Digi Power X Q3 profit rises to $1.05M on $12.2M sales
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Digi Power X Inc. (DGXX) reported third-quarter revenue of $12,246,140, versus $8,145,309 a year earlier, and net income of $1,045,600 versus $64,539. For the first nine months, revenue was $26,841,960 versus $25,533,347, while net loss widened to $17,967,254 from $11,273,285. Cash used in operations was $5,618,717, compared with $25,136,035.
During the nine months, Digi Power issued 30,800,000 subordinate voting shares under its at-the-market program for $174,701,669. It received $12,000,000 from Cerebras for Phase 1 construction under a 10-year colocation agreement; Phase 1 remained under construction and no lease revenue had been recognized at September 30, 2026. The agreement covers up to 40 MW, with Phase 2 conditional. On October 13, 2026, the company disclosed a $200 million debt-financing commitment subject to definitive documentation, diligence and other conditions. USDC share issuances to third parties reduced Digi Power’s ownership to approximately 48%; USDC was deconsolidated and is accounted for under the equity method.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter revenue: $12,246,140, versus $8,145,309.
- Moderate pointThird-quarter net income: $1,045,600, versus $64,539.
- Moderate pointOperating cash used fell to $5,618,717 from $25,136,035.
Negative
- Moderate pointNine-month net loss widened to $17,967,254 from $11,273,285.
Filing Explained
A CEO-linked lease adds a $746,355 recorded obligation and $955,646 in expected base rent over its initial five-year term.
As of
The charge may be refundable before the lease begins in specified circumstances, including a material breach or failure to meet the final outside delivery date, limited to amounts not yet applied to completed work.
Separately, effective
Key Figures
Key Terms
at-the-market equity program financial
unearned lease revenue financial
take-or-pay financial
equity method financial
deconsolidated financial
special purpose vehicle financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What revenue did DGXX report for the third quarter of 2026?
What are the terms of DGXX's Cerebras data-center agreement?
What is the status of DGXX's $200 million financing commitment?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
OR
For the transition period from _____ to _____
Commission file number
(Exact Name of Registrant as Specified in its Charter)
| Not Applicable | ||
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | 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 check mark 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 Act).
Yes ☐ No
As of November 12, 2026, the registrant had
Table of Contents
| Page | ||
| Part I - Financial Information | 1 | |
| Unaudited Condensed Interim Consolidated Balance Sheets | 2 | |
| Unaudited Condensed Interim Consolidated Statements of Operations and Comprehensive Loss | 3 | |
| Unaudited Condensed Interim Consolidated Statements of Cash Flows | 4 | |
| Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity | 5 | |
| Notes to Unaudited Condensed Consolidated Financial Statements | 7 | |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 31 | |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | 46 | |
| Item 4. Controls and Procedures | 46 | |
| Part II - Other Information | 47 | |
| Item 1. Legal Proceedings | 47 | |
| Item 1A. Risk Factors | 47 | |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 47 | |
| Item 3. Defaults Upon Senior Securities | 48 | |
| Item 4. Mine Safety Disclosures | 48 | |
| Item 5. Other Information | 48 | |
| Item 6. Exhibits | 49 | |
| SIGNATURES | 50 |
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report on Form 10-Q (the “Quarterly Report”) that reflect Digi Power X Inc.’s (“we,” “us,” “our,” the “Corporation,” or “Digi Power”) current views with respect to future events and financial performance, business strategies, expectations for our business and any other statements of a future or forward-looking nature, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, and “forward-looking information” within the meaning of applicable Canadian securities laws (collectively referred to herein as “forward-looking statements”). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and forward-looking information within the meaning of Canadian securities laws. All statements other than statements of historical facts contained in this Quarterly Report may be forward-looking statements. These forward-looking statements include statements about our financial condition, results of operations, earnings outlook, prospects, and the treatment of the Corporation under government regulatory and taxation regimes. Forward-looking statements appear in a number of places in this Quarterly Report including, without limitation, in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements can often be identified by forward-looking words, such as “anticipate,” “believe,” “expect,” “plan,” “intend,” “estimate,” “may,” “potential” and “will,” or similar words suggesting future outcomes or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. The forward-looking statements contained in this Quarterly Report are based on our current expectations and beliefs concerning future developments and their potential effects on us, and we cannot assure you that future developments affecting the Corporation will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to, the following:
| ● | The Corporation’s development of a Tier III data center and other infrastructure projects involves significant risks, including but not limited to risks relating to construction delays, cost overruns, supply chain disruptions, the availability of equipment, GPUs, labor and power, and the performance of contractors, many of which are beyond the Corporation’s control, and which could cause Phase 1 and Phase 2 of the Columbiana, Alabama campus not to be completed within the targeted timeframes or at all; |
| ● | The loss of our existing customer and/or our inability to gain new customers may have an adverse effect on the Corporation’s business, financial condition and results of operations; |
| ● | The Corporation’s business may be adversely impacted if the Corporation is unable to fulfill its obligations pursuant to the Cerebras Agreement (as defined below). For more information regarding the Cerebras Agreement, see Note 20 to the Corporation’s Condensed Interim Consolidated Financial Statements for the nine months ended September 30, 2026 and 2025; |
| ● | The Corporation depends on third-party suppliers, for example, NVIDIA Corporation, for critical computing equipment, and any delays, disruptions, supply constraints, or changes in supplier relationships could adversely affect the Corporation’s ability to execute its business plans; |
| ● | The Corporation’s business may be adversely impacted if the Corporation is unable to successfully deploy the NVIDIA Vera Rubin systems that it has committed to purchase; |
| ● | The Corporation’s inability to execute on our evolving business model and strategy, including our ability to diversify and expand into the market for high-performance computing (“HPC”) and artificial intelligence (“AI”) solutions and data centers, may have an adverse impact on the Corporation’s business; |
ii
| ● | The Corporation’s inability to respond to anticipated demand for large data centers, or a reduction in or other change to demand for AI and HPC infrastructure, may have an adverse impact on the Corporation’s business; |
| ● | Regulatory changes or actions related to data centers and/or cryptocurrencies may alter the nature of an investment in the Corporation in a manner that adversely affects the Corporation’s operations; |
| ● | The Corporation is subject to risks associated with the Corporation’s need for significant electrical power. The Corporation’s data center and mining operations require electrical power to be available at commercially feasible rates. Government regulators may potentially restrict the ability of electricity suppliers to provide electricity to mining operations; |
| ● | The Corporation is subject to risks associated with the Corporation’s requirement to obtain, and to comply with, permits, licenses and approvals from federal, state or provincial, and local governmental agencies in the U.S., Canada and other jurisdictions in which the Corporation may operate, including the risk that such permits or licenses may be delayed, denied, revoked or modified, or that the Corporation may fail to timely obtain or comply with their conditions; |
| ● | The Corporation may face community opposition to the operation of its data centers, including complaints and/or community protests regarding, for example, noise, the use of electricity and water, or other quality-of-life issues, which could result in litigation, development delays, moratoria, regulatory action, fines or penalties, costly mitigation measures, restrictions on our electricity use or operating hours, reduced scale of operations, difficulty obtaining permits for expansion, or the shutdown of affected facilities; |
| ● | The Corporation is subject to extensive environmental (including applicable zoning laws and regulations), energy, and climate-related regulation, any of which could result in significant additional costs or liabilities to ensure compliance; |
| ● | The Corporation faces competition from other data center and cryptocurrency companies; |
| ● | The Corporation’s data centers and/or cryptocurrency inventory may be exposed to cybersecurity threats and hacks; |
| ● | The value of cryptocurrencies may be subject to momentum pricing risk; |
| ● | Cryptocurrency exchanges and other trading venues are relatively new and, in most cases, largely unregulated and may therefore be more exposed to fraud and failure; |
| ● | Acceptance and/or widespread use of cryptocurrency is uncertain; |
| ● | If the Corporation is unable to insure the remainder of its mined digital currency, its business and/or its financial condition may be adversely affected; |
| ● | The Corporation may be required to sell its cryptocurrency portfolio to pay its expenses; |
| ● | Technological obsolescence and difficulty obtaining hardware may adversely impact the Corporation’s operating results and financial condition; |
| ● | The Corporation does not currently pay cash dividends, and, therefore, the Corporation’s shareholders will not be able to receive a return on their subordinate voting shares (“subordinate voting shares” or “SV Shares”) unless they sell them; |
| ● | The SV Shares are subject to volatility risk, and there is no guarantee that an active or liquid market will be sustained for the SV Shares; |
iii
| ● | The Corporation has a limited history of operations and is in the early stage of development; |
| ● | Ineffective management of growth could result in a failure to sustain the Corporation’s progress; |
| ● | There are significant legal, accounting, and financial costs of being a publicly traded company, which may reduce the resources available for the Corporation to develop its data centers and/or deploy on its cryptocurrency mining operations; |
| ● | The Corporation may be unable to obtain additional financing on acceptable terms or at all, including the risk that the $200 million debt financing contemplated by the Corporation’s October 13, 2026 commitment letter is not completed on the anticipated terms, on a timely basis or at all, or that its proceeds are insufficient to fund the Columbiana, Alabama project; |
| ● | The Corporation may be subject to tax consequences that could reduce the Corporation’s profitability; |
| ● | The Corporation may be exposed to risks from exchanging currencies, including currency exchange fees. |
| ● | The Corporation may be subject to litigation; |
| ● | Uninsured or uninsurable risks could result in significant financial liabilities; |
| ● | Exposure to environmental liabilities and hazards may result in the imposition of fines, penalties and restrictions; |
| ● | The Corporation’s success is largely dependent on the performance of the Corporation’s management and executive officers; |
| ● | The Corporation may be unable to attract, develop and retain its key personnel and establish adequate succession planning; |
| ● | Certain directors and officers may have a conflict of interest between their duties owed to the Corporation and their interest in other personal or business ventures; |
| ● | Recent changes in U.S. political leadership and economic policies, as well as any future policy changes, may create uncertainty that materially affects the Corporation’s business and financial performance; and |
| ● | Current or future geopolitical events may have an adverse impact on the Corporation’s business. |
The foregoing list of factors and other risks detailed from time to time in our reports filed with the U.S. Securities and Exchange Commission (the “SEC”) is not exhaustive. See “Part II, Item 1A – Risk Factors.” Those factors and the other risk factors described therein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. Consequently, our actual results could be materially different from the results described or anticipated by our forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections and may be better or worse than anticipated. Given these uncertainties, you should not place undue reliance on any forward-looking statements. Forward-looking statements represent our estimates and assumptions only as of the date that they were made. We expressly disclaim any duty to provide updates to forward-looking statements, and the estimates and assumptions associated with them, after the date of this report, in order to reflect changes in circumstances or expectations or the occurrence of unanticipated events, except to the extent required by applicable securities laws.
iv
Part I - Financial Information
DIGI POWER X INC.
CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2026 AND 2025
(EXPRESSED IN UNITED STATES DOLLARS)
(UNAUDITED)
- 1 -
Digi Power X Inc.
Condensed Interim Consolidated Balance Sheets
(Expressed in United States Dollars, except number of shares)
| As at September 30, 2026 |
As at December 31, 2025 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Digital currencies | ||||||||
| Current portion of amounts receivable and other assets | ||||||||
| Other receivable | ||||||||
| Total current assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Operating lease right-of-use assets | - | |||||||
| Intangible asset | ||||||||
| Amounts receivable and other assets, net of current portion | ||||||||
| Investments | ||||||||
| Investment in associate | - | |||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Current portion of operating lease liabilities | - | |||||||
| Unearned lease revenue | - | |||||||
| Warrant liabilities | ||||||||
| Total current liabilities | ||||||||
| Deposits payable | ||||||||
| Operating lease liabilities, net of current portion | - | |||||||
| Unearned lease revenue | - | |||||||
| Total liabilities | ||||||||
| Shareholders’ equity Subordinate voting shares, no par value, unlimited shares authorized; | - | - | ||||||
| Proportionate voting shares, no par value, unlimited shares authorized; | - | - | ||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income (loss), net | ( | ) | ( | ) | ||||
| Total shareholders’ equity attributable to shareholders | 279,942,690 | 123,261,200 | ||||||
| Total shareholders’ equity | ||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
- 2 -
Digi Power X Inc.
Condensed Interim Consolidated Statements of Operations and Comprehensive Income (Loss)
(Expressed in United States Dollars) (Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | ||||||||||||||||
| Digital currency mining and staking | $ | $ | $ | $ | ||||||||||||
| Colocation services | ||||||||||||||||
| Tier III colocation services | - | - | ||||||||||||||
| GPU rental | - | - | ||||||||||||||
| Sale of energy | ||||||||||||||||
| Total revenue | ||||||||||||||||
| Cost of revenue | ||||||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gross loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating expenses | ||||||||||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Foreign exchange gain (loss) | ( | ) | ( | ) | ||||||||||||
| Gain (loss) on sale of digital currencies | ( | ) | ( | ) | ||||||||||||
| Change in fair value of loan and salaries payable | - | - | ( | ) | ||||||||||||
| Gain on revaluation of digital currencies | ||||||||||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ||||||||||
| Other income (expenses) | ||||||||||||||||
| Other income | - | |||||||||||||||
| Gain on deconsolidation of subsidiary | - | - | ||||||||||||||
| Net financial income | ||||||||||||||||
| Gain (loss) from change in fair value of warrant liability | ( | ) | ||||||||||||||
| Gain on sale of property, plant and equipment | - | - | ||||||||||||||
| Total other income (expenses) | ||||||||||||||||
| Net income (loss) for the period attributable to common shareholders | ( | ) | ( | ) | ||||||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||||||||||
| Comprehensive income (loss) for the period attributable to common shareholders | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Net income (loss) per common share: | ||||||||||||||||
| Basic | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Diluted | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
- 3 -
Digi Power X Inc. Condensed Interim Consolidated Statements of Cash Flows (Expressed in United States Dollars) (Unaudited) |
||
| Nine Months Ended September 30, | 2026 | 2025 | ||||||
| Operating activities | ||||||||
| Net loss for the period | $ | ( | ) | $ | ( | ) | ||
| Adjustments for: | ||||||||
| Digital currencies items | ( | ) | ( | ) | ||||
| Gain on sale of property, plant and equipment | ( | ) | - | |||||
| Depreciation of right-of-use assets | ||||||||
| Depreciation and amortization | ||||||||
| Interest on operating lease liabilities | ||||||||
| Share based compensation | ||||||||
| Loss from change in fair value of warrant liability | ( | ) | ||||||
| Lease modification | - | ( | ) | |||||
| Change in fair value of loan and salaries payable | - | |||||||
| Gain on deconsolidation of subsidiary | ( | ) | - | |||||
| Accretion on liability | - | |||||||
| Foreign exchange (gain) loss | ( | ) | ||||||
| Working capital items | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Investing activities | ||||||||
| Purchases and deposits on property, plant and equipment | ( | ) | ( | ) | ||||
| Proceeds from sale of property, plant and equipment | - | |||||||
| Acquisition of investment | ( | ) | - | |||||
| Impact to cash resulting from deconsolidation of subsidiary | ( | ) | - | |||||
| Acquisition of digital currencies | - | ( | ) | |||||
| Digital currencies traded for cash | - | |||||||
| Net cash (used in) provided by investing activities | ( | ) | ||||||
| Financing activities | ||||||||
| Proceeds from pre-funded warrants | - | |||||||
| Proceeds of shares issued for cash, net of issuance costs | ||||||||
| Proceeds from exercise of warrants and options | ||||||||
| Return of proceeds to non-controlling interest | - | ( | ) | |||||
| Repayment of loans payable | - | ( | ) | |||||
| Lease payments | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Net change in cash | ||||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
- 4 -
Digi Power X Inc.
