UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number: 001-38421

BIT DIGITAL, INC.

(Exact name of registrant as specified in its charter)

Cayman Islands		98-1606989
(State or other jurisdiction of Company or organization)		(I.R.S. Employer Identification No.)

31 Hudson Yards, Floor 11, New York, NY		10001
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number: (212) 463-5121

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Ordinary Shares, $.01 par value		BTBT		Nasdaq Capital Market

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Applicable only to Corporate Issuers:

Indicate the number of shares outstanding of each of the issuers’ classes of common stock, as of the latest practicable date: 323,674,831 Ordinary Shares as of November 10, 2025.

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		ii

PART I

Item 1.	Financial Statements.	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	45

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	74

Item 4.	Controls and Procedures.	74

PART II

Item 1.	Legal Proceedings.	75

Item 1A.	Risk Factors.	75

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	84

Item 3.	Defaults Upon Senior Securities.	84

Item 4.	Mine Safety Disclosures.	84

Item 5.	Other Information.	84

Item 6.	Exhibits.	85

SIGNATURES		86

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions.

We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. In particular, information included under “Risk Factors,” “Business,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other sections of this report contain forward-looking statements. Where, in any forward-looking statement, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of Bit Digital, Inc.’s (“Bit Digital”) management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. Whether any such forward-looking statements are in fact achieved will depend on future events, some of which are beyond Bit Digital’s control. Except as may be required by law, Bit Digital undertakes no obligation to modify or revise any forward-looking statements to reflect new information, events or circumstances occurring after the date of this report. Comparisons of results for current and any prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed as historical data.

Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the U.S. Securities and Exchange Commission (the “SEC”).

Item 1. Financial Statements and Supplementary Data

BIT DIGITAL, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

As of September 30, 2025 and December 31, 2024

(Expressed in US dollars, except for the number of shares)

	September 30,			December 31,
	2025			2024
ASSETS
Current Assets
Cash and cash equivalents	$	179,118,182		$	95,201,335
Restricted cash		3,732,792			3,732,792
Accounts receivable, net		17,441,029			5,267,863
USDC		1,027,458			411,413
Digital assets		423,682,364			161,377,344
Digital intangible assets		17,257,172			-
Net investment in lease – current, net		4,126,623			2,546,519
Loans receivable		400,000			400,000
Other current assets, net		25,865,020			28,319,669
Total Current Assets		672,650,640			297,256,935

Non-Current Assets
Deposits for property, plant, and equipment		9,979,576			39,059,707
Property, plant, and equipment, net		271,305,168			107,302,458
Goodwill		19,848,419			19,383,291
Intangible assets, net		12,808,901			13,028,730
Operating lease right-of-use assets		42,773,580			14,967,569
Net investment in lease - non-current, net		10,798,088			6,782,479
Investment securities		86,676,878			30,797,365
Deferred tax asset		91,389			89,246
Other non-current assets, net		6,151,971			9,579,884
Total Non-Current Assets		460,433,970			240,990,729

Total Assets	$	1,133,084,610		$	538,247,664

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	6,301,907		$	3,418,172
Current portion of deferred revenue		7,774,675			30,698,458
Current portion of operating lease liability		5,622,000			4,529,291
Dividend payable		-			800,000
Income tax payable		1,394,825			1,595,308
Other payables and accrued liabilities		17,274,634			13,985,375
Total Current Liabilities		38,368,041			55,026,604

Non-Current Liabilities
Non-current portion of deferred revenue		13,671			73,494
Non-current portion of operating lease liability		36,294,655			9,276,926
Long-term income tax payable		3,196,204			3,196,204
Deferred tax liability		9,434,308			6,409,915
Other long-term liabilities		196,345			785,372
Total Non-Current Liabilities		49,135,183			19,741,911

Total Liabilities		87,503,224			74,768,515

Commitments and Contingencies – Note 19

Bit Digital Shareholders’ Equity
Preferred shares, $0.01 par value, 10,000,000 and 10,000,000 shares authorized, 1,000,000 and 1,000,000 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively		9,050,000			9,050,000
Ordinary shares, $0.01 par value, 1,000,000,000 and 340,000,000 shares authorized, 322,254,781 and 179,255,191 shares issued, 322,124,795 and 179,125,205 shares outstanding as of September 30, 2025 and December 31, 2024, respectively		3,222,548			1,792,548
Treasury stock, at cost, 129,986 and 129,986 shares as of September 30, 2025 and December 31, 2024, respectively		(1,171,679	)		(1,171,679	)
Additional paid-in capital		884,809,812			553,583,437
Retained earnings (Accumulated deficit)		9,836,608			(98,209,661	)
Accumulated other comprehensive income (loss)		406,386			(1,565,496	)
Total Bit Digital Shareholders’ Equity		906,153,675			463,479,149
Noncontrolling Interests		139,427,711			-
Total Equity		1,045,581,386			463,479,149
Total Liabilities and Equity	$	1,133,084,610		$	538,247,664

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BIT DIGITAL, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
INCOME (LOSS)

For the Three and Nine Months Ended September 30, 2025 and 2024

(Expressed in US dollars, except for the number of shares)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2025			2024			2025			2024

Revenues
Digital asset mining	$	7,415,702		$	10,110,221		$	21,824,503		$	48,081,874
Cloud services		18,032,898			12,151,302			49,470,499			32,718,083
Colocation services		1,692,280			-			5,059,693			-
ETH staking		2,868,534			447,004			3,794,507			1,146,562
Other		454,588			130,144			1,073,085			322,396
Total Revenues		30,464,002			22,838,671			81,222,287			82,268,915

Operating costs and expenses
Cost of revenue (exclusive of depreciation and amortization shown below)
Digital asset mining		(5,032,692	)		(9,998,031	)		(17,232,166	)		(33,520,804	)
Cloud services		(6,314,548	)		(5,459,667	)		(18,793,668	)		(13,212,295	)
Colocation services		(674,947	)		-			(1,874,829	)		-
ETH staking		(113,147	)		(11,607	)		(175,348	)		(52,496	)
Depreciation and amortization expenses		(9,636,039	)		(8,383,055	)		(25,101,566	)		(23,575,637	)
General and administrative expenses		(33,094,746	)		(13,681,750	)		(61,031,868	)		(25,118,009	)
Gains (losses) on digital assets		168,040,717			(21,916,244	)		145,990,197			12,277,384
Impairment of digital intangible assets		(1,836,192	)		-			(1,836,192	)		-
Total operating income/ (expenses)		111,338,406			(59,450,354	)		19,944,560			(83,201,857	)

Income (loss) from operations		141,802,408			(36,611,683	)		101,166,847			(932,942	)

Net loss from disposal of property, plant and equipment		(539,378	)		-			(872,998	)		-
Other income (loss), net		6,159,448			(1,555,573	)		6,554,459			3,013,574
Total other income (loss), net		5,620,070			(1,555,573	)		5,681,461			3,013,574

Income (loss) before income taxes		147,422,478			(38,167,256	)		106,848,308			2,080,632

Income tax expenses		(697,668	)		(628,230	)		(2,960,941	)		(2,747,361	)
Net income (loss)		146,724,810			(38,795,486	)		103,887,367			(666,729	)
Net loss attributable to noncontrolling interest		(4,158,903	)		-			(4,158,903	)		-
Net Income (loss) attributable to Bit Digital shareholders	$	150,883,713		$	(38,795,486	)	$	108,046,270		$	(666,729	)


Weighted average number of ordinary share outstanding
Basic		317,296,789			149,684,237			235,907,855			130,917,218
Diluted		318,896,222			149,684,237			236,336,822			130,917,218

Earnings (loss) per share
Basic	$	0.48		$	(0.26	)	$	0.46		$	(0.01	)
Diluted	$	0.47		$	(0.26	)	$	0.46		$	(0.01	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BIT DIGITAL, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME

For the Three and Nine Months Ended September 30, 2025 and 2024

(Expressed in US dollars, except for the number of shares)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2025			2024			2025			2024

Net income (loss)	$	146,724,810		$	(38,795,486	)	$	103,887,367		$	(666,729	)

Other comprehensive income (loss)
Foreign currency translation adjustments		(951,649	)		-			1,971,882			-
Comprehensive income (loss)		145,773,161			(38,795,486	)		105,859,249			(666,729	)
Comprehensive loss attributable to noncontrolling interests		(4,318,221	)		-			(4,318,221	)		-
Comprehensive income (loss) attributable to Bit Digital shareholders	$	150,091,382		$	(38,795,486	)	$	110,177,470		$	(666,729	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BIT DIGITAL, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the Three and Nine Months Ended September 30, 2025 and 2024

(Expressed in U.S. dollars, except for the number of shares)

	Preferred Shares				Common Shares				Treasury						Additional paid -in			Retained Earnings (Accumulated			Accumulated other comprehensive			Noncontrolling			Total Stockholders’
	Shares		Amount		Shares		Par Value		Shares			Amount			capital			deficit)			(loss) income			interest			Equity
Balance, December 31, 2023		1,000,000		9,050,000		107,291,827		1,074,218		(129,986	)		(1,171,679	)		290,660,609			(146,909,292	)		-			-			152,703,856
Share-based compensation expense		-		-		-		-		-			-			106,199			-			-			-			106,199
Issuance of ordinary shares/At-the-market offering, net of offering costs		-		-		12,871,934		128,719		-			-			38,523,688			-			-			-			38,652,407
Share-based compensation in connection with issuance of ordinary shares to employees		-		-		100,000		1,000		-			-			275,000			-			-			-			276,000
Share-based compensation in connection with issuance of ordinary shares to consultants		-		-		700,000		7,000		-			-			2,058,000			-			-			-			2,065,000
Share-based compensation in connection with issuance of ordinary shares to director		-		-		40,000		400		-			-			110,000			-			-			-			110,400
Cumulative effect upon adoption of ASU 2023-08		-		-		-		-		-			-			-			21,193,820			-			-			21,193,820
Net income		-		-		-		-		-			-			-			50,081,857			-			-			50,081,857
Balance, March 31, 2024		1,000,000		9,050,000		121,003,761		1,211,337		(129,986	)		(1,171,679	)		331,733,496			(75,633,615	)		-			-			265,189,539
Share-based compensation expense		-		-		-		-		-			-			40,661			-			-			-			40,661
Issuance of ordinary shares/At-the-market offering, net of offering costs		-		-		16,237,292		162,373		-			-			41,459,137			-			-			-			41,621,510
Share-based compensation in connection with issuance of ordinary shares to employees		-		-		120,000		1,200		-			-			381,875			-			-			-			383,075
Net loss		-		-		-		-		-			-			-			(11,953,100	)		-			-			(11,953,100	)
Balance, June 30, 2024		1,000,000		9,050,000		137,361,053		1,374,910		(129,986	)		(1,171,679	)		373,615,169			(87,586,715	)		-			-			295,281,685
Share-based compensation expense		-		-		-		-		-			-			76,568			-			-			-			76,568
Issuance of ordinary shares/At-the-market offering, net of offering costs		-		-		14,025,827		140,259		-			-			51,295,188			-			-			-			51,435,447
Share-based compensation in connection with issuance of ordinary shares to employees		-		-		1,622,500		16,225		-			-			4,902,225			-			-			-			4,918,450
Share-based compensation in connection with issuance of ordinary shares to consultants		-		-		500,000		5,000		-			-			2,095,000			-			-			-			2,100,000
Net loss		-		-		-		-		-			-			-			(38,795,486	)		-			-			(38,795,486	)
Balance, September 30, 2024		1,000,000		9,050,000		153,509,380		1,536,394		(129,986	)		(1,171,679	)		431,984,150			(126,382,201	)		-			-			315,016,664

