existing customers. Its largest customer accounted for approximately 63% of WhiteFiber’s revenue during the six months ended June 30, 2026. During the period WhiteFiber had discontinuation of three customer orders. The discontinued orders resulted in approximately $5.1M impact to revenue during the six months ended June 30, 2026. However, there were new customer orders contracted in the six months ended June 30, 2026 and through the date of this Form 10-Q for total contracted revenue of $635.8M over a six months to three-year period.
Discontinued customer agreements during the six months ended June 30, 2026 and through the date of this Form 10-Q include: (i) WhiteFiber’s Initial Customer, following execution of the Termination Agreement described below; (ii) a customer whose Master Services Agreement and related purchase order, as previously amended, was terminated in January 2026; and (iii) a customer whose service order, entered into in January 2026, was terminated during the period.
New customer agreements signed during the six months ended June 30, 2026 and through the date of this Form 10-Q include new service orders entered into with existing customers for additional GPU and CPU/storage capacity, as well as new service orders entered into with new customers, in each case as further described below.
Selected Customer Agreements
The following summaries reflect selected GPU cloud service agreements that were entered into or discontinued during the period, or that WhiteFiber otherwise considers to be material or representative. WhiteFiber has entered into additional agreements that are not individually material and are not included below.
On October 23, 2023, Bit Digital announced that it had commenced AI operations by signing a binding term sheet with a customer (the “Initial Customer”) to support the customer’s GPU workloads. On December 12, 2023, WhiteFiber finalized a Master Services and Lease Agreement (“MSA”), as amended, with its Initial Customer for the provision of cloud services from a total of 2,048 GPUs over a three-year period. To finance this operation, WhiteFiber entered into a sale-leaseback agreement with a third party, selling 96 AI servers (equivalent to 768 GPUs) and leasing them back for three years. The total contract value with the Initial Customer for the aggregated 2,048 GPUs was estimated to be worth more than $50 million of annualized revenue. On January 22, 2024, approximately 192 servers (equivalent to 1,536 GPUs) were deployed at a specialized data center and began generating revenue, and subsequently on February 2, 2024, approximately an additional 64 servers (equivalent to 512 GPUs) also started to generate revenue.
In the second quarter of 2024, WhiteFiber finalized an agreement to supply its Initial Customer with an additional 2,048 GPUs over a three-year period. To finance this operation, WhiteFiber entered into a sale-leaseback agreement with a third party, agreeing to sell 128 AI servers (equivalent to 1,024 GPUs) and leasing them back for three years. In late July, at the customer’s request, WhiteFiber agreed with the customer to temporarily delay the purchase order so the customer could evaluate an upgrade to newer generation Nvidia GPUs. Consequently, WhiteFiber and manufacturer postponed the purchase order. In early August, the customer made a non-refundable prepayment of $30.0 million for the services to be rendered under this agreement.
In January 2025, WhiteFiber entered into a new agreement to supply its Initial Customer with an additional 464 GPUs for a period of 18 months. This new agreement replaces the prior agreement whereby WhiteFiber was to provide the customer with an incremental 2,048 H100 GPUs. The contract represents approximately $15 million of annualized revenue and features a two-month prepayment from the customer. Deployment commenced on August 20, 2025, using WhiteFiber’s inventory of B200 GPUs.
In October 2025, Bit Digital’s existing guaranty arrangement with the Initial Customer was scheduled to expire. Beginning in November 2025, the customer will provide a service deposit to WhiteFiber in lieu of the Bit Digital guaranty. The deposit will be funded through fifteen consecutive monthly payments of approximately $0.24 million each, totaling $3.6 million, payable from November 2025 through January 2027. The deposit will serve as security for the customer’s performance obligations under the amended service agreements. Each monthly payment is expected to be invoiced on the first day of the month and paid within thirty days. WhiteFiber will be required to return the deposit in cash upon termination or expiration of the service agreements, provided that all obligations have been fully satisfied and no payment defaults or material breaches exist.
In the second quarter of 2026, WhiteFiber executed a termination agreement (the “Termination Agreement”) with the Initial Customer. The Termination Agreement preserved $12.5 million of previously invoiced, unpaid trade receivables. This preserved balance was fully collected as of June 30, 2026. Prepayment and service deposit balances were applied against other outstanding receivables and WhiteFiber recognized a bad debt expense of approximately $2.2 million for the unpreserved remaining receivable balance outstanding. Additionally, under the Termination Agreement the Initial Customer is obligated to pay WhiteFiber a fixed termination fee of $12.3 million that was recognized as revenue during the second quarter of 2026. Subsequently, after quarter-end, the termination fee was amended to $15.7 million. The amended amount of $15.7 million remains outstanding as of the date of this Form 10-Q. Following the service pause and termination of the agreement, WhiteFiber redeployed the GPUs previously allocated to the Initial Customer to other customers.
In November 2025, WhiteFiber terminated the MSA and all related purchase orders with DNA Fund in accordance with the terms of the contract. At the time of termination, we had approximately $7.3 million in outstanding accounts receivable. Pursuant to the termination agreement, the customer agreed to repay the outstanding balance. As of the date of this Form 10-Q, we have collected $2.2 million of the outstanding amount.
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On November 6, 2024, WhiteFiber entered into a Master Services Agreement (“MSA”) with a minimum purchase commitment of 16 GPUs, along with an associated purchase order, from a new customer. The purchase order provides for services utilizing a total of 16 H200 GPUs over a minimum of a six-month period, representing total contracted value of approximately $0.16 million for the term. The deployment commenced on November 7, 2024, using WhiteFiber’s existing inventory of H200 GPUs. The service under the purchase order concluded in May 2025. Between May 2025 and September 2025, WhiteFiber signed six additional agreements on a month-to-month basis for a total of 88 H200 GPUs, which were terminated in January 2026.
In February 2026, WhiteFiber entered into another service order with the customer to provide services utilizing a total of 10 H200 GPU servers. The service order has an initial term of 14 months beginning on the services commencement date. The service order represents an aggregate revenue opportunity of approximately $1.3 million. The deployment and revenue generation began in March 2026.
In March 2026, WhiteFiber entered into another service order with the customer to provide services utilizing a total of 256 H100 GPU servers. The service order has an initial term of 24 months beginning on the services commencement date, with an option to renew for an additional twelve months. The service order represents an aggregate revenue opportunity of approximately $50.2 million. The deployment and revenue generation began in the second quarter of 2026.
In April 2026, WhiteFiber entered into another service order with the customer to provide CPU and storage server services. The service order has an initial term of 24 months beginning on the services commencement date. The service order represents an aggregate revenue opportunity of approximately $0.8 million. The deployment and revenue generation began in the second quarter of 2026.
On January 30, 2025, WhiteFiber entered into a Master Services Agreement (“MSA”) with a minimum purchase commitment of 40 GPUs, along with an associated purchase order, from a new customer. The purchase orders provide for services utilizing a total of 40 H200 GPUs over a minimum of 12 month period, representing total revenue of approximately $0.8 million for the term. In October 2025, the purchase order was amended to reduce the number of H200 GPUs from 40 to 8 and to extend the term of service through May 2027. This contract was terminated in January 2026.
In October 2025, WhiteFiber entered into a two-week service order with a new customer to provide services utilizing a total of 72 B200 GPUs. In January 2026, WhiteFiber entered into an additional two-week service order with this customer for 72 B200 GPUs. These contracts were terminated as of February 2026. In January 2026, WhiteFiber entered into a further service order with this customer to provide services utilizing a total of 384 B200 GPUs. This service order has an initial term of 24 months commencing on the service commencement date, after which it will automatically renew for successive one-month periods unless terminated by either party. The service order represents an aggregate revenue opportunity of approximately $18.1 million. Deployment and revenue generation commenced in January 2026.
In February 2026, WhiteFiber entered into a service order with a new customer to provide services utilizing a total of 256 GPUs. The service order has an initial term of 12 months beginning on the services commencement date, after which it automatically renews for successive one-month periods unless terminated by either party. The deployment and revenue generation began on February 1, 2026 which is expected to generate total revenues of $3.6 million.
In March 2026, WhiteFiber entered into a service order with a new customer, Prime Intellect, to provide services utilizing a total of 72 GB200 GPUs. The service order has an initial term of six months beginning on the services commencement date, after which it automatically renews for successive one-month periods unless terminated by either party. The deployment and revenue generation began on March 7, 2026 and will generate a total revenue of up to $1.0 million. Additionally, in April 2026, WhiteFiber entered into a service order with this customer to provide services utilizing a total of 216 GB200 GPUs. The service order has an initial term of 12 months beginning on the services commencement date, after which it automatically renews for successive one-month periods unless terminated by either party. The deployment and revenue generation is scheduled to begin in July 2026 generating total revenues of up to $6.8 million.
New Business Developments
In May 2026, WhiteFiber entered into a five-year agreement to provide AI compute infrastructure for an investment-grade technology customer in the Paris region utilizing advanced NVIDIA GPU systems, with total contract value in excess of $160 million. Service under this agreement, which was previously expected to commence in July 2026, is now expected to commence in September 2026, subject to final equipment delivery and acceptance milestones. WhiteFiber has secured third-party data center capacity in France to support the deployment and has entered into a binding term sheet for project-level financing with respect to this deployment (the “France Project Financing”). WhiteFiber is currently in the process of negotiating definitive documentation for the France Project Financing; however, certain material terms remain subject to ongoing negotiation between the parties. While WhiteFiber expects to finalize the France Project Financing in the near term, no definitive agreements have been entered into as of the date of this Quarterly Report, and no assurance can be given that WhiteFiber will enter into such financing on the timeline currently anticipated, on the terms contemplated by the binding term sheet, on other terms satisfactory to us, or at all. If consummated, the France Project Financing is expected to be incurred at a project-level subsidiary and would not be guaranteed by WhiteFiber, Inc. The project is expected to be supported by customer prepayments, including 12 months of advance service fees, and project-level financing, with limited long-term reliance on our corporate balance sheet and existing cash resources.
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Also in May 2026, WhiteFiber entered into a two-year cloud services agreement with Hyperbolic Labs, Inc., with Modal Labs as the end customer and reference partner, to deploy H200 GPUs from our existing owned fleet, with total contract value of approximately $17 million. Revenue under this agreement commenced in June 2026. No incremental GPU capital expenditures were required for this deployment.
In July 2026, WhiteFiber entered into a service order with a new customer to provide services utilizing a total of 128 B300 GPUs. The service order has an initial term of 36 months beginning on the services commencement date, after which it automatically renews for successive one-month periods unless terminated by either party. The service order represents an aggregate revenue opportunity of approximately $16.0 million.
In August 2026, WhiteFiber entered into a new service order with Prime Intellect to provide services utilizing a total of 576 VR200 (Vera Rubin) GPUs in Canada, representing our first Vera Rubin deployment. This is in addition to the orders placed by this customer of 72 GB200 GPUs in March 2026 and 216 GB200 GPUs in April 2026, discussed above. The service order has an initial term of 36 months beginning on the services commencement date, after which it automatically renews for successive one-month periods unless terminated by either party. The service order represents an aggregate revenue opportunity of approximately $108.2 million, with service targeted to commence in the second quarter of 2027. The total revenue contract value with this customer in relation to these three orders is expected to be up to $116.0 million.
In August 2026, WhiteFiber entered into a service order with a new customer, BaseTen Labs, Inc., to provide services utilizing a total of 1,392 B300 GPUs. The service order has an initial term of 36 months beginning on the services commencement date, after which it automatically renews for successive one-month periods unless terminated by either party. The service order represents an aggregate revenue opportunity of approximately $165.2 million. The deployment and revenue generation is scheduled to begin in November 2026.
In August 2026, WhiteFiber entered into a new five-year service order with an existing customer to provide services utilizing a total of 576 Nvidia B300s GPUs in Iceland. The service order represents an aggregate revenue opportunity of approximately $87.5 million over its initial term, with additional potential upside through revenue sharing. Service under this agreement is targeted to commence in December 2026.
Key Factors that May Affect Future Results of Operations
The Company’s future results of operations are, in part, dependent on WhiteFiber’s ability to complete and expand capacity at its existing data center projects and to develop its data center pipeline. WhiteFiber substantially completed construction of its MTL-3 facility by the end of October 2025. The site has commenced billing its customer, Cerebras, as of November 1, 2025, in the amount of CAD 1.4 million (approximately $979 thousand USD) monthly for the duration of the five-year contract. Management expects WhiteFiber to start generating revenues 30 days after completion. Additionally, during the third quarter WhiteFiber will begin the initial phases of construction for MTL-2 with an expected delivery near the end of the fiscal year.
On July 9, 2026, WhiteFiber announced initial research and development results for a proprietary cross-data-center networking architecture designed to link geographically separated data centers into a single logical GPU supercluster. Testing demonstrated 111.2 Tbps of bandwidth across 83 kilometers of dark fiber with a guaranteed round-trip latency of 0.9 milliseconds, and WhiteFiber has submitted related patent applications. WhiteFiber is targeting a commercial launch of this solution in future periods, subject to completion of additional full-spectrum fiber testing; although there can be no assurance that it will do so on the anticipated timeline or at all.
The Company’s and WhiteFiber’s ability to fund the continued construction and buildout of WhiteFiber’s data center facilities, and to refinance near-term debt maturities, depends on successfully obtaining additional financing on acceptable terms, or at all. If the Company or WhiteFiber is unable to do so, the Company’s business, operating results, and financial condition could be adversely affected.
Digital Asset Business
The digital asset business is comprised primarily of two distinct but highly complementary operations: (i) ETH staking (the “ETH Staking Operations”); and (ii) digital asset mining (the “Digital Asset Mining Operations”).
In June 2025, the Company announced that it had initiated a strategic transition to become a pure play ETH staking and treasury company. In connection with the transition, the Company has been converting its BTC holdings into ETH over time and has been winding down its bitcoin mining operations, with any net proceeds to be re-deployed into ETH.
ETH Staking Business
In the fourth quarter of 2022, we formally commenced Ethereum staking operations. We delegate or stake our ETH holdings to an Ethereum validator node to help secure and strengthen the blockchain network. Stakers are compensated for this commitment in the form of a reward of the native network token.
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We initiated our native staking operations with MarsLand Global Limited (“MarsLand”) in August 2023. Subsequently, we have ceased our native staking with MarsLand in the first quarter of 2024 and initiated our native staking with Figment Inc.
We started participating in liquid staking via Liquid Collective protocol on the Coinbase platform in the first quarter of 2023. Liquid staking allows participants to achieve greater capital efficiency by utilizing their staked ETH as collateral and trading their staked ETH tokens on the secondary market. In the first quarter of 2024, we reclaimed all the liquid staked ETH from Liquid Collective protocol. In July 2025, we resumed liquid staking through the Liquid Collective protocol with 5,120 ETH. This approach provided flexibility to engage in both staking and restaking through a broader range of strategies and platforms. Subsequently, we ceased our liquid staking activities with Liquid Collective protocol in October 2025. In April 2026, the Company liquid staked 73,235 ETH and received 66,192 LsETH, a portion of which was subsequently pledged as collateral under certain borrowing arrangements during the period.
Digital Asset Mining Business
We commenced our bitcoin (“BTC”) mining business in February 2020. We initiated limited Ethereum mining operations in January 2022, however discontinued the operations by September 2022 due to Ethereum blockchain switching from proof-of-work (“PoW”) consensus mechanism to proof-of-stake (“PoS”) validation. Our mining operations, hosted by third-party providers, use specialized computers, known as miners, to generate digital assets. Our miners use application specific integrated circuit (“ASIC”) chips. These chips enable the miners to apply high computational power, expressed as “hash rate”, to provide transaction verification services (generally known as “solving a block”) which helps support the blockchain. For every block added, the blockchain provides an award equal to a set number of digital assets per block. Miners with a greater hash rate generally have a higher chance of solving a block and receiving an award.