Condensed Interim Consolidated Statement of Changes in Shareholders’ Equity
(Expressed in United States Dollars) (Unaudited)
| Number of shares (note 11) | Accumulated | |||||||||||||||||||||||||||
| Subordinate | Proportionate | Additional | Other | Non- | ||||||||||||||||||||||||
| Voting | Voting | paid-in | Accumulated | Comprehensive | Controlling | |||||||||||||||||||||||
| Shares | Shares | capital | Deficit | Loss | Interest | Total | ||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||
| Shares issued for cash | - | - | - | - | ||||||||||||||||||||||||
| Cost of issue - cash | - | - | ( | ) | - | - | - | ( | ) | |||||||||||||||||||
| Restricted share units converted to common shares | - | - | - | - | - | - | ||||||||||||||||||||||
| Share based compensation | - | - | - | - | - | |||||||||||||||||||||||
| Dissolution of non-controlling interest | - | - | ( | ) | - | - | ( | ) | ( | ) | ||||||||||||||||||
| Net loss for the period | - | - | - | ( | ) | - | - | ( | ) | |||||||||||||||||||
| Other comprehensive income for the period | - | - | - | - | - | |||||||||||||||||||||||
| Balance as of March 31, 2025 | ( | ) | ( | ) | - | |||||||||||||||||||||||
| Shares issued for cash | - | - | - | - | ||||||||||||||||||||||||
| Cost of issue - cash | - | - | ( | ) | - | - | - | ( | ) | |||||||||||||||||||
| Restricted share units converted to common shares | - | - | - | - | - | - | ||||||||||||||||||||||
| Shares issued for exercise of warrants and options | - | - | - | - | ||||||||||||||||||||||||
| Share based compensation | - | - | - | - | - | |||||||||||||||||||||||
| Net loss for the period | - | - | - | ( | ) | - | - | ( | ) | |||||||||||||||||||
| Other comprehensive income for the period | - | - | - | - | - | |||||||||||||||||||||||
| Balance as of June 30, 2025 | ( | ) | ( | ) | - | |||||||||||||||||||||||
| Shares issued for cash | - | - | - | - | ||||||||||||||||||||||||
| Issuance of pre-funded warrants | - | - | - | - | - | |||||||||||||||||||||||
| Cost of issue - cash | - | - | ( | ) | - | - | - | ( | ) | |||||||||||||||||||
| Restricted share units converted to common shares | - | - | - | - | - | - | ||||||||||||||||||||||
| Shares issued for exercise of warrants and options | - | - | - | - | ||||||||||||||||||||||||
| Warrant liabilities exercised | - | - | - | - | - | |||||||||||||||||||||||
| Share based compensation | - | - | - | - | - | |||||||||||||||||||||||
| Net income for the period | - | - | - | - | - | |||||||||||||||||||||||
| Other comprehensive loss for the period | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | ( | ) | $ | ( | ) | $ | - | $ | ||||||||||||||||||
- 5 -
Digi Power X Inc.
Condensed Interim Consolidated Statement of Changes in Shareholders’ Equity (Continued)
(Expressed in United States Dollars) (Unaudited)
| Number of shares (note 11) | Accumulated | |||||||||||||||||||||||||||
| Subordinate | Proportionate | Additional | Other | Non- | ||||||||||||||||||||||||
| Voting | Voting | paid-in | Accumulated | Comprehensive | Controlling | |||||||||||||||||||||||
| Shares | Shares | capital | Deficit | Loss | Interest | Total | ||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | ( | ) | $ | ( | ) | $ | - | $ | ||||||||||||||||||
| Restricted share units converted to common shares | - | - | - | - | - | - | ||||||||||||||||||||||
| Share based compensation | - | - | - | - | - | |||||||||||||||||||||||
| Changes to ownership of subsidiary | - | - | - | - | ||||||||||||||||||||||||
| Net loss for the period | - | - | - | ( | ) | - | - | ( | ) | |||||||||||||||||||
| Other comprehensive loss for the period | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||
| Balance as of March 31, 2026 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Shares issued for cash | - | - | - | - | ||||||||||||||||||||||||
| Restricted share units converted to common shares | - | - | - | - | - | - | ||||||||||||||||||||||
| Shares issued for exercise of warrants and options | - | - | - | - | ||||||||||||||||||||||||
| Share based compensation | - | - | - | - | - | |||||||||||||||||||||||
| Changes to ownership of subsidiary | - | - | ( | ) | - | - | ( | ) | ( | ) | ||||||||||||||||||
| Net loss for the period | - | - | - | ( | ) | - | - | ( | ) | |||||||||||||||||||
| Other comprehensive loss for the period | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||
| Balance as of June 30, 2026 | ( | ) | ( | ) | - | |||||||||||||||||||||||
| Shares issued for cash | - | - | - | - | ||||||||||||||||||||||||
| Restricted share units converted to common shares | - | - | - | - | - | - | ||||||||||||||||||||||
| Share based compensation | - | - | - | - | - | |||||||||||||||||||||||
| Net income for the period | - | - | - | - | - | |||||||||||||||||||||||
| Other comprehensive income for the period | - | - | - | - | - | |||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | ( | ) | $ | ( | ) | $ | - | $ | ||||||||||||||||||
- 6 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 1. | Nature of operations |
Digi Power X Inc. (together with its subsidiaries, Digihost International, Inc., DGX Holding, LLC and World Generation X, LLC, the “Corporation” or “Digi Power”) is an innovative energy infrastructure corporation that develops data centers to drive the expansion of sustainable energy assets.
The Corporation was incorporated in British Columbia, Canada, on
These unaudited condensed interim consolidated financial statements of the Corporation were approved and authorized for issue by the Board of Directors of the Corporation (the “Board”) on November 13, 2026.
| 2. | Basis of Presentation and Summary of Significant Accounting Policies |
Apart from new revenues and investments as described below in “Revenue” and “Investment in associate”, there have been no new or material changes to the significant accounting policies discussed in the Corporation’s audited consolidated financial statements and accompanying notes thereto for the year ended December 31, 2025, included in the Corporation’s Annual Report on Form 10-K, as originally filed with the SEC on March 31, 2026 and as amended on April 30, 2026 (the “2025 Annual Report”).
| (a) | Statement of compliance |
The accompanying unaudited condensed interim consolidated financial statements included herein have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) and under the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim reporting. The accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, that are necessary to present fairly the Corporation’s financial position, results of operations, and cash flows. The condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosures of the Corporation normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted under the SEC’s rules and regulations. These unaudited condensed interim consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto for the year ended December 31, 2025, included in the 2025 Annual Report.
Prior to January 1, 2026, the Corporation was a foreign private issuer reporting its financial statements under IFRS Accounting Standards as issued by the International Accounting Standards Board. These unaudited condensed interim consolidated financial statements, for all periods, are presented in accordance with U.S. GAAP. Any reference in these notes to applicable guidance is meant to refer to the authoritative guidance found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”).
These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis, meaning that the Corporation will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations.
- 7 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 2. | Basis of Presentation and Summary of Significant Accounting Policies (Continued) |
| (b) | Basis of consolidation |
These unaudited condensed interim consolidated financial statements include the accounts of Digi Power, its wholly owned subsidiaries, Digihost International, Inc., DGX Holding, LLC, and World Generation X. During the three months ended June 30, 2026, the Corporation’s ownership percentage of US Data Centers, Inc. (“USDC”) decreased to
Subsidiaries are consolidated from the date of acquisition, being the date on which the Corporation obtains control and continues to be consolidated until the date that such control ceases. Control is achieved when an investor has power over an investee to direct its activities, exposure to variable returns from an investee, and the ability to use the power to affect the investor’s returns. All intercompany transactions and balances have been eliminated upon consolidation. Foreign exchange gains and losses on cross-currency intercompany loan balances that are not of a long-term investment nature are included in foreign exchange gain (loss). Net earnings or loss and each component of other comprehensive income are attributed to the shareholders of the Corporation and to the non-controlling interests. Total comprehensive income is attributed to the shareholders of the Corporation and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance on consolidation.
| (c) | Revenue recognition |
Revenue from GPU as a Service: The Corporation provides computing hardware to its customers. The Corporation’s offerings are assessed to determine whether an embedded lease arrangement exists. The Corporation identifies certain contracts to be within the scope of ASC 842. For contracts that are in the scope of ASC 842, and in which the lease component is an operating lease, the Corporation applies the practical expedient in ASC 842 to combine the lease component and non-lease components, and to account for the combined components as a single lease component.
Lease income from operating leases is recognized as follows: (i) fixed payments, including non-refundable upfront prepayments of rental fees, are recognized on a straight-line basis over the lease term; and (ii) variable lease payments that do not depend on an index or rate are recognized as income in the period in which the changes in facts and circumstances on which the payments are based occur. Amounts received in advance of the related usage period are recorded as deferred revenue and recognized over the lease term.
Tier III AI data center colocation arrangements: The Corporation assesses its data center colocation agreements to determine whether they contain a lease under ASC 842. Where a customer obtains the right to control the use of an identified facility, the arrangement is accounted for as a lease, with the Corporation as lessor. Lease classification is determined at the commencement date, being the date the facility, or the applicable phase, is made available for the customer’s use. Upfront payments received before commencement, including non-recurring charges for facility construction, are recorded as unearned lease revenue until commencement. For leases classified as operating leases, such payments are recognized on a straight-line basis over the lease term. For leases classified as sales-type leases, such payments are applied against the net investment in the lease at commencement.
Where the Corporation procures equipment that is the customer’s responsibility under a colocation agreement, at cost plus a fixed margin, the procurement is accounted for as a performance obligation separate from the lease under ASC 606. These items transfer to the customer at a point in time, so they do not meet the criteria to be combined with the lease component.
- 8 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 2. | Basis of Presentation and Summary of Significant Accounting Policies (Continued) |
| (d) | Investment in associate |
Investments in associates are entities over which the Corporation has significant influence. Investments in associates are initially recognized at cost, including directly attributable transaction costs.
Under the equity method, the carrying amount of the investment is adjusted to recognize the Corporation’s share of the associate’s profit or loss and other comprehensive income after the acquisition date. The Corporation’s share of the associate’s profit or loss is recognized in the statement of income.
Dividends received from associates are recognized as a reduction in the carrying amount of the investment and are not recognized as income.
Our equity method investment consists of an investment in common stock of USDC in which we have the ability to exercise significant influence but do not have control.
| (e) | Segment reporting |
The reporting segments are identified on the basis of information that is reviewed by the Corporation’s Chief Executive Officer (the “CEO”) and the Corporation’s President to make decisions about resources to be allocated and assess its performance. Accordingly, for management purposes, the Corporation has five reporting segments namely, cryptocurrency mining, sales of energy, colocation services, Tier III AI GPU rentals and Tier III AI data center colocation.
| (f) | Critical accounting judgments, estimates and assumptions |
The preparation of these financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the year in which the estimate is revised and future years if the revision affects both current and future years. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
- 9 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 2. | Basis of Presentation and Summary of Significant Accounting Policies (Continued) |
Significant assumptions about the future that management has made that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:
| (f) | Critical accounting judgements, estimates and assumptions (continued) |
Significant judgements
| (i) | Income from digital currency mining |
The Corporation recognizes income from digital currency mining from the provision of transaction verification services within digital currency networks, commonly termed “cryptocurrency mining”. As consideration for these services, the Corporation receives digital currency from each specific network in which it participates (“coins”). Income from digital currency mining is measured based on the fair value of the coins received. The fair value is determined using the average price of the coin on the date of contract inception. The coins are recorded on the unaudited condensed interim consolidated balance sheets, as digital currencies, at their fair value less costs to sell and re- measured at each reporting date. Revaluation gains or losses, as well as gains or losses on the sale of coins for traditional (fiat) currencies are included in profit or loss in accordance with the Corporation’s treatment of its digital currencies as a traded commodity.
| (ii) | Income, value added, withholding and other taxes |
The Corporation is subject to income, value added, withholding and other taxes. Significant judgment is required in determining the Corporation’s provisions for taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Corporation recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. The determination of the Corporation’s income, value added, withholding and other tax liabilities requires interpretation of complex laws and regulations. The Corporation’s interpretation of taxation law as applied to transactions and activities may not coincide with the interpretation of the tax authorities. A deferred tax asset is recognized only to the extent that it is probable that future taxable income will be available against which the asset can be utilized. All tax related filings are subject to government audit and potential reassessment subsequent to the financial statement reporting period.
