Hut 8 Corp.: Form 10-K for the period ended Dec 31, 2025

Hut 8: Where Power Unlocks Potential

Hut 8 is an energy infrastructure platform that integrates power, digital infrastructure, and compute at scale to fuel next-generation, energy-intensive use cases. We take a power-first, innovation-driven approach to developing, commercializing, and operating the critical infrastructure that underpins the breakthrough technologies of today and tomorrow.

Our Platform

Our platform consists of three layers: Power, Digital Infrastructure, and Compute. Together, these layers form a vertically integrated foundation for next-generation, energy-intensive technology applications. This structure enables us to participate selectively across the infrastructure value chain, including securing power and interconnections, developing and operating digital infrastructure assets that leverage that power, and deploying compute capacity on or alongside that infrastructure. Today, our core focus is on commercializing this platform primarily through the development and operation of data centers at scale, supporting AI, high-performance computing (“HPC”), ASIC compute, and other energy-intensive technology applications.

Power. We acquire, develop, and manage critical energy assets such as powered land, interconnects, substations, switchyards, and related electrical systems designed to address the load demands of next-generation, energy-intensive technology applications. As of December 31, 2025, our Power layer comprised 1,020 megawatts (“MW”) of energy capacity under management across 15 sites in the United States and Canada, spanning energy assets we own, lease, or operate on behalf of third parties. Of this capacity, approximately 310 MW is associated with the four power generation assets we divested in Q1 2026.

Digital Infrastructure. We design, build, commercialize, and operate purpose-built data center facilities for next-generation, energy-intensive technology applications with the aim of maximizing long-term returns from our Power layer. As of December 31, 2025, our Digital Infrastructure layer comprised five ASIC compute data centers, five traditional cloud and colocation data centers, and one non-operational ASIC compute site.

In addition to these sites, we are actively advancing a scaled AI infrastructure development program. We are currently developing an AI data center at our River Bend campus in Louisiana. The project will commercialize 330 MW of utility capacity and is targeted for initial delivery and commissioning in Q2 2027. In addition, we continue to advance the commercialization of 1,230 MW of utility capacity under development across multiple sites in our development pipeline.

Compute. We own, operate, and scale purpose-built businesses that acquire, deploy, and monetize specialized hardware for next-generation, energy-intensive technologies like AI, HPC, and ASIC compute. Each business is typically launched and capitalized under a distinct brand tailored to a specific end market and structured to align with its strategic role within our broader platform. Through this structure, we provide direct exposure to the markets created by transformative technologies such as AI. As of December 31, 2025, our Compute layer primarily comprised three brands:

1. American Bitcoin. Launched in 2025, American Bitcoin, a majority-owned subsidiary of Hut 8, is a publicly listed Bitcoin accumulation platform focused on industrial-scale ASIC compute and the development of a strategic Bitcoin reserve. The principal objective of American Bitcoin is to deliver increasing Bitcoin exposure to its shareholders, as measured by Bitcoin per Share. American Bitcoin’s Class A common stock is listed on Nasdaq under the symbol “ABTC.”

2. Hut 8 Canada. Hut 8 Canada, formerly known as Hut 8 High Performance Computing, provides data center and cloud infrastructure services, including public and private cloud deployments, managed backup, business continuity and disaster recovery services, and high-capacity storage solutions. Hut 8 Canada operates though a wholly owned subsidiary of Hut 8 across five data centers in Canada, serving more than 200 customers.

3. Highrise AI. Highrise AI is an AI Cloud business wholly owned by Hut 8, offering a cloud infrastructure platform purpose-built for AI. Designed for developers and enterprises operating in performance-critical and security-sensitive domains, Highrise AI delivers bare-metal performance with full-stack orchestration to support the training and deployment of production-scale AI models. As of December 31, 2025, Highrise AI operated 1,000 NVIDIA H100 GPUs and 96 NVIDIA H200 GPUs.

Exhibit 1. Power and Digital Infrastructure assets under management as of December 31, 2025

(1) Generally, percentage owned denotes our ownership of power infrastructure at owned or leased sites, whereas for cloud and colocation sites, percentage owned denotes our ownership of mechanical and electrical infrastructure at leased data center locations.

(2) Electric Reliability Council of Texas (“ERCOT”)

(3) Combined cycle gas turbine (“CCGT”)

(4) Alberta Electric System Operator (“AESO”)

(5) New York Independent System Operator (“NYISO”)

(6) One of four sites comprising the 310 MW portfolio of power generation assets Hut 8 divested in Q1 2026

Exhibit 2. Power and digital infrastructure assets under development and construction as of December 31, 2025

Our Operating Segments

We report across three core operating segments: Power, Digital Infrastructure, and Compute. Each segment corresponds directly to a layer of our platform. A fourth segment, Other, captures revenue from activities that are not core to our platform or do not meet the criteria for segment-level reporting.

Power. Our Power segment comprises the origination, development, and management of powered land and energy infrastructure that enables large-scale, energy-intensive infrastructure deployment. This includes interconnects, substations, switchyards, generation assets, and related electrical systems. While our Power segment is designed primarily to support the scaling of our downstream Digital Infrastructure layer, we have also historically monetized our power capabilities through managed services arrangements and the operation of power generation assets. In the future, we may generate revenue in our Power layer through other commercial structures.

Digital Infrastructure. Our Digital Infrastructure segment comprises the development, ownership, and operation of facilities designed to support next-generation, energy-intensive technology applications. This segment represents a downstream pathway through which certain Power assets within our platform are commercialized by developing and leasing data centers. We seek to monetize our Digital Infrastructure assets through a range of commercial structures, including long-term hosting, leasing, or colocation agreements. Our goal is to generate predictable, contracted cash flows supported by strong credit profiles, medium-to-long-term duration, and economic terms designed to deliver attractive returns on and of invested capital.

For example, we build and operate facilities optimized for various chip architectures. For ASIC-based Bitcoin mining, we provide hosting services to third-party customers through fixed-fee or profit-sharing arrangements, often with reimbursement for pass-through costs such as electricity. Through our Hut 8 Canada business, we operate five data centers serving more than 200 customers and deliver services such as colocation, compute, storage, and networking. We are expanding into purpose-built infrastructure to support AI and high-performance computing (e.g., GPUs and TPUs), beginning with our River Bend campus in Louisiana.

Compute. Our Compute segment comprises operating businesses that deploy and monetize compute assets across next-generation energy-intensive technology end markets. We generate revenue through the operation of owned compute infrastructure and the provision of compute-based services, with economics driven by hardware utilization, operating efficiency, and market demand.

1. ASIC Compute. This segment reflects revenue generated primarily by American Bitcoin. Revenue is derived from Bitcoin mining rewards earned based on the computing power contributed to mining pools through the operation of owned mining infrastructure.

2. Traditional Cloud. This segment reflects revenue generated by Hut 8 Canada. Revenue is generated through consumption-based arrangements under which customers commit to baseline levels of compute, storage, network, or power usage, with additional usage billed based on actual consumption.

3. AI Cloud. This segment reflects revenue generated by Highrise AI. Revenue is generated through contracted infrastructure and service fees.

Other. Our Other reporting segment includes activities that fall outside the scope of our Power, Digital Infrastructure, and Compute layers. We continuously evaluate opportunities to leverage our expertise in power, digital infrastructure, and compute to enhance our risk-adjusted returns. While our primary focus remains on the three core layers of our platform, we have previously, and may in the future, expand into complementary business lines we believe align with our strategic capabilities. Revenue from this segment is currently generated through Equipment Sales and Repairs.

Our Strategy and Operating Model

We believe the value of power will continue to rise as next-generation, energy-intensive technologies drive growing demand within a constrained electrical grid. In this increasingly supply-constrained energy environment, access to power has become a key gating factor for digital infrastructure development, often determining where, how, and what infrastructure can be built. Power availability, cost, scale, and timing directly shape the feasibility and economics of large-scale infrastructure projects.

Consistent with this view, we treat power as the first variable in platform development. Rather than serving as a downstream input following real estate acquisition, power informs our site selection, infrastructure design, capital allocation, and commercialization decisions. We believe this power-first approach differentiates us from traditional data center operators, which have historically prioritized real estate availability and addressed power procurement reactively.

Because power attributes vary materially across site-specific fundamentals, including cost structure, scale, timing, provision (front-of-the-meter vs. behind-the-meter), and generation technology, we apply a targeted, asset-by-asset monetization strategy designed to optimize project-level returns while managing exposure to secular market risk. Each asset is initially developed and commercialized for a specific use case determined at the time of investment through project-level underwriting and return analysis.

As we look to develop and commercialize assets for a defined use case through project-level underwriting, we intend to design infrastructure, where appropriate, that preserves optionality. We believe this approach allows for the flexibility to adapt assets in response to changes in technology, market conditions, and customer demand, supporting long-term asset viability and value across the asset lifecycle. The ability to reposition assets across multiple potential use cases provides us with additional flexibility in asset selection.

We execute our strategy through a development flywheel that governs how we originate, invest in, monetize, and optimize power assets (see Exhibit 2). We believe this flywheel provides a structured, scalable, and repeatable framework for disciplined capital deployment. Our objective is to build an investment-grade energy and digital infrastructure platform characterized by durable assets, contracted recurring revenue, and disciplined capital allocation.

We believe this operating model differentiates us from traditional data center colocation providers, which are often constrained by legacy real estate footprints and incremental power procurement processes. It also distinguishes us from developers seeking to adapt existing facilities for emerging workloads with less integrated or fully outsourced power origination and greenfield development capabilities.

Exhibit 3. Our development flywheel

Case study: Power-first digital infrastructure development at the River Bend campus

Our River Bend campus in Louisiana exemplifies the execution of our power-first development model. The campus was initially commercialized in December 2025 through a 15-year triple-net lease supporting 245 MW of IT capacity. From inception, the project was structured around disciplined, power-first site origination and development, with power availability and scalability serving as key underwriting criteria. ​ We applied a systematic, data-driven approach to identify the potential of the Louisiana market and secured a prime site through deep grid, generation and land analysis. Through early engagement with Entergy Louisiana, we assumed key interconnection and development functions typically managed by the utility, such as the development of transmission and distribution infrastructure, materially accelerating originally quoted power delivery timelines. ​ In parallel, we pursued proactive and coordinated stakeholder engagement, working closely with the Governor’s office, Louisiana Economic Development (LED), and West Feliciana Parish to align incentives and advance community and economic impact. We continued to deepen our partnership with Entergy Louisiana to secure scalable, long-term capacity for the campus, demonstrating our ability to operate at a utility level. ​ Commercialization was approached with discipline and patience, with a focus on transaction structure and counterparty selection to optimize long-term economics and shareholder value creation. The outcome validates our ability to originate, execute, and monetize digital infrastructure assets at scale while maintaining control over critical inputs.

ASIC compute data center development is one of our primary tools for commercializing power assets under our power-first strategy. In scenarios where AI or other HPC workloads may not be immediately viable due to commercialization timelines, land constraints, load dynamics, limited fiber access, or other factors, ASIC compute can serve as an initial load that enables near-term monetization while often preserving the ability to transition sites to higher-value use cases over time. This capability strengthens our power origination and acquisition underwriting capabilities by expanding the set of assets we can pursue and accelerating time to cash flow once secured.

American Bitcoin anchors this approach under long-term commercial agreements pursuant to which we are its exclusive infrastructure development and operating partner. These arrangements provide a flexible source of offtake that can increase certainty at the earliest stages of commercialization and can reduce execution risk as assets move from origination into development.

Case study: How ASIC compute enables rapid, cost-efficient power acquisition

In early 2024, we began diligence on our Vega site in Texas, a large-scale, behind-the-meter asset with an existing substation and immediate access to some of the lowest locational wholesale power prices in North America. While the site was potentially attractive for an AI or HPC data center, a contractual requirement to begin consuming power by Q2 2025 would have created an unrealistic timeline for an AI or HPC data center project. To meet this deadline, we underwrote Vega as a data center for ASIC compute, enabling us to secure the site and rapidly begin development. We completed the initial energization of the site in Q2 2025, less than a year after acquiring it, for an all-in development cost of approximately $455,000 per megawatt. Today, the site hosts approximately 15 exahash-per-second (EH/s) of installed hashrate across 17,280 ASIC servers under an ASIC Colocation agreement with American Bitcoin. Importantly, we retain the flexibility to repurpose the site for other applications to optimize long-term value.

As technology and customer demand evolve, the workloads that support the strongest risk-adjusted returns on a given site may change over time. We aim to address this by securing power positions, including powered land and interconnection pathways, with a long-term view, and by commercializing those positions through the structure we believe is best suited to the asset and market at the time, including managed services arrangements, development and infrastructure management activities, and, where appropriate, the development and operation of data centers through our Digital Infrastructure layer. This approach allows us to preserve flexibility at the asset level, reduce reliance on any single demand driver, and support durable growth through market cycles.

Execution of our power-first strategy is supported by a power-native organization with deep experience across the development and commercialization lifecycle of energy infrastructure. Our personnel have deep experience navigating regulatory frameworks, interconnection processes, and regional power markets, enabling disciplined execution across a range of geographies and load profiles. Across our organization and Board of Directors, this experience spans power origination, infrastructure development, commercialization, and capital markets execution, drawing on backgrounds at leading companies including NextEra Energy, Constellation Energy, Exelon Corporation, Clearway Energy, Invenergy, Duke Energy, Holtec International, Oriden Power, Pine Gate Renewables, Acciona Energy, J.P. Morgan, Citigroup, NV Energy, Ormat and GE Capital.

Our Development Pipeline

We execute our power-first strategy by building and advancing a scaled development pipeline. Capacity within this pipeline is converted to energy capacity under management upon commercialization. As of December 31, 2025, our development pipeline comprised approximately 8,500 MW of capacity (see Exhibit 4).

Exhibit 4. Our development pipeline

Our Investment Approach

We invest in power, digital infrastructure, and compute assets that we believe will generate strong risk-adjusted returns, strengthen our competitive position, and drive long-term shareholder value creation. Our investment approach is defined by rigorous underwriting, disciplined capital allocation, and active portfolio management. As we expand and diversify our business, we expect that more predictable and financeable, lower-cost-of-capital segments will form a larger share of our revenue mix. This approach is intended to support the development of an investment-grade infrastructure platform characterized by predictable revenue, intelligent capital structuring, long-lived contracts, creditworthiness, and disciplined risk management.