We operate our mining assets with the primary intent of accumulating digital assets which we may sell for fiat currency from time to time depending on market conditions and management’s determination of our cash flow needs, and/or exchange into ETH or USD Coin (“USDC”). Our mining strategy has been to mine bitcoins as quickly and as many as possible given the fixed supply of bitcoins. In view of historically long delivery lead times to purchase miners from manufacturers like Bitmain Technologies Limited (“Bitmain”) and MicroBT Electronics Technology Co., Ltd (“MicroBT”), and other considerations, we have chosen to acquire miners on the spot market, which can typically result in delivery within a relatively short time.
We have entered into service agreements with third-party hosting partners in North America and Iceland. These partners operate specialized mining data centers, where they install and operate the miners and provide IT consulting, maintenance, and repair work on site for us. Our mining facilities are currently maintained by Digital Energy Partner LLC (“DEP”) in Texas and Mendenhall Ops LLC (“Merkle”) in Tennessee. Our mining facilities in Kentucky, Texas, New York, and Iceland were previously maintained by Soluna Computing, Inc. and DVSL ComputeCo, LLC (collectively, “Soluna”), Bitdeer Technologies Group (“Bitdeer”), Digihost Technologies Inc. (“Digihost”), and GreenBlocks ehf, an Icelandic private limited company (“GreenBlocks”), respectively. The Company’s partnership with Soluna and GreenBlocks concluded at the end of February 2026, while its partnership with Digihost and Bitdeer concluded during May 2026 and June 2026, respectively.
From time to time, the Company may change partnerships with hosting facilities to recalibrate its bitcoin mining operations. These terminations are strategic, targeting reduced operational costs, enhanced energy efficiency for a smaller carbon footprint, increased flexibility in operational control, and minimized geopolitical risks. While a short-term decrease in mining output might occur, we expect these changes to yield long-term operational improvements.
We are a sustainability-focused digital asset mining company. On June 24, 2021, we signed the Crypto Climate Accord, a private sector-led initiative that aims to decarbonize the crypto and blockchain sectors. On December 7, 2021, we became a member of the Bitcoin Mining Council (“BMC”), joining MicroStrategy and other founding members to promote transparency, share best practices, and educate the public on the benefits of bitcoin and bitcoin mining.
Miner Deployments
During the three months ended June 30, 2026, we continued to work with our hosting partners to deploy our miners in North America.
During the first quarter of 2026, the Company reallocated a portion of its mining fleet across hosting facilities as part of its ongoing efforts to recalibrate its mining operations. This transition, driven by changes in hosting partnerships, including the transfer of 2,483 miners from Soluna and DEP’s facilities, respectively, to Bitdeer.
During the second quarter of 2026, the Company transferred 2,451 and 1,778 miners from Soluna and Bitdeer’s facilities, respectively, to Merkle.
As of June 30, 2026, the Company’s active hash rate totals approximately 0.4 EH/s, with operations in North America.
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Power and Hosting Overview
The Company’s subsidiary, Bit Digital Canada, Inc., entered into a Mining Services Agreement effective September 1, 2022, for Blockbreakers, Inc. to provide five (5) MW of incremental hosting capacity at its facility in Canada. The facility utilizes an energy source that is primarily hydroelectric.
On May 8, 2023, the Company entered into a Master Mining Services Agreement with Blockbreakers, pursuant to which Blockbreakers agreed to provide the Company with four (4) MW of additional mining capacity at its hosting facility in Canada. The agreement is for two (2) years automatically renewable for additional one (1) year terms unless either party gives at least 60 days’ advance written notice. The performance fee is 15% of the net profit. This new agreement brought the Company’s total contracted hosting capacity with Blockbreakers to approximately 9 MW. Our service agreement with Blockbreakers expired in November 2024. A portion of the miners were transferred to other hosting facilities, and the inefficient units were sold.
On June 7, 2022, we entered into a Master Mining Services Agreement (the “MMSA”) with Coinmint LLC, pursuant to which Coinmint will provide the required mining colocation services for a one-year period automatically renewing for three-month periods unless earlier terminated. The Company will pay Coinmint electricity costs, plus operating costs required to operate the Company’s mining equipment, as well as a performance fee equal to 27.5% of the net profit, subject to a 10% reduction if Coinmint fails to provide uptime of 98% percent or better for any period. We are not privy to the emissions rate at the Coinmint facility or at any other hosting facility. However, the Coinmint facility operated in an upstate New York region that reportedly utilized power that is 99% emissions-free, as determined based on the 2023 Load & Capacity Data Report published by the New York Independent System Operator, Inc. (“NYISO”).
On April 5, 2023, the Company entered into a letter agreement and MMSA Amendment, as subsequently amended, with Coinmint pursuant to which Coinmint agreed to provide the Company with up to ten (10) MW of additional mining capacity to energize the Company’s mining equipment at Coinmint’s hosting facility in Plattsburgh, New York. The agreement is for two (2) years automatically renewing for three (3) months unless terminated by either party on at least ninety (90) days prior written notice. The performance fees under this letter agreement range from 30% to 33% of the net profit. This new agreement brings the Company’s total contracted hosting capacity with Coinmint to approximately 30 MW at this facility.
On April 27, 2023, the Company entered into a letter agreement and MMSA Amendment with Coinmint pursuant to which Coinmint agreed to provide the Company with up to 10 MW of additional mining capacity to energize the Company’s mining equipment at Coinmint’s hosting facility in Massena, New York. The agreement was for one year automatically renewing for three (3) months unless terminated by either party on at least 90 days prior written notice. The performance fees under this letter agreement are 33% of the net profit. This new agreement brought the Company’s total contracted hosting capacity with Coinmint to approximately 40 MW.
On January 26, 2024, the Company entered into a letter agreement and MMSA Amendment with Coinmint pursuant to which Coinmint agreed to provide the Company with up to 6 MW of additional mining capacity to energize the Company’s mining equipment at Coinmint’s hosting facility in Massena, New York. The agreement was for one year automatically renewing for three months unless terminated by either party on at least 90 days prior written notice. The performance fees under this letter agreement are 28% of the net profit. This agreement brought the Company’s total contracted hosting capacity with Coinmint to approximately 46 MW.
On September 5, 2024, the Company received a 90-days notice of non-renewal of colocation mining services agreement from Coinmint, which informed the Company of its intent not to renew 27 MW of the 36 MW total contracted capacity at its Massena, New York site, effective December 7, 2024. Subsequently, on October 29, 2024, the Company received an additional 90-days notice of non-renewal of colocation mining services agreement from Coinmint, which informed the Company of its intent to not renew the remaining 9 MW of the 36 MW total contracted capacity at its Massena, New York site, effective January 28, 2024. On January 3, 2025, the Company received an additional 90-days notice of non-renewal of colocation mining services agreement from Coinmint, which informed the Company of its intent not to renew the 10 MW total contracted capacity at its Plattsburgh, New York site, effective April 5, 2025. After the contracts with Coinmint expired, a portion of the miners were transferred to other hosting facilities, and the inefficient units were sold.
In June 2021, we entered into a strategic co-mining agreement with Digihost Technologies in North America. Pursuant to the terms of the agreement, Digihost provides certain premises to Bit Digital for the purpose of the operation and storage of a twenty (20) MW bitcoin mining system to be delivered by Bit Digital. Digihost provides services to maintain the premises for a term of two (2) years. Digihost shall also be entitled to 20% of the net profit generated by the miners.
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In April 2023, we renewed the co-mining agreement with Digihost, previously executed in June 2021. Pursuant to the terms of the new agreement, Digihost provides certain premises to Bit Digital for the purpose of the operation and storage of an up to 20 MW bitcoin mining system to be delivered by Bit Digital. Digihost also provides services to maintain the premises for a term of two years, automatically renewing for a period of one (1) year. Digihost shall also be entitled to 30% of the net profit generated by the miners. Our partnership with Digihost concluded in May 2026, and the Company is currently evaluating alternative hosting arrangements for the miners previously deployed at the Digihost facility. As of the date of this report, these miners are in storage.
On May 9, 2023 (“Effective Date”), the Company entered into a Term Loan Facility and Security Agreement (the “Loan Agreement”) with GreenBlocks. Pursuant to the Loan Agreement, GreenBlocks has requested the Company to extend one or more loans (“Advances”) under a senior secured term loan facility in an aggregate outstanding principal amount not to exceed $5 million. The interest rate of the Loan Agreement is 0% and Advances are to be repaid on the maturity date, which is the thirty-nine-month anniversary of the Effective Date. GreenBlocks will exclusively use the Advances to buy miners that will be operated for the benefit of the Company at a facility in Iceland, with an overall capacity of 8.25 MW. To secure the prompt payment of Advances, the Company has been granted a continuing first priority lien and security interest in all of GreenBlocks’s rights, title and interest to the financed miners. The miners are the sole property of GreenBlocks, of which they are responsible for the purchase, installation, operation, and maintenance.
On May 9, 2023, the Company entered into a Computation Capacity Services Agreement (the “Services Agreement”) with GreenBlocks. Pursuant to the Agreement, GreenBlocks will provide computational capacity services and other necessary ancillary services, such as operation, management, and maintenance, at the facility in Iceland for a term of two years. GreenBlocks will own and operate the miners financed through the Loan Agreement for the purpose of providing computational capacity of up to 8.25 MW. The Company will pay power costs of $0.05 per kilowatt hour, a pod fee of $22,000 per pod per month, and a depreciation fee equal to 1/36 of the facility size per month. The performance fees under this agreement are 20% of the net profit. The Company submitted to Greenblocks a deposit in the amount of $1,052,100, which was exclusively for the purpose of paying the landlord of the facility for hosting space.
On June 1, 2023, the Company and GreenBlocks entered the Omnibus Amendment to Loan Documents and Other Agreements (“Omnibus Amendment”). This amendment revised both the Loan Agreement and the Services Agreement previously entered on May 9, 2023. While the core terms remained consistent, notable modifications pertained to the facility size and contracted capacity. Specifically, the facility size was increased from $5 million to $6.7 million. Moreover, GreenBlocks agreed to expand the computation capacity to approximately 10.7 MW. Advances of $6.4 million have been financed by the Company to GreenBlocks.
In May 2025, we amended the Services Agreement with Greenblocks, originally executed in May 2023 and previously amended in June 2023. Pursuant to the terms of the amended agreement, Greenblocks shall provide services to support 8.9 MW of power capacity from March 1, 2025 through April 30, 2025 and 5 MW of computational capacity starting May 1, 2025 through December 31, 2025. The Company will pay power costs of $0.067 per kilowatt hour and a pod fee of $10,000 per pod per month, subject to pro rata adjustment if usage falls below 2 MW. All other provisions of the original agreement and previous appendices remain in effect. The amended terms may be modified by mutual agreement, and either party may terminate with one month’s notice. Our partnership with GreenBlocks concluded in February 2026, and the Company is currently evaluating alternative hosting arrangements for the miners previously deployed at the GreenBlocks facility. As of the date of this report, these miners are in storage.
In October 2023, we entered into a strategic co-location agreement with Soluna Computing, Inc. for a term of one year automatically renewing on a month-to-month basis unless terminated by either party. Pursuant to the terms of the agreement, Soluna provided certain required mining colocation services at their hosting facility in Murray, Kentucky to the Company for the purpose of the operation and storage of up to 4.4 MW bitcoin mining system to be delivered by Bit Digital. Soluna was also entitled to 42.5% of the net profit generated by the miners. This agreement expired at the end of October 2024.
In October 2024, we entered into a co-location agreement with Soluna SW, Inc. to continue our business relationship. Under this agreement, Soluna provides certain required mining colocation services to the Company at their hosting facility in Murray, Kentucky for the purpose of the operation and storage of bitcoin mining system to be delivered by the Company up to 6.6 MW (3.3 MW for terms of nine months and 3.3 MW for terms of one (1) year), automatically renewing on a month-to-month basis unless terminated by either party. Soluna shall also be entitled to 35% of the net profit generated by the miners.
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In December 2024, we entered into two additional co-location agreements with Soluna DVSL ComputerCo, LLC. pursuant to which Soluna agreed to provide the Company with up to 11 MW (5.5 MW and 5.5 MW, respectively) at their hosting facility in Silverton, Texas. Both agreements are for one (1) year automatically renewing on a month-to-month basis unless terminated by either party on at least 60 days prior written notice. Soluna shall also be entitled to 35% and 27.5%, respectively, of the net profit generated by the miners. These new agreements bring the Company’s total contracted hosting capacity with Soluna to approximately 17.6 MW. Our partnership with Soluna concluded in February 2026. The Company has since relocated approximately 2,451 miners to Merkle and is evaluating alternative deployment options for the remaining miners, which are currently in storage.
In November 2023, we entered into a hosting services agreement, which was amended on March 7, 2024, with Dory Creek, LLC, a subsidiary of Bitdeer Technologies Group (“Bitdeer”), for a term of one (1) year automatically renewing on an annual basis unless terminated by either party by giving a 30-day prior notice to the other Party in writing. Pursuant to the terms of the agreement, Bitdeer provides maintenance and operation services to Bit Digital to support 17.5 MW of capacity. Bitdeer shall also be entitled to 30% of the net profit generated by the miners. Bit Digital shall have the first right, but not obligation, to accept services for any extra capacity under the terms of this Agreement. Our partnership with Bitdeer concluded in June 2026. The Company has since relocated approximately 1,778 miners to Merkle and is evaluating alternative deployment options for the remaining miners, which are currently in storage.
In February 2025, we entered into two hosting services agreements with A.R.T. Digital Holdings Corp (“KaboomRacks”) for terms of nine (9) months and three years automatically renewing on an annual basis unless terminated by either party. Pursuant to the terms of the agreements, KaboomRacks provides maintenance and operation services to Bit Digital to support 6 MW and 13 MW of capacity. In accordance with the agreements, we paid a refundable advance of $1.3 million, which will be applied against monthly hosting charges over an 18-month period.
On July 1, 2025, we entered into the first amendment to the hosting service agreement for 13 MW of capacity. The amendment modified the existing agreement, identifying the two facilities that will provide maintenance and operations service to Bit Digital to support 5 MW and 8 MW of capacity. KaboomRacks shall also be entitled to respective 40%, 14.75% and 22.5% of the net profit generated by the miners. On November 12, 2025, we received communication regarding a change in the contracting entity under its existing hosting arrangements. Effective immediately, Digital Energy Partners LLC (“DEP”) replaced KaboomRacks as the sole contracting counterparty. Under the updated terms, KaboomRacks will return all deposits previously held by it, and we will remit a one-month deposit related to electricity costs to DEP. In connection with the transition, DEP assumed the remaining portion of the $1.3 million loan, with an outstanding balance of approximately $0.6 million as of June 30, 2026. As of June 30, 2026, DEP provided approximately 17.1 MW of capacity for our miners at their facility.