Balance, December 31, 2024		1,000,000		9,050,000		179,125,205		1,792,548		(129,986	)		(1,171,679	)		553,583,437			(98,209,661	)		(1,565,496	)		-			463,479,149
Share-based compensation expense		-		-		-		-		-			-			219,255			-			-			-			219,255
Issuance of ordinary shares/At-the-market offering, net of offering costs		-		-		3,149,887		31,499		-			-			10,145,739			-			-			-			10,177,238
Share-based compensation in connection with issuance of ordinary shares to employees		-		-		21,250		216		-			-			48,050			-			-			-			48,266
Share-based compensation in connection with issuance of ordinary shares to consultants		-		-		450,000		4,500		-			-			1,638,000			-			-			-			1,642,500
Share-based compensation in connection with issuance of ordinary shares to director		-		-		20,000		200		-			-			67,600			-			-			-			67,800
Other comprehensive loss		-		-		-		-		-			-			-			-			(504,670	)		-			(504,670	)
Net loss		-		-		-		-		-			-			-			(57,711,645	)		-			-			(57,711,645	)
Balance, March 31, 2025		1,000,000		9,050,000		182,766,342		1,828,963		(129,986	)		(1,171,679	)		565,702,081			(155,921,308	)		(2,070,166	)		-			417,417,891
Share-based compensation expense		-		-		-		-		-			-			5,819,232			-			-			-			5,819,232
Issuance of ordinary shares/At-the-market offering, net of offering costs		-		-		25,504,699		255,047		-			-			48,056,280			-			-			-			48,311,327
Issuance of common stock/public offering, net of offering costs		-		-		75,000,000		750,000		-			-			140,875,128			-			-			-			141,625,128
Share-based compensation in connection with issuance of ordinary shares to consultants		-		-		250,000		2500		-			-			545,000			-			-			-			547,500
Share-based compensation in connection with issuance of ordinary shares to employees		-		-		531,250		5,313		-			-			1,159,850			-			-			-			1,165,163
Other comprehensive income		-		-		-		-		-			-			-			-			3,428,201						3,428,201
Net income		-		-		-		-		-			-			-			14,874,202			-			-			14,874,202
Balance, June 30, 2025		1,000,000		9,050,000		284,052,291		2,841,823		(129,986	)		(1,171,679	)		762,157,571			(141,047,106	)		1,358,035			-			633,188,644
Share-based compensation expense		-		-		-		-		-			-			(5,537,351	)		-			-			-			(5,537,351	)
Changes in ownership interests in a subsidiary - IPO		-		-		-		-		-			-			27,556,652			-			-			119,919,209			147,475,861
Changes in ownership interests in a subsidiary - underwriters’ over-allotment option exercise		-		-		-		-		-			-			4,133,498			-			-			18,197,708			22,331,206
Changes in ownership interests in a subsidiary - settlement of subsidiary RSUs		-		-		-		-		-			-			-			-			-			5,629,015			5,629,015
Issuance of ordinary shares/At-the-market offering, net of offering costs		-		-		22,000,000		220,000		-			-			62,597,489			-			-			-			62,817,489
Issuance of ordinary shares/public offering, net of offering costs		-		-		11,250,000		112,500		-			-			20,892,778			-			-			-			21,005,278
Share-based compensation in connection with issuance of ordinary shares to consultants		-		-		208,153		2,082		-			-			574,870			-			-			-			576,952
Share-based compensation in connection with issuance of ordinary shares to employees		-		-		4,614,351		46,144		-			-			12,434,305			-			-			-			12,480,449
Other comprehensive loss		-		-		-		-		-			-			-			-			(951,649	)		(159,318	)		(1,110,967	)
Net income (loss)		-		-		-		-		-			-						150,883,713			-			(4,158,903	)		146,724,810
Balance, September 30, 2025		1,000,000		9,050,000		322,124,795		3,222,548		(129,986	)		(1,171,679	)		884,809,812			9,836,608			406,386			139,427,711			1,045,581,386

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BIT DIGITAL, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2025 and 2024

(Expressed in US dollars)

	For the Nine Months Ended September 30,
	2025			2024
Cash Flows from Operating Activities:
Net income (loss)	$	103,887,367			(666,729	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization expenses		25,101,566			23,575,637
Loss from disposal of property, plant, and equipment		872,998			-
Gains on digital assets		(145,990,197	)		(12,277,384	)
Share-based compensation expenses		22,379,636			5,911,352
Realized and unrealized gains on digital assets held within Investment Fund		-			(2,676,237	)
Changes in fair value of investment security		(6,245,819	)		1,502,688
Current expected credit losses		111,184			-
Digital assets mined		(21,824,503	)		(48,081,874	)
Digital assets earned from staking		(3,794,507	)		(1,146,562	)
Impairment of digital intangible assets		1,836,192			-
Changes in operating assets and liabilities:
Digital assets and stable coins		(141,867,759	)		376,784
Digital intangible assets		(19,093,364	)		-
Operating lease right-of-use assets		3,876,213			(5,090,587	)
Deferred revenue		(23,002,130	)		16,926,551
Lease liability		(3,543,926	)		5,090,587
Other current assets		3,394,179			(6,184,651	)
Other non-current assets		3,396,737			997,250
Accounts receivable		(12,160,009	)		(3,910,976	)
Accounts payable		4,159,062			5,057,595
Other payables and accrued liabilities		(788,305	)		315,682
Net investment in lease		2,291,771			(3,748,527	)
Other long-term liabilities		(589,028	)		-
Income tax payable		(200,483	)		1,285,204
Deferred tax liability		2,928,274			1,454,157
Loss from divestiture of a subsidiary		-			978,938
Net Cash Used in Operating Activities		(204,864,851	)		(20,311,102	)

Cash Flows from Investing Activities:
Purchases of and deposits made for property, plant and equipment		(164,018,096	)		(7,168,679	)
Investment in equity securities		(2,001,600	)		(16,000,000	)
Investment in SAFE		-			(1,000,000	)
Proceeds from disposal of property, plant and equipment		1,959,079			176,000
Net Cash Used in Investing Activities		(164,060,617	)		(23,992,679	)

Cash Flows from Financing Activities:
Net proceeds from issuance of ordinary shares/public offering		162,630,406			-
Net proceeds from IPO over-allotment option exercise		22,189,232			-
Net proceeds from subsidiary IPO		147,369,859			-
Net proceeds from issuance of ordinary shares/registered direct offering		62,817,210			-
Net proceeds from issuance of ordinary shares/At-the-market offering		58,488,565			131,709,364
Payment of dividends		(800,000	)		-
Net Cash Provided by Financing Activities		452,695,272			131,709,364

Net increase in cash, cash equivalents and restricted cash		83,769,804			87,405,583
Effect of exchange rate changes on cash, cash equivalents and restricted cash		147,043			-
Cash, cash equivalents and restricted cash, beginning of period		98,934,127			18,180,934
Cash, cash equivalents and restricted cash, end of period	$	182,850,974		$	105,586,517

Supplemental Cash Flow Information
Cash paid for income taxes, net of refunds	$	225,000		$	8,000

Non-cash Transactions of Investing and Financing Activities
Reclassification of deposits to property and equipment	$	121,095,949		$	11,329,194
Right of use assets exchanged for operating lease liability	$	31,571,520		$	6,833,407
Net investment in sales-type lease of equipment	$	7,939,715		$	6,425,329
Issuance of subsidiary shares to employees in settlement of RSUs	$	5,876,992			-

Reconciliation of cash, cash equivalents and restricted cash

	September 30,		December 31,
	2025		2024
Cash and cash equivalents	$	179,118,182	$	95,201,335
Restricted cash		3,732,792		3,732,792
Cash, cash equivalents and restricted cash	$	182,850,974	$	98,934,127

The accompanying notes are an integral part of these unaudited consolidated financial statements.

BIT DIGITAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

Bit Digital, Inc. (“BTBT” or the “Company”), is a holding company incorporated on February 17, 2017, under the laws of the Cayman Islands. The Company is a digital asset platform focused on Ethereum (ETH)-native treasury, staking strategies and engaged in the digital asset mining business. Through our controlling majority equity stake in WhiteFiber Inc. (Nasdaq: WYFI), the Company also engages in high performance computing (“HPC”) business, including cloud services and HPC data center services.

On August 17, 2023, WhiteFiber Iceland ehf (f/k/a Bit Digital Iceland ehf) was incorporated to support the Company’s cloud services in Iceland.

On June 27, 2024, WhiteFiber HPC, Inc. (f/k/a Bit Digital HPC, Inc.) (“WF HPC”) was incorporated to support the Company’s cloud services in the United States. WhiteFiber HPC, Inc. is 100% owned by WhiteFiber AI, Inc. which is 100% owned by White Fiber, Inc.

On August 15, 2024, WhiteFiber, Inc. (f/k/a Celer, Inc.) (“WhiteFiber”) was incorporated to support the Company’s generative artificial intelligence (“AI”) workstreams. WhiteFiber was 100% owned by the Company until August 6, 2025 when the Contribution Agreement became effective (See Note 18. Related Parties).

On October 11, 2024, the Company completed the acquisition of Enovum Data Centers Corp (“Enovum”), a Montreal-based owner, operator, and developer of HPC data centers. Enovum is 100% owned by WhiteFiber.

On March 11, 2025, WhiteFiber Canada, Inc. (“WF Canada”) was incorporated to support the Company’s generative AI workstreams in Canada. WF Canada is 100% owned by WhiteFiber AI, Inc., which is 100% owned by WhiteFiber.

On May 7, 2025, Enovum NC-1 BIDCO, LLC (“Enovum NC”) was incorporated to support the HPC data centers workstreams in North Carolina. Enovum NC is 100% owned by WhiteFiber.

On May 22, 2025, WhiteFiber Japan GK (“WF Japan”) was incorporated to support the Company’s generative AI workstreams in Japan. WF Japan is 100% owned by WhiteFiber AI, Inc., which is 100% owned by WhiteFiber.

On August 8, 2025, WhiteFiber completed its initial public offering (“IPO”) of its ordinary shares. Prior to the consummation of the IPO, the Company entered into a contribution agreement (the “Contribution Agreement”) with WhiteFiber, pursuant to which the Company contributed (the “Contribution”) its HPC business through the transfer of 100% of the capital shares of its cloud services subsidiary, WhiteFiber AI, Inc. and its wholly-owned subsidiaries WhiteFiber HPC, Inc., WhiteFiber Canada, Inc., WhiteFiber Japan G.K. and WhiteFiber Iceland, ehf, to WhiteFiber in exchange for 27,043,749 ordinary shares of WhiteFiber (the “Reorganization”). Pursuant to the Contribution Agreement, the transfer will be accounted for as a common control transaction immediately prior to the IPO. The Contribution became effective on August 6, 2025, when the registration statement on Form S-1, as amended (File No. 333-288650), of WhiteFiber was declared effective by the SEC. WhiteFiber AI became a wholly-owned subsidiary of WhiteFiber and the Company became the direct shareholder of WhiteFiber after the Reorganization. As of the date of this Form 10-Q, the Company owns approximately 70.7% of WhiteFiber. (See Note 18. Related Parties).

The accompanying unaudited condensed consolidated financial statements reflect the activities of the Company and each of the following entities:

Name	Background		Ownership
Bit Digital USA, Inc. (“BT USA”)	●	A United States company	100% owned by Bit Digital, Inc.
	●	Incorporated on September 1, 2020
	●	Engaged in digital asset mining business

Bit Digital Canada, Inc. (“BT Canada”)	●	A Canadian company	100% owned by Bit Digital, Inc.
	●	Incorporated on February 23, 2021
	●	Engaged in digital asset mining business
	●	Dormant and previously engaged in digital asset mining-related business

Bit Digital Hong Kong Limited (“BT HK”)	●	A Hong Kong company	100% owned by Bit Digital, Inc.
	●	Acquired on April 8, 2020
	●	Dormant and previously engaged in digital asset mining-related business

Bit Digital Strategies Limited	●	A Hong Kong company	100% owned by Bit Digital, Inc.
(“BT Strategies”)	●	Incorporated on June 1, 2021
	●	Engaged in treasury management activities

Bit Digital Singapore Pte. Ltd.	●	A Singapore company	100% owned by Bit Digital, Inc.
(“BT Singapore”)	●	Incorporated on July 1, 2021
	●	Engaged in digital asset staking activities

Bit Digital Investment Management	●	A British Virgin Islands company	100% owned by Bit Digital Strategies Limited.
Limited (“BT IM”)	●	Incorporated on April 17, 2023
	●	Engaged in fund and investment management activities
	●	Disposed on July 1, 2024

Bit Digital Innovation Master Fund	●	A British Virgin Islands company	100% owned by Bit Digital Strategies Limited.
SPC Limited (“BT SPC”)	●	Incorporated on May 31, 2023
	●	A segregated portfolio company
	●	Disposed on July 1, 2024

WhiteFiber, Inc. (f/k/a Celer, Inc.)	●	A Cayman Islands exempted company	70.7% owned by Bit Digital, Inc.⁽¹⁾
(“WhiteFiber”)	●	Incorporated on August 15, 2024
	●	Engaged in HPC business

WhiteFiber AI, Inc. (f/k/a Bit Digital	●	A United States company	100% owned by WhiteFiber, Inc.
AI, Inc.) (“WF AI”)	●	Incorporated on October 19, 2023
	●	Engaged in cloud services

WhiteFiber Iceland ehf (f/k/a Bit Digital	●	An Icelandic company	100% owned by WhiteFiber AI, Inc.
Iceland ehf) (“WF Iceland”)	●	Incorporated on August 17, 2023
	●	Engaged in cloud services

WhiteFiber HPC, Inc. (f/k/a Bit Digital	●	A United States company	100% owned by WhiteFiber AI, Inc.
HPC, Inc.) (“WF HPC”)	●	Incorporated on June 27, 2024
	●	Engaged in HPC business

Enovum Data Centers Corp (“Enovum”)	●	A Canadian company	100% owned by WhiteFiber, Inc.
	●	Acquired on October 11, 2024
	●	Engaged in HPC data center services

WhiteFiber Canada, Inc. (“WF Canada”)	●	A Canadian company	100% owned by WhiteFiber AI, Inc.
	●	Incorporated on March 11, 2025
	●	Engaged in cloud services

Enovum NC-1 BIDCO, LLC	●	A United States company	100% owned by WhiteFiber, Inc.
(“Enovum NC”)	●	Incorporated on May 7, 2025
	●	Engaged in HPC data center services

WhiteFiber Japan GK (“WF Japan”)	●	A Japanese company	100% owned by WhiteFiber AI, Inc.
	●	Incorporated on May 22, 2025
	●	Engaged in cloud services

(1)	Upon the completion of the WhiteFiber IPO, Bit Digital owned approximately 71.5% of the ordinary shares of WhiteFiber. The ownership percentage has decreased to approximately 70.7% as a result of ordinary shares issued upon conversion of WhiteFiber restricted share units.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and principles of consolidation

The interim unaudited condensed consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States (“US GAAP”).