Underwriting and Diligence. Before deploying capital, we generally undertake a due diligence process to evaluate risk-adjusted returns across financial, operational, commercial, legal, macroeconomic, and geopolitical dimensions. Our framework incorporates scenario modeling, stress testing, and sensitivity analysis as appropriate to quantify expected downside risk and assess potential long-term value creation. Across our platform, we generally invest only when expected returns are projected to meet or exceed identified thresholds for value creation, and we favor investments supported by long-term contracts with creditworthy counterparties. Beyond financial metrics, we prioritize opportunities that support our broader strategic objectives, enhance operational performance and scale, build durable relationships with world-class partners, and strengthen our competitive differentiation. Each opportunity is assessed for its potential to unlock platform synergies, drive scalable efficiencies, and reinforce our competitive position.

Portfolio Management. We take an active approach to portfolio management, driven by a dedicated portfolio management team that works cross-functionally to identify and address both asset-level and platform-wide value creation opportunities. Our approach includes targeted initiatives such as infrastructure upgrades, land expansion, and site-level use case transition. We leverage real-time energy market intelligence and analytics to optimize power costs, mitigate against volatility, and capitalize on arbitrage opportunities. We also maintain active engagement with governing bodies and grid operators to navigate regulatory complexities and to support the long-term reliability of our power assets and the grid.

Our Capital Strategy

Our capital strategy centers on two objectives: securing the lowest possible cost of capital and minimizing enterprise risk. We aim to maintain a robust, liquid balance sheet that enables us to explore creative financing approaches and prioritize non-dilutive sources of funding whenever possible.

Financing. We strive to optimize our cost of capital by taking a disciplined approach to capital formation and leveraging a range of financing instruments at the corporate and project levels. At the corporate level, we aim to balance equity issuance with strategic leverage in alignment with our view of the Company’s intrinsic value. While we remain sensitive to dilution, we recognize the importance of retaining the flexibility to raise capital when compelling growth opportunities arise or when market conditions are favorable. To support our disciplined approach, we employ tools such as at-the-market (“ATM”) offering programs and Bitcoin-backed credit facilities, which we view as strategic levers to optimize shareholder value, and enhance our ability to navigate market volatility. These tools enable us to fund growth initiatives and navigate the markets in which we operate. At the project level, we structure financing to align with the distinct objectives and needs of each opportunity we pursue, including traditional project financing for HPC data center development.

Treasury Management. Our treasury management strategy is designed to maintain liquidity, support consistent cash flow generation, and preserve balance sheet flexibility as we pursue capital-intensive growth initiatives, including digital infrastructure development. We actively manage our treasury with the goal of optimizing return on invested capital while ensuring sufficient financial optionality to fund operations and growth across market conditions. Our approach emphasizes disciplined capital deployment, prudent risk management, and the ability to monetize assets or deploy capital opportunistically as conditions warrant. By aligning our capital and operating strategies, we seek to enhance capital efficiency, support self-funded growth, and maximize long-term value creation for shareholders (see Exhibit 5).

Exhibit 5: Flywheel effect accelerates value creation across capital and operating strategies

Capital Strategy ​ Allocate capital to projects with high ROIC ​ Aim to minimize dilution ​ Maintain healthy leverage levels and liquidity Operating Strategy ​ Expand Power layer in both scale and geography ​ Scale and diversify Digital Infrastructure layer ​ Build customer base

Our Focus on Innovation

We take a first-principles approach to digital infrastructure development, designing each facility based on the specific performance, resiliency, and cost requirements of the workload it is intended to support. Rather than starting with end use workloads such as ASIC compute or GPU-based AI compute, we begin with underlying technical and economic requirements of the workload and engineer solutions accordingly. This application-agnostic, first-principles framework allows us to allocate capital efficiently, avoid overbuilding, and preserve flexibility as technologies and end markets evolve.

Our development model is organized around a tiered framework defined by redundancy and resiliency, which informs both capital intensity and operating economics. At one end of the spectrum are highly resilient, mission-critical facilities designed to support HPC workloads, where uptime and redundancy are often critical and capital requirements are meaningfully higher. At the other end are data centers optimized for ASIC compute, where minimal redundancy, relatively low capital intensity, and rapid deployment can drive superior cost structures and faster time to cash flow.

Across this spectrum, we apply a first-principles approach to innovation, grounded in our vertically integrated platform spanning Power, Digital Infrastructure, and Compute. This end-to-end operating exposure gives us direct insight into the technical and commercial drivers of infrastructure performance, enabling us to design and deploy value-engineered solutions that reduce cost, improve efficiency, and enhance optionality across our asset base. As a result, innovation is not episodic or application-specific, but embedded in how we underwrite, design, and scale infrastructure.

Case study: Applying operational insight to data center performance and innovation

• Highrise AI: Incubating and scaling an AI Cloud platform gave us first-hand visibility into the power density, cooling, networking, and uptime requirements of AI workloads, informing the design of a new AI-optimized data center infrastructure solution we co-developed with Vertiv for our River Bend campus. - Hut 8 Canada: Operating enterprise cloud and colocation data centers strengthened our understanding of contracted service delivery, SLAs, and the operational discipline required to support durable, investment-grade colocation revenue. - Power Generation: Owning and operating dispatchable generation assets deepened our expertise in power market dynamics, reliability, and operational control-capabilities that become increasingly important as behind-the-meter and bring-your-own-generation solutions gain relevance in large-load data center development.

Case study: Pioneering a new data center form factor for ASIC compute

At our Vega site, we pioneered a new data center form factor that challenges conventional assumptions about ASIC compute infrastructure and narrows the gap between ASIC and HPC data center architecture. Historically, data centers designed for ASIC compute relied on shelf-based deployments and forced-air cooling, making them suitable for ASIC compute but incompatible with workloads like HPC, which rely on rack-based deployments and, increasingly, liquid cooling. This architecture constrained infrastructure flexibility, limited potential applications, and left significant efficiency gains untapped. With our Vega project, we are disrupting this paradigm. The custom infrastructure we developed and engineered in-house for the project features high-density racks, direct-to-chip liquid cooling, and HVAC-supported air cooling. Inspired by traditional data center architecture but optimized for the economics and deployment speed of our agile ASIC compute infrastructure developments, this design enables Vega to support rack-based deployments of ASIC compute at densities of 180 kilowatts per rack, surpassing even the 120-kilowatt density required by NVIDIA’s latest Blackwell GPUs. And, despite these innovations, built Vega for an all-in cost of approximately $455,000 per megawatt, a fraction of traditional data center costs, and completed the initial energization of the site less than one year after acquiring it.

Case study: Developing and commercializing a next-generation ASIC miner

We partnered with BITMAIN Technologies Ltd. (“BITMAIN”), the world’s leading manufacturer of digital currency mining servers, to develop and launch the U3S21EXPH ASIC miner, an integral input in the design and commercialization of a new ASIC compute data center form factor. The U3S21EXPH was the first ASIC miner mass-commercialized by BITMAIN to feature direct liquid-to-chip cooling in a U form factor, allowing for high-density deployments of ASIC compute in the rack-based architecture we developed for Vega.

Case study: Energizing a greenfield ASIC compute data center with custom containers in 78 days

In Q1 2022, after acquiring 60 acres of land in West Texas, USBTC designed, developed, and energized Bravo, a 42 MW ASIC compute data center, in just 78 days at an all-in cost of approximately $350,000 per MW. This project was an early proof point of our innovation-driven approach. Rather than following the outsourced development model common among operators, we designed and built the site from the ground up, optimizing for speed, cost efficiency, and long-term performance. A key differentiator was our collaboration with a manufacturer to develop custom-modified containers engineered for the environmental conditions of West Texas, including extreme heat and dust exposure. These enhancements improved cooling, airflow, and operational efficiency, ultimately leading the manufacturer to mass-commercialize the design based on our innovations. Bravo established our internal benchmark for rapid, cost-effective infrastructure deployment, a standard we further advanced with our Salt Creek project, which we completed at an all-in cost of approximately $250,000 per MW.

Our Technology-Driven Operating Philosophy

Building on our deep infrastructure expertise, we operate with a technology-driven philosophy focused on optimizing the drivers of scale and returns. We implement scalable, data-driven processes that enhance the efficiency of our human capital, decrease operating expenses, and lower the marginal costs of expanding our operations. To support this approach, we have developed a proprietary software suite comprising three specialized applications (see Exhibit 5). Recognizing that energy costs represent a significant component of our overall cost structure, we have further embedded advanced data science capabilities within our Compute layer. This dedicated team develops server-level decision-making algorithms and profitability models that guide curtailment decisions, optimize energy consumption, and improve returns.

Exhibit 6: Our proprietary software suite

Our Team

We aim to attract top talent and provide an environment where our teams are inspired to do their best work. We had 248 full-time employees in the United States and Canada as of December 31, 2025. We also hire part-time employees, temporary employees, or consultants as necessary, and we consider our relations with our employees to be good.

Competition

Driven by the proliferation of next-generation, energy-intensive technologies such as ASIC compute and HPC, demand for energy capacity continues to outpace supply. For example, HPC workloads require high-density infrastructure with capacity demands multiples greater than many legacy data centers can provide, while ASIC compute remains a competitive market that requires operational efficiency and low-cost energy at scale. At the same time, grid interconnection bottlenecks have further constrained access to power and digital infrastructure development, while supply chain disruptions and regulatory constraints have extended lead times for critical infrastructure, including GPUs, ASICs, turbines, generators, and transformers.

In this supply-constrained environment, we believe success depends on the ability to secure scarce assets like power, data center equipment, and customers. We compete with digital infrastructure developers and large-scale Bitcoin miners for access to powered land and key inputs for facility development, such as building materials, data center equipment, and skilled labor. Additionally, we compete with cloud services providers and digital infrastructure developers for customers and specialized hardware. Within ASIC Compute, we participate in mining pools that compete for block rewards. See “Risk Factors—Risks Related to Our Business and Operations—We may not be able to compete effectively against our current and future competitors.”

Nonetheless, we believe we have established a defensible competitive advantage through our power-first, innovation-driven strategy, which is underpinned by a power-native team with a deep understanding of power markets, an application-agnostic framework for digital infrastructure design, end-to-end greenfield development capabilities, and our ability to use ASIC compute infrastructure development to rapidly and cost-effectively secure and monetize power.

Customers and Partners

Through our Digital Infrastructure layer, we aim to support energy-intensive workloads such as AI and ASIC compute for third-party customers. We are advancing scaled AI infrastructure development at our River Bend campus in Louisiana, where Fluidstack is expected to serve as tenant and Google is expected to provide a financial backstop that covers the lease payments and related pass-through obligations for the 15-year base lease term. We also provide managed services and ASIC colocation services to American Bitcoin through our Power and Digital Infrastructure segments, respectively; because American Bitcoin is a consolidated subsidiary, revenue from these intercompany agreements is eliminated in consolidation. Through our Hut 8 Canada brand, we provide cloud and colocation services to customers across a range of industries, including technology, financial services, government, and media. As of December 31, 2025, Hut 8 Canada served more than 200 customers through our five enterprise-grade data centers in Canada.

At the corporate level, we actively pursue partnerships across five primary categories: (i) utilities and power market participants, (ii) energy developers and asset owners, (iii) digital infrastructure developers and operators, (iv) large-scale consumers of load capacity, including enterprise and institutional counterparties, and (v) capital providers that allow access to innovative, low cost of capital financing. Through these partnerships, we seek to leverage our expertise in power origination, grid interconnection, large-load site development, infrastructure commercialization, and corporate finance to accelerate development timelines, optimize capital deployment, and enhance risk-adjusted returns across the platform.

Intellectual Property

We actively use specialized hardware and software for our operations. In some instances, source code and other software assets may be subject to an open-source license, as much technology development in this sector is open source. We intend to adhere to the terms of any license agreements that may be in place for these works.

We rely upon intellectual property protections, including trade secrets, trademarks, and copyright, and license the use of intellectual property rights owned and controlled by others. We have developed and may further develop specific proprietary hardware, software applications, or other intellectual property, and may choose to seek patents or other protections in the future.

Regulatory Landscape

The laws and regulations applicable to our offerings are evolving and subject to interpretation and change. We operate in a complex and rapidly evolving regulatory environment and we are subject to a wide range of laws and regulations enacted by federal, state, provincial, and local governments, governmental agencies, and regulatory authorities, including the SEC, the Commodity Futures Trading Commission (“CFTC”), the Federal Trade Commission, and the Financial Crimes Enforcement Network of the U.S. Department of the Treasury (“FinCEN”), as well as similar entities in Canada and other countries. Other regulatory bodies, governmental or semi-governmental, have shown an increased interest in companies operating energy-intensive technologies, including HPC and ASIC compute infrastructure. For example, the energy consumption and environmental impact of data center operations have received heightened regulatory scrutiny, and future regulations may emphasize energy efficiency, sustainability, and grid reliability.

As we expand into the development and operation of large-scale data centers supporting HPC and AI workloads and, through Highrise AI, the operation of our AI cloud, our facilities are becoming subject to an increasing number of laws, ordinances, and regulations. Regulators and policymakers are increasingly focused on the governance, ethical use, and potential misuse of AI systems and advanced computing technologies, as well as cybersecurity, data protection, export controls, and compliance obligations applicable to large-scale data center and HPC infrastructure. Furthermore, Bitcoin and other digital assets are subject to anti-fraud regulations under federal and state commodity and/or securities laws, and digital asset derivative instruments are regulated by the CFTC and SEC. Certain jurisdictions have developed, or are developing, regulatory requirements specifically for digital assets and companies that transact in them. Regulatory frameworks applicable to AI and large-scale computing infrastructure are similarly developing and may vary significantly across jurisdictions. Regulations may substantially change in the future and it is presently not possible to know how regulations will apply to our business, or when they will be effective.

As the regulatory and legal environment evolves, we may become subject to new laws and regulations, which may affect business model and operations. We are unable to predict the impact that any new standards, legislation, laws, or regulations may have on our business at the time of filing this Annual Report. For additional discussion regarding the potential risks existing and future regulations pose to our business, see “Risk Factors.”

Additional Information

Our principal executive offices are located at 1101 Brickell Avenue, Suite N-1500, Miami, FL 33131. We were incorporated in the State of Delaware on January 27, 2023 for the purposes of effecting the Business Combination.