In May 2022, our hosting partner Blockfusion advised us that the substation at its Niagara Falls, New York facility was damaged by an explosion and fire, and power was cut off to approximately 2,515 of the Company’s bitcoin miners and approximately 710 ETH miners that had been operating at the site immediately prior to the incident. The explosion and fire are believed to have been caused by faulty equipment owned by the power utility. Blockfusion and the Company have entered into a common interest agreement to jointly pursue any claims evolving from the explosion and fire. Prior to the incident, our facility with Blockfusion in Niagara Falls, provided approximately 9.4 MW to power our miners. Power was restored to the facility in September 2022. However, we received a notice dated October 4, 2022 (the “Notice”), from the City of Niagara Falls, which ordered the cease and desist from any cryptocurrency mining or related operations at the facility until such time as Blockfusion complies with Section 1303.2.8 of the City of Niagara Falls Zoning Ordinance (the “Ordinance”), in addition to all other City ordinances and codes. Blockfusion has advised us that the Ordinance came into effect on October 1, 2022, following the expiration of a related moratorium on September 30, 2022. Blockfusion has further advised that it has submitted applications for new permits based on the Ordinance’s new standards and that the permits may take several months to process. Pursuant to the Mining Services Agreement between Bit Digital and Blockfusion dated August 25, 2021, Blockfusion represents, warrants and covenants that it “possesses, and will maintain, all licenses, registrations, authorizations and approvals required by any governmental agency, regulatory authority or other party necessary for it to operate its business and engage in the business relating to its provision of the Services.” On October 5, 2022, Bit Digital further advised Blockfusion that it expects it to comply with the directives of the Notice. Our service agreement with Blockfusion ended in September 2023. Legal proceedings involving Blockfusion are currently ongoing. See Note 22. Commitments and contingencies to our condensed consolidated financial statements for further information.
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On June 4, 2026, the Company entered into a hosting services agreement with Mendenhall Ops LLC (“Merkle”) for an initial term of one year, which automatically renews for successive one-year periods unless terminated by either party. Pursuant to the terms of the agreement, Merkle agreed to provide colocation, operation, maintenance, and related services at its facilities for the operation of 4,137 bitcoin miners representing approximately 12.55 MW of power capacity and an aggregate hash rate of approximately 0.62 EH/s. In exchange for these services, Merkle is entitled to receive reimbursement of certain operating costs and performance fees ranging from 25% to 40% of net digital assets generated, depending on the miner model. Upon the execution of this service agreement, we paid a power prepayment of $0.7 million.
Miner Fleet Update and Overview
As of December 31, 2025, we had 21,354 miners owned or operating for bitcoin mining with a total maximum hash rate of 2.8 EH/s.
As of June 30, 2026, we had 21,354 miners owned or operating for bitcoin mining with a total maximum hash rate of 2.8 EH/s.
Bitcoin Production
From the inception of our bitcoin mining business in February 2020 to June 30, 2026, we earned an aggregate of 7,631.2 bitcoins.
During the six months ended June 30, 2026, the Company received 80.4 bitcoins from mining services and recognized mining revenue of $6.1 million.
ETH Staking Business
In the fourth quarter of 2022, we formally commenced Ethereum staking operations. We delegate or stake our ETH holdings to an Ethereum validator node to help secure and strengthen the blockchain network. Stakers are compensated for this commitment in the form of a reward of the native network token.
Our native staking operations are enhanced by a partnership with Blockdaemon, the leading institutional-grade blockchain infrastructure company for node management and staking. In the fourth quarter of 2022, following a similar mechanism to native Ethereum staking, we also participated in liquid staking via Portara protocol (formerly known as Harbour), the liquid staking protocol developed by Blockdaemon and StakeWise and the first of its kind tailored to institutions. With the introduction of staked ETH withdrawals in April 2023, we have reassessed our Ethereum network staking approaches, weighing the advantages of traditional staking against liquid staking solutions. The withdrawal feature in native staking, coupled with yields that are on par with those of liquid staking, has encouraged us to expand our collaborations with other service providers in this domain. As a result, we terminated all liquid staking activities with StakeWise in the third quarter of 2023, reclaiming all staked Ethereum along with the accumulated rewards. In the fourth quarter of 2023, the Company terminated the native staking activities and reclaimed all staked Ethereum with Blockdaemon.
Our native staking operations with MarsProtocol Technologies Pte. Ltd. (“Marsprotocol”) commenced in the first quarter of 2023 and concluded in July 2023. After ceasing operations with Marsprotocol, we initiated our native staking with MarsLand Global Limited (“MarsLand”) in August 2023. Subsequently, we have ceased our native staking with MarsLand in the first quarter of 2024 and initiated our native staking with Figment Inc.
We started participating in liquid staking via Liquid Collective protocol on the Coinbase platform in the first quarter of 2023. Liquid staking allows participants to achieve greater capital efficiency by utilizing their staked ETH as collateral and trading their staked ETH tokens on the secondary market. In the first quarter of 2024, we have reclaimed all the liquid staked ETH from Liquid Collective protocol. In July 2025, we resumed liquid staking through the Liquid Collective protocol with 5,120 ETH. This approach provides flexibility to engage in both staking and restaking through a broader range of strategies and platforms. Subsequently, we ceased our liquid staking activities with Liquid Collective protocol in October 2025. In April 2026, the Company liquid staked 73,235 ETH and received 66,192 LsETH, a portion of which was subsequently pledged as collateral under certain borrowing arrangements during the period.
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Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025
The following table summarizes the results of our operations during the three months ended June 30, 2026 and 2025, respectively, and provides information regarding the dollar increase or (decrease) during the period. This information should be read together with our condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q.
| For the Three Months Ended June 30, | Variance in | |||||||||||
| 2026 | 2025 | Amount | ||||||||||
| Revenues | ||||||||||||
| Digital asset mining | $ | 2,371 | $ | 6,632 | $ | (4,261 | ) | |||||
| Cloud services | 23,806 | 16,595 | 7,211 | |||||||||
| Colocation services | 4,726 | 1,729 | 2,997 | |||||||||
| ETH staking | 903 | 365 | 538 | |||||||||
| Other | 307 | 338 | (31 | ) | ||||||||
| Total revenues | 32,113 | 25,659 | 6,454 | |||||||||
| Operating costs and expenses | ||||||||||||
| Cost of revenue (exclusive of depreciation shown below) | ||||||||||||
| Digital asset mining | (1,761 | ) | (6,076 | ) | 4,315 | |||||||
| Cloud services | (9,963 | ) | (6,391 | ) | (3,572 | ) | ||||||
| Colocation services | (1,746 | ) | (688 | ) | (1,058 | ) | ||||||
| ETH staking | (42 | ) | (30 | ) | (12 | ) | ||||||
| Depreciation and amortization expenses | (10,088 | ) | (8,224 | ) | (1,864 | ) | ||||||
| Impairment of capitalized software assets | (5,006 | ) | - | (5,006 | ) | |||||||
| General and administrative expenses | (22,568 | ) | (19,667 | ) | (2,901 | ) | ||||||
| (Losses) gains on digital assets | (28,841 | ) | 27,155 | (55,996 | ) | |||||||
| Gains on digital intangible assets | 11,324 | - | 11,324 | |||||||||
| Impairment on digital intangible assets | (46,035 | ) | - | (46,035 | ) | |||||||
| Total operating expenses | (114,726 | ) | (13,921 | ) | (100,805 | ) | ||||||
| (Loss) income from operations | (82,613 | ) | 11,738 | (94,351 | ) | |||||||
| Change in fair value of derivative liability | (13,967 | ) | - | (13,967 | ) | |||||||
| Interest expense | (8,062 | ) | - | (8,062 | ) | |||||||
| Other (expense) income, net | (8,484 | ) | 4,727 | (13,211 | ) | |||||||
| Total other (expense) income, net | (30,513 | ) | 4,727 | (35,240 | ) | |||||||
| (Loss) profit before income taxes | (113,126 | ) | 16,465 | (129,591 | ) | |||||||
| Income tax benefits (expenses) | 1,460 | (1,592 | ) | 3,052 | ||||||||
| Net (loss) income | $ | (111,666 | ) | $ | 14,873 | $ | (126,539 | ) | ||||
Revenue
We generate revenues from cloud services, colocation services, digital asset mining, and ETH staking businesses. Refer to Note 3. Revenue from Contracts with Customers for further information.
Revenue from cloud services
In the fourth quarter of 2023, we established our cloud-based HPC graphics processing unit services, which we term cloud services, a new business line to provide services to support generative AI workstreams. The Company commenced offering cloud services to customers in January 2024.
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Our revenue from cloud services increased by $7.2 million, or 43.5%, to $23.8 million for the three months ended June 30, 2026 from $16.6 million for the three months ended June 30, 2025. The increase was primarily due to an increase in deployed GPU servers to new and existing customers in the second quarter of 2026. The decrease in our monthly GPU service revenue from the termination of our agreement with our Initial Customer was substantially offset by $12.3 million of termination fee revenue recorded, and therefore was not a significant driver of the change in revenue.
Revenue from colocation services
In the fourth quarter of 2024, we acquired Enovum which holds our data center business that provides customers with physical space, power, and cooling within data center facilities.
Our revenue from colocation services was $4.7 million and $1.7 million for the three months ended June 30, 2026 and 2025, respectively. The increase was primarily due to the MTL-3 site becoming fully operational and generating revenues beginning November 2025.
Revenue from digital asset mining
We provide computing power to digital asset mining pools, and receive consideration in the form of digital assets, the value of which is determined using the market price of the related digital asset at the time of receipt. By providing computing power to successfully add a block to the blockchain, the Company is entitled to a fractional share of the digital assets award from the mining pool operator, which is based on the proportion of computing power the Company contributed to the mining pool to the total computing power contributed by all mining pool participants in solving the current algorithm.
For the three months ended June 30, 2026, we received 32.3 bitcoins from the Foundry mining pool. As of June 30, 2026, our active hash rate was at an aggregate of 0.4 EH/s for our bitcoin miners. For the three months ended June 30, 2026, we recognized revenue of $2.4 million from bitcoin mining services.
For the three months ended June 30, 2025, we received 68.2 bitcoins from the Foundry mining pool. As of June 30, 2025, our active hash rate was at an aggregate of 1.2 EH/s for our bitcoin miners. For the three months ended June 30, 2025, we recognized revenue of $6.6 million from bitcoin mining services.
Our revenues from digital asset mining services decreased by $4.2 million, or 64.2%, to $2.4 million for the three months ended June 30, 2026 from $6.6 million for the three months ended June 30, 2025. The decrease was primarily due to lower BTC generated from our mining business and lower average BTC price in the second quarter of 2026, compared to the same period in 2025.
Revenue from ETH staking
During the fourth quarter of 2022, we commenced ETH staking business, in both native staking and liquid staking.
For the ETH native staking business, we previously partnered with Blockdaemon, Marsprotocol and MarsLand. Currently, we stake ETH with Figment, using network-based smart contracts, on a node for the purpose of validating transactions and adding blocks to the network. Through these contracts, the Company stakes ETH on nodes for the purpose of validating transactions and adding blocks to the Ethereum blockchain network. The Company is able to withdraw staked ETH under contracted staking since April 12, 2023 when the previously announced Shanghai upgrade was completed. In exchange for staking the ETH and validating transactions on blockchain networks, the Company is entitled to block rewards and transaction fees for successfully validating or adding a block to the blockchain. These rewards are received by the Company directly from the Ethereum network and are calculated approximately based on the proportion of the Company’s stake to the total ETH staked by all validators.
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In the fourth quarter of 2023, the Company terminated the native staking activities and reclaimed all staked Ethereum with Blockdaemon. Our native staking operations with Marsprotocol commenced in the first quarter of 2023 and concluded in July 2023. After ceasing operations with Marsprotocol, we initiated our native staking operations with MarsLand in August 2023. In the first quarter of 2024, we concluded our operations with MarsLand and initiated our native staking operations with Figment. Since December 31, 2024, all of native staking operations are with Figment.
For the liquid staking business, the Company has deployed ETH into Portara protocol (formerly known as Harbour) supported by liquid staking solution provider under the consortium of Blockdaemon and Stakewise, and Liquid Collective protocol supported by Coinbase. By staking, we receive receipt tokens for the ETH staked which could be redeemed to ETH or can be traded or collateralized elsewhere, at any time. In addition, we receive rETH-h for rewards earned from Portara protocol. With the introduction of staked ETH withdrawals in April 2023, we have reassessed our Ethereum network staking approaches, weighing the advantages of traditional staking against liquid staking solutions. The withdrawal feature in native staking, coupled with yields that are on par with those of liquid staking, has encouraged us to expand our collaborations with other service providers in this domain. As a result, we terminated all liquid staking activities with StakeWise in the third quarter of 2023, reclaiming all staked Ethereum along with the accumulated rewards. In the first quarter of 2024, we ceased our liquid staking activities with Liquid Collective protocol and reclaimed all our staked Ethereum. In July 2025, we resumed liquid staking through the Liquid Collective protocol with 5,120 ETH. Subsequently, we ceased our liquid staking activities with Liquid Collective protocol in October 2025. In April 2026, the Company liquid staked 73,235 ETH and received 66,192 LsETH, a portion of which was subsequently pledged as collateral under certain borrowing arrangements during the period.
In the first quarter of 2024, the Company has restaked 3,008 ETH into EigenLayer, a protocol built on Ethereum that enables restaking of the already-staked ETH, through Figment. To mitigate potential risks, we restake our ETH without delegating to any operator and the Company received 33,568 EigenLayer in the fourth quarter of 2024 from this restaking activity. As of the date of this report, the reward earned in 2026 from this restaking activity is not significant.
For the three months ended June 30, 2026, the Company earned 440.1 ETH through native staking and recognized native staking revenue of $0.9 million.
For the three months ended June 30, 2025, the Company earned 166.8 ETH through native staking and recognized native staking revenues of $0.4 million.
Our revenues from ETH native staking increased by $0.5 million, or 147.4% to $0.9 million for the three months ended June 30, 2026 from $0.4 million for the three months ended June 30, 2025. The increase was primarily due to an increase of 273.3 ETH earned from staking services, partially offset by a decrease in the average price of ETH for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Cost of revenue
We incur cost of revenue from digital asset mining, cloud services, colocation services, and ETH staking businesses.
The Company’s cost of revenue consists primarily of direct production costs associated with its core operations, excluding depreciation and amortization, which are separately stated in the Company’s condensed consolidated statements of operations. Specifically, these costs consist of:
| i. | cloud services operations - electricity costs, data center lease expense, GPU servers lease expense, third-party customer support fees and other relevant costs |
| ii. | colocation services - electricity costs, lease costs, data center employees’ wage expenses, and other relevant costs |
| iii. | mining operations - electricity costs, profit-sharing fees and other relevant costs |
| iv. | ETH staking business - service fee and reward-sharing fees to the service providers. |
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Cost of revenue - cloud services
For the three months ended June 30, 2026 and 2025, the cost of revenue from cloud services was comprised of the following:
| For the Three Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Electricity costs | $ | 739 | $ | 602 | ||||
| Datacenter lease expenses | 1,578 | 1,366 | ||||||
| GPU servers lease expenses | 5,601 | 3,749 | ||||||
| Third-party customer support fees | 1,250 | - | ||||||
| Other costs | 795 | 674 | ||||||
| Total | $ | 9,963 | $ | 6,391 | ||||
Electricity costs. These expenses were incurred by the data centers for the HPC equipment and were closely correlated with the number of deployed GPU servers.
For the three months ended June 30, 2026, electricity costs increased by $0.1 million, or 22.8%, compared to the electricity costs incurred for the three months ended June 30, 2025. The increase primarily resulted from an increase in the number of GPU servers deployed.
Datacenter lease expenses. We entered into data center lease agreements for fixed monthly recurring costs.