The unaudited condensed consolidated financial information as of September 30, 2025 and for the three and nine months ended September 30, 2025 and 2024 has been prepared without audit, pursuant to the rules and regulations of the SEC and pursuant to Regulation S-X. Certain information and footnote disclosures, which are normally included in annual financial statements prepared in accordance with US GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim financial information should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on March 14, 2025.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which are necessary for a fair presentation of financial results for the interim periods presented. The Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements have been prepared using the same accounting policies as used in the preparation of the Company’s consolidated financial statements for the year ended December 31, 2024. The results of operations for the three and nine months ended September 30, 2025, and 2024 are not necessarily indicative of the results for the full years.

Initial Public Offering of WhiteFiber

On August 8, 2025, WhiteFiber closed its initial public offering (IPO) of 9,375,000 ordinary shares at a public offering price of $17.00 per share. The IPO generated aggregate gross proceeds of approximately $159.4 million, before deducting underwriting discounts, commissions, and offering expenses payable by WhiteFiber. After deducting underwriting discounts, commissions, and other related offering expenses, net proceeds were approximately $147.4 million. The Underwriters were also granted a 30-day option (“over-allotment option”) to purchase up to an additional 1,406,250 ordinary shares.

On September 2, 2025, the Underwriters fully exercised their option to purchase the additional 1,406,250 ordinary shares at the public offering price of $17.00 per share.

Following the IPO (including the underwriters’ exercise of their option to purchase additional ordinary shares), the Company owned approximately 71.5% of the outstanding ordinary shares of WhiteFiber and continues to consolidate the assets, liabilities, and results of operations of WhiteFiber in the Company’s condensed consolidated financial statements. The portion of equity interest in WhiteFiber that the Company does not own is reflected as noncontrolling interest in the Company’s condensed consolidated financial statements.

Use of estimates

In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of digital assets and other current assets, useful lives of property, plant, and equipment, impairment of long-lived assets, intangible assets and goodwill, valuation of assets and liabilities acquired in business combinations, provision necessary for contingent liabilities and realization of deferred tax assets. Actual results could differ from those estimates.

We review the useful lives of equipment on an ongoing basis, and effective January 1, 2025 we changed our estimate of the useful lives for our cloud service equipment from three to five years. The change was made to better reflect the expected usage patterns and economic benefits of the assets. The effect of this change in estimate for the third quarter of 2025, based on cloud service equipment that were included in “Property, plant and equipment, net” as of December 31, 2024 and those acquired during the three months ended March 31, 2025, was a reduction in depreciation and amortization expense of $2.5 million and a benefit to net income of $1.9 million, or $0.01 per basic share and $0.01 per diluted share. The effect of this change in estimate for the nine months ended September 30, 2025, was a reduction in depreciation and amortization expense of $7.5 million and a benefit to net income of $5.9 million, or $0.03 per basic share and $0.03 per diluted share.

Fair value of financial instruments

ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

●

Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

●

Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data.

●

Level 3 - inputs to the valuation methodology are unobservable.

Fair value of digital assets is based on Level 1 inputs as these were based on observable quoted prices in the Company’s principal market for identical assets. The fair value of the Company’s other financial instruments, including cash and cash equivalents, restricted cash, loans receivable, deposits, accounts receivable, other receivables, accounts payable, and other payables, approximate their fair values because of the short-term nature of these assets and liabilities. Non-financial assets, such as goodwill, intangible assets, operating lease right-of-use assets, and property, plant and equipment, are adjusted to fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only upon recognition of an impairment charge.

USDC

USD Coin (“USDC”) is accounted for as a financial instrument that can be redeemed one USDC for one U.S. dollar on demand from the issuer. While not accounted for as cash or cash equivalents, we treat our USDC holdings as a liquidity resource.

Accounts receivable, net

Accounts receivable consist of amounts due from our customers. Receivables are recorded at the invoiced amount less current expected credit losses for any potentially uncollectable accounts under the current expected credit loss (“CECL”) impairment model and presents the net amount of the financial instrument expected to be collected. The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, that considers forecasts of future economic conditions in addition to information about past events and current conditions. In accordance with ASC 326, Measurement of Credit Losses on Financial Instruments (“ASC 326”), the Company evaluates the collectability of outstanding accounts receivable balances to determine current expected credit losses that reflects its best estimate of the lifetime expected credit losses. Uncollectible accounts are written off against the current expected credit losses when collection does not appear probable.

Due to the short-term nature of the Company’s accounts receivable, the estimate of expected credit loss is based on the aging of accounts using an aging schedule as of period ends. In determining the amount of the current expected credit losses, the Company considers historical collection history based on past due status, the current aging of receivables, customer-specific credit risk factors, including their current financial condition, current market conditions, and probable future economic conditions which inform adjustments to historical loss patterns. Credit loss expense, inclusive of credit loss expense on all categories of financial assets, is recorded within general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss).

Digital assets holdings

The Company’s digital assets primarily include bitcoin, ETH and Liquid Staked ETH (“LsETH”), which are included in current assets in the accompanying consolidated balance sheets. The Company distinguishes between digital assets which fall within the scope of ASC 350-60 and those which do not. The Company refers to digital assets which fall within the scope of ASC 350-60 (e.g., bitcoin and ETH) as “crypto assets.” Digital assets which do not fall within the scope of ASC 350-60, Accounting for and Disclosure of Crypto Assets, are referred to as “digital intangible assets.”

Digital intangible assets comprised of LsETH that are intangible assets outside the scope of ASC 350-60. A receipt token, in general and by design, entitles the holder to redeem the crypto intangible asset(s) for which it was exchanged. Therefore, it fails the ‘other goods and services criterion’ in paragraph 350-60-15-1(b), and thus is outside the scope of Subtopic 350-60. These digital intangible assets are recorded at cost, less impairment within digital intangible assets on the consolidated balance sheets in accordance with ASC 350-30. The Company tests digital intangible assets for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. The test for impairment consists of a comparison of the fair value of the digital intangible assets with their carrying amounts. Refer to Note 6, Digital Asset Holdings for additional information.

Digital assets purchased are recorded at cost and digital assets awarded to the Company through its mining activities and staking activities are accounted for in accordance with the Company’s revenue recognition policy disclosed below.

Effective January 1, 2024, the Company early adopted ASU 2023-08, which requires entities to measure certain cryptocurrencies at fair value, with changes in fair value recorded in net income in each reporting period. The Company’s digital assets are within the scope of ASU 2023-08 and the transition guidance requires a cumulative-effect adjustment as of the beginning of the current fiscal year for any difference between the carrying amount of the Company’s digital assets and fair value.

Prior to the adoption of ASU 2023-08, digital assets were accounted for as intangible assets with indefinite useful lives and are recorded at cost less impairment in accordance with ASC 350 - Intangibles-Goodwill and Other. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Digital assets held are accounted for as intangible assets with indefinite useful lives and are subject to impairment losses if the fair value of digital assets decreases below the carrying value at any time during the period. The fair value is measured using the quoted price of the digital assets at the time its fair value is being measured. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted.

ASC 820 defines “principal market” as the market with the greatest volume and level of activity for the asset or liability. The determination of the principal market (and, as a result, the market participants in the principal market) is made from the perspective of the reporting entity. The digital assets held by the Company are traded on a number of active markets globally. The Company uses both exchanges and Amber Group’s OTC desk to buy and sell digital assets, including transactions involving U.S. dollars or exchanges between different types of digital assets. Prior to April 1, 2025, the Company considered CoinMarketCap to be its principal market. Effective April 1, 2025, the Company determined that Coinbase is its principal market as it provides the most reliable and greatest volume and level of activity for bitcoin and ETH for which the Company can access.

The Company recognizes mining revenue by utilizing the spot price of Bitcoin determined using Coinbase at 0:00:00 UTC on the date of contract inception and staking revenue by utilizing the daily close prices obtained from Coinbase. In 2022, the Company also used hourly close price from CryptoCompare to recognize revenue from our digital asset mining activities. The Company believed the hourly close price can better reflect revenue recognized from our digital asset mining activities as compared to the daily close price from CoinMarketCap used at the time.

Purchases of digital assets by the Company and digital assets awarded to the Company through its mining activities and staking activities are included within operating activities on the accompanying consolidated statements of cash flows. The changes of digital assets are included within operating activities in the accompanying consolidated statements of cash flows. After adopting ASU 2023-08, changes in fair value and realized gains or losses are now reported as “gains (losses) on digital assets” in the consolidated statements of operations. Prior to this adoption, realized gains or losses were reported as “realized gains (losses) on exchange of digital assets” in the consolidated statements of operations. The Company accounts for its gains or losses in accordance with the first-in first-out method of accounting.

Deposits for property, plant, and equipment

The deposits for property, plant, and equipment (“PP&E”) represented advance payments for purchases of miner, high performance computing equipment and other equipment used in our colocation services. The Company initially recognizes deposits for PP&E when cash is advanced to our suppliers. Subsequently, the Company derecognizes and reclassifies deposits for PP&E to PP&E when control is transferred to and obtained by the Company.

Below is the roll forward of the balance of deposits for PP&E for the nine months ended September 30, 2025 and for the year ended December 31, 2024, respectively.

	September 30,			December 31,
	2025			2024

Opening balance	$	39,059,707		$	4,227,371
Reclassification to PP&E		(121,095,949	)		(28,129,082	)
Addition of deposits for PP&E		92,015,818			64,042,703
Adjustment (a)		-			(1,081,285	)
Ending balance	$	9,979,576		$	39,059,707

(a)

The adjustment represents a reimbursement from the customer for equipment purchased under an existing service agreement, resulting from the customer’s request to upgrade to a newer generation of GPUs for future deployment.

Property, plant, and equipment, net

Property, plant, and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets or declining-balance method. Direct costs related to developing or obtaining software for internal use are capitalized as property, plant, and equipment. Capitalized software costs are amortized over the software’s useful life when the software is placed in service. The estimated useful lives by asset category are:

		Estimated Useful Life
Digital asset miners		3 years
Cloud service equipment		5 years
Colocation service equipment		10 to 15 years
Building		30 years
Leasehold improvements		15 years
Purchased and internally developed software		1-5 years
Vehicle		5 years
Other property and equipment		20% to 30%

Effective January 1, 2025, we changed our estimate of the useful lives for our cloud service equipment from three to five years. The change was made to better reflect the expected usage patterns and economic benefits of the assets.

Impairment of long-lived assets

Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is not subject to amortization, and instead, assessed for impairment annually at the end of each fiscal year, or more frequently when events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount in accordance with ASC 350 - Intangibles -Goodwill and Other.

The impairment assessment involves an option to first assess qualitative factors to determine whether events or circumstances exist that lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment is not performed, or after assessing the totality of the events or circumstances, we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative assessment for potential impairment is performed.

The quantitative goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not impaired. An impairment loss is recognized for any excess of the carrying amount of the reporting unit over its fair value up to the amount of goodwill allocated to the reporting unit.

Finite-lived intangible Assets

Intangible assets are recorded at cost less any accumulated amortization and any accumulated impairment losses. Intangible assets acquired through business combinations are measured at fair value at the acquisition date.

Intangible assets with finite lives are comprised of customer relationships and are amortized on straight-line basis over their estimated useful lives. The Company assesses the appropriateness of finite-lived classification at least annually. Additionally, the carrying value and remaining useful lives of finite-lived assets are reviewed annually to identify any circumstances that may indicate potential impairment or the need for a revision to the amortization period. A finite-lived intangible asset is considered to be impaired if its carrying value exceeds the estimated future undiscounted cash flows expected to be generated from it. We apply judgment in selecting the assumptions used in the estimated future undiscounted cash flow analysis. Impairment is measured by the amount that the carrying value exceeds fair value. The useful lives of customer relationships is 19 years.

Business combinations

The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805 - Business Combinations, by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, measured at the acquisition date fair value. The determination of fair value involves assumptions, estimates, and judgments. The initial allocation of the purchase price is considered preliminary and therefore subject to change until the end of the measurement period (up to one year from the acquisition date). Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net assets acquired.

Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.

Investment securities

As of September 30, 2025 and December 31, 2024, investment securities represent the Company’s investments in three funds, a privately held company via a simple agreement for future equity (“SAFE”), and four privately held companies over which the Company neither has control nor significant influence through investments in ordinary shares or preferred shares.

Investment in equity method investee

In accordance with ASC 323, Investments - Equity Method and Joint Ventures, the Company accounts for the investment in one privately held company using equity method, because the Company has significant influence but does not own a majority equity interest or otherwise control over the equity investee.