Our website address is hut8.com and our investor relations website is located at hut8.com/investors. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports are available on our investor relations website free of charge as soon as reasonably practicable after they are filed with the SEC. The information contained on our website is not included in, nor incorporated by reference into, this Annual Report. Reports filed with the SEC also may be viewed at sec.gov.

A description of the risks and uncertainties associated with our business is set forth below. You should consider carefully the risks and uncertainties described below, together with the financial and other information contained in this Annual Report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes. If any of the following risks or uncertainties actually occur, our business, financial condition, and results of operations could be materially and adversely affected. In that case, the market price of our common stock could decline and you may lose all or a part of your investment. The risks discussed below are not the only risks we face. Additional risks or uncertainties not currently known to us, or that we currently deem immaterial, may also have a material adverse effect on our business, financial condition, and results of operations.

Risks Related to Our Growth

Our construction of new data centers, data center expansions, or data center redevelopment could involve significant risks to our business.

In order to sustain our growth in certain of our existing and new markets, we may have to expand existing data centers, lease new facilities, or acquire suitable land, with or without structures, to build new data centers. Expansions or new builds are currently underway, or being contemplated, in new and existing markets. For example, we recently entered into a 15-year, 245 MW IT build to suit data center lease at our River Bend campus. The construction of such projects exposes us to many risks that could have an adverse effect on our business, financial condition, and results of operations, including:

• construction delays, which may result in material consequences, including penalties or liquidated damages payable to our customers, reputational harm, or an inability to satisfy our customer obligations or financing requirements;
• unexpected budget changes or cost overruns, which we may not be able to recover from our customers or which we may not have sufficient financing to cover;
• supply chain and logistical issues, including tariff and inflationary pressures and a lack of availability, increased prices, delays in obtaining building supplies, raw materials, and equipment for data centers, and/or failure of our infrastructure and equipment suppliers to deliver infrastructure and equipment on time and in accordance with agreed upon specifications;
• labor availability, labor disputes, work stoppages, and/or defaults by contractors, subcontractors, and other third parties, including any limitations on such third parties’ liability;
• unanticipated environmental issues and geological problems;
• permitting or regulatory hurdles, including permitting and approval delays;
• the exercise of any step-in rights by a customer, lender, or other third party;
• delays in site readiness, which may delay or otherwise impact the satisfaction of lease commencement conditions; and
• unanticipated customer requirements that would necessitate alternative data center design, making our sites less desirable or leading to increased costs in order to make necessary modifications or retrofits.

We may experience liquidity constraints and may need to raise additional capital. We may be unable to raise the additional capital needed to operate and grow our business.

Liquidity risk is the risk that we will not be able to meet our financial obligations as they fall due. We currently settle our financial obligations out of cash and cash equivalents, including the net proceeds from the sale of common stock under our ATM program, and from any sales of Bitcoin. We have a planning and budgeting process to help determine the funds required to support our normal spending requirements on an ongoing basis and our expansionary plans. However, the capital required to operate our business and implement our growth initiatives is substantial. For example, the development of new data center campuses, including the River Bend campus, requires significant capital expenditures and long lead times before such projects may generate revenue, if at all. As a result, we expect to need to raise additional funds through equity or debt financings, which may be at the corporate level or the project level, in order to meet our operating and capital needs, fund our growth initiatives, and/or respond to competitive pressures or unanticipated working capital requirements.

Such financing may be secured by certain assets or cash flows, involve certain step-in, cure rights, or other remedies, impose certain financial maintenance covenants, operating covenants, or other limitations, or require certain guarantees or other credit enhancements, which may increase our overall risk exposure. Furthermore, we may be unable to secure such financing in a timely manner, in sufficient quantities, or on terms acceptable to us, if at all. Market conditions, including interest rate increases, declining equity valuations, volatility in credit markets, or tightening lending standards, as well as other external events, including impacts on the market’s perception of data center operators and their tenants, including hyperscalers and neoclouds, may further limit our ability to raise capital on favorable terms. In addition, debt financings, whether at the corporate level or the project level, may bear interest at floating rates, which could increase our interest expense in rising interest rate environments, even if a portion of such exposure is hedged.

If we are unable to raise the additional capital needed to maintain our operations and execute on our growth initiatives, we may be unable to fulfill our customer and third-party obligations and may be less competitive in our industry such that our business, financial condition, and results of operations may suffer, and the market price for our securities may be materially and adversely affected. If we were to raise additional equity financing, our stockholders may experience significant dilution of their ownership interest, and the value of their investment could decline. Furthermore, if we were to raise additional debt financing, our debtors would likely have priority over holders of equity with respect to order of payment preference. We may be required to accept terms that restrict our ability to incur additional indebtedness or take other actions, including terms that require us to maintain a specified level of liquidity or other balance sheet ratios that may restrict our business activities and ability to pursue certain growth opportunities and negatively impact our stockholders.

If we do not accurately predict our facility requirements, it could have a material adverse effect on our business, financial condition, and results of operations.

The costs of developing, leasing, operating, and maintaining our facilities may constitute a significant portion of our capital and operating expenses. In order to manage growth and ensure adequate capacity for our planned and existing projects while minimizing unnecessary excess capacity costs, we continuously evaluate our short- and long-term infrastructure requirements. There can be no assurance that we can accurately predict our short- and long-term facility requirements or that existing or future market demand will be sufficient to fully utilize the capacity we develop or secure.

In certain cases, we may develop or secure facility capacity in advance of obtaining customer commitments for all or a portion of such capacity. If we overestimate our facility requirements or the demand for our offerings and therefore secure excess capacity, our facilities may remain vacant or underutilized for extended periods. As a result, our operating margins could be materially reduced and we could experience operating losses, including due to fixed costs incurred regardless of utilization levels. In addition, we may be required to incur additional costs to reposition, retrofit, or otherwise market such capacity to attract customers. Conversely, if we underestimate our facility requirements, we may not be able to service our or our customers’ expanding needs, may be required to limit our growth opportunities or new customer acquisition, or we may lose existing or potential customers to competitors, any of which could have a material adverse effect on our business, financial condition, and results of operations.

We face risks associated with the King Mountain JV and American Bitcoin, and may face similar risks in the future by entering into other joint ventures or launching or spinning out other consolidated businesses.

Joint ventures and majority-owned subsidiaries inherently involve operational, governance, and control risks that may differ from those associated with wholly owned operations, thereby potentially increasing the financial, legal, operational, regulatory, and/or compliance risks associated with them, and may require the diversion of financial and management resources from existing operations or alternative opportunities. We may be dependent on partners, other shareholders, management teams, or other persons or entities who control or influence the entity who may have business interests, strategies, or goals that are inconsistent or competitive with ours. Furthermore, these individuals may receive access to our intellectual property and other resources, which introduces the risk of theft and/or exploitation.

For example, we own a 50% membership interest in the King Mountain JV. Decision-making control over the King Mountain JV’s actions rests in a committee of four member managers, with two from Hut 8 and two from our partner. If the member managers from Hut 8 and our joint venture partner are not aligned with respect to business interests, strategies, or goals, or if the member managers from Hut 8 and our joint venture partner cannot reach agreement in decision-making processes, there is a risk that we may not be able to operate the King Mountain site optimally from a financial, legal, operational, regulatory, and/or compliance perspective. If this situation materializes, it may have a material adverse effect on our business, financial condition, and results of operations.

In addition, although we consolidate American Bitcoin’s results of operations in our financial statements, the presence of minority shareholders, separate management teams, contractual arrangements, fiduciary responsibilities, and regulatory constraints, among other things, limits our control over its operations, governance, and strategic decisions. Conflicts of interest may arise between us and minority shareholders or other stakeholders, and the resolution of such conflicts may not be favorable to us. Further, as we are the majority owner of American Bitcoin’s capital stock, we are also exposed to risks associated with the actual or perceived value of that equity interest. The market price of American Bitcoin’s Class A common stock has been, and may continue to be, volatile and subject to significant fluctuations due to a variety of factors, including changes in Bitcoin prices, market sentiment toward digital asset-related businesses, operating performance, regulatory developments, capital structure, liquidity, and broader equity market conditions. The value of our equity ownership in American Bitcoin may decline significantly, which could result in impairment charges or other adverse impacts to our financial statements, and we may not be able to monetize our ownership interest on favorable terms, or at all. In addition, market perception of American Bitcoin, including investor sentiment, media coverage, or developments affecting its business or industry, may also influence investor perception of Hut 8 and could adversely affect the market price and trading volatility of our common stock. Our investment in American Bitcoin is also subject to the risks described in American Bitcoin’s filings with the SEC, including the risk factors set forth therein, which, if realized, could adversely affect the value of our ownership interest. Any such decline in value, increased volatility, or adverse market perception could have a material adverse effect on our business, financial condition, results of operations, reputation, brand, and liquidity.

Although we expect that our interest in our joint ventures and consolidated businesses will result in benefits to us, we may not realize those benefits. If we fail to address the foregoing risks or other problems encountered in connection with current or future joint ventures or consolidated businesses, it could have a material adverse effect on our business, financial condition, and results of operations.

We may acquire other businesses and/or assets or form strategic alliances or joint ventures that could negatively affect our operating results, dilute shareholder ownership, increase debt, or cause us to incur significant expenses.

We have previously engaged in strategic transactions, including completing the Business Combination and, more recently, launching and taking public American Bitcoin. As part of our growth strategy, in the future, we may pursue additional acquisitions of businesses and/or assets and/or enter into strategic alliances, joint ventures, or other strategic transactions. However, we cannot offer any assurance that any such strategic transaction will be successful. We may not be able to identify suitable partners or acquisition candidates and may not be able to complete such transactions on favorable terms, if at all. Any such strategic transaction also could result in the issuance of stock, incurrence of debt, contingent liabilities, write-offs of intangible assets or goodwill, restructuring and other related expenses, or litigation, any of which could have a negative impact on our business, financial condition, and results of operations. If we complete any acquisitions, we may not be able to integrate these acquisitions successfully into our existing business. In addition, in the event that we acquire any existing businesses, we may assume unknown or contingent liabilities. Integration of an acquired company may also disrupt ongoing operations and carry substantial compliance burdens and costs, which may limit our ability to realize the anticipated benefits of such acquisitions, and which may require management resources that would otherwise be focused on developing and expanding our existing business. We may experience losses related to potential investments in other companies or other strategic transactions, which could materially and adversely affect our business, financial condition, and results of operations. Furthermore, the benefits of any acquisition, strategic alliance, joint venture or other strategic transaction may also take considerable time to develop, and we cannot be certain that any particular acquisition, strategic alliance, joint venture, or other strategic transaction will produce the intended benefits in a timely manner or to the extent anticipated or at all.

New offerings or lines of business may subject us to additional risks.

We are a growth stage company with a small management team and are subject to the strains of ongoing development and growth, which will place significant demands on our management and operational and financial infrastructure. To remain competitive with peers, we may need to modify aspects of our business model or we may implement new offerings or lines of business, from time to time. For example, we signed our first large scale single tenant AI data center lease and commenced construction of the site at our River Bend campus. There are substantial risks and uncertainties associated with the modification or augmentation of our business model, particularly in instances where the markets are not fully developed or where the operational requirements of new offerings or lines of business differ substantially from existing offerings or lines of business. We cannot offer any assurance that these or any other changes will be successful or will not result in harm to our business. In developing and marketing new offerings or lines of business or expanding our current offerings or lines of business, we may invest significant time and resources. Initial timetables for the introduction and development of new offerings or lines of business may not be achieved and profitability targets may not prove feasible. External factors, such as compliance with regulations, competition, and shifting market preferences, may also impact the successful implementation of a new offering or line of business.

In addition, our personnel and technology systems may fail to adapt to the changes or we may fail to effectively integrate new offerings or lines of business into our existing operations and we may lack experience in managing new offerings or lines of business. We may also be unable to proceed with the operations as planned or compete effectively due to different competitive landscapes. Even if we expand our businesses into new jurisdictions or areas, the expansion may not yield intended profitable results. Furthermore, any new offering or line of business could have a significant impact on the effectiveness of our internal control system. Failure to successfully manage these risks in the development and implementation of new offerings or lines of business could have a material adverse effect on our business, financial condition, and results of operations. Finally, we cannot provide any assurance that we will successfully identify all emerging trends and growth opportunities in a market. As a result, we may not capture those potential opportunities or such opportunities may be taken by our competitors. Such circumstances could have a material adverse effect on our business, financial condition, and results of operations.

Risks Related to Our Business and Operations

Failure of critical systems related to our offerings and/or infrastructure could have a material adverse effect on our business, financial condition, and results of operations.

The critical systems related to our offerings and infrastructure are subject to failure. Failure of any of our critical systems, including a breakdown in critical plant, equipment or services, routers, switches or other equipment, power supplies, or network connectivity, whether or not within our control, could result in service interruptions to us or our customers and/or damage to equipment, which could significantly disrupt the normal business operations of our customers, harm our reputation, reduce our revenue, and subject us to liability claims. The destruction or severe impairment of any of the facilities operated by us could result in significant downtime. For certain of our business lines, our ability to attract and retain customers depends on our ability to provide a reliable service, so even minor interruptions in service could harm our reputation and negatively impact our business, financial condition, and results of operations.

Our infrastructure and offerings are subject to temporary or permanent interruption by factors that include but are not limited to:

• failure by us or our suppliers to provide adequate service or maintain equipment;
• equipment failure, power loss, network connectivity downtime, fiber cuts, or plant downtimes;
• human error and accidents, including manmade disasters;
• theft, sabotage, and vandalism;
• service interruptions resulting from server relocation;
• physical and cybersecurity breaches, including security breaches of infrastructure;
• improper or inadequate building maintenance;
• the presence of construction or repair defects or other structural or building damage;
• animal incursions;
• fire, earthquake, hurricane, tornado, flood, winter storms, severe weather events, and other natural disasters, including as a result of climate change;
• water damage;
• public health emergencies; and
• terrorism.

The occurrence of any of these events may have a material adverse effect on our business, financial condition, and results of operations. Moreover, service interruptions and equipment failures may expose us to potential legal liability. As the services provided by us may be critical to our customers’ business operations, any disruption in services could result in lost profit or other indirect or consequential damages to our customers. Although customer contracts typically contain provisions limiting our liability, there can be no assurance that a court would enforce any contractual limitations on our liability in the event that one of our customers brings a lawsuit against us as the result of a service interruption that they ascribe to us. The outcome of any such lawsuit would depend on the specific facts of the case and any legal and policy considerations that we may not be able to mitigate. In such cases, we may be liable for substantial damage awards, which could have a material adverse effect on our business, financial condition, and results of operations.