For the three months ended June 30, 2026, data center lease expenses increased by $0.2 million, or 15.5%, compared to the three months ended June 30, 2025, primarily due to four new leases that commenced in the first quarter of 2026, as well as an additional lease entered into during the second quarter of 2026.
GPU servers lease expenses. We entered into a GPU servers lease agreement to support our cloud services. The lease payment depends on the usage of the GPU servers.
For the three months ended June 30, 2026, GPU server lease expenses increased by $1.9 million, or 49.4%, compared to the GPU server lease expenses incurred for the three months ended June 30, 2025. The increase primarily resulted from a one-time amount due upon finalizing a termination agreement with a GPU servers leasing partner, partially offset by a lower GPU server leasing rate on the newly onboarded customers.
Third-party customer support fees. We engaged a third party to provide customer support services.
For the three months ended June 30, 2026, third-party customer support fees were $1.3 million.
Cost of revenue - Colocation Services
In the fourth quarter of 2024, we acquired Enovum which provides colocation services. For the three months ended June 30, 2026 and 2025, the cost of revenue from colocation services was comprised of the following:
| For the Three Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Electricity costs | $ | 758 | $ | 270 | ||||
| Lease expenses | 70 | 156 | ||||||
| Wage expenses | 253 | 170 | ||||||
| Other costs | 665 | 92 | ||||||
| Total | $ | 1,746 | $ | 688 | ||||
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Electricity costs. These expenses were closely correlated with the number of deployed servers hosted by the data center.
For the three months ended June 30, 2026, electricity costs increased by $0.5 million, or 180.7%, compared to the electricity costs incurred for the three months ended June 30, 2025, Since March 31, 2025, the Company has expanded its data center footprint, including the MTL-3 facility. The increase in electricity costs is primarily attributable to the MTL-3 facility, which was operational during the period ended June 30, 2026 but not operational during the period ended June 30, 2025.
Lease expenses. These expenses were incurred by the data center for lease agreement for a fixed monthly recurring cost.
For the three months ended June 30, 2026, datacenter lease expenses decreased by $0.1 million, or 55.1%, compared to the datacenter lease expenses incurred for the three months ended June 30, 2025. The decrease primarily resulted from conclusion of the MTL-3 lease in the second quarter of 2026.
Wage expenses. These expenses represent the salaries and benefits of data center employees involved in the operation of our facilities.
For the three months ended June 30, 2026, wage expenses increased slightly compared to the three months ended June 30, 2025 due to additional employees hired following the IPO.
Cost of revenue - digital asset mining
For the three months ended June 30, 2026 and 2025, the cost of revenue from digital asset mining was comprised of the following:
| For the Three Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Electricity costs | $ | 1,140 | $ | 4,334 | ||||
| Profit-sharing fees | 422 | 1,052 | ||||||
| Other costs | 199 | 690 | ||||||
| Total | $ | 1,761 | $ | 6,076 | ||||
Electricity costs. These expenses were incurred by mining facilities for the miners in operation and were closely correlated with the number of deployed miners.
For the three months ended June 30, 2026, electricity costs decreased by $3.2 million, or 73.7%, compared to the electricity costs incurred for the three months ended June 30, 2025. The decrease primarily resulted from a decrease in the number of deployed miners.
Profit-sharing fees. We enter into hosting agreements with certain mining facilities, which included performance fees calculated as a fixed percentage of net profit generated by the miners. We refer to these fees as profit-sharing fees.
For the three months ended June 30, 2026, profit-sharing fees decreased by $0.6 million, or 59.9%, compared to profit-sharing fees incurred in the three months ended June 30, 2025. The decrease in profit-sharing fees was primarily due to lower bitcoin production and lower average BTC price in the second quarter of 2026, compared to the same period in 2025.
Cost of revenue - ETH staking
For the three months ended June 30, 2026, cost of revenue from ETH staking business increased by $12 thousand, or 40.0%, compared to the cost of revenue incurred for the three months ended June 30, 2025. The increase was primarily driven by an increased number of staked ETH from 21,568 ETH in the three months ended June 30, 2025 to 74,167 ETH in the three months ended June 30, 2026.
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Depreciation and amortization expenses
For the three months ended June 30, 2026 and 2025, depreciation and amortization expenses were $10.1 million and $8.2 million, respectively, based on an estimated useful life of property, plant, and equipment and intangible assets. The increase in depreciation and amortization expenses is attributable to additional assets placed in service since June 30, 2025, specifically cloud equipment, resulting in higher expense being recognized.
Impairment of capitalized software assets
For the three months ended June 30, 2026 and 2025, impairment of capitalized software assets were $5.0 million and $nil, respectively, the Company determined that it would discontinue further investment in, and use of, its internally-developed software platform. As a result of this decision, effective June 4, 2026, the Company recorded an impairment charge of the remaining book value of $5.0 million during the three months ended June 30, 2026.
General and administrative expenses
For the three months ended June 30, 2026, our general and administrative expenses, totaling $22.6 million, were primarily comprised of professional and consulting expenses of $5.6 million, share-based compensation expenses of $3.9 million, salary and bonus expenses of $6.1 million, marketing expenses of $1.4 million, travel expenses of $0.5 million, directors and officers insurance expenses of $0.4 million, other expenses of $4.5 million and commission expenses of $0.1 million.
For the three months ended June 30, 2025, our general and administrative expenses, totaling $19.7 million, were primarily comprised of professional and consulting expenses of $7.9 million, shared-based compensation expenses of $6.9 million, salary and bonus expenses of $1.8 million, marketing expenses of $0.6 million, travel expenses of $0.3 million, and directors and officers insurance expenses of $0.2 million.
(Losses) gains on digital assets
For the three months ended June 30, 2026, a loss of $28.8 million was recognized, primarily attributable to the decrease in the prices of bitcoin and ETH as of June 30, 2026.
For the three months ended June 30, 2025, a gain of $27.2 million was recognized, primarily attributable to the increase in the prices of bitcoin and ETH as of June 30, 2025.
Gains on digital intangible assets
For the three months ended June 30, 2026 and 2025, gains on digital intangible assets was $11.3 million and $nil, respectively, primarily due to the transfer of LsETH to lending counterparties under collateral arrangements, which resulted in the derecognition of the LsETH and recognition of digital asset collateral receivables. For further details, refer to Note 7. Digital Asset Collateral Receivable.
Impairment on digital intangible assets
For the three months ended June 30, 2026 and 2025, impairment on digital intangible assets was $46.0 million and $nil, respectively, on its LsETH holdings, primarily due to the carrying amount of LsETH exceeding its fair value.
Change in fair value of derivative liability
Change in fair value of derivative liability during the three months ended June 30, 2026 and 2025 were $14.0 million and $nil, respectively, related to the conversion feature of the 2030 Convertible Notes which was originally accounted for separately as a derivative liability.
Interest expense
For the three months ended June 30,2026 and 2025, interest expense was $8.1 million and $nil, respectively. The increase was primarily attributable to interest expense incurred on the Company’s 2030 Convertible Notes, 2031 Convertible Notes, collateralized borrowing, and credit facilities.
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Other (expense) income, net
For the three months ended June 30, 2026, our other expense, totaling $8.5 million, was primarily comprised of unrealized losses on digital assets held in the fund of $8.0 million, non-income foreign tax expense of $0.4 million, unrealized losses on foreign currency exchange of $0.6 million and partially offset by the interest income of $0.2 million and other miscellaneous income of $0.4 million.
For the three months ended June 30, 2025, our other income, totaling $4.7 million, was primarily comprised of unrealized gains on digital assets held in the fund of $3.9 million, unrealized losses on foreign currency exchange of $0.6 million, interest income of $0.2 million, other miscellaneous income of $0.2 million and partially offset by non-income municipal expense of $0.2 million and unrealized losses on equity investments of $0.1 million.
Income tax provisions
Provision for income taxes consists of federal, state and foreign income taxes. Our income tax provision for the six months ended June 30, 2026 is primarily attributable to the mix of earnings and losses in countries with differing statutory tax rates, and the valuation allowance applied to the Company’s deferred tax assets in Canada, Japan, France and Hong Kong. We continue to maintain a valuation allowance against the deferred tax assets in Canada, Japan, France and Hong Kong as the Company does not expect those deferred tax assets are “more likely than not” to be realized in the near future, particularly due to the uncertainty on macroeconomy, politics and profitability of the business.
Our future effective income tax rate depends on various factors, such as tax legislation, the geographic composition of our pre-tax income, the amount of our pre-tax income as business activities fluctuate, non-deductible expenses, non-taxable capital gain in certain jurisdiction, change of valuation allowance and the effectiveness of our tax planning strategies. The Organisation for Economic Co-operation and Development (“OECD”) has introduced a global minimum tax framework (“Pillar Two”) that generally applies to multinational enterprise groups with consolidated annual revenues of €750 million or more and is intended to ensure a minimum effective tax rate of 15% in each jurisdiction in which such groups operate. Certain jurisdictions have enacted, or are considering enacting, legislation implementing these rules. Based on the Company’s current consolidated revenue, for the six months ended June 30, 2026, the Company is not within the scope of the Pillar Two rules. However, the Company continues to monitor developments related to the implementation of these rules, and future growth or changes in the Company’s operations could result in the Company becoming subject to Pillar Two in future periods.
Our income tax provision was $(1.5) million and $1.6 million for the three months ended June 30, 2026 and 2025, respectively. The income tax provision was lower during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 primarily due to higher pretax loss, geographic mix earning impacts and Net CFC Tested Income or NCTI (a.k.a GILTI) impact. Also, in both periods presented, we were not able to benefit from current year foreign loss before taxes due to foreign valuation allowance from certain foreign operations.
Net (loss) income and (loss) earnings per share
For the three months ended June 30, 2026, our net loss was $111.7 million, representing a change of $126.5 million from a net income of $14.9 million for the three months ended June 30, 2025.
Basic and diluted loss per share was $0.31 and $0.31 for the three months ended June 30, 2026, respectively. Basic and diluted earnings per share was $0.07 and $0.07 for the three months ended June 30, 2025, respectively.
Basic and diluted weighted average number of shares was 350,018,575 and 350,018,575 for the three months ended June 30, 2026, respectively. Basic and diluted weighted average number of shares was 206,889,826 and 208,817,806 for the three months ended June 30, 2025, respectively.
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The following table summarizes the results of our operations during the six months ended June 30, 2026 and 2025, respectively, and provides information regarding the dollar increase or (decrease) during the period.
| For the Six Months Ended June 30, | Variance in | |||||||||||
| 2026 | 2025 | Amount | ||||||||||
| Revenues | ||||||||||||
| Digital asset mining | $ | 6,076 | $ | 14,409 | $ | (8,333 | ) | |||||
| Cloud services | 40,573 | 31,438 | 9,135 | |||||||||
| Colocation services | 9,500 | 3,367 | 6,133 | |||||||||
| ETH staking | 3,200 | 926 | 2,274 | |||||||||
| Other | 690 | 618 | 72 | |||||||||
| Total revenues | 60,039 | 50,758 | 9,281 | |||||||||
| Operating costs and expenses | ||||||||||||
| Cost of revenue (exclusive of depreciation shown below) | ||||||||||||
| Digital asset mining | (5,012 | ) | (12,199 | ) | 7,187 | |||||||
| Cloud services | (16,742 | ) | (12,479 | ) | (4,263 | ) | ||||||
| Colocation services | (3,699 | ) | (1,200 | ) | (2,499 | ) | ||||||
| ETH staking | (163 | ) | (62 | ) | (101 | ) | ||||||
| Depreciation and amortization expenses | (20,124 | ) | (15,466 | ) | (4,658 | ) | ||||||
| Impairment of capitalized software assets | (5,006 | ) | - | (5,006 | ) | |||||||
| General and administrative expenses | (50,195 | ) | (27,937 | ) | (22,258 | ) | ||||||
| Losses on digital assets | (149,911 | ) | (22,051 | ) | (127,860 | ) | ||||||
| Gains on digital intangible assets | 11,324 | - | 11,324 | |||||||||
| Impairment on digital intangible assets | (46,035 | ) | - | (46,035 | ) | |||||||
| Total operating expenses | (285,563 | ) | (91,394 | ) | (194,169 | ) | ||||||
| Loss from operations | (225,524 | ) | (40,636 | ) | (184,888 | ) | ||||||
| Net gains (loss) from disposal of property and equipment | 1,822 | (334 | ) | 2,156 | ||||||||
| Change in fair value of derivative liability | (4,715 | ) | - | (4,715 | ) | |||||||
| Interest expense | (13,147 | ) | - | (13,147 | ) | |||||||
| Other (expense) income, net | (21,417 | ) | 395 | (21,812 | ) | |||||||
| Total other (expense) income, net | (37,457 | ) | 61 | (37,518 | ) | |||||||
| Loss before income taxes | (262,981 | ) | (40,575 | ) | (222,406 | ) | ||||||
| Income tax benefits (expenses) | 1,038 | (2,263 | ) | 3,301 | ||||||||
| Net loss | $ | (261,943 | ) | $ | (42,838 | ) | $ | (219,105 | ) | |||
Revenue
We generate revenues from cloud services, colocation services, digital asset mining, and ETH staking businesses. Refer to Note 3. Revenue from Contracts with Customers for further information.
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Revenue from cloud services
In the fourth quarter of 2023, we established our cloud-based HPC graphics processing unit services, which we term cloud services, a new business line to provide services to support generative AI workstreams. The Company commenced offering cloud services to customers in January 2024.
Our revenue from cloud services increased by $9.1 million, or 29.1%, to $40.6 million for the six months ended June 30, 2026 from $31.4 million for the six months ended June 30, 2025. The increase was primarily due to an increase in deployed GPU servers to existing customers in the first and second quarter of 2026. The decrease in our monthly GPU service revenue from the termination of our agreement with our Initial Customer was substantially offset by $12.3 million of termination fee revenue recorded, and therefore was not a significant driver of the change in revenue.
Revenue from colocation services
In the fourth quarter of 2024, we acquired Enovum which provides customers with physical space, power, and cooling within data center facilities.
Our revenue from colocation services was $9.5 million and $3.4 million for the six months ended June 30, 2026 and 2025, respectively. The increase was primarily due to the MTL-3 site becoming fully operational and generating revenues beginning November 2025.
Revenue from digital asset mining
We provide computing power to digital asset mining pools, and receive consideration in the form of digital assets, the value of which is determined using the market price of the related digital asset at the time of receipt. By providing computing power to successfully add a block to the blockchain, the Company is entitled to a fractional share of the digital assets award from the mining pool operator, which is based on the proportion of computing power the Company contributed to the mining pool to the total computing power contributed by all mining pool participants in solving the current algorithm.
For the six months ended June 30, 2026, we received 80.4 bitcoins from the Foundry mining pool. As of June 30, 2026, our active hash rate was at an aggregate of 0.4 EH/s for our bitcoin miners. For the six months ended June 30, 2026, we recognized revenue of $6.1 million from bitcoin mining services.
For the six months ended June 30, 2025, we received 151.5 bitcoins from the Foundry mining pool. As of June 30, 2025, our active hash rate was at an aggregate of 1.2 EH/s for our bitcoin miners. For the six months ended June 30, 2025, we recognized revenue of $14.4 million from bitcoin mining services.
Our revenues from digital asset mining services decreased by $8.3 million, or 57.8%, to $6.1 million for the six months ended June 30, 2026 from $14.4 million for the six months ended June 30, 2025. The decrease was primarily due to lower BTC generated from our mining business and lower average BTC price in the second quarter of 2026, compared to the same period in 2025.
Revenue from ETH staking
During the fourth quarter of 2022, we commenced ETH staking business, in both native staking and liquid staking.