Under the equity method, the Company initially records its investment at cost and prospectively recognizes its proportionate share of each equity investee’s net income or loss into its consolidated statements of operations. When the Company’s share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee.

The Company continually reviews its investment in the equity investee to determine whether a decline in fair value below the carrying value is other-than-temporary. The primary factors the Company considers in its determination include the financial condition, operating performance and the prospects of the equity investee; other company specific information such as recent financing rounds; the geographic region, market and industry in which the equity investee operates; and the length of time that the fair value of the investment is below its carrying value. If the decline in fair value is deemed to be other-than-temporary, the carrying value of the equity investee is written down to fair value.

Investment in funds

Equity securities not accounted for using the equity method are carried at fair value with unrealized gains and losses recorded in the consolidated income statements, according to ASC 321, Investments - Equity Securities. As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the fund. NAV is primarily determined based on information provided by the fund administrator.

Investment in privately held company

Equity securities not accounted for using the equity method are carried at fair value with unrealized gains and losses recorded in the consolidated income statements, according to ASC 321, Investments - Equity Securities. The Company elected to record the equity investments in privately held companies using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer.

Equity investments in privately held companies accounted for using the measurement alternative are subject to periodic impairment reviews. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of these equity securities. In computing realized gains and losses on equity securities, the Company calculates cost based on amounts paid using the average cost method. Dividend income is recognized when the right to receive the payment is established.

Investment in SAFE

SAFE investments provide the Company with the right to participate in future equity financing of preferred stock. The Company accounted for this investment under ASC 320, Investments - Debt Securities and elected the fair value option for the SAFE investment under ASC 825, Financial Instruments, which requires financial instruments to be remeasured to fair value each reporting period, with changes in fair value recorded in the consolidated statements of operations. The fair value estimate includes significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.

Investment in Innovation Fund/Digital assets held in fund

On October 1, 2023, the Company made an investment of 2,701 Ethereum, with a fair value of $4.7 million, into Bit Digital Innovation Master Fund SPC Ltd. (the “Fund”). The Fund was subsequently consolidated based on the Company’s controlling financial interest. As a result, the assets held in the Fund were included in current assets in the consolidated balance sheets under the caption “Digital assets held in Fund” as of June 30, 2023 before the disposition.

The Fund qualified and operated as an investment company for accounting purposes pursuant to the accounting and reporting guidance under ASC 946, “Financial Services – Investment Companies” (“ASC 946”), which requires fair value measurement of the Fund. The Company retains the Fund’s investment company specific accounting principles under ASC 946 upon consolidation. The digital assets held by the Fund were traded on a number of active markets globally. A fair value measurement under ASC 820, “Fair Value Measurement” (“ASC 820”) for an asset assumes that the asset is exchanged in an orderly transaction between market participants either in the principal market for the asset or, in the absence of a principal market, the most advantageous market for the asset (ASC 820-10-35-5). The fair value of the assets within the Fund was primarily determined using the price from CoinMarketCap. Any changes in the fair value of the assets were recorded in Other income (expense), net in the consolidated statements of operations.

On July 1, 2024, the Company entered into a share purchase agreement with Pleasanton Ventures Limited (“Pleasanton Ventures”) for the disposition of Bit Digital Innovation Master Fund SPC Ltd and Bit Digital Investment Management Limited. Refer to Note 20. Disposition of Bit Digital Investment Management Limited and Bit Digital Innovation Master Fund SPC Limited, for more information. Upon the disposition, the Company no longer has a controlling financial interest in the Fund and therefore deconsolidated the Fund in accordance with ASC 810 – “Consolidation” (“ASC 810”). The Company did not record any gain or loss upon deconsolidation as the digital assets in the Fund were measured at fair value. Subsequently, the investment in the Fund is included under the caption “Investment securities” as Investment in Innovation Fund. Refer to Note 10. Investment Securities for more information.

Leases

The Company determines whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the term of such lease is assessed based on the date on which the underlying asset is made available for the Company’s use by the lessor. The Company’s assessment of the lease term reflects the non-cancellable term of the lease, inclusive of any rent-free periods and/or periods covered by early-termination options which the Company is reasonably certain of not exercising, as well as periods covered by renewal options which the Company is reasonably certain of exercising. The Company also determines lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition and the presentation reflected in the consolidated statements of operations over the lease term.

For leases with a term exceeding 12 months, an operating lease liability is recorded on the Company’s consolidated balance sheet at lease commencement reflecting the present value of its fixed minimum payment obligations over the lease term. A corresponding operating lease right-of-use asset equal to the initial lease liability is also recorded, adjusted for any prepayment and/or initial direct costs incurred in connection with execution of the lease and reduced by any lease incentives received. For purposes of measuring the present value of its fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in its leasing arrangements are typically not readily determinable. The Company’s incremental borrowing rate reflects the rate it would pay to borrow on a secured basis and incorporates the term and economic environment of the associated lease. Variable lease costs are recognized in the period in which the obligation for those payments is incurred and not included in the measurement of right-of-use assets and operating lease liabilities.

For the Company’s operating leases, fixed lease payments are recognized as lease expense on a straight-line basis over the lease term. For leases with a term of 12 months or less, any fixed lease payments are recognized on a straight-line basis over the lease term and are not recognized on the Company’s consolidated balance sheet as an accounting policy election. Leases qualifying for the short-term lease exception were insignificant.

For sales-type leases where the Company is the lessor, the Company recognizes a net investment in lease, which comprises of the present value of the future lease payments and any unguaranteed residual value. Interest income is recognized over the lease term at a constant periodic discount rate on the remaining balance of the lease net investment using the rate implicit in the lease and is included in “Revenue – other”. Sales-type leases result in the recognition of gain or loss at the commencement of the lease, which will be recorded in “Other income, net.”

For the operating sublease where the Company is the lessor, the Company recognizes lease payments in income over the lease term on a straight-line basis and is included in “Other income, net”.

Revenue recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. Refer to Note 3. Revenue from Contracts with Customers for further information.

Contract costs

Capitalized contract costs represent the costs directly related and incremental to the origination of new contracts, including commissions that are incurred directly related to obtaining customer contracts. We amortize the deferred contract costs on a straight-line basis over the expected period of benefit. These amounts are included in the accompanying consolidated balance sheets, with the capitalized costs to be amortized to commission expense over the expected period of benefit and commission expense payable included in Other current assets and Other long-term liabilities.

The Company capitalized lease expense incurred in December 2023 that are directly related to fulfilling its cloud services which commenced operations in January 2024. The lease expense is directly related to fulfilling customer contracts and is expected to be recovered. The capitalized lease expense was reclassified as lease expense in January 2024.

Deferred Revenue

Deferred revenue primarily pertains to prepayments received from customers for services that have not yet commenced as of September 30, 2025. Deferred revenues are recognized as revenue when recognition criteria have been met.

Remaining performance obligation

Remaining performance obligations represent the transaction price of contracts for work that have not yet been performed. The amount represents estimated revenue expected to be recognized in the future related to the unsatisfied portion of the performance obligation.

Cost of revenue

The Company’s cost of revenue consists primarily of (i) direct production costs related to mining operations, including electricity costs, profit-sharing fees/variable performance fees and/or other relevant costs paid to our hosting facilities, (ii) direct production costs related to our cloud services, including electricity costs, data center lease costs, and other relevant costs, (iii) direct production costs related to our colocation services, including electricity costs, lease costs, data center employees’ wage expenses and other relevant costs, and (iv) direct cost related to ETH staking business, including service fees payable to the service provider.

Cost revenue excludes depreciation expenses, which are separately stated in the Company’s consolidated statements of operations.

Foreign currency

Accounts expressed in foreign currencies are translated into U.S. dollars. Functional currency assets and liabilities are translated into U.S. dollars generally using rates of exchange prevailing at the balance sheet date of each respective subsidiary and the related translation adjustments are recorded as a separate component of Accumulated other comprehensive income, net of any related taxes, in total shareholders’ equity. Income statement accounts expressed in functional currencies are translated using average exchange rates during the period. Functional currencies are generally the currencies of the local operating environment. Financial statement accounts expressed in currencies other than the functional currency of a consolidated entity are remeasured into that entity’s functional currency resulting in exchange gains or losses recorded in other income (expense), net.

Operating segments

Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. Our CODM is composed of the Chief Executive Officer and Chief Financial Officer, who use segment gross profit (loss) to assess the performance of the business of our reportable operating segments. Asset information is not used by the CODM to evaluate performance or allocate resources.

Income taxes

We account for current and deferred income taxes in accordance with the authoritative guidance, which requires income tax impact to be recognized in the period in which the law is enacted. Current income tax expense represents taxes paid or payable for the current period. Deferred tax assets and liabilities are recognized using enacted tax rates for the future tax impact of temporary differences between the financial statement and tax bases of recorded assets and liabilities. A valuation allowance is recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized based on historical and projected future taxable income over the periods in which the temporary differences are expected to be recovered or settled on each jurisdiction.

In accordance with the authoritative guidance on accounting for uncertainty in income taxes, we recognize liabilities for uncertain tax positions based on the two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained in audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.

Earnings (loss) per share

Basic earnings (loss) per share is computed by dividing net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares or resulted in the issuance of ordinary share participating in the earnings of the entity.

Commitments and contingencies

In the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business, which cover a wide range of matters. Liabilities for contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

If the assessment of a contingency indicates that it is probable that a material loss is incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

The Company may also enter into contractual arrangements that result in commitments, including purchase obligations. In addition, the Company may be subject to contingent consideration obligations related to asset acquisitions, which involve potential future payments contingent upon the achievement of specified conditions or milestones.

Share-based compensation

The Company expenses stock-based compensation to employees and non-employees over the requisite service period based on the grant-date fair value of the awards. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. These assumptions are the expected stock volatility, the risk-free interest rate, the expected life of the option, and the dividend yield on the underlying stock. Expected volatility is calculated based on the historical volatility of the Company’s ordinary shares over the expected term of the option. Risk-free interest rates are calculated based on risk–free rates for the appropriate term. The Company has elected to account for forfeitures of awards as they occur.

The Company has granted RSUs to certain employees and non-employees. Some of the RSUs contain a performance condition, and vesting is determined based on achievement of a performance metric. Compensation expense is recognized on a straight-line basis over the service period based on the expected attainment of a performance metric. At each reporting period, the Company reassesses the probability of the achievement of the performance metric, and any increase or decrease in share-based compensation expense resulting from an adjustment in the number of shares expected to vest is treated as a cumulative catch-up in the period of adjustment.

Treasury stock

The Company accounts for treasury stocks using the cost method. Under this method, the cost incurred to purchase the shares is recorded in the treasury stocks account on the consolidated balance sheets.

The Company treats shares withheld for tax purposes on behalf of employees in connection with the vesting of restricted share grants as ordinary share repurchases because they reduce the number of shares that would have been issued upon vesting.

Reclassification

Certain items in the financial statements of the comparative period have been reclassified to conform to the financial statements for the current period. The reclassification has no impact on the total assets and total liabilities as of September 30, 2025 or on the statements of operations for the three and nine months ended September 30, 2025.

Recent accounting pronouncements

The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial statements and assures that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 expands existing income tax disclosures for rate reconciliations by requiring disclosure of certain specific categories and additional reconciling items that meet quantitative thresholds and expands disclosures for income taxes paid by requiring disaggregation by certain jurisdictions. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact, if any, of the updated guidance on its disclosures for the year ending December 31, 2025.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 requires, in the notes to the financial statements, disclosures of specified information about certain costs and expenses specified in the updated guidance. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact the updated guidance will have on its disclosures.

In May 2025, FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which amends the guidance for identifying the accounting acquirer in transactions involving the acquisition of a variable interest entity that meets the definition of a business. The new standard is effective for the Company for its annual periods beginning January 1, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard.

On September 18, 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Topic ASC 350-40) which amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40. The ASU makes targeted improvements to ASC 350-40 but does not fully align the framework for accounting for internally developed software costs that are subject to ASC 350-40 with the framework applied to software to be sold or marketed externally that is subject to ASC 985-20. The ASU also does not amend the guidance on costs of software licenses that are within the scope of ASC 985-20. The amendments supersede the guidance on Web site development costs in ASC 350-50 and relocate that guidance, along with the recognition requirements for development costs specific to Web sites, to ASC 350-40. The new guidance will be effective for all entities for annual periods beginning after December 15, 2027. Early adoption is permitted as of the beginning of an annual reporting period. The guidance can be applied on a fully prospective basis, a modified basis for in-process projects, or a full retrospective basis. The Company has adopted this ASU as of July 1, 2025 and prospectively applied the updated ASU.

3. Revenue from Contracts with Customers

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).

To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.

The Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange.

The Company is currently engaged in digital asset mining business, high performance computing (“HPC”) business, including cloud services and HPC data center services, and Ethereum staking activities.

In June 2025, the Company announced that it had initiated a strategic transition to become a pure play ETH staking and treasury company. In connection with the transition, the Company intends to convert its BTC holdings into ETH over time and has commenced a strategic alternatives process for its bitcoin mining operations, which is expected to result in a sale or wind-down, with any net proceeds to be re-deployed into ETH.