We are subject to risks associated with our need for significant electrical power.

Our operations require significant amounts of electrical power and our business, financial condition, and results of operations may be impacted by the unavailability of power and/or price fluctuations in the power market. Market prices for power, capacity, and other ancillary services are unpredictable and tend to fluctuate substantially. Unlike most other commodities, electric power can only be stored on a very limited basis and generally must be produced concurrently with its use. As a result, power prices are subject to significant volatility due to supply and demand imbalances, especially in the day-ahead and spot markets. Power availability and prices may also be materially impacted by other factors outside of our control, including:

• changes in generation capacity in our markets, including changes in the supply of power as a result of the development of new plants, expansion, reduction, or retirement of existing plants, the continued operation of uneconomic power plants due to government subsidies, or additional or reduced transmission capacity;
• environmental regulations and legislation;
• electric supply disruptions, including plant outages and transmission disruptions;
• changes in power transmission infrastructure;
• changes in commodity prices and the supply of commodities, including natural gas, coal, and oil;
• fuel transportation capacity constraints or inefficiencies;
• development of new fuels, new technologies, and new forms of competition for the production of power;
• changes in law, including judicial decisions;
• weather conditions, such as extreme weather and seasonal fluctuations, including the effects of climate change;
• changes in the demand for power or in patterns of power usage;
• economic and political conditions;
• supply chain disruption of electrical components needed to transmit energy;
• availability of competitively priced alternative energy sources;
• ability to procure satisfactory levels of inventory; and
• changes in capacity prices and capacity markets.

Such factors and the associated fluctuations in power availability and prices could affect the cost, reliability, and availability of power supply for our operations.

As part of our growth strategy, we pursue a “power first” approach to site development, under which we prioritize identifying and securing access to sufficient and reliable power before committing significant capital to the development or expansion of data center or ASIC compute sites. This approach includes evaluating power availability, grid capacity, interconnection feasibility, permitting requirements, expected timelines, and the commercial terms under which power may be obtained. However, there is significant competition for suitable locations with access to power and the existence of a power pipeline or preliminary arrangements does not guarantee that power will ultimately be delivered on the anticipated timeline, in the expected quantities, on commercially acceptable terms, or at all. Delays or failures in securing interconnection approvals, completing grid upgrades, satisfying regulatory or utility requirements, or finalizing definitive power arrangements could limit our ability to develop sites as planned, increase costs, or result in projects being delayed, scaled back, or abandoned. For example, in many markets, the requirements to secure access to power have become increasingly onerous and may include substantial security obligations, such as large deposits, letters of credit, minimum payment commitments, or other financial assurances, which may be required before power is delivered or before a facility is developed or occupied. In certain cases, we may be required to make such commitments before securing a customer or entering into revenue-generating agreements, which could expose us to increased financial risk if expected customer demand does not materialize.

Furthermore, there can be no assurance that power suppliers will service our facilities or that once we have entered into a power purchase agreement, such supplier will continue to provide us with power for any period of time, which may delay or otherwise impact the satisfaction of lease conditions. Power purchase agreements may be terminated or delayed, or we may lose access to power under certain other circumstances, including as a result of re-studies or other regulatory or utility-driven processes, and we may not be able to find an adequate replacement at a reasonable cost, or at all, especially in light of the limited availability of power and grid constraints in many markets.

Our reliance on power grids subjects us to a variety of risks, including the breakdown or failure of equipment, accidents, security breaches, viruses or outages affecting information technology systems, labor disputes, obsolescence, delivery/transportation problems, disruptions of fuel supply, and performance below expected levels. These events may impact our ability to conduct our businesses efficiently and lead to increased costs, expenses, or losses. Although we maintain limited backup power at certain sites, it may not be feasible to run our operations on back-up power generators in the event of a restriction on electricity or a power outage. Planned or unplanned outages at the power grids that we rely on may require us to purchase power at then-current market prices, either to continue our operations or satisfy our commitments, which could be expensive and therefore have a material impact on the cost structure of our operations. To the extent we are unable to receive or provide adequate power supply and are forced to reduce or cease our operations due to the unavailability or high cost of electrical power, our business, financial condition, and results of operations would be adversely affected.

For example, our customer lease agreements for data centers typically include specific power delivery requirements and lease commencement conditions. If sufficient power is not available at or prior to lease commencement, we may be unable to satisfy such conditions, which could delay the commencement of leases, defer or eliminate expected revenues, or result in the termination of customer agreements. In addition, unavailability of contracted levels of power or power-related services during the term of a lease may constitute a breach of customer agreements in certain circumstances and could give rise to termination rights, damages, or other contractual remedies, any of which could adversely affect our business, financial condition, and results of operations.

Our ASIC compute operations, conducted mainly through American Bitcoin, are also highly dependent on the availability and cost of power. ASIC compute profitability is directly impacted by power costs and availability. Reductions in power availability or increases in power prices may require us to curtail operations, either voluntarily or through our agreements with utility providers. We may also encounter other situations where utilities or government entities restrict or prohibit the provision of electricity to ASIC compute operations. In these cases, our and American Bitcoin’s ability to mine Bitcoin may be negatively affected.

We may not be able to attract, retain, or expand relationships with customers across our platform.

As we look to expand our large-scale data center development, we expect to generate a significant portion of our revenue from a limited number of customers. For example, we recently entered into a 15-year, 245 MW IT lease at our River Bend campus valued at $7.0 billion over the base term and up to $17.7 billion if all renewal options are exercised. However, there can be no assurances that we will be able to attract or retain such customers across our platform on favorable terms, or at all. Our success in doing so is impacted by a variety of factors, including:

• macroeconomic conditions and demand trends in the industries we serve;
• our ability to provide offerings or launch new offerings that meet the needs of existing or potential customers;
• our ability to effectively market our brand and our offerings to potential customers and price our offerings attractively;
• our competitive position in the market relative to alternative offerings, including customers electing to build or operate facilities internally; and
• our ability to meet customers’ ongoing and evolving program qualification standards based on a range of factors, including delivery schedules, power availability requirements, preferred site design specifications, security considerations, and connectivity.

Furthermore, any event leading to the early termination of a customer contract, including customer bankruptcy or force majeure events that disrupt facility operations or damage customer infrastructure, could result in the loss of revenue associated with those contracts. In addition, customer contracts for large-scale data center developments typically include termination rights that may be triggered by specified events or breaches. For example, our lease agreement for the River Bend data center campus provides the customer with certain termination rights, including in connection with certain breaches of the lease or power contract, casualty events, or other circumstances beyond our control. If a customer were to exercise termination rights under such an agreement, we could lose a significant source of expected revenue and may be required to incur additional costs to remarket or redevelop the affected facility. If we were unable to offset lost revenue, it could have a material adverse effect on our business, financial condition, and results of operations.

Our operations and growth may be adversely affected by geographic concentration and market-specific conditions.

Our results of operations and growth prospects may be disproportionately affected by conditions in the specific geographic markets in which our facilities are located or under development. While we operate across multiple locations, a significant portion of our data center capacity, capital investments, and development activities are presently concentrated in Texas and Louisiana, which increases our exposure to geographic and market-specific risks. Conditions in these and other markets may vary materially, including with respect to local demand and competing supply, permitting and zoning requirements, utility and grid practices, power availability, labor conditions, regulatory requirements, environmental or community considerations, and exposure to extreme weather or other natural events. Adverse developments arising from any of these geographic and market-specific factors could delay projects, increase costs, limit available capacity, reduce utilization, or adversely affect pricing and margins, which could have a material adverse effect on our business, financial condition, and results of operations.

We may not be able to compete effectively against our current and future competitors.

The industries in which we operate are highly competitive and continuously evolving. We expect competition to further intensify as existing and new competitors introduce new offerings or enhance existing offerings and as the industries that we operate in continue to grow. As we continue to expand in our existing markets and enter new markets, we compete against an increasing number of companies operating, both within North America and abroad, that may be more established or have greater financial and other resources and/or expertise.

Driven by the proliferation of next-generation, energy-intensive technologies such as ASIC compute and HPC, demand for energy capacity continues to outpace supply. For example, HPC workloads require high-density infrastructure with capacity demands multiples greater than many legacy data centers can provide, while ASIC compute remains a competitive market that requires operational efficiency and low-cost energy at scale. At the same time, grid interconnection bottlenecks have further constrained access to power and digital infrastructure development, while supply chain disruptions and regulatory constraints have extended lead times for critical infrastructure, including GPUs, ASICs, turbines, generators, and transformers.

In this evolving landscape, we compete directly with cloud services providers, digital infrastructure developers, and large-scale Bitcoin miners. The nature of competition varies across the layers of our platform:

• Power: We compete primarily for access to powered land.
• Digital Infrastructure: We compete primarily for customers, as well as key inputs for facility development, including building materials, data center equipment, and skilled labor.
• Compute: We compete primarily for customers, specialized hardware, and Bitcoin rewards, including through our Hut 8 Canada, American Bitcoin, and Highrise AI brands.

Taken as a whole, we believe success depends on the ability to secure, monetize, and optimize power capacity at scale. We believe we have established a defensible competitive advantage through our power-first, innovation-driven strategy, which is underpinned by a power-native team with deep access to power markets, an application-agnostic framework for digital infrastructure design, end-to-end greenfield development capabilities, and our ability to use ASIC compute infrastructure development to rapidly and cost-effectively secure and monetize power. However, these factors might not provide the competitive advantage we anticipate, or if they do, such competitive advantage might not endure. If we are unable to compete successfully, or if competing successfully requires us to take costly actions in response to the actions of our competitors, our business, financial condition, and results of operations could be adversely affected.

Some of our infrastructure is located on leased premises and the termination or higher renewal rate of our leases could materially adversely affect our business, financial condition, and results of operations.

Some of our infrastructure is located on leased premises and there can be no assurance that we will remain in compliance with our leases, that our landlord will continue to support our operations, or that our leases will not be terminated despite negotiation for long term lease periods and renewal provisions. When the initial terms of our existing leases expire, in some instances, we have the right to extend the terms of our leases for one or more renewal periods. Upon the end of our initial term or, if applicable, the renewal periods, we would have to renegotiate our lease terms with the applicable landlords. If renewal rates are less favorable than those we currently have, we may be required to increase revenues to offset such increase in lease payments. Failure to increase revenues to sufficiently offset these projected higher costs could adversely impact our operating income. We may also not be able to renew such leases at all. The termination of a lease could have a material adverse effect on our business, financial condition, and results of operations.

We are required to obtain, maintain, and comply with the terms and conditions of government permits and approvals.

We are required to obtain, maintain, and comply with the terms and conditions of numerous permits, approvals, and licenses from federal, state, provincial, and local governmental agencies. The process of obtaining and renewing necessary permits and licenses can be lengthy and complex and can result in the establishment of conditions that make the project or activity for which the permit or license was sought unprofitable or otherwise unattractive. In addition, the permitting and approval process may be influenced by public input, community organizations, advocacy groups, or other local or regional stakeholders, as well as broader social, environmental, or political movements, which may increase scrutiny, result in additional conditions, delays, or challenges, or lead to opposition to our projects. Furthermore, such permits or licenses may be subject to denial, revocation, or modification under various circumstances and may be impacted by legal and regulatory changes. Failure to obtain or comply with the conditions of permits or licenses, or failure to comply with applicable laws or regulations, may result in the delay or temporary suspension of our development or operations, which could have a material adverse effect on our business, financial condition, and results of operations.

We are subject to many hazards and operational risks that can disrupt our business, some of which may not be insured or fully covered by insurance.

Our operations are subject to many hazards and operational risks inherent to our business, including:

• general business risks;
• the presence of construction or repair defects or other structural or building damage;
• operating large and often hazardous pieces of equipment;
• any noncompliance with or liabilities under applicable environmental, health, or safety regulations, or requirements or building permit requirements;
• any damage resulting from severe weather events, such as droughts, wildfires, flooding, heat waves, hurricanes, winter storms, and other natural or manmade disasters; and
• claims by employees, contractors, customers, or the general public as a result of exposure to potentially dangerous environments at or near our operations.

The measures we take to protect against these risks may not be sufficient. For example, we maintain certain disaster recovery and business continuity plans that would be implemented in the event of severe weather events that interrupt our operations. While these plans are designed to allow us to recover from natural disasters or other events that can interrupt our business, we cannot be certain that our plans will work as intended to mitigate the impacts of such disasters or events. Failure to prevent impact from such events on our or our customers’ operations could adversely affect our business, financial condition, and results of operations.

We maintain an amount of insurance protection that we consider adequate, but we cannot provide any assurance that our insurance will be sufficient or effective under all circumstances and against all hazards or liabilities to which we may be subject and, even if we do have insurance coverage for a particular circumstance, we may be subject to a large deductible and maximum cap. We carry liability, property, business interruption, construction-related, and other insurance policies to cover certain insurable risks to our company. We select the types of insurance, the limits, and the deductibles based on our specific risk profile, the cost of the insurance coverage versus its perceived benefit, and general industry standards. Our insurance policies contain certain industry standard exclusions for events such as war and nuclear disasters. A successful claim for which we are not fully insured could materially harm our business, financial condition, and results of operations. For example, we are currently party to a securities class action claim. To the extent that we are unsuccessful in defending against this claim, we may owe an amount in excess of our insurance coverage, which could have a material adverse effect on our business, financial condition, and results of operations. Further, due to rising insurance costs and changes in the insurance markets, we cannot provide any assurance that our insurance coverage will continue to be available at all or at rates or on terms similar to those presently available. Any losses not covered by insurance could have a material adverse effect on our business, financial condition, and results of operations.

We may be exposed to cybersecurity threats and breaches.

Threats to network and data security are increasingly diverse and sophisticated, such that security breaches, computer malware, and computer hacking attacks have been an increasing concern. Despite our efforts and processes in place to prevent them, our computer servers and systems may be vulnerable to cybersecurity risks, including denial-of-service attacks, physical or electronic break-ins, social engineering attacks, including phishing and business email compromise, employee theft or misuse and similar disruptions from unauthorized tampering. As techniques used to breach security change frequently and are generally not recognized until launched against a target, we may not be able to promptly detect that a cyber breach has occurred, implement security measures in a timely manner or, if and when implemented, we may not be able to determine the extent to which these measures could be circumvented.