For the ETH native staking business, we previously partnered with Blockdaemon, Marsprotocol and MarsLand. Currently, we stake ETH with Figment, using network-based smart contracts, on a node for the purpose of validating transactions and adding blocks to the network. Through these contracts, the Company stakes ETH on nodes for the purpose of validating transactions and adding blocks to the Ethereum blockchain network. The Company is able to withdraw staked ETH under contracted staking since April 12, 2023 when the previously announced Shanghai upgrade was completed. In exchange for staking the ETH and validating transactions on blockchain networks, the Company is entitled to block rewards and transaction fees for successfully validating or adding a block to the blockchain. These rewards are received by the Company directly from the Ethereum network and are calculated approximately based on the proportion of the Company’s stake to the total ETH staked by all validators.
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In the fourth quarter of 2023, the Company terminated the native staking activities and reclaimed all staked Ethereum with Blockdaemon. Our native staking operations with Marsprotocol commenced in the first quarter of 2023 and concluded in July 2023. After ceasing operations with Marsprotocol, we initiated our native staking operations with MarsLand in August 2023. In the first quarter of 2024, we concluded our operations with MarsLand and initiated our native staking operations with Figment. Since December 31, 2024, all of native staking operations are with Figment.
For the liquid staking business, the Company has deployed ETH into Portara protocol (formerly known as Harbour) supported by liquid staking solution provider under the consortium of Blockdaemon and Stakewise, and Liquid Collective protocol supported by Coinbase. By staking, we receive receipt tokens for the ETH staked which could be redeemed to ETH or can be traded or collateralized elsewhere, at any time. In addition, we receive rETH-h for rewards earned from Portara protocol. With the introduction of staked ETH withdrawals in April 2023, we have reassessed our Ethereum network staking approaches, weighing the advantages of traditional staking against liquid staking solutions. The withdrawal feature in native staking, coupled with yields that are on par with those of liquid staking, has encouraged us to expand our collaborations with other service providers in this domain. As a result, we terminated all liquid staking activities with StakeWise in the third quarter of 2023, reclaiming all staked Ethereum along with the accumulated rewards. In the first quarter of 2024, we ceased our liquid staking activities with Liquid Collective protocol and reclaimed all our staked Ethereum. In July 2025, we resumed liquid staking through the Liquid Collective protocol with 5,120 ETH. Subsequently, we ceased our liquid staking activities with Liquid Collective protocol in October 2025. In April 2026, the Company liquid staked 73,235 ETH and received 66,192 LsETH, a portion of which was subsequently pledged as collateral under certain borrowing arrangements during the period.
In the first quarter of 2024, the Company has restaked 3,008 ETH into EigenLayer, a protocol built on Ethereum that enables restaking of the already-staked ETH, through Figment. To mitigate potential risks, we restake our ETH without delegating to any operator and the Company received 33,568 EigenLayer in the fourth quarter of 2024 from this restaking activity. As of the date of this report, the reward earned in 2026 from this restaking activity is not significant.
For the six months ended June 30, 2026, we earned 1,389.2 ETH in native staking and recognized native staking revenues of $3.2 million.
For the six months ended June 30, 2025, we earned 377.8 ETH in native staking and recognized native staking revenues of $0.9 million.
Our revenues from ETH native staking increased by $2.3 million, or 245.6%, to $3.2 million for the six months ended June 30, 2026 from $0.9 million for the six months ended June 30, 2025. The increase was primarily due to an increase of 1,011.4 ETH earned from staking services, partially offset by a decrease in the average price of ETH for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Cost of revenue
We incur cost of revenue from digital asset mining, cloud services, colocation services, and ETH staking businesses.
The Company’s cost of revenue consists primarily of direct production costs associated with its core operations, excluding depreciation and amortization, which are separately stated in the Company’s condensed consolidated statements of operations. Specifically, these costs consist of:
| i. | cloud services operations - electricity costs, data center lease expense, GPU servers lease expense, third-party customer support fees and other relevant costs |
| ii. | colocation services - electricity costs, lease costs, data center employees’ wage expenses, and other relevant costs |
| iii. | mining operations - electricity costs, profit-sharing fees and other relevant costs |
| iv. | ETH staking business - service fee and reward-sharing fees to the service providers. |
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Cost of revenue - cloud services
For the six months ended June 30, 2026 and 2025, the cost of revenue from cloud services was comprised of the following:
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Electricity costs | $ | 1,644 | $ | 1,172 | ||||
| Datacenter lease expenses | 2,974 | 2,640 | ||||||
| GPU servers lease expenses | 9,316 | 7,497 | ||||||
| Third-party customer support fees | 1,398 | - | ||||||
| Other costs | 1,410 | 1,170 | ||||||
| Total | $ | 16,742 | $ | 12,479 | ||||
Electricity costs. These expenses were incurred by the data centers for the HPC equipment and were closely correlated with the number of deployed GPU servers.
For the six months ended June 30, 2026, electricity costs increased by $0.5 million, or 40.3%, compared to the electricity costs incurred for the six months ended June 30, 2025. The increase primarily resulted from an increase in the number of deployed GPU servers.
Datacenter lease expenses. We entered into datacenter lease agreements for fixed monthly recurring costs.
For the six months ended June 30, 2026, datacenter lease expenses increased by $0.3 million, or 12.7%, compared to the six months ended June 30, 2025, primarily due to four new leases that commenced in the first quarter of 2026, as well as an additional lease entered into during the second quarter of 2026.
GPU servers lease expenses. We entered into a GPU servers lease agreement to support our cloud services. The lease payment depends on the usage of the GPU servers.
For the six months ended June 30, 2026, GPU servers lease expenses increased by $1.8 million, or 24.3%, compared to the GPU server lease expense incurred for the six months ended June 30, 2025. The increase primarily resulted from a one-time amount due upon finalizing a termination agreement with a customer, partially offset by a lower GPU server leasing rate on the newly onboarded customers.
Third-party customer support fees. We engaged a third party to provide customer support services.
For the six months ended June 30, 2026, third-party customer support fees were $1.4 million.
Cost of revenue - Colocation Services
In the fourth quarter of 2024, we acquired Enovum which provides colocation services. For the six months ended June 30, 2026 and 2025, the cost of revenue from colocation services was comprised of the following:
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Electricity costs | $ | 1,589 | $ | 493 | ||||
| Lease expenses | 537 | 307 | ||||||
| Wage expenses | 458 | 170 | ||||||
| Other costs | 1,115 | 230 | ||||||
| Total | $ | 3,699 | $ | 1,200 | ||||
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Electricity costs. These expenses were closely correlated with the number of deployed servers hosted by the data center.
For the six months ended June 30, 2026, electricity costs increased by $1.1 million, or 222.3%, compared to the electricity costs incurred for the six months ended June 30, 2025. Since March 31, 2025, the Company has expanded its data center footprint, including the MTL-3 facility. The increase in electricity costs is primarily attributable to the MTL-3 facility, which was operational during the period ended June 30, 2026 but not operational during the period ended June 30, 2025.
Lease expenses. These expenses were incurred by the data center for lease agreement for a fixed monthly recurring cost.
For the six months ended June 30, 2026, data center lease expenses increased by $0.2 million, or 74.9%, compared to the data center lease expenses incurred for the six months ended June 30, 2025. The increase primarily resulted from the new MTL-3 lease entered in the second quarter of 2025.
Wage expenses. These expenses represent the salaries and benefits of data center employees involved in the operation of our facilities.
For the six months ended June 30, 2026, wage expenses increased by $0.3 million, or 169.4%, compared to the six months ended June 30, 2025. The increase was primarily attributable to the operations of MTL-3 site.
Cost of revenue - digital asset mining
For the six months ended June 30, 2026 and 2025, the cost of revenue from digital asset mining was comprised of the following:
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Electricity costs | $ | 3,345 | $ | 8,567 | ||||
| Profit-sharing fees | 1,039 | 2,242 | ||||||
| Other costs | 628 | 1,390 | ||||||
| Total | $ | 5,012 | $ | 12,199 | ||||
Electricity costs. These expenses were incurred by mining facilities for the miners in operation and were closely correlated with the number of deployed miners.
For the six months ended June 30, 2026, electricity costs decreased by $5.2 million, or 61.0%, compared to the electricity costs incurred for the six months ended June 30, 2025. The decrease primarily resulted from a decrease in the number of deployed miners.
Profit-sharing fees. We enter into hosting agreements with certain mining facilities, which included performance fees calculated as a fixed percentage of net profit generated by the miners. We refer to these fees as profit-sharing fees.
For the six months ended June 30, 2026, profit-sharing fees decreased by $1.2 million, or 53.7%, compared to profit-sharing fees incurred in the six months ended June 30, 2025. The decrease in profit-sharing fees was primarily due to a lower bitcoin production and lower average BTC price in the second quarter of 2026, compared to the same period.
Cost of revenue - ETH staking business
For the six months ended June 30, 2026, cost of revenue from ETH staking business increased by $0.1 million, or 162.9%, compared to the cost of revenue incurred for the six months ended June 30, 2025. The increase was primarily driven by an increased number of staked ETH from 21,568 ETH in the six months ended June 30, 2025 to 74,167 ETH in the six months ended June 30, 2026.
Depreciation and amortization expenses
For the six months ended June 30, 2026 and 2025, depreciation and amortization expenses were $20.1 million and $15.5 million, respectively, based on an estimated useful life of property, plant, and equipment and intangible assets. The increase in depreciation and amortization expenses is attributable to additional assets placed in service, resulting in higher expense being recognized.
Impairment of capitalized software assets
For the six months ended June 30, 2026 and 2025, impairment of capitalized software assets were $5.0 million and $nil, respectively. In the second quarter of 2026, the Company determined that it would discontinue further investment in, and use of, its internally-developed software platform. As a result of this decision, effective June 4, 2026, the Company recorded an impairment charge of the remaining book value of $5.0 million during the six months ended June 30, 2026.
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General and administrative expenses
For the six months ended June 30, 2026, our general and administrative expenses, totaling $50.2 million, were primarily comprised of professional and consulting expenses of $11.6 million, shared-based compensation expenses of $16.9 million, salary and bonus expenses of $8.4 million, marketing expenses of $2.7 million, travel expenses of $0.7 million, directors and officers insurance expenses of $0.8 million, other expenses of $8.4 million and transportation expenses of $0.6 million.
For the six months ended June 30, 2025, our general and administrative expenses, totaling $27.9 million, were primarily comprised of professional and consulting expenses of $12.2 million, shared-based compensation expenses of $7.1 million, salary and bonus expenses of $3.2 million, marketing expenses of $1.0 million, travel expenses of $0.5 million, and directors and officers insurance expenses of $0.4 million.
Losses on digital assets
For the six months ended June 30, 2026, a loss of $149.9 million was recognized, primarily attributable to the decreases in the prices of bitcoin and ETH as of June 30, 2026.
For the six months ended June 30, 2025, a loss of $22.1 million was recognized, primarily attributable to the decreases in the price of ETH as of June 30, 2025, partially offset by an increase in the price of bitcoin as of June 30, 2025.
Gains on digital intangible assets
For the six months ended June 30, 2026 and 2025, gains on digital intangible assets was $11.3 million and $nil, respectively, primarily due to the transfer of LsETH to lending counterparties under collateral arrangements, which resulted in the derecognition of the LsETH and recognition of digital asset collateral receivables. For further details, refer to Note 7. Digital Asset Collateral Receivable.
Impairment on digital intangible assets
For the six months ended June 30, 2026 and 2025, impairment on digital intangible assets was $46.0 million and $nil, respectively, on its LsETH holdings, primarily due to the carrying amount of LsETH exceeded its fair value.
Net gain (loss) from disposal of property, plant and equipment
For the six months ended June 30, 2026, WhiteFiber sold 126 H200s GPU for a total consideration of approximately $26.1 million. On the date of the transaction, the carrying amount of these GPUs was $24.3 million. The Company recognized a gain of $1.8 million from the sale which was recorded within Net gain (loss) from disposal of property, plant and equipment. As of the date of this report, WhiteFiber has collected the full cash consideration of $26.1 million.
For the six months ended June 30, 2025, the Company sold 4,828 miners for a total consideration of $0.9 million. On the dates of the transaction, the total original cost and accumulated depreciation of these miners were $5.4 million and $4.1 million, respectively. The Company recognized a loss of $0.3 million from the sale of miners which was recorded within Net gain (loss) from disposal of property, plant and equipment.
Change in fair value of derivative liability
Change in fair value of derivative liability during the six months ended June 30, 2026 and 2025 were $4.7 million and $nil, respectively, related to the conversion feature of the 2030 Convertible Notes which was originally accounted for separately as a derivative liability.
Interest expense
For the six months ended June 30,2026 and 2025, interest expense was $13.1 million and $nil, respectively. The increase was primarily attributable to interest expense incurred on the Company’s 2030 Convertible Notes, 2031 Convertible Notes, collateralized borrowing, and credit facilities.
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Other (expense) income, net
For the six months ended June 30, 2026, our other expense, totaling $21.4 million, was primarily comprised of unrealized losses on digital assets held in the fund of $21.0 million, non-income foreign tax expense of $0.8 million, unrealized losses on foreign currency exchange of $0.9 million and partially offset by the interest income of $1.0 million and other miscellaneous income of $0.5 million.
For the six months ended June 30, 2025, our other income, totaling $0.4 million, was primarily comprised of unrealized gains on foreign currency exchange of $0.8 million, interest income of $0.5 million, other miscellaneous income of $0.3 million, and partially offset by the unrealized losses on digital assets held in the fund of $0.6 million, unrealized losses on equity investment of $0.3 million and non-income municipal expense of $0.4 million.
Income tax provisions
Provision for income taxes consists of federal, state and foreign income taxes. Our income tax provision for the six months ended June 30, 2026 is primarily attributable to the mix of earnings and losses in countries with differing statutory tax rates, and the valuation allowance applied to the Company’s deferred tax assets in the United States, Singapore and Hong Kong. We continue to maintain a valuation allowance against the deferred tax assets in United States, Singapore and Hong Kong as the Company does not expect those deferred tax assets are “more likely than not” to be realized in the near future, particularly due to the uncertainty on macroeconomy, politics and profitability of the business.
Our future effective income tax rate depends on various factors, such as tax legislation, the geographic composition of our pre-tax income, the amount of our pre-tax income as business activities fluctuate, non-deductible expenses, non-taxable capital gain in certain jurisdiction, change of valuation allowance and the effectiveness of our tax planning strategies. The Organization for Economic Co-operation and Development (“OECD”) has introduced a global minimum tax framework (“Pillar Two”) that generally applies to multinational enterprise groups with consolidated annual revenues of €750 million or more and is intended to ensure a minimum effective tax rate of 15% in each jurisdiction in which such groups operate. Certain jurisdictions have enacted, or are considering enacting, legislation implementing these rules. Based on the Company’s current consolidated revenue, for the three months ended June 30, 2026, the Company is not within the scope of the Pillar Two rules. However, the Company continues to monitor developments related to the implementation of these rules, and future growth or changes in the Company’s operations could result in the Company becoming subject to Pillar Two in future periods.
Our income tax provision was $(1.0) million and $2.3 million for the six months ended June 30, 2026 and 2025, respectively. The income tax provision was lower during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to higher pretax loss, geographic mix earning impacts and Net CFC Tested Income or NCTI (a.k.a GILTI) impact. Also, in both periods presented, we were not able to benefit from current year foreign loss before taxes due to foreign valuation allowance from certain foreign operations.