Disaggregation of revenues

Revenue disaggregated by reportable segment is presented in Note 17. Segment Reporting.

Cloud services

The Company provides cloud services to support customers’ generative AI workstreams. We have determined that cloud services are a single continuous service comprised of a series of distinct services that are substantially the same and have the same pattern of transfer (i.e. distinct days of service).

These services are consumed as they are received, and the Company recognizes revenue over time using the variable allocation exception as it satisfies performance obligations. We apply this exception because we concluded that the nature of our obligations and the variability of the payment terms based on the number of GPUs providing HPC services are aligned and uncertainty related to the consideration is resolved on a daily basis as we satisfy our obligations. The Company recognizes revenue net of consideration payable to customers, such as service credits, and accounted for as a reduction of the transaction price in accordance with guidance in ASC 606-10-32-25.

During the nine months ended September 30, 2025, the Company accrued an estimated service credit of approximately $2.0 million to a customer under the terms of the contract. During the nine months ended September 30, 2024, the Company issued a service credit of $1.9 million to a customer as compensation for decreased utilization during the initial deployment period, which included testing and optimization phases.

The Company’s cloud services revenue has been generated from Iceland.

Colocation services

Colocation services generate revenue by providing customers with physical space, power, and cooling within the data center facility.

Our revenue is primarily derived from recurring revenue streams, mainly (1) colocation, which is the leasing of cabinet space and power and (2) connectivity services, which includes cross-connects. Additionally, the remainder of our revenue is from non-recurring revenue, which primarily includes installation services related to a customer’s initial deployment.

Revenues from recurring revenue streams are billed monthly and recognized ratably over the term of the contract, generally one to five years for data center colocation customers. Non-recurring installation fees, although generally paid upfront upon installation, are deferred and recognized ratably over the contract term.

We guarantee certain service levels, such as uptime, as outlined in individual customer contracts. If these service levels are not achieved due to any failure of the physical infrastructure or offerings, or in the event of certain instances of damage to customer infrastructure within our data center, we would reduce revenue for any credits or cash payments given to the customer.

The Company’s colocation services revenue has been generated from Canada.

Digital asset mining

The Company enters in contracts with mining pool operators to provide computing power to digital asset mining pools. Providing computing power for digital asset transaction verification services is an output of the Company’s ordinary activities. The provision of such computing power is the only performance obligation in the Company’s contracts with mining pool operators.

Contract inception and the Company’s enforceable right to consideration begin when the Company commences providing hash calculation services to the mining pool operators. Each party to the contract has the unilateral right to terminate the contract at any time without any compensation to the other party for such termination. As such, the duration of a contract is less than 24 hours (a day) and may be continuously renewed throughout the day. The implied renewal option is not a material right because there are no upfront or incremental fees in the initial contract, and the rate of payments remains the same upon each implied renewal, as the Full-Pay-Per-Share (FPPS) formula remains the same. The Company is entitled to compensation once it begins to perform hash calculations for the pool operator in accordance with the operator’s specifications over a 24-hour period beginning 00:00:00 UTC and ending 23:59:59 on a daily basis. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed digital assets award the mining pool operator receives, for successfully adding a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. The Company is entitled to its relative share of consideration even if a block is not successfully placed.

The transaction consideration the Company receives, if any, is noncash consideration in the form of digital assets, net of pool fees charged by the mining pool operator. The Company estimates the fair value of noncash consideration at contract inception. This non-cash consideration is variable since the amount of block reward earned depends on the Company’s hash rate provided and transaction fees depend on the actual Bitcoin Network transaction fees. While the non-cash consideration is variable, the payout is settled the next day on a daily basis and the Company has the ability to estimate the variable consideration with reasonable certainty, without the risk of significant revenue reversal because it is probable that a significant reversal in the amount of revenue recognized from the contract will not occur when the uncertainty is subsequently resolved.

Revenue is recognized on the same day that control of the contracted service transfers to the mining pool operator, which is the same day as contract inception. Revenue is estimated and recognized based on the spot price of Bitcoin determined using the Company’s Principal Market at 0:00:00 UTC on the date of contract inception.

Below table presents the Company’s revenues generated from digital asset mining business from Foundry USA Pool by country:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2025		2024		2025		2024
United States	$	5,821,711	$	8,951,079	$	17,441,125	$	42,448,768
Iceland		1,593,991		879,626		4,383,378		3,691,176
Canada		-		279,516		-		1,941,930
	$	7,415,702	$	10,110,221	$	21,824,503	$	48,081,874

ETH staking business

The Company generates revenue through ETH staking rewards. The Company commenced both native staking business and liquid staking business in 2022. In the first quarter of 2024, the Company terminated its liquid staking business. During the nine months ended September 30, 2025, the Company participated in both native staking and liquid staking. In July 2025, we resumed liquid staking through the Liquid Collective protocol with 5,120 ETH.

With the introduction of staked ETH withdrawals in April 2023, we have reassessed our Ethereum network staking approaches, weighing the advantages of traditional staking against liquid staking solutions. The withdrawal feature in native staking, coupled with yields that are on par with those of liquid staking, has encouraged us to expand our collaborations with other service providers in this domain. As a result, we have terminated all liquid staking activities with StakeWise and Liquid Collection in the third quarter of 2023 and in the first quarter of 2024, respectively, reclaiming all staked Ethereum along with the accumulated rewards. In the fourth quarter of 2023, the Company terminated the native staking activities and reclaimed all staked Ethereum with Blockdaemon. Subsequently, we have ceased our native staking with MarsLand in the first quarter of 2024 and initiated our native staking with Figment Inc.

(a) Native staking

The Company has entered into network-based smart contracts by staking ETH on nodes run by third-party operators or nodes maintained by us in 2022. Through these contracts, the Company stakes ETH on nodes for the purpose of validating transactions and adding blocks to the Ethereum blockchain network. The Company is able to withdraw the staked ETH which was previously locked-up in staking contracts since the Shanghai upgrade was successfully completed on April 12, 2023. In exchange for staking the ETH and validating transactions on blockchain networks, the Company is entitled to the block rewards and transaction fees for successfully validating or adding a block to the blockchain. These rewards are received by the Company directly from the Ethereum network and are calculated approximately based on the proportion of the Company’s stake to the total ETH staked by all validators.

The provision of validating blockchain transactions is an output of the Company’s ordinary activities. Each separate block creation or validation under a smart contract with a network represents a performance obligation. The transaction consideration the Company receives, the digital asset awards, is a non-cash consideration, which the Company measures at fair value on the date received. The fair value of the ETH reward received is determined using the quoted price of the ETH at the time of receipt. The satisfaction of the performance obligation for transaction verification services occurs at a point in time when confirmation is received from the network indicating that the validation is complete, and the awards are deposited to our address. At that point, revenue is recognized.

As of September 30, 2025 and December 31, 2024, the Company had native staked 99,936 ETH and 21,568 ETH, respectively, on the Ethereum blockchain. For the three months ended September 30, 2025 and 2024, the Company earned 644.3 ETH valued at $2,649,831 and 161.9 ETH valued at $447,004, respectively, from such staking activities and recognized the ETH staking rewards as revenues. For the nine months ended September 30, 2025 and 2024, the Company earned 1022.1 ETH valued at $3,575,804 and 382.4 ETH valued at $1,142,059 respectively, from such staking activities and recognized the ETH staking rewards as revenues.

(b) Liquid staking

Liquid staking is similar to native staking in terms of performance obligations, determination of transaction price and revenue recognition. When we participated in liquid staking via Portara protocol, the Company received receipt tokens sETH-H to represent the staked ETH at 1:1 ratio. The liquid staking rewards were in the form of rETH-H which could be redeemed for ETH from the liquid staking provider or exchange for ETH via over-the-counter markets. When we participated in liquid staking via Liquid Collective protocol, the Company received receipt tokens Liquid Staked ETH (“LsETH”) to represent the staked ETH. LsETH uses a floating conversion rate, or protocol conversion rate, between the receipt token and staked tokens, reflecting the value of accrued network rewards, penalties, and fees associated with the staked tokens.

For the three months ended September 30, 2025 and September 30, 2024, the Company generated revenues of $218,703 and $nil, respectively, from the liquid staking. For the nine months ended September 30, 2025 and September 30, 2024, the Company generated revenues of $218,703 and $4,503, respectively, from the liquid staking.

Contract costs

The Company capitalizes commission expenses directly related to obtaining customer contracts, which would not have been incurred if the contract had not been obtained. As of September 30, 2025, capitalized costs to obtain a contract totaled $1.2 million, and the outstanding commission expense payable was $1.6 million. As of December 31, 2024, capitalized costs to obtain a contract totaled $2.0 million, and the outstanding commission expense payable was $1.6 million.

Contract Assets

Contract assets primarily consist of revenue allocated to complimentary services provided to customers as part of contractual arrangements. As of September 30, 2025 and December 31, 2024, contract assets were $1.1 million and $nil, respectively.

Contract Liabilities

The Company’s contract liabilities consist of deferred revenue and customer deposits. As of September 30, 2025 and December 31, 2024, contract liabilities were $7.8 million and $30.8 million, respectively.

During the three months ended September 30, 2025 and 2024, $3.8 million and $nil, respectively, and during the nine months ended September 30, 2025 and 2024, $26.3 million and $13.1 million, respectively, of the beginning balance of contract liabilities was recognized as revenue.

During the three months ended September 30, 2025 and 2024, $2.1 million and $nil, respectively, and during the nine months ended September 30, 2025 and 2024, $6.1 million and $nil, respectively, were recognized as revenue as a result of satisfying performance obligations in previous periods.

Remaining performance obligation

The following table presents estimated revenue expected to be recognized in the future related to the unsatisfied portion of the performance obligation as of September 30, 2025:

	2025		2026		2027		2028		2029		Total
Colocation Services	$	1,670,626	$	3,862,221	$	611,353	$	92,435	$	-	$	6,236,635
Other Revenue		423,741		1,352,323		918,966		612,206	$	289,473		3,596,709
Total contract liabilities	$	2,094,367	$	5,214,544	$	1,530,319	$	704,641	$	289,473	$	9,833,344

The amounts presented in the table above exclude variable consideration allocated entirely to wholly unsatisfied performance obligations. Such amounts have been excluded from the disclosure of remaining performance obligations in accordance with ASC 606, as the consideration is not fixed and determinable.

4. Acquisitions

Enovum Data Centers Acquisition

On October 11, 2024, the Company acquired 100% of Enovum Data Centers Corp. (the “Acquiree” or “Enovum”), an owner, operator, and developer of high-performance computing data centers, located in Montreal, Quebec, Canada. The acquisition of Enovum provides the Company with a strong diversity of existing and prospective colocation customers, delivers a strong pipeline of expansion site opportunities and an experienced management team to lead the development processes, and enables the Company to offer new service offerings. The acquisition creates the potential for significant synergies, as the Company may capture additional margin from HPC customers, versus hosting them with third party data centers. Additionally, Enovum enhances the Company’s competitive positioning in the marketplace, enabling the Company to offer an integrated GPU cloud solution to customers. Finally, the Company will enjoy greater operating flexibility by collocating its owned GPU inventory in Enovum data centers, offering capacity to customers on a just-in-time basis.

The acquisition-date fair value of the consideration transferred totaled $43,834,313. The total consideration consists of $38,993,603 of cash consideration and $4,840,710 in equity-classified exchangeable shares. The acquisition-date fair value of the exchangeable shares was determined based on the opening market price of the Company’s ordinary shares as of the acquisition date.

The following table summarizes the preliminary allocation of the purchase price based on the estimated fair value of the assets acquired and liabilities assumed at the acquisition date:

Accounts receivable	$	616,153
Other current assets		2,008,566
Property and equipment, net		14,201,790
Operating lease right-of-use assets		4,752,501
Intangible asset		13,486,184
Deferred tax asset		91,368
Other non-current assets		2,493
Accounts payable		(1,866,804	)
Other payables and accrued liabilities		(1,100,095	)
Current portion of deferred revenue		(465,360	)
Current portion of operating lease liability		(248,301	)
Non-current portion of deferred revenue		(123,652	)
Non-current portion of operating lease liability		(3,273,709	)
Deferred tax liability		(4,090,683	)
Total identifiable assets and liabilities		23,990,451
Goodwill		19,843,862
Total Purchase Consideration	$	43,834,313

The acquisition-date fair value of the acquired accounts receivable was $616,153, which equals the gross contractual amount. The Company does not expect a material amount of uncollectible contractual cash flows.

The Company recognized customer relationships as an intangible asset of $13,486,184 to be amortized over 19 years.

Of the total Goodwill recognized, $37,000 is attributable to the assembled workforce at Enovum and the rest is attributable to synergies expected to be achieved from the combined operations of the Company and Enovum. The goodwill recognized is not deductible for tax purposes. We assigned the goodwill to our colocation reportable segment.

Through September 30, 2025, the Company recognized $2.0 million of acquisition-related costs in the income statement line item “General and Administrative Expense”.