Recent developments in the cyber threat landscape include use of AI and machine learning, as well as an increased number of cyber extortion and ransomware attacks, with the potential for higher ransom demand amounts and increasing sophistication, using a variety of ransomware techniques and methodology. Further, any adoption of AI by us or by third parties may pose new security challenges. A party who is able to compromise the security measures on our networks or the security of our infrastructure could misappropriate the proprietary or sensitive information of us, our customers, or our employees, or cause interruptions or malfunctions in our operations or our customers’ operations.

We also may be required to expend significant capital and resources to protect against such threats or to alleviate problems caused by cyber breaches in our physical or virtual security systems. The cybersecurity regulatory landscape continues to evolve and compliance with the proposed reporting requirements could further complicate our ability to resolve cyberattacks. Although we maintain insurance coverage for certain cyber risks, such coverage may be unavailable or insufficient to cover our losses. Any breaches that may occur in the future could expose us to increased risk of lawsuits, regulatory penalties, loss of existing or potential customers, damage relating to loss of proprietary information, harm to our reputation, and increases in our security costs, which could have a material adverse effect on our business, financial condition, and results of operations. Furthermore, we hold our Bitcoin with third-party custodians. If our custodians are exposed to a cyberattack or breach, we may temporarily or permanently lose access to some or all of our Bitcoin, which would have a material adverse effect on our business, financial condition, and results of operations. See “Risks Related to Bitcoin—We may be subject to additional risks associated with holding Bitcoin for our and American Bitcoin’s account.” The cybersecurity regulatory landscape continues to evolve and compliance with the proposed reporting requirements could further complicate our ability to resolve cyberattacks. Although we maintain insurance coverage for certain cyber risks, such coverage may be unavailable or insufficient to cover our losses.

We may face the risk of Internet-related disruptions.

Our digital infrastructure and compute offerings are dependent upon access to the Internet. We are not an Internet provider, and as such, we rely on third parties to provide us with access to the Internet. There can be no assurance that Internet providers will service our data centers or that once a provider has decided to deliver Internet connectivity to our data centers, it will continue to do so for any period of time. If we face a significant disruption in Internet connectivity, we may be required to reduce the impacted operations or cease them altogether. If this occurs, our business, financial condition, and results of operations may be materially and adversely affected.

Our business may be heavily impacted by political, social, economic, and other events and circumstances in the United States, Canada, or elsewhere.

Our business may be heavily impacted by political, social, economic, and other events and circumstances in the United States, Canada or elsewhere. These include natural disasters, pandemics (like the COVID-19 pandemic), political tensions, acts of terrorism, hostilities or the perception that hostilities may be imminent, military conflicts and acts of war (such as the Russia-Ukraine conflict) and related responses, including sanctions or other restrictive actions. In addition, shifts in political leadership, policy priorities, broader public sentiment relating to political matters, and any actual or perceived associations of our Company or certain of our business partners or affiliates with prominent political figures may, from time to time, subject us to heightened scrutiny, reputational risk, or adverse reactions from customers, investors, regulators, or other stakeholders. Further, interest rate fluctuations, inflationary issues and associated changes in monetary policy or potential economic recession, commodity prices, legislative and regulatory changes, foreign currency fluctuations, international tariffs, fluctuations in capital markets, and broad trends in industry and finance may also adversely affect our business. For example, equipment necessary for our operations and our offerings is manufactured in large part outside of the United States. There is currently significant uncertainty about the future relationship between the United States and other regions, including Canada, Mexico, China, the European Union, and others, with respect to trade policies, treaties, tariffs, and taxes. These events and circumstances are largely outside of our influence and control and, while the impact of such events or circumstances is not presently known, any of them could adversely affect our business, financial condition, and results of operations. See “Risks Related to Certain Regulations and Laws, Including Tax Laws—Our operations are subject to various regulatory, governmental, and technological uncertainties.”

We operate in the United States and Canada and may further expand our operations internationally, which may expose us to risks associated with doing business internationally.

We currently operate in the United States and Canada and may further expand our operations internationally. We also engage with third parties outside of the United States. As a result, we are and may become increasingly exposed to risks inherent in conducting business outside of the United States. These risks include the following:

• adverse changes in foreign currency exchange rates;
• increased difficulty in protecting our intellectual property rights and trade secrets, including litigation costs and the outcome of such litigation in jurisdictions outside the United States;
• increased exposure to events that could impair our ability to operate internationally with third parties such as problems with such third parties’ operations, finances, insolvency, labor relations, manufacturing capabilities, costs, insurance, natural disasters, public health emergencies, or other catastrophic events;
• unexpected legal or government action or changes in legal or regulatory requirements;
• difficulties in managing, growing, and staffing international operations;
• social, economic, or political instability;
• potential negative consequences from changes to taxation or tariff policies;
• challenges to the transfer pricing of cross-border intercompany transactions;
• increased difficulty in ensuring compliance by employees, agents, and contractors with our policies as well as with the laws of multiple jurisdictions, including international environmental, health, and safety laws and increasingly complex regulations relating to the conduct of international commerce, including import/export laws and regulations, economic sanctions laws and regulations, and trade control; and
• increased exposure to cybersecurity risks in foreign jurisdictions.

Our failure to successfully manage these risks could harm our operations and growth opportunities internationally. We may also incur significant expenses as a result of our international operations and potential expansion, and we may not be successful in converting those expenditures into increased profitability. For example, our functional currency is the U.S. dollar and most purchases are transacted in U.S. dollars; however, our Canadian operations use Canadian dollars as their functional currency, we incur costs in Canadian dollars, and we hold cash balances in Canadian dollars. We currently do not hedge our foreign exchange risk and as a result, we are, and may increasingly become, exposed to fluctuations in currency exchange rates, which could negatively affect our business, financial condition and results of operations.

Our success depends on key personnel whose continued service is not guaranteed.

We depend on the efforts of our key personnel, including our senior leadership, many of whom have strong technology, finance, real estate, and/or power expertise and industry reputations. They are important to our success for many reasons, including that they attract investors and business and investment opportunities and assist us in negotiations with investors, lenders, existing and potential customers, and industry personnel. If we lost their services, our business and investment opportunities and our relationships with lenders and other capital markets participants, existing and prospective customers, and industry personnel could suffer. As the number of our competitors increases, it becomes more likely that a competitor would attempt to hire certain of these individuals away from us. The loss of any of these key personnel would result in the loss of these and other benefits and could materially and adversely affect our business, financial condition, and results of operations.

We also depend on the talents and efforts of highly skilled technical individuals. Our success depends on our continuing ability to identify, hire, develop, motivate, and retain highly skilled technical personnel for all areas of our business. Competition in our industry for qualified technical employees is intense, and the availability of qualified technical personnel is not guaranteed or may be costly to hire. We cannot assure you that we will be able to attract or retain the personnel we require. If we are unable to identify, hire, develop, motivate, and retain such personnel, it could have a material adverse effect on our business, financial condition, and results of operations.

The pace of technological change continues to accelerate, and our inability to adapt to rapidly evolving technologies and price dynamics could adversely affect our competitiveness and results of operations.

The pace of technological change is accelerating, and the continued creation, development, and advancement of new technologies, such as AI, quantum computing, data analytics, data storage, and other emerging technologies, are transforming the industries in which we operate. These industries are characterized by rapid technological changes, new product introductions, enhancements, evolving industry standards, and price fluctuations. In order to remain competitive, we must continue to stay abreast of technological developments, invest in and deploy new hardware, equipment, and systems, require our employees to continuously learn and adapt, and integrate new technologies into our existing and future business models.

New technologies, techniques, or offerings may emerge that provide superior performance, efficiency, or cost advantages compared to the technologies we currently utilize, and we may be required to manage complex and costly transitions to such technologies to remain competitive. There can be no assurance that we will be successful, either generally or relative to our competitors, in implementing new technologies in a timely or cost-effective manner, or at all. The implementation of new technologies may result in system interruptions, failures, or operational inefficiencies, and there can be no assurance that we will realize the anticipated benefits of such investments, if any.

In addition, increased use of emerging technologies, including AI, may expose us to social, ethical, regulatory, and reputational risks, including potential liability. We must also compete for and retain skilled personnel with expertise in these technologies, including through workforce upskilling, in an increasingly competitive labor market. If we fail to effectively respond to technological change, evolving pricing dynamics, or competitive pressures, our business, financial condition, and results of operations could be materially adversely affected.

We are a growth-stage company with an evolving business model and strategy.

We are a growth-stage company currently and although we have achieved profitable quarters in the past, we have not maintained consistent profitability from period to period, and no assurances can be made that we will achieve consistent profitability in the near future, if ever. As a result of our growth-stage profile, our operating results may fluctuate significantly from quarter to quarter due to the timing of capital expenditures, expansion initiatives, market conditions, and other factors inherent in scaling our business. Accordingly, you should consider our business prospects in light of the costs, uncertainties, delays, and difficulties frequently encountered by growth-stage companies. Potential investors should carefully consider the risks and uncertainties that growth-stage company will face, including the risk that we may be unable to successfully implement or execute our evolving business plan, adjust to changing conditions, keep pace with increased demand, or raise sufficient funds to effectuate our business plan.

We face risks associated with our current indebtedness, and our failure to service debt or remain in compliance with certain covenants may have a material adverse effect on our business, financial condition, and results of operations.

We and certain of our subsidiaries are party to various arrangements with lenders as described in more detail in this Annual Report, and we may become party to additional debt financing arrangements in the future. As of December 31, 2025, we had approximately $411.1 million of outstanding debt. Our level of indebtedness could have the effect of, among other things, reducing our flexibility to respond to changing business and economic conditions. In addition, the increased amount of liquidity and capital required to pay interest on our indebtedness could reduce funds available for capital expenditures, growth initiatives and other activities, which may create competitive disadvantages for us relative to other companies with lower debt levels.

Agreements governing our current debt obligations, and any debt we may incur in the future, may contain financial covenants and covenants that restrict our and our subsidiaries’ ability to take certain corporate and operational actions. As a result of these covenants, we can be limited in the manner in which we conduct our business, and we may be unable to engage in favorable business activities or finance future operations or capital needs. Any violation by us of any of these covenants could provide the lender with the ability to accelerate the maturity of the indebtedness and exercise a variety of remedies, including foreclosing on any collateral securing the debt.

Risks Related to Bitcoin, Including ASIC Compute

We and our consolidated subsidiary, American Bitcoin, are highly concentrated in Bitcoin. Bitcoin is a highly volatile asset, and fluctuations in the price of Bitcoin have in the past influenced, and are likely to continue to influence, our business, financial condition, and results of operations and the market price of our common stock.

Currently, our investments are highly concentrated in Bitcoin, including through the Bitcoin held in our strategic reserve and through our consolidated subsidiary, American Bitcoin, which is a Bitcoin accumulation platform with its own strategic Bitcoin reserve. We also generate revenue from Bitcoin rewards that are earned through mining in our facilities, primarily by American Bitcoin. American Bitcoin also acquires additional Bitcoin through at-market purchases and strategic transactions to build its Bitcoin reserve. However, Bitcoin is a highly volatile asset, and fluctuations in the price of Bitcoin have in the past influenced, and are likely to continue to influence, our and American Bitcoin’s business, financial condition, and results of operations and the market price of our common stock and American Bitcoin’s Class A common stock. Our and American Bitcoin’s business, financial condition, and results of operations and the market price of our common stock and American Bitcoin’s Class A common stock may be adversely affected if the price of Bitcoin decreased substantially, including as a result of:

• decreased user and investor confidence in Bitcoin, including due to the various factors described herein;
• investment and trading activities, such as (i) trading activities of highly active retail and institutional users, speculators, Bitcoin miners, and investors, (ii) actual or expected significant dispositions of Bitcoin by large holders, including vehicles investing in Bitcoin or tracking Bitcoin markets, and (iii) actual or perceived manipulation of the spot or derivative markets for Bitcoin or spot Bitcoin exchange-traded products (“ETPs”);
• negative publicity, media coverage, or sentiment due to events in or relating to, or perception of, Bitcoin or the broader digital assets industry, for example, (i) public perception that Bitcoin can be used as a vehicle to circumvent sanctions or to fund criminal or terrorist activities; (ii) expected or pending civil, criminal, regulatory enforcement, or other high profile actions against major participants in the Bitcoin ecosystem, including the SEC’s enforcement actions against Coinbase, Inc. and Binance Holdings Ltd.; (iii) additional filings for bankruptcy protection or bankruptcy proceedings of major digital asset industry participants, such as the bankruptcy proceeding of FTX Trading and its affiliates; and (iv) the actual or perceived environmental impact of ASIC compute and related activities, including environmental concerns raised by private individuals, governmental and non-governmental organizations, and other actors related to the energy resources consumed in the ASIC compute process;
• changes in consumer preferences and the perceived value or prospects of Bitcoin;
• competition from other digital assets that exhibit better speed, security, scalability, or energy efficiency, that feature other more favored characteristics, that are backed by governments or reserves of fiat currencies, or that represent ownership or security interests in physical assets;
• a decrease in the price of other digital assets, including stablecoins, or the crash or unavailability of stablecoins that are used as a medium of exchange for Bitcoin purchase and sale transactions, such as the crash of the stablecoin Terra USD in 2022, to the extent the decrease in the price of such other digital assets or the unavailability of such stablecoins may cause a decrease in the price of Bitcoin or adversely affect investor confidence in digital assets generally;
• disruptions, failures, unavailability, or interruptions in service of Bitcoin exchanges;
• cyber theft of Bitcoin from online wallet providers, or news of such theft from such providers or from individuals’ online wallets;
• the filing for bankruptcy protection by, liquidation of, or market concerns about the financial viability of digital asset custodians, exchanges, lending platforms, investment funds, or other digital asset industry participants;
• regulatory, legislative, enforcement, and judicial actions that adversely affect the price, ownership, transferability, trading volumes, legality, or public perception of Bitcoin, or that adversely affect the operations of or otherwise prevent digital asset custodians, exchanges, lending platforms, or other digital assets industry participants from operating in a manner that allows them to continue to deliver services to the digital assets industry;
• further reductions in mining rewards of Bitcoin, including block reward halving events;
• increases in the costs associated with ASIC compute, including increases in electricity costs and hardware and software used in mining, that may cause a decline in support for the Bitcoin network;
• scaling challenges, including transaction congestion or slow settlement times and higher transaction fees, associated with processing transactions on the Bitcoin network;
• macroeconomic changes, such as changes in the level of interest rates and inflation, fiscal and monetary policies of governments, trade restrictions, and fiat currency devaluations;
• developments in mathematics or technology, including in digital computing, algebraic geometry ,and quantum computing, that could result in the cryptography used by the Bitcoin blockchain becoming insecure or ineffective; and
• changes in national and international economic and political conditions.