Developments in an audit, litigation, or the relevant laws, regulations, administrative practices, principles, and interpretations could have a material effect on our operating results or cash flows in the period or periods for which that development occurs, as well as for prior and subsequent periods. We recognize the tax benefit from an uncertain tax position in accordance with ASC 740, Income Taxes, only if it is more likely than not that the tax position will be sustained on examination by the applicable taxing authority, including resolution of the appeals or litigation processes, based on the technical merits of the position. The tax benefits recognized in the unaudited condensed interim consolidated financial statements from such a position are measured based on the largest benefit for each such position that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Many factors are considered when evaluating and estimating the tax positions and tax benefits. Such estimates involve interpretations of regulations, rulings, case law, etc. and are inherently complex. Our estimates may require periodic adjustments and may not accurately anticipate actual outcomes as resolution of income tax treatments in individual jurisdictions typically would not be known for several years after completion of any fiscal year. We believe the judgments and estimates discussed above are reasonable. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to losses or gains that could be material.
- 10 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 2. | Basis of Presentation and Summary of Significant Accounting Policies (Continued) |
| (f) | Critical accounting judgements, estimates and assumptions (continued) |
| (iii) | Impairment of property, plant and equipment |
Management applies judgment in assessing whether indicators of impairment exist for property, plant and equipment, including assets under construction.
The Corporation reviews its property and equipment and intangible assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Impairment exists when the carrying value of the company’s asset exceeds the related estimated undiscounted future cash flows expected to be derived from the asset. If impairment exists, the carrying value of that asset is adjusted to its fair value. This assessment requires consideration of internal and external factors such as changes in the expected use of assets, operating performance, market conditions, and strategic plans. As at September 30, 2026, management concluded that no impairment indicators existed for the Corporation’s property, plant and equipment.
Significant estimates
| (i) | Useful lives of property, plant and equipment |
Depreciation of data miners and equipment are an estimate of its expected life. In order to determine the useful life of computing equipment, assumptions are required about a range of computing industry market and economic factors, including required hashrates, technological changes, availability of hardware and other inputs, and production costs.
| (ii) | Warrant liability |
The Corporation uses Black Scholes method or the Monte Carlo simulation technique to determine the fair value of the warrant liability. The Black Scholes method requires significant judgement in determining the fair value such as volatility and risk-free rate. A change in these inputs could lead to significant change in the fair value of the warrant liability.
| (g) | Recently announced accounting pronouncements not yet adopted |
The Corporation continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement may affect the Corporation’s financial reporting, the Corporation undertakes an analysis to determine any required changes to its unaudited condensed interim consolidated financial statements and assures that there are proper controls in place to ascertain that the Corporation’s unaudited condensed interim consolidated financial statements properly reflect the change.
In November 2024, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires additional disclosures of certain expenses in the notes of the financial statements, to provide enhanced transparency into the expense captions presented on the unaudited condensed interim Consolidated Statements of Operations. Additionally, in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), to clarify the effective date of ASU 2024-03. The new standard is effective for the Corporation for its annual periods beginning after December 15, 2026 and for interim periods beginning after December 15, 2027, with early adoption permitted. The Corporation is currently evaluating the impact of adopting the standard.
There were no other significant updates to the recently issued accounting standards which may be applicable to the Corporation. Although there are several other new accounting pronouncements issued or proposed by the FASB, the Corporation does not believe any of those accounting pronouncements have had or will have a material impact on its financial position or operating results.
- 11 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 3. | Digital currencies |
The Corporation’s holdings of digital currencies consist of the following:
| As at September 30, 2026 | As at December 31, 2025 | |||||||
| Bitcoin | $ | $ | ||||||
| Ethereum | ||||||||
| $ | $ | |||||||
The continuity of digital currencies was as follows:
| Number of Ethereum | Amount | Number of Bitcoin | Amount | Total | ||||||||||||||||
| Balance, December 31, 2024 | - | $ | - | $ | $ | |||||||||||||||
| Digital currencies mined | ||||||||||||||||||||
| Digital currencies received from colocation services | - | - | ||||||||||||||||||
| Acquisition of digital currencies | ||||||||||||||||||||
| Digital currencies traded for cash | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||
| Digital currencies paid for services | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||
| Digital currencies remitted as per Miner Agreement | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||
| Gain on sale of digital currencies | - | - | - | |||||||||||||||||
| Revaluation adjustment | - | ( | ) | - | ( | ) | ( | ) | ||||||||||||
| Balance, December 31, 2025 | ||||||||||||||||||||
| Digital currencies mined and staked (1) | ||||||||||||||||||||
| Digital currencies received from colocation services | - | - | ||||||||||||||||||
| Digital currencies paid for services | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||
| Gain on sale of digital currencies | - | - | - | ( | ) | ( | ) | |||||||||||||
| Revaluation adjustment | - | ( | ) | - | ||||||||||||||||
| Balance, September 30, 2026 | $ | $ | $ | |||||||||||||||||
(1)
The cost bases of the Corporation’s holdings of digital currencies consist of:
| As at | As at | |||||||
| September 30, 2026 | December 31, 2025 | |||||||
| Bitcoin | $ | $ | ||||||
| Ethereum | ||||||||
| $ | $ | |||||||
- 12 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 4. | Amounts receivable and other assets |
| As at September 30, 2026 | As at December 31, 2025 | |||||||
| Utility deposits | $ | $ | ||||||
| Equipment deposit | ||||||||
| Prepaid expenses | ||||||||
| Accounts receivable | ||||||||
| Other receivable | ||||||||
| Long-term deposits and prepaid expenses | ( | ) | ( | ) | ||||
| $ | $ | |||||||
The Corporation uses the single expected credit loss impairment model, which is based on changes in credit quality since initial application.
The Corporation assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due. The Corporation considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Corporation in full or when the financial asset is more than 90 days past due.
The carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Corporation determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off.
- 13 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 5. | Property, plant and equipment |
| Land and building(1) | Data miners | Equipment(1)(2) | Leasehold improvement | Power plant | Total | |||||||||||||||||||
| Cost | ||||||||||||||||||||||||
| December 31, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Additions | - | |||||||||||||||||||||||
| Disposal | - | ( | ) | - | - | - | ( | ) | ||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||
| Additions | - | - | ||||||||||||||||||||||
| Disposal | - | ( | ) | - | - | - | ( | ) | ||||||||||||||||
| September 30, 2026 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Accumulated depreciation | ||||||||||||||||||||||||
| December 31, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Depreciation | ||||||||||||||||||||||||
| Disposal | - | ( | ) | - | - | - | ( | ) | ||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||
| Depreciation | ||||||||||||||||||||||||
| Disposal | - | ( | ) | - | - | - | ( | ) | ||||||||||||||||
| September 30, 2026 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Net carrying value | ||||||||||||||||||||||||
| As at December 31, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| As at September 30, 2026 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| (1) |
| (2) |
- 14 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 6. | Intangible asset |
Intangible asset relates to the right-of-use of an electric power facility for a period of
| As at September 30, | As at December 31, | |||||||
| 2026 | 2025 | |||||||
| Cost | $ | $ | ||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Intangible assets, net | $ | $ | ||||||
During the nine months ended September 30, 2026, the Corporation recognized amortization expense of $
| 7. | Leases |
Lessor activities
GPU Rental
The Corporation leases computing hardware to customers under a bare-metal rental arrangement with a non-cancellable term of
The Corporation received a non-refundable upfront payment under its bare-metal GPU rental arrangement, which represents a prepayment of lease consideration. The upfront payment is recorded as deferred lease income and recognized as lease income on a straight-line basis over the 24-month non-cancellable lease term at $
Tier III AI Colocation Data Center
On May 4, 2026, the Corporation entered into a ten-year data center colocation and master services agreement with Cerebras Systems Inc (“Cerebras”) (see note 20 to the Condensed Interim Consolidated Financial Statements). The Corporation has determined that the agreement contains a lease under ASC 842. Cerebras will obtain exclusive use of the identified facility and substantially all of its economic benefits. The Corporation retains ownership of the land and facility. Lease commencement occurs when the applicable phase is made available for Cerebras’s use. As of September 30, 2026, Phase 1 was under construction, and the lease had not commenced. Accordingly, no lease revenue has been recognized.
During the three months ended September 30, 2026, the Corporation received $
Lease classification will be determined at the commencement date. Until then, the NRC is recorded as unearned lease revenue. As the lease is expected to commence within twelve months, and the NRC may become refundable upon a breach prior to commencement, the full $
- 15 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 7. | Leases (continued) |
Lessee activities
Effective as of July 1, 2026, the Corporation entered into a lease agreement with DOGE Capital, LLC, a company controlled by the CEO and in which Michel Amar and Alec Amar, each a director and executive officer of the Corporation, have an ownership interest. The present value of the lease liability at September 30, 2026 was $
During the year ended December 31, 2022, the Corporation entered a lease for a warehouse facility. The lease was prepaid, resulting in a right-of-use asset and no corresponding lease liability. The lease is classified as a finance lease. The finance lease right-of-use asset is included in property, plant and equipment on the consolidated balance sheets.
The lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The following table summarizes the operating lease liabilities recorded within the Corporation’s consolidated financial statements as of September 30, 2026 and December 31 2025:
| As at September 30, | As at December 31, | |||||||
| 2026 | 2025 | |||||||
| Balance, beginning of period | $ | - | $ | |||||
| Additions | - | |||||||
| Interest | ||||||||
| Lease payments | ( | ) | ( | ) | ||||
| Modification of lease | - | ( | ) | |||||
| Balance, end of period | $ | $ | - | |||||
| Current portion | $ | $ | - | |||||
| Non-current portion | - | |||||||
| Total lease liabilities | $ | $ | - | |||||
The following table summarizes the operating right-of-use assets recorded within the Corporation’s consolidated financial statements as of September 30, 2026 and December 31, 2025:
As at | As at | |||||||
| 2026 | 2025 | |||||||
| Balance, beginning of period | $ | - | $ | |||||
| Additions | - | |||||||
| Depreciation | ( | ) | ( | ) | ||||
| Modification of lease | - | ( | ) | |||||
| Balance, end of period | $ | $ | - | |||||
- 16 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 7. | Leases (continued) |
The components of lease cost for the period ended September 30, 2026 and 2025 are as follows:
| Nine Months Ended September 30, | 2026 | 2025 | ||||||
| Finance lease cost | ||||||||
| Amortization of right-of-use asset | $ | $ | ||||||
| Interest on lease liability | - | - | ||||||
| Operating lease cost | ||||||||
| Variable lease cost | - | - | ||||||
| Short-term lease cost | - | - | ||||||
| Total lease cost | $ | $ | ||||||
| Other information: | ||||||||
| Operating lease | ||||||||
| Weighted average remaining lease term (in years) | - | |||||||
| Weighted average discount rate | % | % | ||||||
| Operating cash flows - operating leases | ||||||||
The future lease payments as at September 30, 2026 are as follows:
| Operating Leases | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total future minimum lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Total lease liability balance | $ | |||
| 8. | Investment |
| As at September 30, 2026 | As at December 31, 2025 | |||||||
| Balance, beginning of period | $ | $ | ||||||
| Additional investment (i)(ii)(iii)(iv) | - | |||||||
| Change in fair value of investment | - | |||||||
| Balance, end of period | $ | $ | ||||||
| (i) |
| (ii) |
- 17 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 8. | Investment (Continued) |
| (iii) |
| (iv) |
The SAFE does not provide the Corporation with an ownership interest, voting rights or other shareholder rights until such time as it converts into equity securities. If a qualified financing does not occur before a liquidity event or dissolution event, the Corporation is entitled to receive the greater of (i) its original investment amount or (ii) the value determined in accordance with the terms of the SAFE, subject to the priority provisions contained in the agreement.
As of September 30, 2026, the SAFE had not converted into equity securities.
| 9. | Investment in associate |
The Corporation incorporated USDC, as a subsidiary on September 20, 2024. Subsequent to December 31, 2024, the Corporation dissolved this subsidiary and incorporated an entity of the same name. During the year ended December 31, 2025, $
During the three months ended March 31, 2026, the Corporation reduced its ownership interest in USDC by
During the nine months ended September 30, 2026, USDC issued common shares to third-party investors for gross proceeds of $
On deconsolidation, the Corporation measured its retained interest at fair value of $
| 10. | Warrant liabilities |
The Corporation has warrants classified as financial liabilities as they are not considered to be indexed to the common shares of the Corporation, due to the exercise price of the warrants denominated in a currency other than the Corporation’s functional currency. In addition, during the nine months ended September 30, 2026, the Corporation issued a warrant in respect of
- 18 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 10. | Warrant liabilities (Continued) |
The following table summarizes the changes in the warrant liabilities for the Corporation’s warrants for the periods ended September 30, 2026 and December 31, 2025:
| Number of warrants | Amount | |||||||
| Balance, December 31, 2024 | $ | |||||||
| Warrants issued | ||||||||
| Warrants exercised | ( | ) | ( | ) | ||||
| Revaluation of warrant liabilities | - | |||||||
| Foreign currency translation | - | |||||||
| Balance, December 31, 2025 | ||||||||
| Warrants issued | ||||||||
| Warrants exercised | ( | ) | ( | ) | ||||
| Revaluation of warrant liabilities | - | |||||||
| Foreign currency translation | - | ( | ) | |||||
| Balance, September 30, 2026 | $ | |||||||
The fair value of the Corporation’s warrants issued during the three months ended March 31, 2026 were determined using the Monte Carlo simulation model with the following assumptions: expected life of
The fair value of the Corporation’s warrants determined using the Black Scholes pricing model was determined with the following weighted average assumptions:
As at September 30, | As at December 31, | |||||||
| 2026 | 2025 | |||||||
| Spot price (in CAD$) | $ | $ | ||||||
| Risk-free interest rate | % | % | ||||||
| Expected annual volatility | % | % | ||||||
| Expected life (years) | ||||||||
| Dividend | nil | nil | ||||||
The following table reflects the Corporation’s warrants classified as liabilities outstanding and exercisable as at September 30, 2026.