The following unaudited pro forma financial information represents the consolidated results of operations as if the acquisition had occurred on January 1, 2024:

	For the Three Months Ended September 30, 2024			For the Nine Months Ended September 30, 2024
Revenue	$	24,175,317		$	85,598,014
Net loss	$	(38,804,217	)	$	(1,018,499	)

These pro forma results are presented for information purposes only and do not necessarily reflect the actual results that would have been achieved had the acquisition occurred on the date assumed, nor are they indicative of future consolidated results of operations.

These amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Enovum to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment, right-of-use asset and intangible assets had been applied on January 1, 2024, together with the consequential tax effects.

Enovum commenced its operations in October 2023. Therefore, is it impracticable to estimate and present proforma revenue and net income of the combined entity as though the business combination had occurred as of January 1, 2023.

Real estate Acquisition – Montreal, Canada

On December 27, 2024, the Company, through WhiteFiber, acquired the building and land, together with all the related improvements, located in Montreal, Canada, from an unrelated third party. The total consideration consisted of approximately $23.3 million in cash.

The acquired set of assets did not meet the definition of a business as defined in ASC 805, Business Combinations, as no substantive processes or employees were acquired. The assets acquired consisted primarily of land, building and related equipment, which are included in Property, plant, and equipment, net on the consolidated balance sheets. The fair value of the tangible assets acquired was estimated to be $23.3 million. No identifiable intangible assets were acquired, no goodwill was recognized, and no liabilities were assumed in connection with the transaction.

Real estate Acquisition – Madison, North Carolina

On May 20, 2025, the Company, through WhiteFiber, acquired the building and land, together with all the related improvements owned by Unifi Manufacturing, Inc. (“Unifi Transaction”) that were located in Madison, North Carolina. The total consideration consisted of $45.0 million in cash, including the initial deposit of $2.2 million.

The acquired set of assets did not meet the definition of a business as defined in ASC 805, Business Combinations, as no substantive processes or employees were acquired. The assets acquired consisted primarily of land, building and related equipment, which are included in Property, plant, and equipment, net on the consolidated balance sheets. The fair value of the tangible assets acquired was estimated to be $45.0 million. No identifiable intangible assets were acquired, no goodwill was recognized, and no liabilities were assumed in connection with the transaction.

In connection with the agreement, additional contingent consideration may become payable to the seller based on the timing and availability of power at the site (see Note 19. Commitments and Contingencies).

5. USDC

		September 30, 2025				December 31, 2024
USDC		$	1,027,458			$	411,413

The following table presents additional information about USDC for the nine months ended September 30, 2025 and 2024, respectively:

	For the Nine Months Ended September 30,
	2025			2024

Opening balance	$	411,413		$	405,596
Receipt of USDC from sales of other digital assets		2,321,750			1,652,100
Payment of USDC for other expenses		(1,745,805	)		(1,620,063	)
Payment of USDC for service charges from mining facilities		-			(67,538	)
Receipt of USDC from other income		-			31
Receipt of USDC from sales of property, plant, and equipment		40,100			-
Ending balance	$	1,027,458			370,126

6. DIGITAL ASSETS HOLDINGS

Digital Assets

Adoption of ASU 2023-08, Accounting for and Disclosure of Crypto Assets

Effective January 1, 2024, the Company early adopted ASU 2023-08, which requires entities to measure crypto assets at fair value with changes recognized in net income each reporting period. The Company’s digital assets are within the scope of ASU 2023-08 and the transition guidance requires a cumulative-effect adjustment as of the beginning of the current fiscal year for any difference between the carrying amount of the Company’s digital assets and fair value. As a result of the Company’s early adoption of ASU 2023-08, the Company recorded a $21.2 million increase to digital assets and a $21.2 million decrease to accumulated deficit on the consolidated balance sheets as of the beginning of the quarter ended March 31, 2024.

The following table presents the Company’s significant digital assets holdings as of September 30, 2025:

	Quantity		Cost Basis		Fair Value
BTC		6.1	$	679,409	$	693,468
ETH		102,023.6		264,254,817		422,988,896
Total digital assets held as of September 30, 2025			$	264,934,226	$	423,682,364

The cost basis is equal to the post-impairment value of all BTC and ETH held as of the adoption of ASU 2023-08 on January 1, 2024. For BTC and ETH earned subsequent to the adoption of ASU 2023-08, the cost basis of the BTC and ETH represents the valuation at the time the Company determined for revenue recognition purposes.

The following table presents a roll-forward of BTC for the nine months ended September 30, 2025, based on the fair value model under ASU 2023-08:

	Fair value
BTC as of December 31, 2024	$	69,319,731
Receipt of BTC from mining services		21,824,503
Sales of BTC in exchange of cash		(54,950,404	)
Sales of BTC in exchange of ETH		(34,582,781	)
Sales of BTC in exchange of USDC		(2,321,750	)
Payment of BTC for service charges from mining facilities		(1,365,252	)
Payment of BTC for other expenses		(80,106	)
Change in fair value of BTC		2,849,527
BTC fair value as of September 30, 2025	$	693,468

For the additions of BTC generated by the Company’s mining business, see Note 3. Revenue from Contracts with Customers.

Bitcoin is sold on a FIFO basis. For the nine months ended September 30, 2025, gains from the sales of bitcoin are included in change in fair value of BTC which is included in the consolidated statements of operations under the caption “Gains (losses) on digital assets”.

The following table presents a roll-forward of ETH for the nine months ended September 30, 2025, based on the fair value model under ASU 2023-08:

	Fair value
ETH as of December 31, 2024	$	92,057,613
Receipt of ETH from native staking business		3,575,804
Receipt of ETH from liquid staking business		218,703
Receipt of ETH from exchange of BTC		104,252,985
Receipt of ETH from exchange of cash		148,733,783
Sales of ETH in exchange of LsETH		(18,988,032	)
Investment of ETH in fund		(47,632,094	)
Payment of ETH for other expenses		(289	)
Change in fair value of ETH		140,770,423
ETH fair value at September 30, 2025	$	422,988,896

For the additions of ETH generated by the Company’s ETH staking business, see Note 3. Revenue from Contracts with Customers.

ETH is sold on a FIFO basis. For the nine months ended September 30, 2025, gains from the sales of ETH are included in change in fair value of ETH which is included in the consolidated statements of operations under the caption “Gains (losses) on digital assets”.

Digital Intangible Assets

The following table sets forth the cost basis, impairment amount, and carrying amount of digital intangible assets held, as shown on the consolidated balance sheet as of September 30, 2025:

	Quantity		Cost		Impairment		Net
LsETH		4,719	$	19,093,364	$	1,836,192	$	17,257,172
Total digital intangible assets held as of September 30, 2025			$	19,093,364	$	1,836,192	$	17,257,172

The cost of LsETH was initially recorded at fair value of LsETH on the date of receipt. Following the receipt of LsETH in July 2025, the price of LsETH decreased, and the Company determined that the carrying amount of the LsETH exceeded its fair value during the period ending September 30, 2025. The fair value of the LsETH is determined in accordance with ASC 820, Fair Value Measurement. For the period ending September 30, 2025, the Company recorded an impairment loss of $1.8 million in the condensed consolidated statement of operations within impairment of digital intangible assets.

7. OTHER CURRENT ASSETS, NET

Other current assets were comprised of the following:

	September 30, 2025			December 31, 2024
Deposits (a)	$	4,099,225		$	1,704,785
Prepayments to mining facilities (b)		-			290,475
Prepaid director and officer insurance expenses		408,175			219,471
Prepaid consulting service expenses		3,503,032			3,016,460
Deposit for lease		76,906			63,586
Deferred contract costs		982,039			982,039
Contract assets		807,322			-
Prepayment to third parties		8,301,833			15,526,472
Receivable from third parties		7,256,336			6,305,652
Others		441,662			210,729
Less: Current expected credit losses		(11,510	)		-
Total	$	25,865,020		$	28,319,669

(a)

As of September 30, 2025 and December 31, 2024, the balance of deposits represented the deposits made to our service providers, who paid utility charges in mining facilities on behalf of the Company. The deposits are refundable upon expiration of the agreement.

(b)

As of September 30, 2025 and December 31, 2024, the balance of prepayments to mining facilities represented the prepayments for service charges from the mining facilities.

8. LEASES

Lease as Lessee

For the year ended December 31, 2023, the Company entered into a capacity lease agreement for its cloud services designed to support generative AI workstreams. The initial lease term is three years, with automatic renewals for successive 12 month periods. The lease expense incurred in December 2023 is capitalized as deferred cost since it is directly related to fulfilling its cloud services which commenced operations in January 2024. The capitalized lease payment was expensed in January 2024.

On July 30, 2024, the Company entered into an office lease agreement for its headquarters office in New York. The initial lease term is three years with automatic renewals for successive terms equal in length to the initial term.

On August 1, 2024, the Company entered into an additional capacity lease agreement for its cloud services. The initial lease term is three years with automatic renewals for successive 12 month periods.

On October 11, 2024, the Company acquired 100% of Enovum Data Centers Corp, including a data center lease agreement in Montreal for its data center services. The remaining lease term on the date of acquisition was 12 years with two five-year renewal options.

On December 3, 2024, the Company entered into a lease agreement in Singapore for general and administrative purposes. The initial lease term is two years with option to renew for one year.

On February 11, 2025, the Company, through WhiteFiber, entered into an additional office lease agreement for its headquarters office in New York. The initial lease term is 27 months with automatic renewals on a month-to-month basis.

On March 1, 2025, the Company entered into an additional capacity lease agreement for its cloud services. The initial lease term is three years with automatic renewals for successive 12 month periods.

On April 1, 2025, the Company entered into a lease agreement for general and administrative purposes. The lease term is two years.

On April 11, 2025, the Company, through WhiteFiber, entered into a data center lease agreement in Saint-Jérôme for its data center colocation services. The initial lease term is for 20 years with two five-year extension options. The transaction also includes a fixed-price purchase option exercisable until December 31, 2025.

As of September 30, 2025 and December 31, 2024, operating right-of-use assets were $42.8 million and $15.0 million, respectively and operating lease liabilities were $41.9 million and $13.8 million, respectively. For the three months ended September 30, 2025 and 2024, the Company’s amortization on the operating lease right-of-use assets totaled $1.4 million and $0.8 million, respectively. For the nine months ended September 30, 2025 and 2024, the Company’s amortization on the operating lease right-of-use assets totaled $3.9 million and $1.7 million, respectively.

The following table presents the components of the Company’s lease expense. GPU lease expenses and data center lease expenses related to operational data centers are included in cost of revenue; data center lease expenses incurred during construction and office lease expenses are included in general and administrative expense:

	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2025			2024		2025			2024
Operating lease costs	$	5,411,642		$	4,913,369	$	16,091,023		$	12,025,609
Short-term lease costs		67,290			45,966		205,305			157,038
Sublease income		(6,534	)		-		(19,300	)		-
Total lease costs		5,472,397			4,959,335		16,277,027			12,182,647

Additional information regarding the Company’s leasing activities as a lessee is as follows:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2025			2024			2025			2024
Operating cash outflows from operating leases	$	1,957,334		$	1,038,617		$	5,139,859		$	2,238,617
Weighted average remaining lease term – operating lease		21.4			2.5			21.4			2.5
Weighted average discount rate – operating lease		6.4	%		10.2	%		6.4	%		10.1	%

The following table represents our future minimum operating lease payments as of September 30, 2025:

Year	Amount
2025	$	1,957,531
2026		7,761,039
2027		3,801,727
2028		2,247,084
2029		2,037,351
2030 and thereafter		55,758,253
Total undiscounted lease payments		73,562,985
Less: present value discount		(31,646,330	)
Present value of lease liability	$	41,916,655

The Company entered into a GPU server lease agreement effective January 2024 for its cloud services designed to support generative AI workstreams. The lease payment depends on the usage of the GPU servers and the Company concludes that the lease payments are variable and will be recognized when they are incurred. For the three months ended September 30, 2025 and 2024, the GPU server lease expense amounted to $3.5 million and $3.9 million, respectively. For the nine months ended September 30, 2025 and 2024, the GPU server lease expense amounted to $11.0 million and $9.8 million, respectively.

Lease as Lessor

During the quarter ended March 31, 2024, the Company entered into a sales-type lease agreement as a lessor for its data storage equipment. The term of the lease is scheduled to expire in December 2026.

During the quarter ended September 30, 2024, the Company entered into a sales-type lease agreement as a lessor for its data storage equipment. The term of the lease is scheduled to expire in December 2026.

During the quarter ended December 31, 2024, the Company entered into two sales-type lease agreements as a lessor for its cloud service equipment. The term of the lease is scheduled to expire in October 2029 and November 2029 respectively.

During the quarter ended December 31, 2024, the Company entered into an operating sublease agreement to partially lease out its leased data center to a third party. The term of the sublease is scheduled to expire on October 30, 2026 and includes two automatic renewal periods of three years each, unless subtenant provides at least 90 days’ notice of non-renewal prior to the end of the then-current term.

During the quarter ended June 30, 2025, the Company entered into two sales-type lease agreements as a lessor for its cloud service equipment. The term of the lease is scheduled to expire in April 2030 and May 2030, respectively.