Net loss and loss per share
For the six months ended June 30, 2026, our net loss was $261.9 million, representing a change of $219.1 million from a net loss of $42.8 million for the six months ended June 30, 2025.
Basic and diluted loss per share was $0.75 and $0.75 for the six months ended June 30, 2026, respectively. Basic and diluted loss per share was $0.22 and $0.22 for the six months ended June 30, 2025, respectively.
Basic and diluted weighted average number of shares was 337,998,729 and 337,998,729 for the six months ended June 30, 2026, respectively. Basic and diluted weighted average number of shares was 194,355,223 and 194,355,223 for the six months ended June 30, 2025, respectively.
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Discussion of Certain Balance Sheet Items
The following table sets forth selected information from our condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025. This information should be read together with our condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q.
| June 30, | December 31, | Variance in | ||||||||||
| 2026 | 2025 | Amount | ||||||||||
| ASSETS | ||||||||||||
| Current Assets | ||||||||||||
| Cash and cash equivalents | $ | 83,555 | $ | 118,356 | $ | (34,801 | ) | |||||
| Restricted cash | 4,313 | 3,857 | 456 | |||||||||
| Accounts receivable, net | 23,243 | 23,922 | (679 | ) | ||||||||
| USDC | 408 | 484 | (76 | ) | ||||||||
| Net investment in lease – current, net | 2,573 | 4,261 | (1,688 | ) | ||||||||
| Loans receivable | 400 | 400 | - | |||||||||
| Digital asset collateral receivable | 105,616 | - | 105,616 | |||||||||
| Other current assets, net | 25,343 | 26,735 | (1,392 | ) | ||||||||
| Total Current Assets | 245,451 | 178,015 | 67,436 | |||||||||
| Non-Current Assets | ||||||||||||
| Deposits for property, plant, and equipment | 33,500 | 52,838 | (19,338 | ) | ||||||||
| Property, plant, and equipment, net | 667,574 | 360,243 | 307,331 | |||||||||
| Goodwill | 19,402 | 20,146 | (744 | ) | ||||||||
| Digital assets | 120,149 | 415,734 | (295,585 | ) | ||||||||
| Digital intangible assets | 27,600 | - | 27,600 | |||||||||
| Intangible assets, net | 12,001 | 12,821 | (820 | ) | ||||||||
| Operating lease right of use assets, net | 16,925 | 12,053 | 4,872 | |||||||||
| Finance lease right of use assets, net | - | 12,602 | (12,602 | ) | ||||||||
| Net investment in lease - non-current, net | 8,375 | 9,687 | (1,312 | ) | ||||||||
| Investment securities | 47,890 | 69,121 | (21,231 | ) | ||||||||
| Deferred tax asset | 7,564 | 2,578 | 4,986 | |||||||||
| Other non-current assets, net | 29,463 | 28,580 | 883 | |||||||||
| Total Non-Current Assets | 990,443 | 996,403 | (5,960 | ) | ||||||||
| Total Assets | $ | 1,235,894 | $ | 1,174,418 | 61,476 | |||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| Current Liabilities | ||||||||||||
| Accounts payable | $ | 14,319 | $ | 8,875 | 5,444 | |||||||
| Current portion of deferred revenue | 17,909 | 7,997 | 9,912 | |||||||||
| Current portion of operating lease liabilities | 5,455 | 5,549 | (94 | ) | ||||||||
| Current portion of finance lease liabilities | - | 12,911 | (12,911 | ) | ||||||||
| Short-term debt and current portion of long-term debt, net | 78,436 | - | 78,436 | |||||||||
| Income tax payable | 367 | 1,547 | (1,180 | ) | ||||||||
| Other payables and accrued liabilities | 46,019 | 56,067 | (10,048 | ) | ||||||||
| Total Current Liabilities | 162,505 | 92,946 | 69,559 | |||||||||
| Non-Current Liabilities | ||||||||||||
| Non-current portion of deferred revenue | 125,201 | 71,554 | 53,647 | |||||||||
| Non-current portion of operating lease liabilities | 10,232 | 5,415 | 4,817 | |||||||||
| Long-term debt, net | 25,464 | - | 25,464 | |||||||||
| Convertible note payable, net | 336,155 | 110,291 | 225,864 | |||||||||
| Derivative liability | 23,975 | 19,260 | 4,715 | |||||||||
| Deferred tax liabilities | 13,951 | 9,691 | 4,260 | |||||||||
| Other long-term liabilities | 6,279 | - | 6,279 | |||||||||
| Total Non-Current Liabilities | 541,257 | 216,211 | 325,046 | |||||||||
| Total Liabilities | $ | 703,762 | $ | 309,157 | 394,605 | |||||||
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Cash and cash equivalents
Cash and cash equivalents primarily consist of funds deposited with banks, which are highly liquid and are unrestricted to withdrawal or use. The total balance of cash and cash equivalents were $83.6 million and $118.4 million as of June 30, 2026 and December 31, 2025, respectively. The decrease in the balance of cash and cash equivalents was a result of net cash of $312.5 million used in investing activities, partially offset by net cash of $46.8 million provided by operating activities and net cash of $230.7 million provided by financing activities.
Restricted cash
Restricted cash represents cash balances that support outstanding letters of credit to third parties related to security deposits and are restricted from withdrawal. As of June 30, 2026 and December 31, 2025, the fixed maximum amount guaranteed under the letter of credit was $4.3 million and $3.9 million, respectively.
Accounts receivable, net
Accounts receivable, net consists of amounts due from our customers. The total balance of accounts receivable, net was $23.2 million and $23.9 million as of June 30, 2026 and December 31, 2025, respectively. The decrease in the balance of accounts receivable is attributable primarily to the timing of collections and write-offs relating to one of our discontinued customers.
USDC
USD Coin (“USDC”) is accounted for as a financial instrument; one USDC can be redeemed for one U.S. dollar on demand from the issuer. The balance of USDC was $0.4 million and $0.5 million as of June 30, 2026 and December 31, 2025, respectively. The decrease in the balance of USDC was primarily due to the receipt of USDC from sales of other digital assets of $0.9 million, receipt of USDC from cash of $0.4 million and partially offset by the payment of USDC for other expenses of $1.1 million and refund of advance payment of $0.2 million.
Loans receivable
Loans receivable consist of a loan issued by the Company to a third party. The total balance of loans receivable was $0.4 million and $0.4 million as of June 30, 2026 and December 31, 2025, respectively.
Net investment in lease, net
Net investment in lease, net represents the present value of the lease payments not yet received from lessees. The current and non-current balance of net investment in lease was $2.6 million and $8.4 million, respectively as of June 30, 2026 due to sales-type lease agreements as a lessor for its cloud service equipment. The current and non-current balance of net investment in lease was $4.3 million and $9.7 million, respectively as of December 31, 2025. The decrease in the balance of net investment in lease was a result of the termination of a sales-type leases totaling $1.4 million and $2.3 million of lease payments collected from equipment leasing customers, partially offset by $0.7 million in interest income earned.
Other current assets, net
Other current assets, net were $25.3 million and $26.7 million as of June 30, 2026 and December 31, 2025, respectively. The decrease in the balance of other current assets was mainly attributable to a decrease in prepaid consulting service of $1.1 million, and deposits made to our service provider of $1.4 million, partially offset by an increase in receivable from third parties of $0.8 million and funds held in escrow of $0.4 million and deferred contract costs of $0.2 million.
Digital assets
Digital assets primarily consist of BTC and ETH. For the six months ended June 30, 2026, we earned digital assets from mining services and ETH staking services. We exchanged BTC into ETH or USDC, exchanged BTC and ETH into cash, or used BTC and ETH to pay certain operating costs and other expenses. Digital assets held are accounted for as intangible assets measured at fair value, with changes in fair value recorded in net income in each reporting period.
As compared with the balance as of December 31, 2025, the balance of digital assets as of June 30, 2026 decreased by $295.6 million, which was primarily attributable to the generation of bitcoins of $6.1 million from our mining business, generation of ETH of $3.2 million from our native staking business, exchange of $20.0 million cash into ETH, partially offset by the change in fair value of $149.9 million, exchange of bitcoins of $3.4 million into cash, exchange of BTC into USDC of $0.9 million, exchange of ETH into cash of $2.4 million, exchange of ETH into LsETH of $167.9 million and payment of BTC for service charges from mining facilities of $0.4 million.
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Digital intangible assets
Digital intangible assets were $27.6 million as of June 30, 2026, compared with $nil as of December 31, 2025. The increase was primarily attributable to the Company’s liquid staking of 73,235 ETH during the six months ended June 30, 2026, through which it received 66,192 LsETH. The LsETH holdings were subsequently pledged as collateral for borrowings. Refer to Note 6. Digital Assets Holdings and Note 7. Digital Asset Collateral Receivable, for additional information.
Deposits for property, plant, and equipment
The deposits for property, plant, and equipment consists of advance payments for property, plant, and equipment. The balance is derecognized once the control of the property, plant, and equipment is transferred to and obtained by us.
Compared with December 31, 2025, the balance as of June 30, 2026 decreased $19.3 million, mainly due to the reclassification of property, plant and equipment of $57.8 million offset by the prepayment of $38.4 million for property, plant and equipment.
Property, plant, and equipment, net
Property, plant, and equipment primarily consist of service equipment used in our Cloud services and Colocation businesses, digital asset businesses, internally developed software used in our Cloud services business, and construction in progress (“CIP”) representing assets received but not yet put into service in our Cloud services and Colocation businesses.
As of June 30, 2026, we had 21,354 bitcoin miners with net book value of $16.3 million. As of December 31, 2025, we had 21,354 bitcoin miners with net book value of $23.4 million. Compared with December 31, 2025, the decrease in the net book value of our bitcoin miners from $23.4 million as of December 31, 2025 to $16.3 million as of June 30, 2026 was primarily attributable to depreciation expense recognized during the six months ended June 30, 2026.
As of June 30, 2026, the Cloud service equipment had a net book value, including CIP, of $95.8 million. As of December 31, 2025, the Cloud service equipment and internally developed software had a net book value, including CIP, of $124.0 million. Compared with December 31, 2025, the balance as of June 30, 2026 decreased by $28.2 million, mainly due to the sale of H200 servers with a carrying value of $24.3 million as well as the one-time write-off due to the discontinuation of the internally developed software operations in the amount of $5.0 million.
As of June 30, 2026, the Colocation service equipment had a net book value, including CIP, of $556.3 million. As of December 31, 2025, the Colocation service equipment had a net book value, including CIP, of $212.6 million. Compared with December 31, 2025, the balance as of June 30, 2026 increased by $343.7 million, mainly due to $322.5 million of development costs for the construction of NC-1 facility, $18.2 million for the acquisition of the MTL-3 property as well as infrastructure, CIP and building improvement costs incurred of $4.7 million for MTL-3 in Saint-Jerome and of $1.9 million for MTL-1 in Montreal, in part, by an increase in accumulated depreciation of $2.1 million as well as a foreign-exchange impact of $3.5 million.
Operating and finance lease right-of-use assets and lease liabilities
As of June 30, 2026, our operating and finance right-of-use assets and lease liabilities were $16.9 million and $15.7 million, respectively. As of December 31, 2025, the Company’s operating and finance right-of-use assets and lease liabilities were $24.7 million and $23.9 million, respectively.
The decrease in right-of-use assets of $7.8 million was due to the amortization of the right-of-use assets totaling $3.2 million for the six months ended June 30, 2026 and the reduction of $12.6 million resulting from the Company’s acquisition of the underlying leased assets under its existing finance lease, which was reclassified to property and equipment, net, partially offset by the addition of $8.3 million for eight operating leases.
The decrease in lease liabilities of $8.2 million was primarily due to the lease payments totaling $16.8 million for the six months ended June 30, 2026, partially offset by the addition of $8.3 million for eight operating leases.
Other non-current assets, net
Other non-current assets, net were $29.5 million as of June 30, 2026, compared to $28.6 million as of December 31, 2025, an increase of $0.9 million. The increase was primarily due to $0.3 million increase in deferred financing costs, $0.8 million increase in deposits, and $0.8 million increase in prepaid warranty, partially offset by decrease of $1.2 million in deferred contract costs which was reclassified to current.
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Investment securities
As of June 30, 2026, our portfolio consists of investments in three funds, a privately held company via a simple agreement for future equity (“SAFE”), four privately held companies, and a publicly traded company over which the Company neither has control nor significant influence. The total balance of investment securities was $47.9 million and $69.1 million as of June 30, 2026, and December 31, 2025, respectively. The $21.2 million decrease in the balance of investment securities was primarily driven by a downward fair value adjustment.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in relation to the Enovum acquisition. As of June 30, 2026 and December 31, 2025, the Company recorded goodwill in the amount of $19.4 million and $20.1 million, respectively, with the change attributable to foreign currency translation adjustments.
Intangible assets, net
Intangible assets pertain to customer relationships acquired in connection with the acquisition of Enovum. Refer to Note 17. Goodwill and Intangible Assets for further information. As of June 30, 2026 and December 31, 2025, the total balance of intangible assets was $12.0 million and $12.8 million, respectively relating to amortization during the period.
Accounts payable
Accounts payable primarily consists of amounts due for costs related to HPC services. Compared with December 31, 2025, the balance of accounts payable increased by $5.4 million in the six months ended June 30, 2026, largely due to a one time amount due upon finalizing a termination agreement with a GPU servers leasing partner in the quarter, and timing of unpaid bills for our cloud services in the six months ended June 30, 2026.
Deferred revenue
As of June 30, 2026, the Company’s current and non-current portion of deferred revenue was $17.9 million and $125.2 million, respectively, compared to $8.0 million and $71.6 million, respectively, as of December 31, 2025. The increase in deferred revenue of $63.6 million reflects $72.6 million prepayments from customers for cloud services and data center services to be rendered in the future, partially offset by the recognition of $1.4 million in revenue related to the successful fulfillment of performance obligations from our cloud services and data center services as well as a decrease due to net settlement of receivables and liabilities with a customer upon contract termination.
Other payables and accrued liabilities
Other payables and accrued liabilities were $46.0 million as of June 30, 2026, compared to $56.1 million as of December 31, 2025, a decrease of $10.1 million. The decrease was primarily due to the decrease in payables of $19.4 million which primarily related to the NC-1 facility while the remaining related from unpaid invoices to our vendors in HPC due to the timing of invoicing and cash payments. In addition, there was a decrease relating to bonus payable of $2.2 million. These decreases were partially offset by an increase in fixed asset payables of $5.1 million, interest payable of $5.6 million and a write-off in the amount of $1.4 million in commissions payable relating to the termination agreement of one of our customers.
Short-term and long-term debt, net
Short-term and long-term debt, net consists of amounts borrowed under several credit facilities entered into by the Company and its subsidiaries during the six months ended June 30, 2026, including term loan facilities (including the related B. Riley Facility) and collateralized borrowings with Galaxy Digital LLC. Refer to Note 13. Debt, for more information.
As of June 30, 2026 and December 31, 2025, the total balance of our short-term and long-term debt, net was $103.9 million and $nil, respectively, with the change attributable to proceeds drawn under the new facilities during the period, net of related debt issuance costs and discounts. Refer to Note 13. Debt, for more information.
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Convertible notes payable, net
The convertible notes payable relates to the purchase agreement entered into by the Company in connection with the issuance of its convertible senior notes.
In October 2025, the Company issued an aggregate principal amount of $150.0 million of 4.0% convertible senior notes due 2030 (the “2030 Notes”), which included the full exercise by the initial purchasers of their option to purchase up to an additional $15.0 million principal amount of the 2030 Notes.