| Expiry date | SV Shares and exercisable | Exercise price | ||||||
| US$ | | |||||||
| US$ | ||||||||
| US$ | ||||||||
- 19 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 11. | Share capital |
| a) | Authorized share capital |
Unlimited subordinate voting shares without par value and conferring
Unlimited proportionate voting shares without par value, conferring
| b) | Subordinate voting shares and proportionate voting shares issued |
(i) On February 7, 2025, the Corporation completed a private placement consisting of
(ii) On May 30, 2025, the Corporation entered into an at-the-market sales agreement with A.G.P./Alliance Global Partners (the “Agent”), which may issue and sell from time to time such number of subordinate voting shares of the Corporation having an aggregate offering price of up to US$
(iii) On July 23, 2025, the Corporation completed a registered direct offering of
The Corporation paid a
The
(iv) On May 8, 2026, the Corporation filed with the SEC a prospectus supplement to the base prospectus and the accompanying preliminary prospectus supplement included in the Corporation’s registration statement on Form S-3 (File No. 333-294953), filed with the SEC on April 9, 2026, covering the offer and sale from time to time of up to an aggregate of $
During the nine months ended September 30, 2026, pursuant to this at-the-market equity program, the Corporation issued
- 20 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 12. | Warrants Classified as Equity |
| Number of Warrants | Weighted Average Exercise Price (CAD$) | |||||||
| Balance, December 31, 2024 | ||||||||
| Issued | ||||||||
| Expired | ( | ) | ||||||
| Balance, September 30, 2025 | ||||||||
| Balance, December 31, 2025 and September 30, 2026 | - | - | ||||||
As of September 30, 2026, no equity-classified warrants are outstanding.
| 13. | Stock options and restricted share units |
The following table presents share based compensation expense by instrument type:
| Nine Months Ended September 30, | 2026 | 2025 | ||||||
| Stock options | $ | $ | ||||||
| Restricted share units | ||||||||
| $ | $ | |||||||
| (a) | Stock options |
The Corporation has a stock option plan whereby the maximum number of shares subject to the plan, in the aggregate, shall not exceed
The following table reflects the continuity of stock options for the periods presented below:
| Number of Stock Options | Weighted Average Exercise Price (CAD$) | |||||||
| Balance, December 31, 2024 | ||||||||
| Granted | ||||||||
| Exercised | ( | ) | ||||||
| Expired / cancelled | ( | ) | ||||||
| Balance, September 30, 2025 | ||||||||
| Balance, December 31, 2025 | ||||||||
| Granted | ||||||||
| Exercised | ( | ) | ||||||
| Expired / cancelled | ( | ) | ||||||
| Balance, September 30, 2026 | ||||||||
- 21 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 13. | Stock options and restricted share units (Continued) |
The fair value of options granted for the nine months ended September 30, 2026 and 2025 was $
The fair value of the Corporation’s options has been determined using the Black Scholes pricing model and the following weighted average assumptions:
| Granted in 2026 | ||||
| Spot price (in CAD$) | $ | |||
| Risk-free interest rate | % | |||
| Expected annual volatility | % | |||
| Expected life (years) | ||||
| Dividend | nil | |||
| Fair value of option | $ | |||
The aggregate intrinsic value of stock options outstanding and exercisable as at September 30, 2026 is $
The following table reflects the stock options issued and outstanding as of September 30, 2026:
| Expiry Date | Exercise Price (CAD$) | Weighted | Number of Options Outstanding | Number of | Number of Options Unvested | |||||||||||||||
| March 5, 2030 | US$ | - | ||||||||||||||||||
| June 6, 2030 | - | |||||||||||||||||||
| August 18, 2030 | - | |||||||||||||||||||
| August 27, 2030 | US$ | - | ||||||||||||||||||
| November 19, 2030 | - | |||||||||||||||||||
| January 30, 2031 | US$ | - | ||||||||||||||||||
| March 23, 2031 | US$ | - | ||||||||||||||||||
| April 20, 2031 | US$ | - | ||||||||||||||||||
| May 15, 2031 | US$ | - | ||||||||||||||||||
| August 19, 2031 | US$ | - | ||||||||||||||||||
| - | ||||||||||||||||||||
- 22 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 13. | Stock options and restricted share units (Continued) |
| (b) | Restricted share units |
The Corporation has an RSU plan whereby there is a fixed cap of shares that can be granted under the plan.
The following table reflects the continuity of RSUs for the periods presented below:
| Number of RSUs | ||||
| Balance, December 31, 2024 | ||||
| Granted (i) | ||||
| Converted | ( | ) | ||
| Cancelled | ( | ) | ||
| Balance, September 30, 2025 | ||||
| Balance, December 31, 2025 | ||||
| Granted (ii) | ||||
| Converted | ( | ) | ||
| Cancelled | ( | ) | ||
| Balance, September 30, 2026 | ||||
| (i) |
| (ii) |
The aggregate intrinsic value of RSUs outstanding as at September 30, 2026 is $
For the three and nine months ended September 30, 2026, the Corporation recorded share based compensation of $
- 23 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 14. | Loss per share |
Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding for the period. Diluted earnings per share is computed by dividing net income (loss) by the weighted average number of shares of common stock during the period, plus common stock equivalents, outstanding during the period. If the Corporation reports a net loss, the computation of diluted loss per share excludes the effect of dilutive common stock equivalents, as their effect would be anti-dilutive.
The following table sets forth the computation of basic and diluted loss per share attributable to common stockholders:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Numerator | ||||||||||||||||
| Net loss attributable to common shareholders - basic and diluted | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Denominator | ||||||||||||||||
| Weighted average shares used in computing net loss per share attributable to common shareholders - basic | ||||||||||||||||
| Dilutive effect of stock options and warrants | - | - | ||||||||||||||
| Weighted average number of shares outstanding - diluted | ||||||||||||||||
| Net loss per share attributable to common shareholders - basic | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Net loss per share attributable to common shareholders - diluted | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
In periods with a reported net loss, the effect of stock options, warrants, unvested restricted stock units, are excluded and diluted loss per share is equal to basic loss per share.
| Nine Months Ended September 30, | 2026 | 2025 | ||||||
| Liability-classified warrants outstanding | ||||||||
| Equity-classified warrants outstanding | - | |||||||
| Stock options outstanding | ||||||||
| Unvested restricted share units | ||||||||
- 24 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 15. | General and administrative expenses |
General and administrative expenses are comprised of:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Office and administrative expenses | $ | $ | $ | $ | ||||||||||||
| Professional fees | ||||||||||||||||
| Regulatory fees | ||||||||||||||||
| Share based compensation | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
| 16. | Related party transactions |
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control. Related parties include key management personnel and may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions are recorded at the exchange amount, being the amount agreed to between the related parties.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Corporation, directly or indirectly. Key management personnel include the Corporation’s executive officers and members of the Board. Effective as of July 1, 2026, the Corporation entered into a lease agreement with DOGE Capital, LLC, a company controlled by the CEO and in which Michel Amar and Alec Amar, each a director and an executive officer of the Corporation, have an ownership interest. As of September 30, 2026, the present value of the related lease liability was $
Remuneration of key management personnel of the Corporation was as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Professional fees (1) | $ | $ | $ | $ | ||||||||||||
| Salaries (1) | ||||||||||||||||
| Directors fees | - | - | ||||||||||||||
| Share based compensation (2) | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
| (1) |
| (2) |
- 25 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 17. | Cash flow supplemental information |
| Nine Months Ended September 30, | 2026 | 2025 | ||||||
| Digital currencies items | ||||||||
| Digital currencies mined and staked | $ | ( | ) | $ | ( | ) | ||
| Bitcoin received from colocation services | ( | ) | ( | ) | ||||
| Services paid in digital currencies | ||||||||
| Gain on sale of digital currencies | ( | ) | ||||||
| Gain on revaluation of digital currencies | ( | ) | ( | ) | ||||
| $ | ( | ) | $ | ( | ) | |||
| Working capital items | ||||||||
| Amounts receivable and prepaid expenses | $ | ( | ) | $ | ( | ) | ||
| Accounts payable and accrued liabilities | ( | ) | ||||||
| Income tax receivable | ( | ) | - | |||||
| Deposit payable | ( | ) | - | |||||
| Unearned revenue | - | |||||||
| $ | $ | ( | ) | |||||
| Other supplemental information | ||||||||
| Interest paid | $ | - | $ | - | ||||
| Taxes paid | $ | - | $ | - | ||||
18. Segmented reporting
The Corporation has
During the three months ended September 30, 2026, the Corporation changed the structure of its internal reporting to the CODM. The Tier III AI data center segment previously reported is now reported as two operating segments: Tier III AI GPU Rentals and Tier III AI data center colocation.
Segment information for prior periods has been recast to conform to the current period presentation.
The GPU as a Service segment began generating revenue in May 2026. The data center colocation segment is in the development phase. As of September 30, 2026, Phase 1 of the facility had not commenced, and no lease revenue was recognized. Revenue of $
The CODM, being the Corporation’s President and Chief Executive Officer, uses segment revenue, segment net income (loss), and segment EBITDA to assess the performance of each segment, and reviews segment total assets when allocating capital. The CODM uses these measures primarily to compare actual results against budget and forecast, and to decide on the allocation of operating and capital resources. Segment net income (loss) is the measure most consistent with the amounts in the consolidated financial statements. The total of the reportable segments’ revenue, net income (loss) and total assets equals the Corporation’s consolidated revenue, net income (loss) and total assets, respectively. Income taxes are nil for all periods presented.
The significant segment expenses regularly provided to the CODM are cost of revenue and depreciation and amortization. Other segment items comprise general and administrative expenses, foreign exchange gains and losses, gains and losses on the sale and revaluation of digital currencies, changes in the fair value of warrant liabilities, net financial income, the gain on deconsolidation of subsidiary, and other income. These items are allocated to segments based on the segment in which the item arises. Accordingly, each of the Tier III AI segments has been included as a reportable segment.
- 26 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 18. | Segmented reporting (Continued) |
| Three Months Ended September 30, 2026 | Cryptocurrency mining | Sales of energy | Colocation services | Tier III GPU rental | Tier III AI data center colocation | Total | ||||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | - | ( | ) | - | ( | ) | ||||||||||||||
| Net income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| EBITDA | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Nine Months Ended September 30, 2026 | Cryptocurrency mining | Sales of energy and electricity | Colocation services | Tier III GPU rental | Tier III AI project | Total | ||||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Cost of revenue | ( | ) | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | - | ( | ) | - | ( | ) | ||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| EBITDA | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Three Months Ended September 30, 2025 | Cryptocurrency mining | Sales of energy and electricity | Colocation services | Tier III GPU rental | Tier III AI project | Total | ||||||||||||||||||
| Revenue | $ | $ | $ | $ | - | $ | ||||||||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | - | ( | ) | |||||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | - | ( | ) | |||||||||||||||
| Net loss | ( | ) | - | |||||||||||||||||||||
| EBITDA | ( | ) | - | |||||||||||||||||||||
| Nine Months Ended September 30, 2025 | Cryptocurrency mining | Sales of energy and electricity | Colocation services | Tier III GPU rental | Tier III AI project | Total | ||||||||||||||||||
| Revenue | $ | $ | $ | $ | - | $ | ||||||||||||||||||
| Cost of revenue | ( | ) | ) | ( | ) | - | ( | ) | ||||||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | - | ( | ) | |||||||||||||||
| Net loss | ( | ) | ( | ) | - | ( | ) | |||||||||||||||||
| EBITDA | ( | ) | ( | ) | - | ( | ) | |||||||||||||||||
| As at September 30, 2026 | Cryptocurrency mining | Sales of energy and electricity | Colocation services | Tier III GPU rental | Tier III AI project | Total | ||||||||||||||||||
| Total assets | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| As at December 31, 2025 | Cryptocurrency mining | Sales of energy and electricity | Colocation services | Tier III GPU rental | Tier III AI project | Total | ||||||||||||||||||
| Total assets | $ | $ | $ | $ | $ | - | $ | |||||||||||||||||
- 27 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 19. | Financial instruments and risk management |
Risks
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Corporation’s primary exposure to credit risk is on its cash and amounts receivable. The cash is held in multiple accounts which are FDIC insured up to $
Liquidity risk
Liquidity risk is the risk that the Corporation will not be able to meet its financial obligations as they fall due. The Corporation manages liquidity risk by maintaining cash balances to ensure that it is able to meet its short-term and long-term obligations as and when they fall due. The Corporation manages cash projections and regularly updates projections for changes in business and fluctuations caused in digital currency prices and exchange rates.
The following table summarizes the expected maturity of the Corporation’s significant financial liabilities and other liabilities based on the remaining period from the balance sheet date to the contractual maturity date:
| Payments by period | ||||||||||||||||||||||||
| As at September 30, 2026 | Less than 1 year | 1 - 3 years | 4 - 5 years | More than 5 years | Total | Carrying Value | ||||||||||||||||||
| Accounts payable and accrued liabilities | $ | $ | - | $ | - | $ | - | $ | $ | |||||||||||||||
| Deposit payable | - | - | - | |||||||||||||||||||||
| Operating lease liabilities | - | |||||||||||||||||||||||
| $ | $ | $ | $ | - | $ | $ | ||||||||||||||||||
| Payments by period | ||||||||||||||||||||||||
| As at December 31, 2025 | Less than 1 year | 1 - 3 years | 4 - 5 years | More than 5 years | Total | Carrying Value | ||||||||||||||||||
| Accounts payable and accrued liabilities | $ | $ | - | $ | - | $ | - | $ | $ | |||||||||||||||
| Deposit payable | - | - | - | |||||||||||||||||||||
| $ | $ | $ | - | $ | - | $ | $ | |||||||||||||||||
- 28 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 19. | Financial instruments and risk management (Continued) |
Foreign currency risk
Currency risk relates to the risk that the fair values or future cash flows of the Corporation’s financial instruments will fluctuate because of changes in foreign exchange rates. Exchange rate fluctuations affect the costs that the Corporation incurs in its operations.