During the quarter ended September 30, 2025, the Company entered into one sales-type lease agreement as a lessor for its cloud service equipment. The term of the lease is scheduled to expire in June 2030.

The components of lease income for the sales-type lease were as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2025		2024		2025		2024
Interest income related to net investment in lease	$	454,588	$	130,144	$	1,073,085	$	322,396

Interest income is included in the consolidated statements of operations under the caption “Revenue – Other”.

The components of net investment in sales-type leases were as follows:

		September 30, 2025				December 31, 2024
Net investment in lease - lease payment receivable		$	14,924,711			$	9,328,998

The following table illustrates the Company’s future minimum receipts for sales-type lease as of September 30, 2025:

Year	Sales-Type Lease
2025	$	1,404,591
2026		5,618,362
2027		3,636,831
2028		3,636,831
2029		3,428,121
2030 and thereafter		848,915
Total future minimum receipts		18,573,651
Unearned interest income		(3,596,709	)
Less: Current expected credit losses		(52,231	)
Net investment in sales type lease	$	14,924,711

The present value of minimum sales-type receipts of $14,924,711 is included in the consolidated balance sheets under the caption “Net investment in lease”.

The following table illustrates the future lease payments to be received from the Company’s sublease tenant as of September 30, 2025 were as follows:

Year	Operating Lease
2025	$	6,468
2026		25,871
2027		25,871
2028		25,871
2029		25,871
2030 and thereafter		73,301
Total future receipts	$	183,253

9. PROPERTY, PLANT, AND EQUIPMENT, NET

Property, plant and equipment, net was comprised of the following:

	September 30, 2025			December 31, 2024
Miners for Bitcoin	$	48,789,488		$	37,484,751
Cloud service equipment		144,557,095			63,360,624
Colocation service equipment		15,340,860			12,509,288
Purchased and internal-use software development costs		3,371,723			495,285
Land		6,456,862			3,502,539
Building		60,868,626			19,474,743
Leasehold Improvements		2,479,199			2,032,691
Vehicle		235,576			235,576
Other property and equipment		29,763			29,066

Less: Accumulated depreciation		(53,957,658	)		(36,946,762	)
		228,171,534			102,177,801
Construction in progress		43,133,634			5,124,657
Property, plant, and equipment, net	$	271,305,168		$	107,302,458

For the three months ended September 30, 2025 and 2024, depreciation expenses were $9.6 million and $8.4 million, respectively and for the nine months ended September 30, 2025 and 2024, depreciation and amortization expenses were $25.1 million and $23.6 million, respectively. Construction in progress represents assets received but not placed into service as of September 30, 2025 and December 31, 2024.

During the quarter ended March 31, 2024, we purchased data storage equipment totaling $5,315,202. Almost immediately thereafter, we entered into a sales-type lease agreement effective January 2024 for a portion of these assets valued at $3,353,608 with a third party. As a result, the leased data storage equipment was derecognized from our property and equipment and recorded as a net investment in lease. Refer to Note 8. Leases for more information.

During the quarter ended September 30, 2024, we purchased data storage equipment totaling $1,254,248 and immediately thereafter, we entered into a sales-type lease agreement effective August 2024 for a portion of these assets valued at $1,184,937 with a third party. As a result, the leased data storage equipment was derecognized from our property, plant and equipment and recorded as a net investment in lease. Refer to Note 8. Leases for more information.

During the quarter ended December 31, 2024, the Company purchased servers and network equipment totaling $6,056,700 and almost immediately thereafter, we entered into two sales-type lease agreements effective November 2024 and December 2024 with a third party. As a result, the leased cloud service equipment was derecognized from our property, plant, and equipment and recorded as a net investment in lease. Refer to Note 8. Leases for more information.

During the quarter ended June 30, 2025, the Company purchased servers and network equipment totaling $4,898,326 and almost immediately thereafter, we entered into two sales-type lease agreements effective May 2025 and June 2025, respectively, with a third party. As a result, the leased cloud service equipment was derecognized from our property, plant, and equipment and recorded as a net investment in lease. Refer to Note 8. Leases for more information.

During the quarter ended September 30, 2025, the Company purchased servers and network equipment totaling $3,041,389 and almost immediately thereafter, we entered into one sales-type lease agreement effective July 2025 with a third party. As a result, the leased cloud service equipment was derecognized from our property, plant, and equipment and recorded as a net investment in lease. Refer to Note 8. Leases for more information.

Disposal of Property, Plant and Equipment

For the nine months ended September 30, 2025, the Company sold 7,900 bitcoin miners for a total consideration of $1,325,877. On the dates of the transaction, the total original cost and accumulated depreciation of these miners were $9,437,817 and $7,577,165, respectively. The Company recognized a loss of $534,775 from the sale of miners which was recorded in the account of “loss from disposal of property, plant and equipment”. As of the date of this report, the Company has collected cash consideration of $935,079.

For the nine months ended September 30, 2025, the Company sold 64 InfiniBand (IB) Switches for a total consideration of $ 1.0 million. On the date of the transaction, the carrying amount of these switches was $1.4 million. The Company recognized a loss of $338,222 from the sale which was recorded within Net loss from disposal of property, plant and equipment. As of the date of this report, the Company has collected the cash consideration of $1.0 million.

10. INVESTMENT SECURITIES

Investment securities were comprised of the following:

	September 30, 2025		December 31, 2024
Investment in Digital Future Alliance Limited (“DFA”) (a)	$	94,534	$	94,534
Investment in Nine Blocks Offshore Feeder Fund (“Nine Blocks”) (b)		3,036,667		3,036,403
Investment in Auros Global Limited (c)		1,999,987		1,999,987
Investment in Ingonyama Ltd (d)		100,000		100,000
Investment in Cysic Inc. (e)		100,000		100,000
Investment in a SAFE (f)		1,000,000		1,000,000
Investment in AI Innovation Fund I (“AI fund”) (g)		17,576,600		15,800,000
Investment in Innovation Fund I (“Innovation fund”) (h)		62,769,090		8,666,441
Total	$	86,676,878	$	30,797,365

(a) Investment in Digital Future Alliance Limited (“DFA”)

DFA is a privately held company, over which the Company has neither control nor significant influence through investment in ordinary shares. The Company accounted for the investment in DFA using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer.

For the three and nine months ended September 30, 2025 and 2024, the Company did not record upward adjustments or downward adjustments on the investment. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security. As of September 30, 2025 and December 31, 2024, the Company did not recognize impairment against the investment security.

(b) Investment in Nine Blocks Offshore Feeder Fund (“Nine Blocks”)

On August 1, 2022, the Company entered into a subscription agreement with Nine Blocks for investment of $2.0 million. The investment includes a direct investment into the Nine Blocks Master Fund, a digital assets market neutral fund using basis trading, relative value, and special situations strategies.

As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the fund. For the three months ended September 30, 2025 and 2024, the Company recorded cumulative upward adjustments of $102,359 and cumulative upward adjustments of $18,811, respectively, on the investment. For the nine months ended September 30, 2025 and 2024, the Company recorded cumulative upward adjustments of $264 and cumulative upward adjustments of $556,308, respectively, on the investment.

(c) Investment in Auros Global Limited (“Auros”)

On February 24, 2023, the Company closed an investment of $1,999,987 in Auros, which is a leading crypto-native algorithmic trading and market making firm that delivers best-in-class liquidity for exchanges and token projects. The Company neither has control nor significant influence through investment in ordinary shares. The Company accounted for the investment in Auros using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer.

(d) Investment in Ingonyama Ltd. (“Ingonyama”)

In September 2023, the Company closed an investment of $100,000 in Ingonyama, a semiconductor company focusing on Zero Knowledge Proof hardware acceleration. The Company neither has control nor significant influence through investment in preferred shares. The Company accounted for the investment in Ingonyama using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer.

(e) Investment in Cysic Inc (“Cysic”)

On April 2, 2024, the Company closed an investment of $100,000 in Cysic, a ZK hardware acceleration company and ZK prover network to provide ZK Compute-as-a-Service. The Company has neither control nor significant influence through investment in preferred shares. The Company accounted for the investment in Cysic using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer.

For the three and nine months ended September 30, 2025, the Company did not record upward adjustments or downward adjustments on the investment. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security. As of September 30, 2025 and December 31, 2024, the Company did not recognize impairment against the investment security.

(f) Investment in a SAFE

On June 30, 2024 (the “Effective Date”), the Company entered into a simple agreement for future equity (“SAFE”) agreement for an initial investment amount of $1 million in exchange for a right to participate in a future equity financing of preferred stock to be issued by Canopy Wave Inc. (“Canopy”). Alternatively, upon a liquidity event such as a change in control, a direct listing or an initial public offering, the Company is entitled to receive the greater of (i) the SAFE investment amount plus 15% annual accrued interest (the “cash-out amount”) or (ii) the SAFE investment amount divided by a discount to the price per share of Canopy’s ordinary shares. In a dissolution event, such as a bankruptcy, the Company is entitled to receive the cash-out amount. If the SAFE is outstanding on the three-year anniversary of the Effective Date, then the SAFE will expire and the Company will be entitled to receive the cash-out amount. In the event of a qualifying equity financing, the number of shares of preferred stock received by the Company would be determined by dividing the SAFE investment amount by a discounted price per share of the preferred stock issued in the respective equity financing. The Company recorded an investment of $1 million as an investment in the SAFE on the consolidated balance sheets. Additionally, per the terms of the SAFE arrangement, the Company may be obligated to invest up to an additional $2 million into the SAFE arrangement if Canopy satisfies certain milestones prior to the expiration of the SAFE, or if an equity financing event occurs.

The Company accounted for this investment under ASC 320, Investments - Debt Securities and elected the fair value option for the SAFE investment pursuant to ASC 825, Financial Instruments, which requires financial instruments to be remeasured to fair value each reporting period, with changes in fair value recorded in the consolidated statements of operations. The fair value estimate includes significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The decision to elect the fair value option is determined on an instrument-by-instrument basis on the date the instrument is initially recognized, is applied to the entire instrument, and is irrevocable once elected. For instruments measured at fair value, embedded conversion or other features are not required to be separated from the host instrument. Issuance costs related to convertible securities carried at fair value are not deferred and are recognized as incurred on the consolidated statements of operations.

At September 30, 2025, the Company performed a qualitative assessment to identify if events or circumstances indicate that the investment is impaired or that an observable price change has occurred. We considered available information about Canopy’s operations and industry conditions. No events or circumstances were identified that would indicate the investment is impaired or that an observable price change occurred. As of September 30, 2025, the investment continues to be reported at its original cost of $1,000,000. For the three and nine months ended September 30, 2025, the Company did not record upward adjustments or downward adjustments on the investment.

(g) Investment in AI Innovation Fund I (“AI fund”)

On July 15, 2024, the Company entered into a subscription agreement with Pleasanton Ventures Innovation Master Fund SPC Limited for investment of $15.9 million in its AI Innovation Fund I. The investment includes a direct investment into private equity and fund of fund opportunities within the AI industry. On May 20, 2025 the Company invested an additional $2.0 million into the fund.

As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the fund. For the three months ended September 30, 2025, the Company recorded cumulative downward adjustments of $75,000 on the investment. For the nine months ended September 30, 2025, the Company recorded cumulative downward adjustments of $225,000 on the investment.

(h) Investment in Innovation Fund I (“Innovation fund”)

After the Company disposed its BVI entities for its previous fund operation (See Note 20. Disposition of Bit Digital Investment Management Limited and Bit Digital Innovation Master Fund Spc Limited for more information), the Company no longer consolidates the investment in the fund. As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the fund.

In March 2025, the Company invested an additional 3,400 ETH into the fund, equivalent to approximately $7.0 million based on the ETH-to-USD exchange rate at the time of investment.

In August 2025, the Company invested an additional 9,000 ETH into the fund, equivalent to approximately $40.6 million based on the ETH-to-USD exchange rate at the time of investment.

For the three months ended September 30, 2025 and 2024, the Company recorded cumulative upward adjustments of $7,094,032 and cumulative downward adjustments of $2,058,996, respectively, on the investment. For the nine months ended September 30, 2025 and 2024, the Company recorded cumulative upward adjustments of $6,470,555 and $617,241, respectively, on the investment.

11. OTHER NON-CURRENT ASSETS, NET

Other non-current assets were comprised of the following:

	September 30, 2025			December 31, 2024
Deposits (a)	$	5,094,966		$	7,103,560
Deferred contract costs		245,510			982,039
Contract assets		336,384			-
Others		516,450			1,494,285
Less: Current expected credit losses		(41,339	)		-
Total	$	6,151,971		$	9,579,884

(a)

As of September 30, 2025 and December 31, 2024, the balance of deposits primarily consisted of the deposits made to a utility company related to our colocation services and to our service providers who paid utility charges in mining facilities on behalf of the Company. The deposits are refundable upon expiration of the agreement.