In addition, we and American Bitcoin have adopted ASU 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires us and American Bitcoin to measure our Bitcoin holdings at fair value in our balance sheets, with gains and losses in the fair value of our Bitcoin recognized in net income for each reporting period. Therefore, volatility and fluctuations in the price of Bitcoin has caused, and may in the future cause, our and American Bitcoin’s quarterly results to fluctuate significantly, which could have an adverse effect on our and American Bitcoin’s financial results and the value of our and American Bitcoin’s securities.

We may be subject to additional risks associated with holding Bitcoin for our and American Bitcoin’s account.

The Bitcoin we hold and that our consolidated subsidiary, American Bitcoin, holds, are not insured and or held at a banking institution or a member of the Federal Deposit Insurance Corporation (“FDIC”) or the Securities Investor Protection Corporation (“SIPC”). Therefore, such Bitcoin are not subject to the protections enjoyed by depositors with FDIC or SIPC member institutions. Instead, we and American Bitcoin safeguard and keep our Bitcoin private by utilizing storage solutions provided by custodians, including NYDIG Trust Company LLC (“NYDIG”), BitGo Trust Company Inc. (“BitGo”), and Coinbase Custody Trust Company, LLC (“Coinbase Custody”), and may also temporarily store Bitcoin on digital asset trading platforms or pledge Bitcoin to counterparties in connection with commercial arrangements.

Although our and American Bitcoin’s custodians, digital asset trading platforms, counterparties, and other third-party providers employ various security measures to mitigate the risk of loss, damage, or theft, neither they nor we can guarantee that such events will not occur, whether as a result of cyberattacks, malicious activity, computer or human error, natural disasters, terrorist acts, or other events. Digital asset trading platforms and counterparties have experienced hacks, security breaches, insolvencies, and operational failures in the past, including instances where platforms were undercapitalized or over-exposed, such as FTX, and may lack adequate insurance or otherwise be unable or unwilling to compensate us or American Bitcoin for losses. In addition, malicious actors may be able to intercept or divert our or American Bitcoin’s Bitcoin during transactions, transfers, or pledging activities. Given the significant amount of Bitcoin we and American Bitcoin hold and expect to continue to hold, any actual or perceived loss, whether temporary or permanent, could adversely affect our and American Bitcoin’s business, financial condition, and results of operations. Furthermore, as Bitcoin transactions are generally irreversible, any Bitcoin that is stolen, lost, or incorrectly transferred may be irretrievable, leaving us or American Bitcoin with limited or no effective means of recovery.

Bitcoin may only be controlled by the possessor of both the unique public key and private key relating to the digital wallet in which such Bitcoin are held. While we and American Bitcoin rely on third-party providers to safeguard private keys, to the extent a private key is lost, destroyed, or otherwise compromised and no backup is accessible, we or American Bitcoin will be unable to access the related Bitcoin, and such private key cannot be restored by the Bitcoin network. Any loss of private keys relating to digital wallets used to store our or American Bitcoin’s Bitcoin could adversely affect our and American Bitcoin’s business, financial condition, and results of operations.

We and American Bitcoin also face credit and counterparty risk in connection with custodied, stored, or pledged Bitcoin. For example, we currently pledge Bitcoin to Coinbase in connection with our Coinbase credit facility and American Bitcoin currently pledges Bitcoin to BITMAIN in connection with the purchase of mining equipment. Our and American Bitcoin’s ability to monitor the financial condition and operational stability of counterparties such as Coinbase and BITMAIN is limited, and any recovery efforts could be time-consuming, costly, and uncertain. If any such counterparty were to fail to perform its obligations, experience financial distress, or become subject to insolvency or bankruptcy proceedings, we or American Bitcoin could face delays in, or losses associated with, the recovery of our or American Bitcoin custodied, stored, or pledged Bitcoin, which could have a material adverse effect on our and American Bitcoin’s business, financial condition, and results of operations.

Although we and American Bitcoin believe that existing law and the terms and conditions of our custodial arrangements would not result in Bitcoin held by our custodians being considered part of a custodian’s bankruptcy estate, applicable insolvency law is not fully developed with respect to digital assets held in custodial accounts. If our or American Bitcoin’s custodially held Bitcoin were nevertheless considered property of a bankruptcy estate, we or American Bitcoin could be treated as a general unsecured creditor, which could inhibit our or American Bitcoin’s ability to exercise ownership rights with respect to such Bitcoin and have a material adverse effect on our and American Bitcoin’s business, financial condition and results of operations.

We may be subject to risks associated with holding World Liberty Financial, Inc. tokens.

In addition to Bitcoin, we have acquired 100 million World Liberty Financial, Inc. tokens (the “WLFI Tokens”), which are subject to many of the same risks applicable to Bitcoin and other digital assets, including price volatility, limited liquidity, regulatory uncertainty, technological risks, cybersecurity risks, and changes in market sentiment. Unlike Bitcoin, our WLFI Tokens are subject to an indefinite lock-up, with a minimum of twelve months from the purchase date, and may not be freely transferable. The WLFI Tokens are also subject to the governance procedures of the World Liberty Financial, Inc. protocol, which may be amended or administered in the discretion of World Liberty Financial, Inc. or its affiliates. As a result, we may have limited ability to influence decisions affecting the WLFI Tokens or its underlying protocol, and the value, utility, or transferability of the WLFI Tokens could be adversely affected by governance actions or other decisions beyond our control.

From time to time, we have entered, and we and American Bitcoin may continue to enter, into certain hedging transactions to generate income and partially offset volatility in Bitcoin prices, which may expose us and American Bitcoin to risks associated with such transactions.

From time to time, we have entered, and we and American Bitcoin may continue to enter, into certain hedging transactions, which may expose us or American Bitcoin to various risks, including counterparty risk. Hedging transactions may limit the opportunity for gains or result in realized losses, margin requirements, or liquidity constraints. For example, selling call options does not protect us from declines in the price of Bitcoin and may require us to deliver Bitcoin at a predetermined strike price if the market price exceeds such strike price, capping our participation in Bitcoin price appreciation above the applicable strike price. Moreover, it may not be possible to hedge against a particular fluctuation that is so generally anticipated by the markets that a hedging transaction at an acceptable price is unavailable. In light of these and other factors, we or American Bitcoin may not be successful in mitigating our exposure to volatile Bitcoin prices through any hedging transactions we or American Bitcoin undertake.

If our consolidated subsidiary, American Bitcoin, fails to grow its hashrate, it may be unable to compete, and our and American Bitcoin’s business, financial condition, and results of operations could suffer.

Generally, a Bitcoin miner’s chance of solving a block on the Bitcoin blockchain and earning a Bitcoin reward is a function of the miner’s hashrate (i.e., the amount of computing power devoted to supporting the Bitcoin blockchain), relative to the global network hashrate. As demand for Bitcoin has increased, the global network hashrate has increased, and to the extent more adoption of Bitcoin occurs, we would expect the demand for Bitcoin would increase, drawing more mining companies into the industry and further increasing the global network hashrate. As new and more powerful miners are deployed, the global network hashrate will continue to increase, meaning a miner’s percentage of the total daily rewards will decline unless it deploys additional hashrate at pace with the growth of global hashrate. Accordingly, to compete, we believe that American Bitcoin will need to continue to acquire new miners, both to replace those lost to ordinary wear-and-tear and other damage, and to increase hashrate to keep up with a growing global network hashrate. However, there can be no assurance that American Bitcoin will have the resources to acquire new miners and increase hashrate in order to maintain the profitability of its mining operations. See “—We may be unable to purchase miners at scale or face delays or difficulty in obtaining new miners at scale.”

Furthermore, predicting the growth in network hashrate is extremely difficult. Generally, we would expect hashrate increases to be correlated with increases in Bitcoin price, but that has not always been the case, including recently during 2022 and 2023. To the extent that hashrate increases but the price of Bitcoin does not, there can be no assurance that American Bitcoin would be able to recover its investment in the hardware and processing power required to expand or upgrade its mining operations, and the results of our ASIC compute operations will suffer.

Our consolidated subsidiary, American Bitcoin, may be unable to purchase miners at scale or face delays or difficulty in obtaining new miners at scale.

The ASIC compute operations mainly conducted through our consolidated subsidiary, American Bitcoin, can only be profitable if the costs, inclusive of hardware and electricity costs, associated with mining Bitcoin are lower than the price of the Bitcoin mined at the time of sale. As the cost of obtaining new miners increases, the cost of producing Bitcoin also increases. For example, miners experience ordinary wear-and-tear from operation and may also face more significant malfunctions caused by factors which may be beyond American Bitcoin’s control. Additionally, as technology evolves, American Bitcoin may acquire newer models of miners to remain competitive in the market. The continual upgrade and refresh of mining machines requires substantial capital investment, and American Bitcoin may face challenges in doing so on a timely basis based on the price and availability of new miners and its access to adequate capital resources.

In the past, we have observed periods of shortage in new miners available for purchase and a delay in delivery schedules for new miner purchases. There is no assurance that miner manufacturers or any other equipment manufacturers will be able to keep pace with potential surges in demand for mining equipment. It is uncertain how manufacturers will respond to increased global demand and whether they fulfill purchase orders fully and in a timely manner. Supply chain issues or geopolitical matters, including the relationship of the United States and Canada between each other and with China and other countries may also impact equipment manufacturers’ ability to fully and timely fulfill purchase orders. In the event that miner manufacturers or other suppliers are not able to keep pace with, or fail to satisfy, demand, American Bitcoin may not be able to purchase miners or other equipment in sufficient quantities or on the delivery schedules required to meet its business needs. In the past, including for American Bitcoin’s recent purchase of BITMAIN Antminer S21+ miners, miner manufacturers have required advance deposits for miner purchases. If this continues in the future, American Bitcoin may need to tie up significant amounts of capital for prolonged periods before it receives and is able to deploy purchased miners to generate revenue. Should any suppliers default on purchase agreements with American Bitcoin, it may need to pursue recourse under international jurisdictions, which could be costly and time-consuming. The outcome of any actions initiated in such international jurisdictions, and American Bitcoin’s ability to enforce judgments (if any) issued in its favor on such jurisdictions is inherently uncertain given differences in legal systems, biases against foreign litigants in certain jurisdictions, and other factors outside our control. Furthermore, there is no guarantee that American Bitcoin would succeed in recovering any of the deposits paid for such purchases, which could materially and adversely affect our and American Bitcoin’s business, financial condition, and results of operations.

Our and American Bitcoin’s reliance on third-party mining pool service providers, including Foundry and Luxor, for our mining revenue payouts may have a negative impact on our and American Bitcoin’s business, financial condition, and results of operations.

We and American Bitcoin receive Bitcoin rewards from our mining activity through third-party mining pool operators, including Foundry and Luxor. Mining pools allow miners to combine their processing power, increasing their chances of solving a block and getting paid by the network. We and American Bitcoin provide computing power to mining pools, which use this computing power to operate nodes and validate blocks on the blockchain. The pools then distribute our or American Bitcoin’s pro-rata share of Bitcoin mined based on the computing power we contribute. Under our and American Bitcoin’s mining pool agreements with Foundry and Luxor, our daily payout is calculated based on the hashrate contribution delivered to the pool in the applicable calculation period, after deducting the applicable pool fee, if any. Our and American Bitcoin’s pool fees in relation to these agreements is currently below 1.0% of our daily payout.

Should one of our or American Bitcoin’s pool operator’s systems suffer downtime due to a cyberattack, software malfunction or other similar issues, it will negatively impact our or American Bitcoin’s ability to receive Bitcoin mining rewards. Furthermore, we and American Bitcoin are dependent on the accuracy of the mining pool operators’ record keeping and internal controls to prevent any fraud and to accurately record the total processing power provided by us, American Bitcoin, and other mining pool participants for a given Bitcoin mining application in order to assess the proportion of that total processing power we provided. While we and American Bitcoin have internal methods of tracking both our processing power provided and the total used by the pool, the mining pool operator uses its own recordkeeping to determine our proportion of a given reward. We and American Bitcoin have little means of recourse against mining pool operators if we determine the proportion of the reward paid out to us or American Bitcoin by the mining pool operator is incorrect, other than leaving the pool. If we or American Bitcoin are unable to consistently obtain accurate proportionate rewards from our mining pool operators, we or American Bitcoin may experience reduced reward for our efforts, which would have an adverse effect on our and American Bitcoin’s business, financial condition, and results of operations.

The further development and acceptance of the Bitcoin network and other digital assets is subject to a variety of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of Bitcoin and other digital asset systems may adversely affect our and American Bitcoin’s business, financial condition, and results of operations.

The use of digital assets to, among other things, buy and sell goods and services and complete transactions, is part of a new and rapidly evolving industry that employs digital assets, including Bitcoin, based upon a computer-generated mathematical and/or cryptographic protocol. The growth of this industry in general, and the use of Bitcoin in particular, is subject to a high degree of uncertainty, and the slowing or stopping of the development or acceptance of developing protocols may occur unpredictably.

During 2022 and early 2023, some well-known digital asset market participants, including Celsius Network, Voyager Digital Ltd., Three Arrows Capital, and Genesis Global Holdco LLC, declared bankruptcy, resulting in a loss of confidence in participants of the digital asset ecosystem, negative publicity surrounding digital assets more broadly, decreased liquidity, and extreme price volatility. Even if there was no direct material impact on our business from such bankruptcies, we have been and may continue to be impacted indirectly, including through American Bitcoin.