As the Corporation operates in an international environment, some of the Corporation’s financial instruments and transactions are denominated in currencies other than an entity’s functional currency. The fluctuation of the Canadian dollar in relation to the US dollar will consequently impact the profitability of the Corporation and may also affect the value of the Corporation’s assets and liabilities and the amount of shareholders’ equity. As at September 30, 2026 and December 31, 2025, the foreign currency risk was considered minimal.
Digital currency risk
Digital currency prices are affected by various forces including global supply and demand, interest rates, exchange rates, inflation or deflation and the global political and economic conditions. The profitability of the Corporation is directly related to the current and future market price of digital currencies; in addition, the Corporation may not be able to liquidate its holdings of digital currencies at its desired price if required. A decline in the market prices for digital currencies could negatively impact the Corporation’s future operations. The Corporation has not hedged the conversion of any of its sales of digital currencies.
Digital currencies have a limited history and the fair value historically has been very volatile. Historical performance of digital currencies is not indicative of their future price performance. The Corporation’s digital currencies currently consist of Bitcoin and Ethereum.
At September 30, 2026, had the market price of the Corporation’s holdings of Bitcoin increased or decreased by
$
At September 30, 2026, had the market price of the Corporation’s holdings of Ethereum increased or decreased by
$
Financial Instruments
The Corporation measures certain financial and non-financial assets and liabilities at fair value on a recurring or non-recurring basis. The fair values of investments were measured using the cost, market or income approaches.
The fair value of the Corporation’s financial instruments, including cash, current portion of amounts receivable, investment, and accounts payable and accrued liabilities approximates their carrying value due to their short-term nature. Deposit payable is due to arm’s length third parties, with the fair value of this payable measured using relevant market input (Level 3). The fair value of deposit payable was calculated using actualized cash flows using market rates in effect at the balance sheet date. Reasonable changes to key assumptions would not have a significant impact. Investment is measured using a market-based valuation approach, utilizing relevant Level 3 market inputs. Digital currencies are measured at fair value using the quoted price on Gemini Exchange (Level 1). Warrant liabilities are measured at fair value using the Black Scholes pricing model (Level 2) or the Monte Carlo simulation technique (Level 3).
- 29 -
Digi Power X Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2026
(Expressed in United States Dollars) (Unaudited)
| 19. | Financial instruments and risk management (Continued) |
The following tables present information about the Corporation’s assets and liabilities measured at fair value on a recurring basis and the Corporation’s estimated level within the fair value hierarchy for each of those assets and liabilities as of September 30, 2026 and December 31, 2025, respectively:
| As at September 30, 2026 | As at December 31, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Cash | $ | $ | - | $ | - | $ | $ | - | $ | - | ||||||||||||||
| Digital currencies | $ | $ | - | $ | - | $ | $ | - | $ | - | ||||||||||||||
| Investments | $ | - | $ | - | $ | $ | - | $ | - | $ | ||||||||||||||
| Liabilities | ||||||||||||||||||||||||
| Warrant liability | $ | - | $ | $ | - | $ | - | $ | $ | - | ||||||||||||||
| Obligation to issue warrants | $ | - | $ | - | $ | - | $ | - | $ | $ | - | |||||||||||||
There were no transfers among Levels 1, 2 or 3 during the periods ended September 30, 2026 and December 31, 2025.
| 20. | Commitment |
(i) During the year ended December 31, 2025, the Corporation entered into a contract with a supplier for the purchase of various high-performance computers in connection with the Tier III AI data center colocation. Under the terms of the agreement, payments are due upon shipment of the equipment.
The Corporation has made payments of $
(ii) On May 4, 2026, the Corporation entered into a ten-year data center colocation and master services agreement with Cerebras Systems Inc. Under the terms of the agreement, the Corporation is obligated, to construct, commission, and operate a purpose-built Tier III facility in Columbiana, Alabama delivering up to
| 21. | Subsequent events |
(i) The Corporation entered into a bare metal GPU rental agreement with Smartshare, Inc. for a term of 12 months, effective on October 12, 2026, relating to the Tier III AI data center colocation. For more information regarding this agreement, please see Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operation – “Description of Business” – “Updates and Expansion.”
(ii) In October 2026, the Corporation issued a total of
(iii) On October 13, 2026, the Corporation announced that it had received a commitment letter from a major lending institution for $
- 30 -
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read together with our unaudited condensed interim consolidated financial statements and the related notes included elsewhere in this Quarterly Report and with our audited consolidated financial statements and the related notes included in the 2025 Annual Report. This MD&A is intended to provide investors with an understanding of our results of operations, financial condition, liquidity and capital resources, and critical accounting estimates through the eyes of management. It includes “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, as amended, and “forward-looking information” within the meaning of U.S. and Canadian securities laws (collectively referred to herein as “forward-looking statements”). Actual results could differ materially from those anticipated in these forward-looking statements due to a number of factors, including those discussed under the headers “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” and elsewhere in this Quarterly Report. The numbers below are presented in thousands except for percentages, share and per share amounts.
The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and include the results of the Corporation and its subsidiaries. Any reference in these notes to applicable guidance is meant to refer to the authoritative guidance found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”). The Corporation’s consolidated financial statements filed with this Quarterly Report and this discussion and analysis are reported in thousands of US dollars and US dollars, respectively, except where otherwise noted. The Corporation’s management team is responsible for the preparation and integrity of the financial statements, including the maintenance of appropriate information systems, procedures and internal controls. Management is also responsible for ensuring that information disclosed externally, including the financial statements and this related discussion and analysis, is complete and reliable.
Description of Business
Digi Power, through its U.S. operating subsidiaries, is an innovative energy infrastructure company that develops data centers to drive the expansion of sustainable energy assets. With multiple sites, including its combined cycle and high-capacity substations, the Corporation taps into and enhances the energy grid, supporting both industrial clients and broader energy markets.
The Corporation’s strategy is to use its owned and contracted power infrastructure to support data center and GPU-compute operations. Management believes that access to existing power infrastructure may reduce certain development timelines and infrastructure costs.
The Company converts owned power assets into high-density, AI-ready data center capacity — targeting Tier III classification, direct liquid cooling, and 200kW+ per-rack GPU density at its Alabama facility.
NeoCloudz is the compute layer on top of the Digi Power infrastructure stack — providing bare-metal GPU access, 400G InfiniBand fabric, and enterprise-grade telemetry for AI training, inference, and HPC workloads.
The Corporation also receives revenue from its Bitcoin mining operations, which is described in greater detail in “Mining Operations” below.
Updates and Expansion
The Corporation commenced assembly of its first ARMS 200 Tier III AI data center pod during Q4 2025, with full activation in Q2 2026. This milestone represents Digi Power X’s first modular AI infrastructure deployment utilizing the ARMS (AI-Ready Modular Solution) platform, for which a company in which we hold an approximately 48% equity interest, USDC, has filed a provisional patent application.
- 31 -
The Corporation has received approval for a load study providing an additional 60 MW of available power capacity at one of its New York locations, further strengthening Digi Power X’s energy infrastructure to support future AI expansion across its U.S. sites.
In partnership with Super Micro Computers, Inc. (“SMCI”), the Corporation deployed its first fully operational NVIDIA B200 GPU cluster in Q2 2026, marking a milestone in its AI infrastructure roadmap.
The Corporation continues to develop its retail compute platform, NeoCloudz, which launched in January 2026. Built on an SMCI enterprise-grade backbone, NeoCloudz is designed to provide developers, startups, and enterprises with on-demand access to GPU compute through a modern, consumer-grade interface. The Corporation intends for the platform to leverage Digi Power X’s Tier III infrastructure, high-efficiency liquid cooling and low-latency networking architecture to deliver scalable, high-performance AI and HPC capabilities to its customers.
As part of its ongoing transition from cryptocurrency mining to AI-driven infrastructure, Digi Power X has established a phased deployment plan across its existing power assets. This strategic roadmap is intended to scale Tier III AI data center capacity while seeking to optimize energy efficiency and returns.
The Corporation currently has the following power available through its dedicated infrastructure:
| ● | Alabama site: 60 MW | |
| ● | New York sites: 141.7 MW | |
| ● | Total available power today: 201.7 MW | |
| ● | North Carolina (anticipated availability by 2028): 200 MW |
In March 2026, the Corporation introduced the formation of US Data Centers Inc. (“USDC”). USDC intends to commercialize the ARMS modular data center system, a turnkey modular AI data center system designed to convert a powered site into an operational AI data center more quickly than conventional construction. USDC intends to manufacture and sell the ARMS system, while allowing for its customers to own and operate their own sites. As of September 30, 2026, Digi Power X currently holds an approximately 48% equity stake in USDC. USDC is not a subsidiary of the Corporation, and the Corporation accounts for its investment in USDC under the equity method.
On April 18, 2026, the Corporation entered into a bare metal GPU rental agreement with SubQ AI, a next generation AI company. The 24-month contract carries an expected total contract value of approximately $19.6 million and became effective May 15, 2026. Under the terms of the agreement, Digi Power X will deliver exclusive, dedicated access to a fleet of the latest generation of NVIDIA Blackwell GPUs. These systems will be operated on a bare metal basis through NeoCloudz, Digi Power X’s GPU-as-a-Service platform, at the Corporation’s AI data center. The deployment follows NVIDIA reference architecture, and the facility is engineered to Rated 3 standards, with redundant utility feeds, N+1 UPS, and a CDU and chiller based two loop cooling architecture. The Corporation began recognizing revenues from this agreement during Q2 2026.
On May 4, 2026, the Corporation entered into a Data Center Colocation and Master Services Agreement (the “Cerebras Agreement”) with Cerebras Systems Inc. (“Cerebras”) for the colocation of a purpose-built, 40-megawatt AI data center campus located in Columbiana, Alabama (the “Facility”). The initial 10-year term is valued at approximately $1.1 billion, with total potential contract value of up to $2.5 billion assuming one seven-year extension, in each case subject to the Corporation meeting its obligations under the Cerebras Agreement. Digi Power X will develop and deliver the Facility in two phases: Phase 1 comprising 15 MW of IT load, followed by Phase 2 delivering an incremental 25 MW for a combined total of 40 MW. The additional 25 MW in Phase 2 is conditioned on the Corporation securing adequate financing. The Facility is being designed to Tier III infrastructure standards optimized for the high-density thermal requirements of next-generation AI accelerator hardware. For more information, see the Corporation’s Current Report on Form 8-K, filed with the SEC on May 8, 2026.
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On October 12, 2026, the Corporation entered into a bare metal GPU rental agreement with Smartshare, Inc., a next generation AI company. The 12-month contract carries an expected total contract value of approximately $2.7 million. Under the terms of the agreement, Digi Power X will deliver exclusive, dedicated access to a fleet of the latest generation of NVIDIA Blackwell GPUs. These systems will be operated on a bare metal basis through NeoCloudz, Digi Power X’s GPU-as-a-Service platform, at the Corporation’s AI data center. The deployment follows NVIDIA reference architecture, and the facility is engineered to Rated 3 standards, with redundant utility feeds, N+1 UPS, and a CDU and chiller based two loop cooling architecture.
Mining operation and network overview
Revenue from the Corporation’s Bitcoin mining operation is recognized based upon the average Bitcoin price in effect on the day the Bitcoins are mined. Bitcoins are received within a 24-hour period from the actual time they are mined. The Bitcoin price is volatile and can change markedly from day to day. This volatility in price can result in material changes in revenue recorded from period to period.
Network mining difficulty is one of the most significant competitive conditions the Corporation faces in its Bitcoin mining operation. Network difficulty is a unitless measure of how difficult it is to find a hash below a given target. Network difficulty is impacted directly by the price of Bitcoin. As the price of Bitcoin increases network mining difficulty may increase if more competitors begin to mine Bitcoin, which would result in a decrease in the number of Bitcoins mined by the Corporation based upon its existing computing power. As network difficulty rises the costs to the Corporation to mine Bitcoin also rises.
The Bitcoin network protocol automatically adjusts network difficulty by changing the target every 2,016 blocks hashed based on the time it took for the total computing power used in Bitcoin mining to solve the previous 2,016 blocks such that the average time to solve each block is maintained as close to ten minutes as possible. Price and network difficulty are positively correlated such that as the price of Bitcoin rises, there is an added incentive for miners to enter the market, and such increase in miners typically has a proportional increase in network difficulty.
With respect to the conversion of the Corporation’s Bitcoin to cash, the Corporation relies on a third-party service provider to broker sales of its mined Bitcoin. In 2022, the Corporation began to monetize a portion of Bitcoin mined to fund the Corporation’s operating costs and SG&A expenses, mitigating the need to access equity markets to fund those costs and expenses when appropriate. When necessary, this strategy has continued to be utilized during the entirety of 2025 and to the date of this MD&A.
A “mining pool” is a service operated by a mining pool operator that pools the resources of individual miners to share their processing power over a network. Mining pools emerged in response to the growing difficulty and network hash rate competing for Bitcoin rewards on the Bitcoin blockchain as a way of lowering costs and reducing the risk of an individual miner’s mining activities. The mining pool operator provides a service that coordinates the computing power of the independent mining enterprises participating in the mining pool. Mining pools are subject to various risks such as disruption and down time. In the event that a pool we utilize experiences down time or is not yielding returns, our results may be impacted.
The Corporation uses a mining pool that pays Bitcoin rewards utilizing a “Full-Pay-Per-Share” payout of Bitcoin based on a contractual formula, which calculates payout primarily based on the hash rate provided by us to the mining pool as a percentage of total network hash rate, along with other inputs. We are entitled to consideration even if a block is not successfully placed by the mining pool operator. The Corporation transitioned completely to this type of mining pool in 2022 and utilized it for the period ended September 30, 2026.
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Mining Operations
Bitcoin
As of September 30, 2026, the Corporation held a total of approximately 259 Bitcoins with an inventory value of $21,718,596 based on the Bitcoin price as of that date per the Gemini Exchange. For the nine-month period ended September 30, 2026, Digi Power mined a total of approximately 5 Bitcoins compared to a total of approximately 33 Bitcoins for the nine-month period ended September 30, 2025, representing a decrease of 85%.