12. SHARE-BASED COMPENSATION

Share-based compensation such as restricted stock units (“RSUs”), incentive and non-statutory stock options, restricted shares, share appreciation rights and share payments may be granted to any directors, employees and consultants of the Company or affiliated companies under the 2021 Omnibus Equity Incentive Plan (“2021 Plan”), 2021 Second Omnibus Equity Incentive Plan (“2021 Second Plan”), 2023 Omnibus Equity Incentive Plan (“2023 Plan”), and 2025 Omnibus Equity Incentive Plan (“2025 Plan”). An aggregate of 2,415,293 RSUs were granted under the 2021 Plan and no ordinary shares remain reserved for issuance under the 2021 Plan. There are 5,000,000 ordinary shares reserved for issuance under the Company’s 2021 Second Plan, under which 4,211,372 RSUs and 395,000 share options have been granted as of September 30, 2025. There are 5,000,000 ordinary shares reserved for issuance under the Company’s 2023 Plan, under which 4,993,201 RSUs have been granted as of September 30, 2025. There are 8,000,000 ordinary shares reserved for issuance under the Company’s 2025 Plan, under which 5,987,455 RSUs have been granted as of September 30, 2025.

On February 6, 2025, the Board of Directors of WhiteFiber adopted the 2025 Omnibus Equity Incentive Plan (the “WhiteFiber 2025 Plan”). The WhiteFiber 2025 Plan provides share-based compensation such as restricted stock units (“RSUs”), incentive and non-statutory stock options, restricted shares, share appreciation rights and share payments may be granted to any directors, employees and consultants of the Company or affiliated companies and up to 4,000,000, as amended, Ordinary Shares. There have been 685,290 RSUs granted as of September 30, 2025.

From time to time, WhiteFiber grants equity awards under the WhiteFiber 2025 Plan to employees of the Company as consideration for services rendered to WhiteFiber. These awards are settled in shares of WhiteFiber’s ordinary shares and might be accounted for as share-based compensation to non-employee consultants and included within general and administrative expenses.

Restricted Stock Units (“RSUs”)

As of December 31, 2024, the Company had 1,025,968 awarded and unvested RSUs.

On January 14, 2025, the Company granted 20,000 RSUs to a non-executive director in accordance with his compensation arrangement. All of these RSUs were immediately vested.

On February 10, 2025, the Company granted 32,113 RSUs to an employee, which are subjected to a sixteen-quarter service vesting schedule.

On May 14, 2025, the Company granted 20,000 RSUs to an employee. All of these RSUs were immediately vested.

On June 17, 2025, the Company granted 2,599,198 RSUs to employees. All of these RSUs were vested on July 2, 2025, the effective date of the S-8 registration statement filed July 2, 2025.

On June 30, 2025, the Company granted 255,000 RSUs to each of the Company’s Chief Executive Officer and Chief Financial Officer in accordance with their compensation arrangements. All of these RSUs were immediately vested.

On July 25, 2025, the Company granted 1,287,619 RSUs to employees. All of these RSUs were immediately vested.

On July 25, 2025, the Company granted 543,873 RSUs to employees, which are subjected to a sixteen-quarter service vesting with a one-year cliff vesting schedule.

On July 25, 2025, the Company granted 20,000 RSUs to an employee, which are subjected to a fourteen-quarter service vesting schedule.

In August 2025, an employee left the Company and 166,667 RSUs were forfeited.

In August 2025, in connection with WhiteFiber’s initial public offering, 1,329,037 outstanding and unvested RSUs of the Company held by employees were cancelled and replaced with awards issued from the WhiteFiber 2025 Plan.

On September 30, 2025, the Company granted 325,000 RSUs to each of the Company’s Chief Executive Officer and Chief Financial Officer in accordance with their compensation arrangements. All of these RSUs were immediately vested.

For the three months ended September 30, 2025 and 2024, the Company recognized share-based compensation expenses of $6,941,175 and $4,953,839, respectively. For the nine months ended September 30, 2025 and 2024, the Company recognized share-based compensation expenses of $14,208,394 and $5,724,474, respectively. As of September 30, 2025, the Company had $279,310 unrecognized compensation costs related to the unvested RSUs.

As of September 30, 2025, the Company had 133,198 awarded and unvested RSUs.

Share Options

For the three months ended September 30, 2025 and 2024, the Company did not grant any options.

The Company recognizes compensation expenses related to options on a straight-line basis over the vesting periods. For the three months ended September 30, 2025 and 2024, the Company recognized share-based compensation expenses of $1,923 and $41,178, respectively. For the nine months ended September 30, 2025 and 2024, the Company recognized share-based compensation expenses of $54,420 and $186,878, respectively. As of September 30, 2025, the Company had no unrecognized compensation costs related to all outstanding share options.

Other share-based compensation

In January 2025, the Company entered into separate one-year service agreements with three consultants by granting each 150,000 RSUs, all of which vested immediately. Over the duration of the service agreement, the Company will recognize share-based compensation expenses aggregating $1.6 million based upon the closing price of the Company’s ordinary shares on date of agreement.

In April 2025, the Company entered into a one-year service agreement with a consulting firm and granted 250,000 RSUs thereto, all of which vested immediately. Over the duration of the service agreement, the Company will recognize share-based compensation expenses aggregating $0.5 million based upon the closing price of the Company’s ordinary shares on date of agreement.

In April 2025, WhiteFiber entered into a one-year director agreement with David Andre pursuant to which Mr. Andre would be appointed as a director of WhiteFiber upon the commencement of trading of our ordinary shares on the Nasdaq Capital Market. This agreement granted 135,135 RSUs of Bit Digital, which are subject to a four-quarter service vesting schedule. As the effective date of the Form S-1 was subsequent to June 30, 2025, this agreement was considered a consulting agreement until Mr. Andre was elected to the Board of Directors of WhiteFiber on August 7, 2025. Over the duration of the service agreement, the Company will recognize share-based compensation expenses aggregating $0.2 million based upon the closing price of the Company’s ordinary shares on the date of the agreement.

In July 2025, the Company entered into separate one-year service agreements with a consultant and granted 180,000 RSUs, all of which vested immediately. Over the duration of the service agreement, the Company will recognize share-based compensation expenses aggregating $0.5 million based upon the closing price of the Company’s ordinary shares on date of agreement.

The Company recognized share-based compensation expense of $576,952 for three months ended September 30, 2025 and $2,766,952 for the nine months ended September 30, 2025 for RSUs granted to consultants.

For the three months ended September 30, 2025, WhiteFiber recognized share based compensation expense of $3,932,926 related to awards granted to its employees and director under WhiteFiber 2025 Plan. In September 2025, WhiteFiber granted 235,294 RSUs to consultants under WhiteFiber 2025 Plan, all of which vested immediately, resulting in additional share-based compensation expense of $4,839,998.

13. SHARE CAPITAL

Ordinary shares

As of December 31, 2024, there were 179,255,191 ordinary shares issued and 179,125,205 ordinary shares outstanding.

In May 2022, the Company entered into an At-the-Market Offering Agreement with H.C. Wainwright & Co., LLC relating to the Company’s ordinary shares. In accordance with the terms of the sales agreement, the Company may offer and sell ordinary shares having an aggregate offering price of up to $500,000,000. During the nine months ended September 30, 2025, the Company sold 28,654,586 ordinary shares for an aggregate purchase price of $58.5 million net of offering costs pursuant to this at-the-market offering.

On April 29, 2025, the Company filed a registration statement on Form S-3 (No. 333-286841) to register up to $500 million of its ordinary shares, preference shares, debt securities, warrants, units and subscription rights (the “Registration Statement”).

In June 2025, the Company completed an underwritten public offering of its ordinary shares registered under the Registration Statement. In accordance with the terms of the underwriting agreement entered into with B. Riley Securities, Inc., as representative of the several underwriters, the Company sold 75,000,000 ordinary shares at a price to the underwriters of $1.90 per share. The Company received net proceeds of approximately $141.6 million, after deducting the underwriting discount and offering expense. On July 1, 2025, the underwriters related to this public offering fully exercised their option to purchase an additional 11,250,000 ordinary shares, resulting in additional net proceeds to the Company of $21.3 million, after deducting the underwriting discount and offering expenses.

In July, 2025, the Company entered into a placement agency agreement (the “Placement Agent Agreement”) with B. Riley Securities, Inc. (the “Placement Agent”), pursuant to which the Placement Agent agreed to serve as the sole placement agent for the Company in connection with a registered direct offering (the “Registered Direct Offering”) of an aggregate of 22,000,000 ordinary shares of the Company at an offering price of $3.06 per share. The gross proceeds to the Company from the Registered Direct Offering were approximately $67.3 million before deducting placement agent fees and other estimated offering expenses.

On September 29, 2025, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Barclays Capital Inc., Cantor Fitzgerald & Co. and B. Riley Securities, Inc. as representatives of the several underwriters named in Schedule I thereto, in connection with the issuance and sale of $150 million aggregate principal amount of the Company’s 4.00% Convertible Senior Notes due 2030 (the “Notes”), including the exercise in full on September 30, 2025 of the underwriters’ option to purchase an additional $15 million aggregate principal amount of Notes. The Notes were offered and sold in an offering registered under the Securities Act pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-286841).

On October 2, 2025, the Company issued the Notes. The Notes were issued pursuant to, and are governed by, an indenture (the “Base Indenture”), dated as of October 2, 2025, between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), as supplemented by a supplemental indenture (the “Supplemental Indenture,” and the Base Indenture, as supplemented by the Supplemental Indenture, the “Indenture”), dated as of October 2, 2025, between the Company and the Trustee.

During the nine months ended September 30, 2025, 6,095,004 ordinary shares were issued to the Company’s employees, directors, and consultants in settlement of an equal number of fully vested restricted share units awarded to such individuals and companies by the Company pursuant to grants made under the Company’s 2023 Plan and 2025 Plan.

As of September 30, 2025, there were 322,254,781 ordinary shares issued and 322,124,795 ordinary shares outstanding.

Preferred shares

As of September 30, 2025 and December 31, 2024, there were 1,000,000 preferred shares issued and outstanding.

The preference shares are entitled to the following preference features: 1) an annual dividend of 8% when, and if, declared by the Board of Directors; 2) a liquidation preference of $10.00 per share; 3) convert on a one for one basis for ordinary shares, subject to a 4.99% conversion limitation; 4) rank senior to ordinary shares in insolvency; and 5) solely for voting purposes vote 50 ordinary shares, for each preference share.

On December 20, 2024, the Board of Directors declared an 8% ($800,000) dividend on the preference shares to Geney Development Ltd. (“Geney”). Erke Huang, our Chief Financial Officer, is the President of Geney and the beneficial owner of 30% of the equity of Geney, with the remaining 70% held by Zhaohui Deng, the Company’s Chairman of the Board. The Company fully paid the declared dividend in January 2025.

Treasury stock

The Company treats ordinary shares withheld for tax purposes on behalf of employees in connection with the vesting of restricted share grants as ordinary share repurchases because they reduce the number of ordinary shares that would have been issued upon vesting. For the nine months ended September 30, 2025 and 2024, the Company withheld nil ordinary shares that were surrendered to the Company for withholding taxes related to restricted stock vesting valued at $nil, based on fair value of the withheld shares on the vesting date.

As of September 30, 2025 and December 31, 2024, the Company had treasury stock of $1,171,679 and $1,171,679, respectively.

Warrants

As of September 30, 2025 and December 31, 2024, the Company had outstanding 10,118,046 private placement warrants to purchase an aggregate of 10,118,046 ordinary shares at an exercise price of $7.91 per whole share. These warrants expired on July 25, 2025 and were not extended.

In accordance with ASC 815, the Company determined that the warrants meet the conditions necessary to be classified as equity because the consideration is indexed to the Company’s own equity, there are no exercise contingencies based on an observable market not based on its stock or operations, settlement is consistent with a fixed-for-fixed equity instrument, the agreement contains an explicit number of ordinary shares and there are no cash payment provisions.

The fair value of the warrants was estimated at $33.3 million using the Black-Scholes model. Inherent in these valuations are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its ordinary shares based on historical and implied volatilities of selected peer companies as well as its own that match the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates it to remain at zero.

The following table provides quantitative information regarding Level 3 fair value measurements inputs for the Company’s warrants at their measurement dates:

	As of October 4, 2021
Volatility		192.85	%
Stock price		7.59
Expected life of the warrants to convert		3.81
Risk free rate		0.97	%
Dividend yield		0.0	%

14. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The components of goodwill as of September 30, 2025 are as follows:

	As of September 30, 2025

Enovum Data Centers Corp.	$	19,848,419
Total goodwill	$	19,848,419

The Company recorded goodwill in the amount of $19.8 million in connection with its acquisition of the Enovum Data Centers Corp. (“Enovum”) on October 11, 2024. Refer to Note 4. Acquisitions for further information.

Finite-lived intangible assets

In addition to goodwill, in connection with the acquisition of Enovum, the Company recorded an identified intangible asset, customer relationships, with a definite useful life of 19 years in the amount of $13.5 million. Refer to Note 4. Acquisitions for further information.

The following table presents the Company’s finite-lived intangible assets as of September 30, 2025:

As of September 30, 2025

Cost

Bit Digital, Inc 10-Q