Furthermore, the closure and temporary shutdown of major digital asset exchanges and trading platforms, such as FTX, due to fraud or business failure, has disrupted investor confidence in digital assets and led to a rapid escalation of oversight of the digital asset industry. Thus, the failures of key market participants and systemic contagion risk are expected to, as a consequence, invite stricter regulatory scrutiny. This could have a negative impact on further development and acceptance of digital asset networks and digital assets, including Bitcoin.

Other factors that could affect further development and acceptance of digital asset networks and other digital assets include:

• continued worldwide growth in the adoption and use of digital assets as a medium of exchange or store of value;
• governmental regulation of Bitcoin and its use, or restrictions on or regulation of access to and operation of the Bitcoin network or similar digital asset systems;
• limitations on financial institutions processing funds for Bitcoin transactions, processing wire transfers to or from Bitcoin exchanges, Bitcoin-related companies or service providers, or servicing or maintaining accounts for persons or entities transacting in Bitcoin;
• changes in consumer demographics and public tastes and preferences;
• the maintenance and development of the open-source software protocol of the network, including software updates and changes to network protocols that could introduce bugs or security risks;
• the increased consolidation of contributors to the Bitcoin blockchain through mining pools;
• the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies;
• the use of the networks supporting digital assets for developing smart contracts and distributed applications;
• general economic conditions and the regulatory environment relating to digital assets;
• environmental and other regulatory restrictions on the use of power to mine Bitcoin and a resulting decrease in global Bitcoin mining operations;
• an increase in Bitcoin transaction costs and a resultant reduction in the use of and demand for Bitcoin; and
• negative consumer sentiment and perception of Bitcoin specifically and digital assets generally.

The outcome of these and other factors could have negative effects on our and American Bitcoin’s business, financial condition, and results of operations, as well as potentially negative effect on the value of any Bitcoin we or American Bitcoin mine or otherwise acquire or hold for our own accounts.

The Bitcoin reward for successfully uncovering a block will halve several times in the future and Bitcoin’s value may not adjust to compensate us or American Bitcoin for the reduction in the rewards we or American Bitcoin receive from our mining efforts, mainly through American Bitcoin.

Halving is a process incorporated into many proof-of-work consensus algorithms that reduces the coin reward paid to miners over time according to a pre-determined schedule. This reduction in reward spreads out the release of digital assets over a long period of time resulting in an ever smaller number of coins being mined. At a predetermined block, the mining reward is cut in half, hence the term “halving.” For example, the mining reward for Bitcoin declined from 6.25 to 3.125 bitcoin on April 19, 2024. This process is scheduled to occur once every 210,000 blocks, until the total amount of Bitcoin rewards issued reaches 21 million.

As the number of Bitcoin awarded for solving a block in a blockchain decreases, our and American Bitcoin’s ability to achieve profitability through our ASIC compute operations becomes more difficult. While the Bitcoin price has had a history of price fluctuations around the halving of its rewards, there is no guarantee that in future periods when a halving occurs the price change will be favorable or would compensate for the reduction in mining reward. If a corresponding and proportionate increase in the trading price of Bitcoin or a proportionate decrease in mining difficulty does not follow these anticipated halving events, the revenue we earn from our ASIC compute operations, mainly through American Bitcoin, would see a corresponding decrease, which would have a material adverse effect on our and American Bitcoin’s business, financial condition, and results of operations. If the award of Bitcoin rewards for solving blocks and transaction fees are not sufficiently high, we and American Bitcoin may not have an adequate incentive to continue mining and may decrease or cease our ASIC compute operations.

The development and acceptance of competing blockchain platforms or technologies may cause consumers to use alternative distributed ledgers or other alternatives.

The development and acceptance of competing blockchain platforms or technologies may cause industry participants and consumers to abandon Bitcoin. As Bitcoin is the only digital asset we and American Bitcoin mine, we and American Bitcoin could face difficulty adapting to emergent digital ledgers, blockchains or alternatives thereto. This could prevent us and American Bitcoin from realizing the anticipated profits from our investments. Such circumstances could have a material adverse effect on our and American Bitcoin’s business, financial condition, and results of operations and the value of any Bitcoin we or American Bitcoin mine or otherwise acquire or hold for our own accounts.

Our and American Bitcoin’s operations, investment strategies, and profitability may be adversely affected by competition from other methods of investing in Bitcoin.

Through American Bitcoin, we compete with other users and/or companies that are mining Bitcoin and we also face significant competition from other users and/or companies that are processing transactions on one or more digital asset networks, as well as other potential financial vehicles, including securities, derivatives or futures backed by, or linked to, digital assets through entities such as exchange-traded funds. For instance, on January 10, 2024, the SEC approved the listing and trading of spot Bitcoin, which offers investors another alternative to gain exposure to digital assets, which could result in a decline in the trading price of Bitcoin as well as a decline in the value of such securities relative to the value of Bitcoin holdings.

Investors may view our common stock or American Bitcoin’s Class A common stock as an alternative to an investment in an exchange-traded products (“ETPs”), and choose to purchase shares of a spot Bitcoin ETP instead of such securities, which could impact the price of our common stock and/or American Bitcoin’s Class A common stock. They may do so for a variety of reasons, including if they believe that ETPs offer a “pure play” exposure to Bitcoin that is generally not subject to federal income tax at the entity level as we or American Bitocin will be, or the other risk factors applicable to an operating business. Additionally, unlike spot Bitcoin ETPs, we and American Bitcoin (i) do not seek for our securities to track the value of the underlying Bitcoin we hold before payment of expenses and liabilities, (ii) do not benefit from various exemptions and relief under the Exchange Act, including Regulation M, and other securities laws, which enable ETPs to continuously align the value of their shares to the price of the underlying assets they hold through share creation and redemption, (iii) are Delaware corporations rather than statutory trusts, and do not operate pursuant to a trust agreement that would require us to pursue one or more stated investment objectives, and (iv) are not required to provide daily transparency as to our Bitcoin holdings or our daily net asset value.

Market and financial conditions, and other conditions beyond our and American Bitcoin’s control, may make it more attractive to invest in other financial vehicles, or to invest in Bitcoin directly, which could limit the market for shares of our common stock and American Bitcoin’s Class A common stock and reduce the liquidity of these securities. The emergence of other financial vehicles and ETPs have been scrutinized by regulators and such scrutiny and the negative impressions or conclusions resulting from such scrutiny could be applicable to us or American Bitcoin and impact our and American Bitcoin’s ability to successfully pursue our respective strategies or American Bitcoin’s ability to operate at all, or to establish or maintain markets for our or American Bitcoin’s securities. Such circumstances could have a material adverse effect on our and American Bitcoin’s business, financial condition, and results of operations and potentially the value of any Bitcoin we or American Bitcoin mine or otherwise acquire or hold for our own accounts.

The characteristics of Bitcoin have been, and may in the future continue to be, exploited to facilitate illegal activity such as fraud, money laundering, tax evasion, and ransomware scams. Furthermore, the exchanges on which Bitcoin trades are relatively new and, in most cases, largely unregulated and may therefore be more exposed to fraud and failure than established, regulated exchanges for other assets. Such circumstances may result in a reduction in the price of Bitcoin and can adversely affect our and American Bitcoin’s business, financial condition, and results of operations.

Bitcoin and the exchanges on which Bitcoin trades are relatively new and, in most cases, largely unregulated. Certain characteristics, including the speed with which Bitcoin transactions can be conducted, the ability to conduct transactions without the involvement of regulated intermediaries, the ability to engage in transactions across multiple jurisdictions, the irreversible nature of certain Bitcoin transactions, and the encryption technology that anonymizes these transactions make Bitcoin, and digital currencies generally, particularly susceptible to use in illegal activity such as fraud, money laundering, tax evasion, and ransomware scams. Furthermore, many Bitcoin exchanges do not typically provide the public with significant information regarding their ownership structure, management teams, corporate practices, or regulatory compliance. As a result, the marketplace may lose confidence in, or may experience problems relating to, Bitcoin exchanges, including prominent exchanges handling a significant portion of the volume of Bitcoin trading.

While we and American Bitcoin continue to maintain policies and procedures reasonably designed to promote compliance with applicable anti-money laundering and sanctions laws, if we or American Bitcoin are found to have transacted with bad actors that have used Bitcoin to launder money or persons subject to sanctions, we or American Bitcoin may be subject to regulatory proceedings and may be prohibited or restricted from engaging in further transactions or dealings in Bitcoin. Furthermore, negative perception, a lack of stability in the broader Bitcoin markets, and the closure or temporary shutdown of Bitcoin exchanges due to fraud, business failure, hackers, malware, or government-mandated regulation may reduce confidence in Bitcoin and result in greater volatility in the prices of Bitcoin. A number of Bitcoin exchanges have been closed due to fraud, failure, or security breaches. In many of these instances, the customers of such Bitcoin exchanges were not compensated or made whole for the partial or complete losses of their account balances in such Bitcoin exchanges. To the extent investors view our or American Bitcoin’s securities as linked to the value of our or American Bitcoin’s Bitcoin holdings, such a negative perception of Bitcoin exchanges could have a material adverse effect on the market price of our common stock, the market price of American Bitcoin’s Class A common stock, and/or our and American Bitcoin’s business, financial condition, and results of operations.

It may be illegal now, or in the future, to acquire, own, hold, sell, or use Bitcoin or other digital assets, participate in blockchains or utilize similar digital assets in one or more countries.

Although currently digital assets generally are not regulated or are lightly regulated in most countries, countries such as China have taken harsh regulatory action to curb the use of digital assets and may continue to take regulatory action in the future that could severely restrict the right to acquire, own, hold, sell, or use these digital assets or to exchange them for fiat currency. For example, in 2021 China instituted a blanket ban on all digital asset mining and transactions, including overseas digital asset exchange services taking place in China, effectively making all digital asset-related activities illegal in China. In certain nations, it is illegal to accept payment in Bitcoin or other digital assets for consumer transactions, and banking institutions are barred from accepting deposits of Bitcoin. Such restrictions may adversely affect us and American Bitcoin as the large-scale use of Bitcoin as a means of exchange is presently confined to certain regions. Any of these circumstances could have a material adverse effect on our and American Bitcoin’s business, financial condition, results of operations and the value of any Bitcoin we or American Bitcoin mine or otherwise acquire or hold for our own accounts, ultimately harming our investors.

A failure to properly monitor and upgrade the Bitcoin network’s protocol could damage that network and an investment in our and American Bitcoin’s securities.

As an open-source project, Bitcoin does not generate revenues for its contributors, and contributors are generally not compensated for maintaining and updating the Bitcoin network protocol. The lack of guaranteed financial incentives for contributors to maintain or develop the Bitcoin network and the lack of guaranteed resources to adequately address emerging issues with the Bitcoin network may reduce incentives to address the issues adequately or in a timely manner. To the extent that contributors fail to adequately update and maintain the Bitcoin network protocol, there may be a material adverse effect on our or American Bitcoin’s business, financial condition, results of operations, and the value of any Bitcoin we or American Bitcoin mine or otherwise acquire or hold for our own accounts.

There is a possibility of Bitcoin mining algorithms transitioning to “proof of stake” validation, which could make us and American Bitcoin less competitive and adversely affect our and American Bitcoin’s business, financial condition, and results of operations.

“Proof of stake” is an alternative method in validating digital asset transactions. Should the Bitcoin network shift from the current “proof of work” validation method to a “proof of stake” validation method, mining would require less energy, which may render companies, such as us and American Bitcoin, less competitive. Furthermore, if American Bitcoin’s miners or our other mining infrastructure cannot be modified to accommodate changes in rule or protocol of the Bitcoin network, our and American Bitcoin’s business, financial condition, and results of operations will be significantly affected.

If a malicious actor or botnet obtains control of a majority of the processing power active on any digital asset network, including the Bitcoin network, the blockchain may be manipulated in a manner that adversely affects us and American Bitcoin.

Miners ceasing operations would reduce the collective processing power on the Bitcoin network, which would adversely affect the confirmation process for transactions (i.e., temporarily decreasing the speed at which blocks are added to the Bitcoin blockchain until the next scheduled adjustment in difficulty for block solutions). If a reduction in processing power occurs, the Bitcoin network may be more vulnerable to a malicious actor obtaining control in excess of 50% of the processing power on the Bitcoin network.

If a malicious actor or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating the actions of the computers) obtains a majority of the processing power dedicated to mining on any digital asset network, including the Bitcoin network, it may be able to alter the blockchain by constructing fraudulent blocks or preventing certain transactions from completing in a timely manner, or at all. In such alternate blocks, the malicious actor or botnet could control, exclude, or modify the ordering of transactions, though it could not generate new digital assets or transactions using such control. Using alternate blocks, the malicious actor could “double-spend” its own digital assets (i.e., spend the same digital assets in more than one transaction) and prevent the confirmation of other users’ transactions for so long as it maintains control. To the extent that such malicious actor or botnet does not yield its control of the processing power on the Bitcoin or other network, or the Bitcoin or other community does not reject the fraudulent blocks as malicious, reversing any changes made to the blockchain may not be possible.

Although there are no known reports of malicious activity or control of the Bitcoin blockchain achieved through controlling over 50% of the processing power on the network, it is believed that certain mining pools may have exceeded, and could exceed, the 50% threshold. The possible crossing of the 50% threshold indicates a greater risk in that a single mining pool could exert authority over the validation of Bitcoin transactions. To the extent that the Bitcoin or other digital asset ecosystems, including developers and administrators of mining pools, do not act to ensure greater decentralization of Bitcoin or other digital asset mining processing power, the feasibility of a malicious actor obtaining control of the processing power on the Bitcoin or other network will increase, which may adversely impact our and American Bitcoin’s business, financial condition, and results of operations.

Forks in the Bitcoin network may occur in the future, which may affect the value of Bitcoin held by us and American Bitcoin.

Contributors can propose refinements or improvements to the Bitcoin network’s source code that alter the protocols and software that govern the Bitcoin network and the properties of Bitcoin, including the irreversibility of transactions and limitations on the mining of new Bitcoin. This is known as a “fork.” In the event a developer or group of developers proposes modifications to the Bitcoin network that are not accepted by a majority of miners and users, but that are nonetheless accepted by a substantial plurality of miners and users, two or more competing and incompatible blockchain implementations could result running in parallel, yet lacking interchangeability and necessitating exchange-type transactions to convert currencies between the two forks. This is known as a “hard fork.”