For the three-month period ended September 30, 2026, Digi Power mined a total of 2 Bitcoins compared to 10 for the three-month period ended September 30, 2025, representing a decrease of 80%.
The number of Bitcoins mined decreased compared to the same period in 2025 due to the continued expansion of the Corporation’s hosting and colocation operations agreements that were entered into in order to diversify its operations, along with the Corporation’s transition from Bitcoin mining to a focus on AI infrastructure that began in 2025.
Ethereum
As of September 30, 2026, the Corporation held a total of 1,021 Ethereum with an inventory value of $2,741,090 based on the Ethereum price as of that date per the Gemini exchange, as compared to a value of $0 as of September 30, 2025, as the Corporation diversified its cryptocurrency holdings with the acquisition of Ethereum during the 2nd half of 2025.
Custodial services for digital currencies
The Corporation has a digital custody account with Gemini Trust Company, LLC (“Gemini”). Gemini is a digital currency exchange and custodian that allows customers to buy, sell, and store its digital assets. Gemini holds 100% of the Corporation’s cryptocurrency assets in hot storage. Gemini is not a related party of the Corporation. The Corporation is not aware of anything with regard to Gemini’s operations that would adversely affect the Corporation’s ability to obtain an unqualified audit opinion on its audited financial statements.
The Corporation has chosen to hold its full inventory of the Corporation’s cryptocurrency assets with Gemini due to its track record in the industry. Gemini is a New York trust company regulated by the New York State Department of Financial Services and is the foreign equivalent of a Canadian financial institution (as that term is defined in National Instrument 45-106 – Prospectus Exemption). Gemini is a qualified custodian under New York Banking Law and is licensed by the State of New York to custody digital assets. Gemini has not appointed a sub-custodian to hold any of the Corporation’s cryptocurrencies. Gemini has US$125M split between US$25M of commercial crime insurance for digital assets held in online hot wallet and US$100M for offline, cold storage insurance coverage. Although the Corporation has historically utilized both cold and hot storage for its digital crypto assets with Gemini, the Corporation currently holds all its cryptocurrencies custodied with Gemini in hot storage.
The Corporation has conducted due diligence on Gemini and has not identified any material concerns. It routinely reviews and verifies its asset balances on public blockchain explorers. Management of the Corporation is not aware of any security breaches or other similar incidents involving Gemini that resulted in lost or stolen cryptocurrency assets. In the event of an insolvency or bankruptcy of Gemini, the Corporation would write off as losses any unrecoverable cryptocurrency assets.
In order to monitor Gemini, the Corporation relies on system and organization controls provided by a SOC 2 Type II report, which was undertaken by Deloitte & Touche LLP, an independent audit firm. A SOC 2 Type II certification and report are viewed as instrumental in providing verification to third parties that appropriate controls have been put in place to safeguard the Corporation’s cryptocurrency assets, specifically as it relates to having strict security and data protection processes and protocols.
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In general, a SOC 2 Type II certification is issued by an outside auditor that evaluates the extent to which a vendor complies with five trust principles based on the systems and processes in place. These five principles include the following:
| ● | “Security”, which addresses the safeguarding of system resources and assets against unauthorized access; |
| ● | “Availability”, which addresses the accessibility of the system as stipulated by the applicable service agreement between vendor and customer; |
| ● | “Processing Integrity”, which addresses whether or not a system achieves its purpose; |
| ● | “Confidentiality”, which addresses whether access and disclosure of data is restricted to a specified set of persons or organizations; and |
| ● | “Privacy”, which addresses the system’s collection, use, retention, disclosure and disposal of personal information in conformity with an organization’s privacy notice. |
The Corporation has elected to use Gemini as its sole custodian as Gemini compiles documented controls that can be provided to the Corporation, such as the SOC 2 Type II certification. The Corporation reviews the SOC 2 Type II report to ensure it maintains a secure technology infrastructure and the security systems designed to safeguard cryptocurrency assets are operating effectively. To date, the Corporation has not identified any material concerns based on its review of the SOC 2 Type II report.
Gemini maintains insurance coverage for the cryptocurrency held on behalf of the Corporation in its online hot wallet. The Corporation is in the process of looking to insure the remainder of its mined digital currency. Given the novelty of digital currency mining and associated businesses, insurance of this nature is generally not available, or is uneconomical for the Corporation to obtain, which leads to the risk of inadequate insurance cover.
On occasion, to mitigate third-party risk, the Corporation will hold a portion of its digital currencies in cold storage solutions that are not connected to the internet. The Corporation’s digital assets that are held in cold storage are stored in safety deposit boxes at a bank branch. The wallets in which the Corporation stores its cryptocurrency assets are not multi-signature wallets; however, the Corporation secures the 24-word seed phrase, which facilitates recovery of the wallets should the wallets become lost, stolen or damaged, by partitioning the seed phrase in multiple parts, and securing each part in a separate location. Each part of the seed phrase is stored in either a safe or safety deposit box, The Corporation replicates this security protocol by taking the same 24-word seed phrase, partitioning this into several parts and storing each part in a secure location in a separate safe or safety deposit box than was used for the first copy of the seed-phrase. This duplication ensures that the digital currencies held via cold storage solutions will be recoverable by the Corporation, should the Corporation’s cold-wallets become lost, stolen or damaged. During the period-ended September 30, 2026, and as of the date of this MD&A, all of the Corporation’s cryptocurrency assets are currently held in its Gemini wallets.
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Selected Financial Information
Period ended September 30, ($) | Year ended ($) | |||||||
| Revenue | 26,841,960 | 34,188,226 | ||||||
| Net (loss) | (17,967,254 | ) | (28,356,223 | ) | ||||
| Net income (loss) per share – basic and diluted | (0.21 | ) | (0.64 | ) | ||||
Period ended ($) | Year ended ($) | |||||||
| Total assets | 306,325,579 | 134,113,579 | ||||||
| Total long-term liabilities | 3,130,236 | 2,203,526 | ||||||
Selected Quarterly Information
A summary of selected information for each of the eight most recent quarters prepared in accordance with U.S. GAAP is as follows:
| Net Income or (Loss) | ||||||||||||||||
| Three Months Ended | Revenues ($) | Total ($) | Per Share - Basic ($) | Per Share - Diluted ($) | ||||||||||||
| 2026-September 30 | 12,246,140 | 1,045,600 | 0.01 | 0.01 | ||||||||||||
| 2026-June 30 | 6,628,607 | (14,360,509 | ) | (0.17 | ) | (0.17 | ) | |||||||||
| 2026-March 31 | 7,967,213 | (4,652,345 | ) | (0.08 | ) | (0.08 | ) | |||||||||
| 2025-December 31 | 8,654,879 | (16,584,733 | ) | (0.31 | ) | (0.31 | ) | |||||||||
| 2025-September 30 | 8,145,309 | 64,539 | 0.00 | 0.00 | ||||||||||||
| 2025-June 30 | 8,111,451 | (9,704,563 | ) | (0.29 | ) | (0.29 | ) | |||||||||
| 2025-March 31 | 9,276,587 | (1,633,261 | ) | (0.05 | ) | (0.05 | ) | |||||||||
| 2024-December 31 | 5,637,540 | (6,057,655 | ) | (0.28 | ) | (0.28 | ) | |||||||||
The Corporation is generally not subject to seasonality. Factors that may impact revenues and profitability include Bitcoin price, network difficulty, the price of power, overall market conditions, foreign currency fluctuations and the Corporation’s hashrate.
Results of Operations
For the three months ended September 30, 2026, compared to the three months ended September 30, 2025:
For the three months ended September 30, 2026, the Corporation’s net income was $1,045,600 compared to net income of $64,539 for the three months ended September 30, 2025. Highlights of the quarter include:
Revenue
Revenue from Bitcoin mining was $184,003 for the three months ended September 30, 2026, compared to $1,212,291 for the period ended September 30, 2025.
For the three-month period ended September 30, 2026, the Corporation self-mined a total of approximately 2 Bitcoins at an average Bitcoin price of US$71,179 (from Gemini) compared to the three-month period ended September 30, 2025, in which the Corporation mined approximately 10 Bitcoins at an average price of Bitcoin of US$105,320.
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The primary reason for the minimal amount in the Corporation’s mining revenues as compared to last year was the continued diversification of the Corporation’s revenue streams by entering into the AI GPU rental space and colocation agreements mentioned above in this MD&A. By entering into these contracts, the Corporation was able to utilize its existing infrastructure and power supply and receive consistent payment for consumption.
Exemplifying this transition, during the quarter ended September 30, 2026, the Corporation recognized revenue per its GPU rental agreement with SubQAI for a total of $2,460,858 (as compared to $0 as of September 30, 2025).
From legacy colocation agreements, the Corporation recognized revenue from colocation services of $2,993,432 for the quarter ended September 30, 2026 (as compared to $3,904,675 as of September 30, 2025). The decrease in overall colocation revenue in Q3 2026 versus Q3 2025 is attributed to the Corporation’s transition to building out AI-driven infrastructure during the quarter in one of its previous hosting locations, recognizing revenue of approximately $3,315,379 (as compared to $0 as of September 30, 2025).
The Corporation also recognized revenue from the sale of energy of $3,292,468 for the quarter, compared to $3,028,343 in Q3 2025. Sale of energy revenue is recognized each month through the operations of the plant through its available capacity that can be sold, and actual generation of power sold. The slight year-over-year increase in this revenue was primarily due to the plant selling a greater portion of its power to the grid during the current quarter, rather than using that power to support the Corporation’s mining operations.
Cost of Revenue
The Corporation’s cost of revenues including depreciation and amortization was $14,652,641 for the three-month period ended September 30, 2026, compared to $8,999,194 for the three-month period ended September 30, 2025.
Cost of revenue increased by $1,760,646 year over year as the Corporation’s plant related expenses associated with carbon compliance increased due to price of credits along with expenses associated with the pass through of purchases related to the Cerebras Agreement.
Depreciation and amortization expense increased by $3,892,801 year over year as the Corporation placed into service approximately $55,000,000 of assets related to its Tier III GPU equipment.
Operating Expenses
The Corporation’s operating expenses were a gain of $125,048 for the three-month period ended September 30, 2026, compared to a loss of $182,523 in the same period of 2025.
The primary drivers in the current period versus the quarter ended September 30, 2025, were due to:
| ● | Increase in general and administrative spend of $2,743,131 associated with expenses incurred related to officer payroll, taxes, marketing, legal and consulting fees. |
| ● | Gain on revaluation of digital currencies in the current period of $7,068,609 (compared to a gain of $99,973 in the same period in 2025) due to appreciation of cryptocurrency prices. |
| ● | Share based compensation expense of $2,214,411 (compared to $450,526 in the same period in 2025) related to vested stock options and RSU awards. |
| ● | Foreign exchange loss of $461,241 (compared to a gain of $1,522,995 in the same period in 2025) related to currency exchange fluctuations on the intercompany balances. |
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Other income (expenses)
Other income/expense items of note in the three-month period include the revaluation of the warrant liabilities which resulted in a gain of $1,531,585 (as compared to a gain of $1,079,923 for the same period in 2025) and net financial interest income of $1,101,440 (as compared to $21,024 for the same period in 2025).
For the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025:
For the nine months ended September 30, 2026, the Corporation’s net loss was $17,967,254 compared to a net loss of $11,273,285 for the nine months ended September 30, 2025. Highlights of the period ended include:
Revenue
Revenue from Bitcoin mining was $393,152 for the nine months ended September 30, 2026, compared to $3,372,907 for the period ended September 30, 2025.
For the nine-month period ended September 30, 2026, the Corporation self-mined a total of approximately 5 Bitcoins at an average Bitcoin price of US$73,091 (from Gemini) compared to the nine-month period ended September 30, 2025, in which the Corporation mined approximately 33 Bitcoins at an average price of Bitcoin of US$102,266.
The primary reason for the minimal amount in the Corporation’s mining revenues as compared to last year was the continued diversification of the Corporation’s revenue streams by entering into the AI GPU rental space and colocation agreements mentioned above in this MD&A. By entering into these contracts, the Corporation was able to utilize its existing infrastructure and power supply and receive consistent payment for consumption.
Exemplifying this transition, during the nine months ended September 30, 2026, the Corporation recognized revenue per its GPU rental agreement with SubQAI for a total of $3,543,450 (as compared to $0 for the nine months ended September 30, 2025).
From legacy colocation agreements, the Corporation recognized revenue from colocation services of $9,446,648 for the nine-month period ended September 30, 2026 (as compared to $13,474,599 for the nine-month period ended September 30, 2025). In addition, the Corporation recognized Tier III AI data center colocation revenue of approximately $3,315,379 for the nine months ended September 30, 2026 (as compared to $0 for the nine months ended September 30, 2025), which relates to equipment procured on behalf of Cerebras under the Cerebras Agreement.
The Corporation also recognized revenue from the sale of energy of $10,143,331 for the nine-month period ended September 30, 2026, compared to $8,685,841 in the first nine months of 2025. Sale of energy revenue is recognized each month through the operations of the plant through its available capacity that can be sold and actual generation of power sold. The year-over-year increase in this revenue was primarily due to the plant selling a greater portion of its power to the grid during the current period, rather than using that power to support the Corporation’s mining operations.
Cost of Revenue
The Corporation’s cost of revenues including depreciation and amortization was $35,574,161 for the nine-month period ended September 30, 2026, compared to $27,997,827 for the nine-month period ended September 30, 2025.
Cost of revenue increased by $1,911,177 year over year as the Corporation’s plant related expenses associated with carbon compliance increased due to the price of credits along with expenses associated with the pass through of purchases related to the Cerebras Agreement.
Depreciation and amortization expense increased by $5,665,157 year over year as the Corporation placed into service approximately $55,000,000 of assets related to its Tier III GPU equipment.
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Operating Expenses
The Corporation’s operating expenses were $9,658,098 for the nine-month period ended September 30, 2026, compared to $9,700,967 in the same period of 2025.