In January 2026, the Company issued $230.0 million aggregate principal amount of 4.5% convertible senior notes due 2031 (the “2031 Notes”).
As of June 30, 2026 and December 31, 2025, the carrying amount of the Company’s convertible note payable was $336.2 million and $110.3 million, respectively. Refer to Note 13. Debt, for more information.
Derivative liability
Derivative liability relates to the conversion feature embedded in the 2030 Notes. Refer to Note 14. Fair Value of Financial Instruments, for more information.
As of June 30, 2026 and December 31, 2025, the Company’s derivative liability was $24.0 million and $19.3 million, respectively. The increase was primarily attributable to changes in the fair value of the derivative liability during the six months ended June 30, 2026.
Other long-term liabilities
As of June 30, 2026 and December 31, 2025, the Company’s other long-term liabilities were $6.3 million and $nil, respectively. The increase of $6.3 million was primarily attributable to the long-term customer deposits.
Non-GAAP Financial Measures
In addition to consolidated U.S. GAAP financial measures, we consistently evaluate our use of and calculation of the non-GAAP financial measures, such as EBITDA and Adjusted EBITDA. These non-GAAP financial measures have not been calculated in accordance with GAAP and should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, GAAP results. In addition, EBITDA and Adjusted EBITDA should not be construed as indicators of our operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that they fail to address. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions. Therefore, its use can make it difficult to compare our current results with our results from other reporting periods and with the results of other companies.
EBITDA is computed as net income before interest, taxes, depreciation, and amortization. Adjusted EBITDA is a financial measure defined as our EBITDA adjusted to eliminate the effects of certain non-cash and / or non-recurring items that do not reflect our ongoing strategic business operations, which management believes results in a performance measurement that represents a key indicator of the Company’s core business operations. The adjustments currently include fair value adjustments such as investment securities value changes and non-cash share-based compensation expenses, in addition to other income and expense items.
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We believe Adjusted EBITDA can be an important financial measure because it allows management, investors, and our board of directors to evaluate and compare our operating results, including our return on capital and operating efficiencies, from period-to-period by making such adjustments.
Adjusted EBITDA is provided in addition to and should not be considered to be a substitute for, or superior to net income, the comparable measures under U.S. GAAP. Further, Adjusted EBITDA should not be considered as an alternative to revenue growth, net income, diluted earnings per share or any other performance measure derived in accordance with U.S. GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity. Adjusted EBITDA has limitations as an analytical tool, and you should not consider such measures either in isolation or as substitutes for analyzing our results as reported under U.S. GAAP.
Reconciliations of Adjusted EBITDA to the most comparable U.S. GAAP financial metric for historical periods are presented in the table below:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Reconciliation of non-GAAP income (loss) from operations: | ||||||||||||||||
| Net (loss) income | $ | (111,666 | ) | $ | 14,873 | $ | (261,943 | ) | $ | (42,838 | ) | |||||
| Depreciation and amortization expenses | 10,088 | 8,224 | 20,124 | 15,466 | ||||||||||||
| Interest expense | 8,062 | - | 13,147 | - | ||||||||||||
| Income tax (benefits) expenses | (1,460 | ) | 1,592 | (1,038 | ) | 2,263 | ||||||||||
| EBITDA | (94,976 | ) | 24,689 | (229,710 | ) | (25,109 | ) | |||||||||
| Adjustments: | ||||||||||||||||
| Net (gain) loss from disposal of property and equipment | - | - | (1,822 | ) | 334 | |||||||||||
| Impairment of capitalized software assets | 5,006 | - | 5,006 | - | ||||||||||||
| Share based compensation expenses | 4,322 | 6,891 | 19,625 | 7,143 | ||||||||||||
| Changes in fair value of long-term investments | 8,117 | (3,817 | ) | 21,228 | 876 | |||||||||||
| Change in fair value of derivative liability | 13,967 | - | 4,715 | - | ||||||||||||
| Adjusted EBITDA | $ | (63,564 | ) | $ | 27,763 | $ | (180,958 | ) | $ | (16,756 | ) | |||||
Liquidity and capital resources
As of June 30, 2026, we had working capital of $82.9 million which includes USDC of $0.4 million, as compared with working capital of $85.1 million as of December 31, 2025. Working capital is the difference between the Company’s current assets and current liabilities.
To date, we have financed our operations primarily through cash flows from operations, sales of our equity securities, the issuance of convertible notes and other debt financing arrangements, including collateralized borrowings secured by our ETH holdings. We plan to support our future operations primarily from cash generated from our operations and equity financings. We may also consider debt, including secured debt which may include preferred and convertible financing on favorable terms.
We believe our existing cash will be sufficient to fund our anticipated operating cash requirements for at least 12 months following the date of this filing.
On April 29, 2025, the Company filed a registration statement on Form S-3 (No. 333-286841) with the SEC to register up to $500 million of its ordinary shares, preference shares, debt securities, warrants, units and subscription rights (the “Registration Statement”), which included a sales agreement prospectus covering the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $500 million of the Company’s ordinary shares that may be issued and sold under an At The Market Offering Agreement we entered into with H.C. Wainwright & Co., LLC, as sales agent (as amended from time to time, the “Sales Agreement”).
In the first quarter of 2026, the Company sold an aggregate of 2,372,035 ordinary shares in connection with the at-the-market offering. The Company received net proceeds of $4.1 million, net of offering costs.
In the second quarter of 2026, the Company sold an aggregate of 22,997,224 ordinary shares in connection with the at-the-market offering. The Company received net proceeds of $34.5 million, net of offering costs.
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In June 2025, the Company completed an underwritten public offering of its ordinary shares registered under the Registration Statement. In accordance with the terms of the underwriting agreement entered into with B. Riley Securities, Inc., as representative of the several underwriters, the Company sold 75,000,000 ordinary shares at a price to the underwriters of $1.90 per share. The Company received net proceeds of approximately $141.6 million, after deducting the underwriting discount and offering expenses. On July 1, 2025, the underwriters related to this public offering fully exercised their option to purchase an additional 11,250,000 ordinary shares, resulting in additional net proceeds to the Company of $21.3 million, after deducting the underwriting discount and offering expenses.
On July 15, 2025, the Company entered into a registered direct offering with B. Riley Securities, Inc. relating to its ordinary shares. In accordance with the terms of the sales agreement, the Company agreed to issue and sell 22,000,000 ordinary shares having an aggregate purchase price of $63.6 million, net of offering costs. The registered direct offering closed on July 15, 2025. The Company intends to use the net proceeds from the registered direct offering to purchase Ethereum.
On October 31, 2025, the Company filed an automatically effective shelf registration statement on Form S-3 (File No. 333-291205) with the SEC to register an indeterminate amount of its ordinary shares, which included a sales agreement prospectus supplement covering the offering, issuance and sale by the Company of up to a maximum aggregate offering price of up to $2.5 billion of the Company’s ordinary shares that may be issued and sold from time to time pursuant to the Sales Agreement.
2030 Convertible notes
On September 29, 2025, the Company entered into an underwriting agreement with certain financial institutions (collectively the “Underwriters”), pursuant to which the Company agreed to sell $135 million aggregate principal amount of its 4.00% Convertible Notes due 2030. Subsequently, the greenshoe option was exercised under which additional $15 million was sold to the Underwriters, making a total of $150 million aggregate principal amount of the Convertible Notes. The Convertible Notes closed on October 1, 2025 and will mature on October 1, 2030, unless earlier converted, redeemed or repurchased in accordance with their terms as stipulated in the Agreement.
The Notes were issued pursuant to, and are governed by, an indenture (the “Base Indenture”), dated as of October 2, 2025, between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), as supplemented by a first supplemental indenture (the “Supplemental Indenture,” and the Base Indenture, as supplemented by the Supplemental Indenture, the “Indenture”), dated as of October 2, 2025, between the Company and the Trustee. The net proceeds from the 2030 Notes offering, after deducting underwriting discounts and commissions and estimated offering expenses, were approximately $143.7 million, including the proceeds from the Underwriters’ exercise of their over-allotment option in full.
2031 Convertible notes
In January 2026, WhiteFiber issued $230.0 million aggregate principal amount of 4.50% convertible senior notes due 2031, resulting in net proceeds of approximately $102.1 million after deducting the Zero Strike Call Option premium, initial purchasers’ discounts and offering expenses. The issuance enhances its liquidity and provides additional capital to fund upcoming development projects, including construction activities and other strategic growth initiatives.
The 2031 Notes bear interest at 4.50% per annum, payable semiannually in arrears on February 1 and August 1 of each year, beginning August 1, 2026, and mature on February 1, 2031, unless earlier converted, redeemed, or repurchased. The Notes increase its long-term indebtedness and will require annual cash interest payments of approximately $10.4 million.
Iceland facility agreement
WhiteFiber Iceland ehf., a subsidiary of WhiteFiber, entered into a secured term loan facility with Landsbankinn hf. in March 2026, providing up to $20 million of available borrowings. The Facility bears interest at a floating rate per annum equal to the sum of (i) three month CME Term SOFR (or any successor benchmark), and (ii) an applicable margin of 4.25% per annum and has an initial two-year term, extendable up to four years. The loan is guaranteed by WhiteFiber, Inc. and WhiteFiber AI, Inc.
The Facility allows for up to two drawdowns (minimum $5 million each), with quarterly principal repayments beginning three months after initial borrowing. On April 24, 2026, WhiteFiber drew down $18 million under the Facility. As of June 30, 2026, $18 million was outstanding under the Facility, with an effective interest rate of 10.64%, which includes the stated interest rate of 7.92%. The Facility is secured by first-ranking security over (i) 100% of the WhiteFiber’s shareholding in WhiteFiber Iceland ehf., (ii) designated assets (including GPU servers, CPU servers, IB switches and equipment accessories) at the date of the agreement, and (iii) material assets acquired thereafter (to be secured within 60 days), in each case until all obligations are fully satisfied.
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Royal Bank of Canada Credit Facility
On July 6, 2026, WhiteFiber entered into a syndicated credit agreement. The Syndicated Credit Facility Agreement provides for an aggregate of up to approximately CAD $115 million (approximately $80.8 million) to refinance the Amended Credit Agreement and finance its data centers business. The agreement also includes an accordion feature that permits WhiteFiber to increase by up to an additional CAD $25 million (approximately $17.7 million) to refinance the Amended Credit Agreement, subject to the satisfaction of specified conditions. The Syndicated Credit Facility Agreement is a non-revolving facility, and amounts repaid or prepaid may not be reborrowed.
On July 15, 2026, WhiteFiber drew a CORRA loan amount of CAD $36.8 million (approximately $26.2 million) under the Syndicated Credit Facility Agreement.
B. Riley Facility
On May 26, 2026, the Company assigned to B. Riley Securities, Inc. a $20 million note originally issued to Enovum NC-1 Venture, LLC, an indirect wholly-owned subsidiary of WhiteFiber under the Delayed Draw Term Loan Facility.
As of June 30, 2026, the B. Riley Facility had a net carrying value of $19.4 million and an effective interest rate of 50.6%, which exceeded the contractual rate due to the MOIC payment and the facility’s short-term nature. The facility provides WhiteFiber with additional short-term capital to support ongoing development activities.
NC-1 Project Financing Update
Whitefiber has entered into exclusivity with a consortium of lenders in connection with a proposed secured financing for its NC-1 project. The parties have commenced diligence and are negotiating definitive documentation, and are working toward closing, subject to customary approvals and conditions. There can be no assurance that the financing will be completed on favorable terms or at all. If completed, WhiteFiber expects the financing would return a significant portion of WhiteFiber’s invested capital to the balance sheet for redeployment into future development.
WhiteFiber future capital requirements will depend on many factors, including WhiteFiber’s ability to refinance or extend near-term debt maturities described above, the revenue growth rate, the success of future product development and capital investment required, and the timing and extent of spending to support further sales and marketing and research and development efforts. In addition, WhiteFiber expects to incur additional costs as a result of operating as a public company. In the event that additional financing is required from outside sources, WhiteFiber cannot be sure that any additional financing will be available to WhiteFiber on acceptable terms if at all. If WhiteFiber are unable to raise additional capital when desired, our business, operating results, and financial condition could be adversely affected.
Collateralized borrowing
On May 20, 2026, the Company entered into a collateralized borrowing arrangement with Galaxy Digital LLC, under which the Company received borrowing proceeds of $50.0 million. The borrowing bears interest at 5.5% per annum and is collateralized by LsETH pledged to the lender. The borrowing is an evergreen facility that may be recalled by the lender upon seven days’ notice in accordance with the terms of the loan agreement. As the Company does not have an unconditional right to defer settlement of the borrowing for at least one year after the balance sheet date, the related loan payable is classified as a current liability in the condensed consolidated balance sheets.
The borrowing is subject to collateral maintenance requirements, and the Company may be required to transfer additional collateral or may receive the return of collateral based on changes in the value of the pledged collateral relative to the contractual collateralization thresholds.
Cash flows
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net Cash Provided by Operating Activities | $ | 46,770 | $ | 35,098 | ||||
| Net Cash Used in Investing Activities | (312,457 | ) | (148,241 | ) | ||||
| Net Cash Provided by Financing Activities | 230,733 | 199,314 | ||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (34,954 | ) | 86,171 | |||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 609 | (204 | ) | |||||
| Cash, cash equivalents and restricted cash, beginning of period | 122,213 | 98,934 | ||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 87,868 | $ | 184,901 | ||||
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Operating Activities
Net cash provided by operating activities was $46.8 million for the six months ended June 30, 2026, derived mainly from (i) a net loss of $261.9 million for the six months ended June 30, 2026 adjusted for digital assets mined of $6.1 million from our mining services, depreciation expenses and amortization expense of $20.1 million, impairment of capitalized software assets of $5.0 million, gain from disposal of property, plant and equipment of $1.8 million, loss on digital assets of $149.9 million, amortization of discount on debts issued of $4.2 million, share based compensation expenses of $19.6 million, changes in fair value of investment security of $21.2 million, changes in fair value of derivative liability of $4.7 million, current expected credit losses of $2.2 million, digital assets earned from staking of $3.2 million, impairment of digital intangible assets of $46.0 million, gains on digital intangible assets of $11.3 million and (ii) net changes in our operating assets and liabilities, principally comprising of a decrease in digital assets and stable coins of $20.2 million, an increase in deferred revenue of $63.6 million, a decrease in accounts receivable of $1.6 million, an increase in other payable and accrued liabilities of $4.2 million, an increase in other current assets of $0.9 million, a decrease in other non-current assets of $0.9 million, an increase in right-of-use assets of $2.9 million, an increase in net investment in lease of $2.0 million, an increase in account payable of $5.9 million, a decrease in deferred tax liability of $0.6 million, a decrease in income tax payable of $1.2 million, an increase in other long-term liabilities of $6.3 million and a decrease in lease liability of $3.3 million.
Net cash provided by operating activities was $35.1 million for the six months ended June 30, 2025, derived mainly from (i) a net loss of $42.8 million for the six months ended June 30, 2025 adjusted for digital assets mined of $14.4 million from our mining services, depreciation expenses and amortization expense of $15.5 million, losses on digital assets of $22.1 million, share based compensation expenses of $7.1 million, loss from disposal of property, plant, and equipment of $0.3 million, and changes in fair value of investment security of $0.9 million, and (ii) net changes in our operating assets and liabilities, principally comprising of a decrease in digital assets and stable coins of $54.0 million, decrease in deferred revenue of $19.0 million, an increase in accounts receivable of $1.2 million, an increase in other payable and accrued liabilities of $5.3 million, a decrease in net investment in lease of $1.3 million, a decrease in accounts payable of $0.3 million, a decrease in other current assets of $3.9 million, and a decrease in other non-current assets of $1.6 million.