The primary drivers in the current period versus the period ended September 30, 2025, were due to:
| ● | Increase in general and administrative spend of $5,580,389 associated with expenses incurred related to performance bonuses paid to Corporation officers, and an increase in marketing, legal, taxes and consulting fees. |
| ● | Share based compensation expense of $9,319,193 (compared to $3,169,496 in the same period of 2025) related to vested stock options and RSU awards. |
| ● | Gain on revaluation of digital currencies in the current period of $461,590 (2025: gain of $385,945). |
| ● | Foreign exchange gain of $10,188,087 (compared to a loss of $2,047,587 in the same period of 2025) related to currency exchange fluctuations on the intercompany balances. |
Other income (expenses)
Other income/expense items of note in the current year include the revaluation of the warrant liabilities which resulted in a loss of $2,719,187 (compared to a gain of $883,855 in the same period of 2025) and net financial interest income of $2,448,204 (compared to $7,557 in the same period of 2025).
Liquidity and Capital Resources
As of September 30, 2026, the Corporation had a positive working capital balance of $103,014,872 including digital currencies of $24,459,686. The Corporation commenced earning revenue from digital currency mining in mid-February 2020 and revenue from artificial intelligence during Q2 2026; however, it has limited operating history, and there can be no assurance that the Corporation’s historical performance will be indicative of its future performance.
The Corporation’s ability to continue as a going concern is dependent on the Corporation’s ability to efficiently execute on its Tier III initiatives, continue its existing colocation arrangements and develop new customers, manage operational expenses, obtain and maintain significant financial funding for its colocation agreements, and raise additional funds through debt or equity financing.
The Corporation’s capital management objective is to provide the financial resources that will enable Digi Power to maximize the return to its shareholders while also optimizing its cost of capital. In order to achieve this goal, the Corporation monitors its capital structure and adjusts as required in response to an ever-changing economic environment and the various risks to which the Corporation is exposed. The Corporation’s approach to attaining this objective is to preserve a flexible capital structure that optimizes the cost of capital at a satisfactory level of risk, to maintain its ability to meet financial obligations as they come due, and to ensure the Corporation has appropriate financial resources to fund its organic and acquisitive growth.
In order to achieve its future business objectives, Digi Power may need to liquidate or borrow against Bitcoin that has been accumulated as of the date hereof as well as Bitcoin generated from ongoing operations, which may or may not be possible on commercially attractive terms or at all. The Corporation presently anticipates that additional financing will be required to fund its initiative of developing high-performance computing and artificial intelligence focused data centers. Specifically, the build-out of the Corporation’s data center facility in Columbiana, Alabama requires specific funding in connection with the Cerebras Agreement. On October 13, 2026, the Corporation announced that it had received a commitment letter from a major lending institution for $200 million in debt financing, syndicated by Goldman Sachs, to support the development of its 40 MW AI data center in Columbiana, Alabama. The financing is expected to be structured at a project special purpose vehicle level, with an unsecured Corporation guarantee through project completion and other limited matters. Proceeds are intended to support completion of the Columbiana, Alabama project and related project costs. The closing remains subject to definitive documentation and satisfaction of various conditions, including the lender’s completion of its diligence efforts. There can be no assurance that the financing will be completed on the anticipated terms or at all. The Corporation also anticipates that additional financing could be required as part of its ongoing transition from cryptocurrency mining to AI-driven infrastructure.
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Digi Power may manage its capital structure through a variety of methods, including, without limitation, by issuing equity, seeking financing through loan products, adjusting capital spending, entering into beneficial hosting or colocation agreements, or disposing of assets.
At-the-Market Offering
On May 30, 2025, the Corporation entered into an at-the-market sales agreement with A.G.P./Alliance Global Partners as agent (the “Agent”), pursuant to which the Corporation established an at-the-market equity program (the “ATM Program”). From the commencement of the ATM Program through September 30, 2026, the Corporation issued 54,878,450 subordinate voting shares in exchange for gross proceeds of $266,250,703 at an average share price of $4.85 and received net proceeds of $259,729,374 after paying commissions of $6,421,329 to the Agent and incurring $100,000 of other transaction fees.
On May 8, 2026, the Corporation filed with the SEC a prospectus supplement to the base prospectus and the accompanying preliminary prospectus supplement included in the Corporation’s registration statement on Form S-3 (File No. 333-294953), filed with the SEC on April 9, 2026, covering the offer and sale from time to time of up to an aggregate of $175,000,000 of subordinate voting shares of the Corporation, which includes the $75,000,000 of subordinate voting shares covered by the prior prospectus supplement.
On July 17, 2026, the Corporation filed a registration statement on Form S-3 (File No. 333-297539), as amended on September 11, 2026, registering the resale by certain selling securityholders of up to 380,590 subordinate voting shares issuable upon the exercise of warrants issued in the Corporation’s February 2025 private placement, which warrants have an exercise price of $3.66 per share and expire on February 7, 2028. The registration statement was declared effective by the SEC on September 15, 2026. The Corporation will not receive any proceeds from the resale of such shares but will receive aggregate gross proceeds of approximately $1.4 million if all such warrants are exercised for cash.
Cash flows
Operating Activities
Cash used by operating activities for the nine months ended September 30, 2026, was $5,618,717 as compared to cash used of $25,136,035 for the nine months ended September 30, 2025. The difference is primarily attributed to the change in digital currency items ($-9,645,506 versus -$15,641,922, respectively), change in foreign exchange (-$10,269,591) versus $2,022,988), change in share-based compensation expense ($9,319,193 versus $3,169,496, respectively), change in deprecation ($10,912,616 versus $5,302,504, respectively) and the increase in amounts owed for working capital items in the current quarter ($9,895,793 versus $-8,068,234, respectively).
Investing Activities
Cash used in investing activities for the nine months ended September 30, 2026, was $150,395,792 as compared to cash provided in investing activities of $1,809,377 for the nine months ended September 30, 2025. In the current period, cash of $145,497,792 was used for the purchase of equipment and deposits, $3,600,000 related to the deconsolidation of a subsidiary and $1,350,000 was used for an investment opportunity. In the prior year, cash of $3,005,123 was used for the purchase of equipment and digital currencies traded for cash of $10,972,014.
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Financing Activities
Cash provided by financing activities for the nine months ended September 30, 2026, was $172,720,683, as compared to $27,836,840 for the nine months ended September 30, 2025. In the current year, the Corporation received proceeds of shares issued for cash of $170,804,292 and received proceeds from exercise of warrants and options of $1,961,391. The drivers of the balance in the prior year were proceeds of shares issued for cash of $20,073,556, proceeds from the exercise of warrants and options of $6,389,037, proceeds from pre-funded warrants of $2,487,377 and the return of proceeds from an NCI of $1,000,000, partly offset by repayment of loans of $78,130 and lease payments of $35,000.
Notes Receivable and Related Party Transactions
Investment
(i) In December 2021, the Corporation entered into an agreement for a Secured Convertible Promissory Note (“Note”) with principal of $800,000. The Note accrued interest at a rate of 6% per annum, with 3% payable in cash every calendar quarter and 3% payable in notes. The Note was converted into Series C Preferred Stock (“Shares”) of the issuer effective October 1, 2023, with 8,000 warrants issued to the Corporation. The Shares are secured by the assets of the issuer. As at September 30, 2026, the fair value of the Shares and warrants was estimated to be $1,543,331.
(ii) On February 11, 2026, the Corporation invested $1,000,000 in Alpha Square Fund, LP, a Delaware limited partnership managed by Alpha Square Management, LLC, through the purchase of limited partnership interests in the fund.
(iii) In May 2026, the Corporation invested $100,000 in Three Lions Pictura, LP, a Delaware limited partnership, through the purchase of limited partnership interests in the fund.
(iv) On April 23, 2026, the Corporation entered into a Simple Agreement for Future Equity (“SAFE”) with Subquadratic Inc., a Delaware corporation, pursuant to which the Corporation invested $250,000 in exchange for the right to receive shares of Subquadratic’s capital stock upon the occurrence of certain future events, including a qualified equity financing.
The SAFE does not provide the Corporation with an ownership interest, voting rights or other shareholder rights until such time as it converts into equity securities. If a qualified financing does not occur before a liquidity event or dissolution event, the Corporation is entitled to receive the greater of (i) its original investment amount or (ii) the value determined in accordance with the terms of the SAFE, subject to the priority provisions contained in the agreement.
As of September 30, 2026, the SAFE had not converted into equity securities.
Related Party Transactions
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control. Related parties include key management personnel and may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions are recorded at the exchange amount, being the amount agreed to between the related parties.
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Key management personnel are those persons having authority and responsibility for planning, directing, and controlling the activities of the Corporation, directly or indirectly. Key management personnel include the Corporation’s executive officers and members of the Board of Directors.
Effective as of July 1, 2026, the Corporation entered into a lease agreement with DOGE Capital, LLC, a company controlled by the CEO and in which Michel Amar and Alec Amar, each a director and an executive officer of the Corporation, have an ownership interest. As at September 30, 2026, the present value of the related lease liability was $746,355, and payments made under the lease during the three and nine months ended September 30, 2026 totaled $45,000. The Corporation expects to pay aggregate base rent of $90,000 under the lease for the year ending December 31, 2026. The lease was approved by the disinterested members of the Board on July 16, 2026, with Michel Amar and Alec Amar abstaining. For more information, see “Part II, Item 5 – Other Information – Related Party Lease Agreement.”.
Remuneration of key management personnel of the Corporation was as follows:
| Nine-month period ended September 30, 2026 | Nine-month period ended September 30, 2025 | |||||||
| Professional fees (1) | 403,857 | 133,021 | ||||||
| Salaries (1) | 2,699,961 | 1,266,366 | ||||||
| Directors’ fees | 342,414 | - | ||||||
| Share based compensation (2) | 8,308,279 | 2,351,732 | ||||||
| Total | $ | 11,754,511 | $ | 3,751,119 | ||||
| (1) | Represents the professional fees and salaries paid to officers and directors in cash and BTC. During the nine months ended September 30, 2026, the Corporation paid 3 BTC (as compared to 6 BTC for the nine months ended September 30, 2025) as compensation for the services provided by officers and directors with a fair value of $234,206 (as compared to $587,615 for the nine months ended September 30, 2025). |
| (2) | Represents the share-based compensation for officers and directors. |
Share Capital
As of the date of this MD&A, the Corporation has 101,396,689 subordinate voting shares outstanding.
As of the date of this MD&A, the Corporation has 3,660,000 Stock options, 4,761,978 restricted share units and 1,080,475 warrants issued and outstanding, including 240,385 broker warrants.
Subsequent Events
The Corporation entered into a bare metal GPU rental agreement with Smartshare, Inc. for a term of 12 months, effective on October 12, 2026, relating to the Tier III AI project. For more information regarding this agreement, please see Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operation – “Description of Business” – “Updates and Expansion.”
In October 2026, the Corporation issued a total of 50,000 stock options and 100,000 RSUs to employees of the Corporation in accordance with the Corporation’s stock option plan and restricted share unit plan, respectively. The stock options were granted to two employees in two grants of 25,000 options each, exercisable for subordinate voting shares of the Corporation at exercise prices of $3.97 and $2.79, respectively, for a period of five years from the date of grant. The stock options vest fully on the date of grant and are subject to the terms and conditions of the Corporation’s stock option plan and applicable securities laws. Each RSU entitles the holder to acquire one subordinate voting share of the Corporation on vesting. One-third (1/3) of the RSUs will vest in October 2027, and the remaining two-thirds (2/3) will vest quarterly over the two years following October 2027.
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On October 13, 2026, the Corporation announced that it had received a commitment letter from a major lending institution for $200 million in debt financing, syndicated by Goldman Sachs, to support the development of its 40 MW AI data center in Columbiana, Alabama. The financing is expected to be structured at a project special purpose vehicle level, with an unsecured Corporation guarantee through project completion and other limited matters. Proceeds are intended to support completion of the Columbiana, Alabama project and related project costs. Closing is subject to definitive documentation and the satisfaction of various conditions, including the lender’s completion of its diligence. There can be no assurance that the financing will be completed on the anticipated terms or at all. Phase 1 and Phase 2 of the Columbiana, Alabama campus are currently targeted for completion in December 2026 and March 2027, respectively.
Off-Balance Sheet Arrangements
As of September 30, 2026, the Corporation did not have any off-balance sheet arrangements.
Adoption of new accounting policies
The Corporation continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement may affect the Corporation’s financial reporting, the Corporation undertakes an analysis to determine any required changes to its Consolidated Financial Statements and assures that there are proper controls in place to ascertain that the Corporation’s Consolidated Financial Statements properly reflect the change.
Accounting standards issued but not yet effective
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires additional disclosures of certain expenses in the notes of the financial statements, to provide enhanced transparency into the expense captions presented on the unaudited condensed interim Consolidated Statements of Operations. Additionally, in January 2025, the FASB issued ASU 2025-01, Income Statement – Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), to clarify the effective date of ASU 2024-03. The new standard is effective for the Corporation for its annual periods beginning December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Corporation is currently evaluating the impact of adopting the standard.
There were no other significant updates to the recently issued accounting standards which may be applicable to the Corporation. Although there are several other new accounting pronouncements issued or proposed by the FASB, the Corporation does not believe any of those accounting pronouncements have had or will have a material impact on its financial position or operating results.
Critical accounting judgments, estimates and assumption
The preparation of these financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the year in which the estimate is revised and future years if the revision affects both current and future years. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant assumptions about the future that management has made could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:
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Significant judgments
(i) Income from digital currency mining
The Corporation recognizes income from digital currency mining from the provision of transaction verification services within digital currency networks, commonly termed “cryptocurrency mining”. As consideration for these services, the Corporation receives digital currency from each specific network in which it participates (“coins”). Income from digital currency mining is measured based on the fair value of the coins received. The fair value is determined using the spot price of the coin on the date of receipt. The coins are recorded on the statement of financial position, as digital currencies, at their fair value less costs to sell and re- measured at each reporting date. Revaluation gains or losses, as well as gains or losses on the sale of coins for traditional (fiat) currencies are included in profit or loss in accordance with the Corporation’s treatment of its digital currencies as a traded commodity.
(ii) Income, value added, withholding and other taxes
The Corporation is subject to income, value added, withholding and other taxes. Significant judgment is required in determining the Corporation’s provisions for taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Corporation recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. The determination of the Corporation’s income, value added, withholding and other tax liabilities requires interpretation of complex laws and regulations. The Corporation’s interpretation of taxation law as applied to transactions and activities may not coincide with the interpretation of the tax authorities. A deferred tax asset is recognized only to the extent that it is probable that future taxable income will be available against which the asset can be utilized. All tax related filings are subject to government audit and potential reassessment subsequent to the financial statement reporting period.
Developments in an audit, litigation, or the relevant laws, regulations, administrative practices, principles, and interpretations could have a material effect on our operating results or cash flows in the period or periods for which that development occurs, as well as for prior and subsequent periods. We recognize the tax benefit from an uncertain tax position in accordance with ASC 740, Income Taxes, only if it is more likely than not that the tax position will be sustained on examination by the applicable taxing authority, including resolution of the appeals or litigation processes, based on the technical merits of the position. The tax benefits recognized in the unaudited consolidated financial statements from such a position are measured based on the largest benefit for each such position that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Many factors are considered when evaluating and estimating the tax positions and tax benefits. Such estimates involve interpretations of regulations, rulings, case law, etc. and are inherently complex. Our estimates may require periodic adjustments and may not accurately anticipate actual outcomes as resolution of income tax treatments in individual jurisdictions typically would not be known for several years after completion of any fiscal year. We believe the judgments and estimates discussed above are reasonable. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to losses or gains that could be material.
(iii) Impairment of property, plant and equipment
Management applies judgment in assessing whether indicators of impairment exist for property, plant and equipment, including assets under construction. The Corporation reviews its property and equipment and intangible assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Impairment exists when the carrying value of the company’s asset exceeds the related estimated undiscounted future cash flows expected to be derived from the asset. If impairment exists, the carrying value of that asset is adjusted to its fair value. This assessment requires consideration of internal and external factors such as changes in the expected use of assets, operating performance, market conditions, and strategic plans. As at September 30, 2026, management concluded that no impairment indicators existed for the Corporation’s property, plant and equipment.
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Significant estimates
(i) Useful lives of property, plant, and equipment
Depreciation of data miners and equipment are an estimate of its expected life. In order to determine the useful life of computing equipment, assumptions are required about a range of computing industry market and economic factors, including required hashrates, technological changes, availability of hardware and other inputs, and production costs.
(ii) Warrant liability
The Corporation uses Black Scholes method to determine the fair value of the warrant liability. The Black Scholes method requires significant judgement in determining the fair value such as volatility and risk-free rate. A change in these inputs could lead to a significant change in the fair value of the warrant liability. The fair value of the Corporation’s warrants issued during the three months ended March 31, 2026 were determined using the Monte Carlo simulation model.
Factors Impacting Profitability
Market Price of Bitcoin: The Corporation’s business is heavily dependent on the average price of Bitcoin. The prices of cryptocurrencies, including Bitcoin, have experienced substantial volatility, meaning that high or low prices may be based on speculation and incomplete information, subject to rapidly changing investor sentiment, and influenced by factors such as technology, regulatory void or changes, fraudulent actors, manipulation, and media reporting. Bitcoin (as well as other cryptocurrencies) may have value based on various factors, including, but not limited to, their acceptance as a means of exchange by consumers and producers, scarcity, and market demand, all of which are beyond the Corporation’s control.
Halving: Further affecting the industry, particularly for the Bitcoin blockchain, the Bitcoin reward for solving a block is subject to periodic incremental halving. Halving is a process designed to control the overall supply and reduce the risk of inflation in Bitcoin, which uses a proof-of-work consensus algorithm. At a predetermined block, the mining reward is cut in half, hence the term “halving.” For Bitcoin the reward was initially set at 50 Bitcoin currency rewards per block. The Bitcoin blockchain has undergone halvings three times since its inception as follows: (1) on November 28, 2012, at block height 210,000; (2) on July 9, 2016, at block height 420,000; (3) on May 11, 2020, at block height 630,000, when the reward was reduced to its current level of 6.25 Bitcoin per block; and (4) on April 20, 2024 at block height of 840,000. The next halving for the Bitcoin blockchain is currently anticipated to occur in April 2028 at block height 1,050,000. Halvings will continue to occur until the total amount of Bitcoin currency rewards issued reaches approximately 21 million and the theoretical supply of new Bitcoin is exhausted, which is expected to occur around the year 2140. Many factors influence the price of Bitcoin, and potential increases or decreases in prices in advance of or following a future halving is unknown.
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Network Hash Rate and Difficulty: Generally, a Bitcoin miner’s chance of solving a block on the Bitcoin blockchain and earning a Bitcoin reward is a function of the miner’s hash rate, relative to the global network hash rate (i.e., the aggregate amount of computing power devoted to supporting the Bitcoin blockchain at a given time). As demand for Bitcoin has increased, the global network hash rate has increased rapidly, and as greater adoption of Bitcoin occurs, we expect the demand for new Bitcoin will likewise increase as more mining companies are drawn into the industry by this increased demand. Further, as a greater number of increasingly powerful miners have been deployed, the network difficulty for Bitcoin has consequently also increased. Network difficulty is a measure of how difficult it is to solve a block on the Bitcoin blockchain, which is adjusted every 2,016 blocks (approximately every 2 weeks) so that the average time between each block validation remains approximately ten minutes. A high difficulty means that more computing power will be required in order to solve a block and earn a new Bitcoin reward, which, in turn, makes the Bitcoin network more secure by limiting the possibility of one miner or mining pool gaining control of the network. Therefore, as new and existing miners deploy additional hash rate, the global network hash rate will continue to increase, meaning a miner’s share of the global network hash rate (and therefore its chance of earning Bitcoin rewards) will decline if it fails to deploy additional hash rate at pace with the industry.
Cost of electricity: A key factor in the Corporation’s profitability of its mining and colocation operations is the cost of electricity in the regions where the Corporation has mining operations. Energy costs generally are subject to government regulation, natural occurrences (including weather) and local supply and demand for energy. The availability and pricing of energy may be negatively affected by governmental or regulatory changes in energy policies in the states where we operate. In addition, the Corporation is exposed to negative impacts of changes in tax policy, such as, but not limited to, being precluded from claiming back input taxes or other specific taxes imposed on cryptocurrency.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
This item is not applicable as the Corporation is a smaller reporting company.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Quarterly Report, the Corporation carried out an evaluation, under the supervision of the Corporation’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Corporation’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based upon that evaluation, the Corporation’s Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported accurately and within the time frames specified in the SEC’s rules and forms and accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
Management has not identified any change in the Corporation’s internal control over financial reporting that occurred during the quarter ended September 30, 2026 that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting.
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Part II - Other Information
Item 1. Legal Proceedings
The Corporation is not currently a party to any actual or pending legal proceedings or regulatory actions that would materially affect the Corporation nor is the Corporation currently contemplating any legal proceedings that are material to its business or of which any of its assets are likely to be subject. Furthermore, the Corporation is not aware of any such proceeding known to be contemplated or threatened which would materially affect the Corporation.
Item 1A. Risk Factors
In addition to the other information set forth in this Quarterly Report, including the cautionary statement under the caption “Cautionary Note Regarding Forward-Looking Statements,” Management’s Discussion and Analysis of Financial Condition and Results of Operations, the condensed consolidated financial statements and related notes, and the following additional risk factors, you should carefully consider the risks discussed in “Part I, Item 1A - Risk Factors” in the 2025 Annual Report, as updated and supplemented in “Part II, Item 1A – Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (the “Q1 Quarterly Report”) and in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 (the “Q2 Quarterly Report”). There have been no material changes with respect to the risk factors disclosed in our 2025 Annual Report, our Q1 Quarterly Report, and our Q2 Quarterly Report. However, we note that the risks described in this report, our 2025 Annual Report, our Q1 Quarterly Report, and our Q2 Quarterly Report are not the only risks facing the Corporation, and such additional risks and uncertainties that we currently deem to be immaterial or are unknown to us could negatively impact our business, operations and/or financial results.
We expect to require additional financing, including project-level debt financing, to complete the buildout of our AI data center campus, and such financing may not be available on acceptable terms or at all.
The full deployment of Phase 2 of our purpose-built AI data center campus, which would bring the campus to a total of 40 MW of IT load, is conditioned on our securing adequate financing. On October 13, 2026, we received a commitment letter from a major lending institution for US$200 million in debt financing to support the development of such data center campus, the closing of which remains subject to definitive documentation and the satisfaction of various conditions, including the lender’s completion of its diligence efforts. There can be no assurance that we will complete this financing or any such financing on the terms we currently contemplate, or at all. If we are unable to obtain sufficient financing on acceptable terms, we may be required to delay, curtail or abandon all or a portion of our development plans, including our ability to satisfy our obligations under our AI colocation agreement, which could have a material adverse effect on our business, financial condition and results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
None.
Issuer Purchases of Equity Securities
None.
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Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
Insider Trading Arrangements
During the fiscal quarter ended September 30, 2026, none of our directors or executive officers entered into,
Related Party Lease Agreement
Effective as of July 1, 2026, the Corporation, as tenant, entered into a Short Form Lease Agreement (the “DOGE Lease”) with DOGE Capital, LLC, a California limited liability company (“DOGE Capital”), as landlord, for approximately 100,000 rentable square feet of warehouse space within a building located at 11670-A Hwy 43, Grove Hill, Alabama 36451. The DOGE Lease has an initial term of five years, commencing on July 1, 2026 and expiring on June 30, 2031, and the Corporation has the option to renew the DOGE Lease for one additional five-year term at fair market value rent. Under the DOGE Lease, the Corporation is required to pay annual base rent of $180,000, payable in equal monthly installments of $15,000, which will increase by 3% on each anniversary of the commencement date. The DOGE Lease is a triple net lease, pursuant to which the Corporation is also responsible for its pro rata share (approximately 45.45%) of real estate taxes, building insurance premiums and common area maintenance expenses, as well as utilities. The DOGE Lease also requires the Corporation to deposit a security deposit of $25,000. The premises may be used for warehouse, storage, distribution and related industrial and commercial uses. Payments made under the DOGE Lease during the three and nine months ended September 30, 2026 totaled $45,000, and the Corporation expects to pay aggregate base rent of $90,000 under the DOGE Lease for the year ending December 31, 2026 and aggregate base rent of approximately $955,646 over the initial five-year term, excluding the Corporation’s share of taxes, insurance, common area maintenance expenses and utilities.
DOGE Capital is controlled by Michel Amar, the Corporation’s CEO and a director, and each of Michel Amar and Alec Amar, the Corporation’s President and a director and Michel Amar’s son, has an ownership interest in DOGE Capital. The DOGE Lease was approved by the disinterested members of the Board by written resolution dated July 16, 2026, with Michel Amar and Alec Amar having declared their interest and abstained in accordance with Section 149 of the Business Corporations Act (British Columbia). The foregoing description of the DOGE Lease does not purport to be complete and is qualified in its entirety by reference to the full text of the DOGE Lease, a copy of which is filed as Exhibit 10.1 to this Quarterly Report and is incorporated herein by reference.
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Item 6. Exhibits
| 3.1 | Articles of Incorporation of Chortle Capital Corp. (incorporated by reference to Exhibit 1.1 to the Corporation’s Annual Report on Form 20-F, filed with the SEC on July 14, 2023) | |
| 3.2 | Certificate of Change of Name to Hashchain Technology Inc. (incorporated by reference to Exhibit 1.2 to the Corporation’s Annual Report on Form 20-F, filed with the SEC on July 14, 2023) | |
| 3.3 | Notice of Articles (incorporated by reference to Exhibit 1.3 to the Corporation’s Annual Report on Form 20-F, filed with the SEC on July 14, 2023) | |
| 3.4 | Certificate of Change of Name to Digihost Technology Inc. (incorporated by reference to Exhibit 1.4 to the Corporation’s Annual Report on Form 20-F, filed with the SEC on July 14, 2023) | |
| 3.5 | Notice of Articles (incorporated by reference to Exhibit 1.5 to the Corporation’s Annual Report on Form 20-F, filed with the SEC on July 14, 2023) | |
| 3.6 | Notice of Articles (incorporated by reference to Exhibit 1.6 to the Corporation’s Annual Report on Form 20-F, filed with the SEC on July 14, 2023) | |
| 3.7 | Certificate of Change of Name to Digi Power X Inc. (incorporated by reference to Exhibit 1.7 to the Corporation’s Annual Report on Form 20-F, filed with the SEC on March 31, 2025) | |
| 10.1* | Short Form Lease Agreement, by and between the Corporation and DOGE Capital, LLC, effective as of July 1, 2026 | |
| 31.1* | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes- Oxley Act of 2002 | |
| 31.2* | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes- Oxley Act of 2002 | |
| 32.1** | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 32.2** | Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101* | The following financial information from the Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025, (ii) Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2026 and 2025, (iii) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2026 and 2025, (iv) Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended September 30, 2026 and 2025, and (v) the Notes to Condensed Consolidated Financial Statements. | |
| 104* | The cover page from Digi Power X Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, formatted in iXBRL (Inline eXtensible Business Reporting Language) and contained in Exhibit 101. |
| * | Filed herewith. |
| ** | Furnished herewith. |
| + | Portions of this exhibit have been redacted in accordance with Regulation S-K Item 601(b)(10)(iv). The Corporation agrees to furnish supplementally an unredacted copy of the exhibit to the SEC upon its request. |
| # | Schedules and exhibits have been omitted pursuant to Regulation S-K Item 601(b)(2). The Corporation agrees to furnish supplementally the omitted schedules and exhibits to the SEC upon its request. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned; thereunto duly authorized.
| Date: November 13, 2026 | By: | /s/ Michel Amar | |
| Name: | Michel Amar | ||
| Title: | Chief Executive Officer | ||
| Date: November 13, 2026 | By: | /s/ Paul Ciullo | |
| Name: | Paul Ciullo | ||
| Title: | Chief Financial Officer | ||
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