Investing Activities
Net cash used in investing activities was $312.5 million for the six months ended June 30, 2026, primarily attributable to purchases of and deposits made for property, plant, and equipment of $344.7 million, and partially offset by proceeds from disposal of property, plant and equipment of $26.5 million and proceeds from disposal of digital assets of $5.8 million.
Net cash used in investing activities was $148.2 million for the six months ended June 30, 2025, primarily attributable to purchases of and deposits made for property, plant, and equipment of $147.1 million, investment in equity securities of $2.0 million, and proceeds from disposal of property, plant and equipment of $0.9 million.
Financing Activities
Net cash provided by financing activities was $230.7 million for the six months ended June 30, 2026, attributable to net proceeds of $38.6 million from at-the-market offering, net proceeds of $222.1 million from convertible debt, net proceeds from issuance of debt from third parties of $103.4 million partially offset by the purchase of zero-strike call option of $120.0 million, payment of dividends of $0.8 million and repayment of finance lease liabilities of $12.6 million.
Net cash provided by financing activities was $199.3 million for the six months ended June 30, 2025, attributable to net proceeds of $58.5 million from the at-the-market offering, net proceeds of $141.6 million from the public offering, and offset by the payment of dividends of $0.8 million.
Off-Balance Sheet Arrangements
During the periods presented, we did not have any off-balance sheet arrangements.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk.
The Company is exposed to market risks in the ordinary course of business, primarily related to digital asset prices, interest rates, foreign currency exchange rates, energy prices and utility risk.
Risks Regarding the Price of Ethereum (“ETH”)
The Company’s business is focused on active participation in Ethereum (“ETH”) infrastructure and staking strategies to maximize the amount of ETH we earn and hold. As of June 30, 2026, we held approximately 75,757.5 ETH, recognized at its fair value of $118.9 million.
The market price of ETH is highly volatile, and we cannot accurately predict future price movements. Fluctuations in the market value of ETH directly affect revenue generated from our staking operations and the fair value of our ETH holdings. In addition, any decline in the fair value of the ETH we hold would be reflected in our financial statements as a charge against net income, which could have a material adverse effect on our results of operations and the market price of our securities.
The following table presents the impact of 10% changes in the price of ETH on our ETH holdings during the applicable period (in thousand):
| For the Three Months Ended June 30, 2026 | For the Three Months Ended June 30, 2025 | |||||||||||||||
| 10% Increase in Price of ETH | 10% Decrease in Price of ETH | 10% Increase in Price of ETH | 10% Decrease in Price of ETH | |||||||||||||
| Increase/ (Decrease) in Net Income | $ | 11,890 | $ | (11,890 | ) | $ | 6,116 | $ | (6,116 | ) | ||||||
The increased sensitivity to price changes for the three and six months ended June 30, 2026, compared with the corresponding periods in 2025, was primarily due to the increase in our ETH holdings as of June 30, 2026, relative to June 30, 2025.
Interest Rate Risk
The Company is exposed to interest rate risk primarily through its variable-rate debt obligations used to finance infrastructure development and capital expenditures. Changes in benchmark interest rates may increase future interest expense and adversely affect cash flows. In addition, fluctuations in interest rates may affect the Company’s ability to obtain financing on favorable terms and increase the cost of future borrowings. The Company monitors its interest rate exposure and may utilize financing arrangements or other risk management strategies intended to mitigate the impact of interest rate fluctuations; however, such activities may not fully offset the effects of changes in interest rates.
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Foreign Currency Risk
The Company operates internationally and is exposed to foreign currency exchange rate risk arising from transactions denominated in currencies other than the U.S. dollar, including certain operating expenses, vendor payments and capital expenditures. Fluctuations in foreign currency exchange rates may adversely affect the Company’s results of operations, financial condition and cash flows. To manage a portion of this exposure, the Company may enter into derivative instruments, including foreign currency forward contracts, to reduce the impact of exchange rate fluctuations on certain foreign currency-denominated transactions. The Company’s hedging activities may not fully offset the adverse financial effects of unfavorable movements in foreign currency exchange rates.
Energy Price and Utility Risk
The Company’s cloud business and data center business are energy intensive and, in certain instances, subject to fluctuations in electricity prices and utility availability. Increases in energy costs, changes in energy market conditions or constraints on available electrical capacity could increase operating costs, adversely affect operating margins and impact the timing or ability to deploy additional infrastructure capacity.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Principal Executive Officer and our Principal Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosures.
Based on this evaluation, our management, with the participation of our Principal Executive Officer and our Principal Financial Officer, concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this report.
Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in conducting a cost-benefit analysis of possible controls and procedures.
Changes in Internal Control over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting during the quarter-ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Except as set forth herein, there have been no changes since the filing of the Company’s Form 10-K for the year ended December 31, 2025.
Bit Digital USA, Inc v. Blockfusion USA, Inc. – Superior Court of Delaware
On June 3, 2024, the Company filed suit in Delaware Superior Court against Blockfusion, Inc. (“Blockfusion”) alleging claims for breach of contract, conversion, and related claims in connection with, among other things, certain deposits and advances paid to Blockfusion, the return of which is owed to Bit Digital. Bit Digital was seeking in excess of $4.3 million. On October 22, 2024, Blockfusion denied the Company’s claims and brought reciprocal breach of contract and related counterclaims. Following limited discovery, the Company sought leave to file a Second Amended Complaint asserting additional tort and equitable claims, including fraud-based claims, and adding Blockfusion’s Chief Executive Officer as an individual defendant. On September 19, 2025, Blockfusion moved to dismiss the Second Amended Complaint. The Company filed its opposition to the motion on October 17, 2025, and the Court held a hearing on the motion on January 6, 2026. Following the hearing, the Court granted the motion to dismiss. The Court dismissed the claims against the individual defendant without prejudice on the ground that it lacked personal jurisdiction, and did not reach the merits of certain substantive issues raised in the motion. The Company’s contract-based claims and related claims for contractual recovery against Blockfusion were not dismissed and remain pending.
On March 18, 2026, the Company moved to dismiss some of the Blockfusion’s counterclaims. The Court heard argument on that motion on June 12, 2026, and the motion remains pending.
The litigation is ongoing and remains in an active pretrial phase. The parties are engaged in discovery. The Company seeks recovery of its original investment, allegedly improper invoice payments, unpaid contractual amounts, and other damages, and may seek equitable or other relief as the proceedings continue. The aggregate damages sought exceed $5.0 million.
At this time, the Company cannot reasonably estimate a possible loss, range of loss, or expected recovery associated with this litigation.
Bit Digital USA, Inc. v. Alex Martini-Lo Manto, et. al. – New York Supreme Court, New York County, Commercial Division
On March 4, 2026, the Company filed suit against Alex Martini-Lo Manto, CEO of Blockfusion; Blockfusion; and two Blockfusion-related entities alleging that the defendants had designed a Special Purpose Acquisition Company (“SPAC”) merger to avoid paying the Company for its prejudgment liabilities. The suit alleges claims under New York Uniform Voidable Transactions Act, as well as fraud claims against defendant Martini-Lo Manto and other related claims.
Upon filing, the Company also moved for a preliminary injunction enjoining the SPAC transaction. On April 15, 2026, the Court denied that motion. The Company appealed that ruling, and the appeal was subsequently resolved as described below.
On April 29, 2026, Defendants moved to dismiss the Company’s claims. The Company filed its opposition on May 22, 2026.
On July 23, 2026, the Court issued a decision granting the motion in part and denying it in part. The Court dismissed the Company’s claims under the New York Uniform Voidable Transactions Act but permitted the Company’s successor-liability claim against the proposed post-combination public company to proceed. With respect to the fraud claims against Mr. Martini-Lo Manto, the Court permitted the claim based on allegedly fraudulent invoices to proceed and dismissed the remaining fraud claims. The Company is evaluating whether to seek leave to replead or to appeal the dismissed claims.
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The litigation is ongoing and remains in an active pretrial phase. The parties are engaged in discovery. The aggregate damages sought exceed $5.0 million.
At this time, the Company cannot reasonably estimate a possible loss, range of loss, or expected recovery associated with this litigation.
Bit Digital USA, Inc. v. Alex Martini-Lo Manto, et. al. – New York Supreme Court, Appellate Division, First Department
On April 22, 2026, the Company appealed the Commercial Division’s denial of the preliminary injunction. The Company also filed a request for interim appellate injunctive relief. On May 22, 2026, the Appellate Division issued an interim order, pending determination of the application by a full panel, directing the defendants to escrow $5.4 million on or before June 1, 2026 and directing the Company to post a $100,000 undertaking. The escrow was not funded. Instead, on June 5, 2026, Blockfusion Data Centers, Inc., the entity that would become the publicly traded parent upon completion of the proposed business combination, executed a limited guarantee in favor of the Company. Subject to its terms, the guarantee covers payment of the net amount, if any, that Blockfusion is finally determined to owe the Company in the Delaware or New York actions under a final, non-appealable judgment (or a settlement to which the guarantor consents), after giving effect to all defenses, counterclaims, and rights of setoff, and is capped at that amount. By its terms, the guarantee will not become effective unless and until the proposed business combination closes, and it will be null and void if the transaction is not consummated. In connection with the guarantee, the Company withdrew its appeal on June 6, 2026, and the interim order is no longer in effect. The proposed business combination has not yet closed.
At this time, the Company cannot reasonably estimate a possible loss, range of loss, or expected recovery associated with this litigation.
Item 1A. Risk Factors
Except as set forth below, there have been no material changes from risk factors as previously disclosed in the Company’s Annual Report on Form 10-K for the year-ended December 31, 2025 (“Annual Report”) in response to Item 1A to PART 1 of Form 10-K. You should refer to the other information set forth in this report, including the information set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as well as in our consolidated financial statements and the related notes. Our business prospects, financial condition or results of operations could be adversely affected by any of these risks.
Please note in considering the “Risk Factors” in Item 1A of our Annual Report that (A) notwithstanding the fact that Bit Digital, Inc. has not conducted operations in the PRC since September 30, 2021, we have previously disclosed under Risk Factors in our Annual Report. “We may be subject to fines and penalties for any noncompliance with or any liabilities in our former business in China in a certain period from now on.” Although the statute of limitations for non-compliance by our former business in the PRC is generally two years and the Company has been out of the PRC, for more than two years, the Authority may still find its prior bitcoin mining operations involved a threat to financial security. In such event, the two-year period would be extended to five years.
Please note the following in considering the risk factor in our Annual Report titled “Uncertainty in the global economy and instability within international relations, including changes in governmental policies relating to technology, and any potential downturn in the semiconductor and electronics industries, may negatively impact our business”: In addition, the recent armed conflict between the U.S. and its allies and Iran has caused a de facto closure of the Strait of Hormuz and further disruption of trade routes in the Red Sea, which has had a significant impact in the Middle East region and on global oil markets. We cannot predict the severity or length of the current conditions impacting international shipping in this region and the continuing disruption of the trade routes in the region of the Red Sea and Strait of Hormuz. Based on the complex relationship between countries involved in our supply chain, disruptions in shipping and the impact on energy prices could have a material and adverse impact on our financial condition, results of operations, and future performance.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None. Previously reported on Form 8-K.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
10b5-1 Trading Arrangements
During the three months ended June 30, 2026, no director or officer of the Company
Syndicated RBC Credit Facility Agreement executed on July 6, 2026
On July 6, 2026, the WhiteFiber’s wholly-owned subsidiary, Enovum Data Center Corp. entered into a syndicated credit agreement (“Syndicated RBC Credit Facility Agreement”). The Syndicated RBC Credit Facility Agreement provides for an aggregate of up to approximately CAD $115 million (approximately $80.8 million) to refinance the Amended Credit Agreement and finance its data centers business. The agreement also includes an accordion feature that permits WhiteFiber to increase by up to an additional CAD $25 million (approximately $17.7 million) to refinance the Amended Credit Agreement, subject to the satisfaction of specified conditions. The Syndicated RBC Credit Facility Agreement is a non-revolving facility, and amounts repaid or prepaid may not be reborrowed.
Borrowings under the Syndicated RBC Credit Facility Agreement bear interest, at WhiteFiber’s option, at either (i) the CORRA-based benchmark rate for such interest period, plus 2.45% per annum, plus the credit spread adjustment for the applicable interest period (29.547 basis points for one month interest period, 32.138 basis points for a three month interest period and 0 for a daily interest period), or (ii) RBC Prime rate plus 1.00% per annum. The facility has a three-year term from the date of the initial drawdown and requires interest-only payments until the first full quarter after the date of the initial drawdown. The loan will be amortized through quarterly principal repayments based on a 15-year amortization schedule, with the outstanding principal due in full at maturity. The specific borrowing terms are established at the time of each drawdown pursuant to a borrowing request submitted by WhiteFiber and accepted by the lender.
The Syndicated RBC Credit Facility is secured by first-ranking security interests over substantially all present and future personal property and assets of the borrower and the guarantors, together with first-ranking mortgages on certain owned real estate, including WhiteFiber’s MTL-2 and MTL-3 properties and related improvements and equipment
WhiteFiber has agreed to certain financial covenants, including a minimum debt service coverage ratio and a maximum Net funded debt to EBITDA ratio.
On July 15, 2026, WhiteFiber drew a CORRA loan amount of CAD $36.8 million (approximately $26.2 million) under the Syndicated RBC Credit Facility Agreement.
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Item 6. Exhibits.
(a) Exhibits.
| Exhibit No. | Document Description | |
| 3.1 | Certificate of Incorporation, as amended(1) | |
| 3.2 | Amended and Restated Memorandum of Association of Bit Digital, Inc., adopted July 29, 2026(2) | |
| 10.1+ | Master Digital Currency Loan Agreement dated March 27, 2026, by and between Bit Digital Inc. and Galaxy Digital LLC. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on May 27, 2026). | |
| 10.2 | Delayed Draw Term Loan Facility and Security Agreement, dated May 20, 2026, by and among Enovum NC-1 Venture, LLC, Bit Digital Capital, Inc. and the guarantors party thereto. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed on May 27, 2026). | |
| 10.3+ | Syndicated Credit Facility Agreement, dated July 6, 2026, among Enovum Data Center Corp., the lenders party thereto and Royal Bank of Canada, as administrative agent.*** | |
| 31.1 | Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*** | |
| 31.2 | Certification of PFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*** | |
| 32.1 | Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*** | |
| 32.2 | Certification of PFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*** | |
| 101.INS* | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).** | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document.** | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document.** | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document.** | |
| 101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document.** | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document.** | |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).** |
| * | This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings. |
| ** | XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
| *** | Filed with the Report. |
| + | Certain of the schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). |
| The Registrant agrees to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request. |
| 1. | Incorporated by reference to Exhibit 3.1 to the Registrant's Form F-1 registration statement filed on March 10, 2021 |
| 2. | Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed on July 30, 2026 |
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SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Bit Digital, Inc. | ||
| Date: August 13, 2026 | By: | /s/ Sam Tabar |
| Sam Tabar | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: August 13, 2026 | By: | /s/ Erke Huang |
| Erke Huang | ||
| (Chief Financial Officer) | ||
| (Principal Accounting Officer) |
| Date: August 13, 2026 | By: | /s/ Bryan Ng |
| Bryan Ng | ||
| (Principal Financial Officer) |
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