The value of Bitcoin after the creation of a fork is subject to many factors, including the value of the fork product, market reaction to the creation of the fork product, and the occurrence of additional forks in the future. It may be unclear following a fork which fork represents the original asset and which is the new asset. If we or American Bitcoin hold Bitcoin at the time of a hard fork into two digital assets, industry standards would dictate that we or American Bitcoin would be expected to hold an equivalent amount of the old and new assets following the fork. However, we or American Bitcoin may not be able, or it may not be practical, to secure or realize the economic benefit of the new asset for various reasons. For instance, we or American Bitcoin may determine that there is no safe or practical way to custody the new asset, that trying to do so may pose an unacceptable risk to our holdings in the old asset, or that the costs of taking possession and/or maintaining ownership of the new digital asset exceed the benefits of owning the new digital asset. Additionally, laws, regulations, or other factors may prevent us or American Bitcoin from benefiting from the new asset even if there is a safe and practical way to custody and secure the new asset. As such, we or American Bitcoin may not be able to realize the economic benefit of a fork, either immediately or ever, which could adversely affect the value of the Bitcoin we and American Bitcoin hold as well as our and American Bitcoin’s business, financial condition, and results of operations.

Intellectual property rights claims may adversely affect the operation of some or all digital asset networks.

Third parties may assert intellectual property claims relating to the holding and transfer of digital assets, including Bitcoin, and their source code. Regardless of the merit of any intellectual property or other legal action, any threatened action that reduces confidence in some or all digital asset networks’ long-term viability or the ability of end-users to hold and transfer digital assets, including Bitcoin, may adversely affect the value of the Bitcoin we and American Bitcoin hold as well as our and American Bitcoin’s business, financial condition, and results of operations. Additionally, a meritorious intellectual property claim could prevent us, American Bitcoin, and other end-users from accessing some or all digital asset networks or holding or transferring their digital assets. As a result, an intellectual property claim against us, American Bitcoin, or other large digital asset network participants could adversely affect our and American Bitcoin’s business, financial condition, and results of operations.

Risks Related to Certain Regulations and Laws, Including Tax Laws

Our operations are subject to various complex legal, regulatory, governmental, and technological uncertainties.

As of December 31, 2025, our platform included 19 sites across Canada and the United States: five ASIC compute, hosting, and managed services sites in Alberta, New York, and Texas; five HPC data centers in British Columbia and Ontario; four power generation assets in Ontario; one non-operational site in Alberta; three sites under development in Texas and Illinois; and one site under construction in Louisiana. We also have Highrise AI, our AI Cloud business, and American Bitcoin, our Bitcoin accumulation platform. Our various lines of business operating across multiple jurisdictions subject us to extensive laws, rules, regulations, policies, orders, determinations, directives, and legal and regulatory interpretations and guidance.

Furthermore, many of these legal and regulatory regimes were adopted prior to the advent of the internet, mobile technologies, digital assets, AI, and/or related technologies. As a result, some applicable laws and regulations do not contemplate or address unique issues associated with the AI and crypto economies, are subject to significant uncertainty, and vary widely across U.S. and Canadian federal, state, provincial, and local and international jurisdictions. These legal and regulatory regimes, including the laws, rules, and regulations thereunder, evolve frequently and may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another. For example, the Digital Asset Market Clarity Act of 2025 (the “CLARITY Act”) was passed by the U.S. House of Representatives in July 2025, which would, if enacted, regulate digital asset markets and digital asset trading platforms in the United States. It is difficult to predict whether, or when, the CLARITY Act or another bill that would regulate digital asset markets and digital asset trading platforms may become law or whether any new law will lead to Congress granting additional authorities to the SEC or other regulators, what the nature of such additional authorities might be, how additional legislation and/or regulatory oversight might impact the ability of digital asset markets to function or how any new regulations or changes to existing regulations might impact the value of digital assets generally and bitcoin specifically. The consequences of increased federal regulation of digital assets and digital asset activities could have a material adverse effect on our business, financial condition, and results of operations.

Moreover, the complexity, volume, and evolving nature of our business and of the applicable laws and regulations increase the risk that we may inadvertently fail to comply with one or more requirements, even where we are acting in good faith, or that we are required to exercise judgment as to whether certain laws, rules, and regulations apply to us, and it is possible that governmental bodies and regulators may disagree with our conclusions. To the extent we have not complied, or are deemed to have not complied, with such laws, rules, and regulations, we could be subject to significant fines, revocation of licenses, limitations on our offerings, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect our business, financial condition, and results of operations.

Additionally, various governmental and regulatory bodies, including legislative and executive bodies, in the United States, Canada, and in other countries may adopt new laws and regulations, the direction and timing of which may be influenced by changes in the governing administrations and major events in the economy. For example, tariffs that are, or may in the future be, imposed by the United States on imports from certain countries and current or potential counter-tariffs in response, could lead to increased costs and supply chain disruptions. Penalties for non-compliance with any of these laws or regulations may be significant. If we are not able to navigate these changes, it could have a material adverse effect on our business, financial condition, and results of operations.

Due to our business activities, we may be subject to examinations, oversight, reviews, investigations, and inquiries, many of which have broad discretion to audit and examine our business. Moreover, laws and regulations related to economic sanctions, export controls, anti-bribery and anti-corruption, and other international activities can restrict or limit our ability to engage in transactions or dealings with certain counterparties in, or with, certain countries or territories or in certain activities. We cannot guarantee compliance with all such laws and regulations and failure to comply with such laws and regulations could expose us to fines, penalties, and/or costly and extensive investigations. Any new laws, regulations, or interpretations may result in additional litigation, regulatory investigations, and enforcement or other actions, including preventing or delaying if and how we provide our offerings. Adverse changes to, or our failure to comply with, any laws and regulations may have an adverse effect on our business, financial condition, and results of operations.

We may be subject to substantial environmental or energy regulation and may be adversely affected by legislative or regulatory changes.

Our business is subject to extensive U.S. and Canadian federal, state, provincial, and local laws. Compliance with, or changes to, the requirements under these legal and regulatory regimes may cause us to incur significant additional costs or adversely impact our ability to compete on favorable terms with competitors. Our plans and strategic initiatives are based, in part, on our understanding of current environmental and energy regulations, policies, and initiatives. If new regulations are imposed, or if existing regulations are modified, the assumptions made underlying our plans and strategic initiatives may be inaccurate, and we may incur additional costs to adapt our plans, if we are able to adapt them at all, to such changes. Failure to comply with such requirements could result in the shutdown of a non-complying facility, the imposition of liens, fines, and/or civil or criminal liability, costly litigation, or substantial delays or modifications to our operations or strategic initiatives. Changes to these laws and regulations could result in temporary or permanent restrictions on the development or operation of our facilities or restrictions on their use. Compliance with, or opposing such regulation, may be costly. In addition, we may be responsible for any on-site liabilities associated with the environmental condition of facilities that we have acquired, leased, developed, or sold, regardless of when the liabilities arose and whether they are now known or unknown.

In addition, there continues to be a lack of consistent environmental legislation, which creates economic and regulatory uncertainty for our business because AI and ASIC compute, with their energy demand, may become targets for future environmental and energy regulation. For example, governmental authorities in the past have sought to restrict data center development based on environmental considerations, citing concerns about energy usage and requiring new data centers to meet energy efficiency requirements. Recently, local regulators, public service commissions, and utility authorities have engaged in deeper analysis and assessment of risk to ratepayers and grid reliability in connection with large data center and high-load energy users, which may result in heightened scrutiny, additional approval requirements, cost-allocation conditions, or limitations on power availability for such projects. Rapid changes in legislation, increased regulation, or conflicting requirements in regulations could impose significant costs on us and our suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting, and other costs to comply with such regulations. In addition, certain customers, counterparties, or other third parties may adopt, promote, or commit to enhanced community engagement, sustainability, or local impact frameworks in connection with data center development, which may shift expectations, raise costs, increase permitting complexity, extend timelines, or require additional commitments or expenditures beyond those required by law. Further, any future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such limitations. Given the political significance and uncertainty around the impact of climate change and how it should be addressed, we cannot predict how legislation and regulation will affect our business, financial condition, and results of operations. Even without such regulation, adverse publicity, increased scrutiny, or changing expectations from stakeholders with respect to our practices and the impacts of climate change may result in additional costs or risks and could harm our reputation. Any of the foregoing could result in a material adverse effect on our business, financial condition, and results of operations.

Our interactions with a blockchain may expose us to specially designated nationals (“SDN”) or blocked persons and new legislation or regulation could adversely impact our business or the market for digital assets.

The Office of Financial Assets Control (“OFAC”) of the U.S. Department of Treasury requires us to comply with its sanction program and not conduct business with persons named on its SDN list. However, because of the pseudonymous nature of blockchain transactions, we or American Bitcoin may inadvertently and without our knowledge engage in transactions with persons named on OFAC’s SDN list. We and American Bitcoin have procedures in place designed to prevent transactions with such individuals on the SDN list, and we and American Bitcoin take commercially reasonable steps to avoid such transactions, but we or American Bitcoin may not be adequately capable of determining the ultimate identity of the individual with whom we transact with respect to transacting in Bitcoin. Moreover, there is a risk that some bad actors will continue to attempt to use digital assets, including Bitcoin, as a potential means of avoiding federally imposed sanctions.

We and American Bitcoin are unable to predict the nature or extent of new and proposed legislation and regulation affecting the digital asset industry, or the potential impact of the use of Bitcoin or other digital assets by SDN or other blocked or sanctioned persons, which could have material adverse effects on our and American Bitcoin’s business, financial condition, and results of operations and our industry more broadly. Further, we or American Bitcoin may be subject to investigations, administrative or court proceedings, and civil or criminal monetary fines and penalties as a result of any enforcement actions, all of which could harm our and American Bitcoin’s business, financial condition, and results of operations.

The application of the U.S. Commodities Exchange Act of 1936, as amended (the “CEA”) and the regulations promulgated thereunder to our business is unclear and is subject to change in a manner that is difficult to predict.

To the extent we become or are deemed to be subject to regulation by the U.S. Commodity Futures Trading Commission (“CFTC”) in connection with our or American Bitcoin’s business activities, we may incur additional regulatory obligations and compliance costs, which may be significant. The CFTC has stated, and judicial decisions involving CFTC enforcement actions have confirmed, that Bitcoin and other digital assets fall within the definition of a “commodity” under the CEA, and the regulations promulgated by the CFTC thereunder (“CFTC Rules”). As a result, the CFTC has general enforcement authority to police against manipulation and fraud in the spot markets for Bitcoin and other digital assets. From time to time, manipulation, fraud, and other forms of improper trading by other participants involved in the markets for Bitcoin and other digital assets have resulted in, and may in the future result in, CFTC investigations, inquiries, enforcement action, and similar actions by other regulators, government agencies, and civil litigation. Such investigations, inquiries, enforcement actions, and litigation may cause negative publicity for Bitcoin and other digital assets, which could adversely impact mining profitability, the value of such assets, and the price of our common stock and American Bitcoin’s Class A common stock.

In addition to the CFTC’s general enforcement authority, the CFTC has regulatory and supervisory authority with respect to commodity futures, options, and/or swaps (“Commodity Interests”) and certain transactions in commodities offered to retail purchasers on a leveraged, margined, or financed basis. Changes in our activities, the CEA, CFTC Rules, or the interpretations and guidance of the CFTC may subject us to additional regulatory requirements, licenses, and approvals, which could result in significant increased compliance and operational costs.

Furthermore, trusts, syndicates, and other collective investment vehicles operated for the purpose of trading in Commodity Interests may be subject to regulation and oversight by the CFTC and the National Futures Association as “commodity pools.” If our or American Bitcoin’s mining activities or transactions in Bitcoin were deemed by the CFTC to involve Commodity Interests and the operation of a commodity pool for our or American Bitcoin’s shareholders, we or American Bitcoin could be subject to regulation as a commodity pool operator and required to register as such. Such additional registrations may result in increased expenses, thereby materially and adversely impacting our and American Bitcoin’s business, financial condition, and results of operations. If we or American Bitcoin determine it is not possible or practicable to comply with such additional regulatory and registration requirements, we or American Bitcoin may seek to cease certain of our operations. Any such action may adversely affect an investment in us or American Bitcoin.

If regulatory changes or interpretations require our or American Bitcoin’s registration as a “money services business” under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act (the “BSA”), or otherwise under state laws, we and American Bitcoin may incur significant compliance costs.

FinCEN regulates providers of certain services with respect to “convertible virtual currency,” including Bitcoin. Businesses engaged in the transfer of convertible virtual currencies are subject to registration and licensure requirements at the U.S. federal level and also under U.S. state laws. While FinCEN has issued guidance that digital assets mining, without engagement in other activities, does not require registration and licensure with FinCEN, this could be subject to change as FinCEN and other regulatory agencies continue their scrutiny of the Bitcoin network and digital assets generally. To the extent that our or American Bitcoin’s business activities cause us to be deemed a “money services business” under the regulations promulgated by FinCEN under the authority of the BSA, we or American Bitcoin may be required to comply with FinCEN regulations, including those that would mandate us or American Bitcoin to implement anti-money laundering programs, make certain reports to FinCEN, and maintain certain records.

To the extent that our or American Bitcoin’s activities would cause us to be deemed a “money transmitter” or equivalent designation under state law in any state in which we or American Bitcoin may operate, we or American Bitcoin may be required to seek a license or otherwise register with a state regulator and comply with state regulations that may include the implementation of anti-money laundering programs, including implementing a know-your-counterparty program and transaction monitoring, maintenance of certain records, and other operational requirements.

Such additional federal or state regulatory obligations may cause us or American Bitcoin to incur extraordinary expenses. Furthermore, we or American Bitcoin may not be capable of complying with certain federal or state regulatory obligations applicable to “money services businesses” and “money transmitters,” such as monitoring transactions and blocking transactions, because of the nature of the Bitcoin blockchain. If we or American Bitcoin are deemed to be subject to and determine not to comply with such additional regulatory and registration requirements, we or American Bitcoin may cease or alter our activities and offerings.

Regulatory changes reclassifying Bitcoin as a security could lead to our or certain of our subsidiaries’ classification as an “investment company” under the Investment Company Act of 1940 (the “1940 Act”) and could adversely affect the market price of Bitcoin and the market price of our listed securities.

Our assets, and the assets of our consolidated subsidiary, American Bitcoin, are concentrated in Bitcoin holdings. While senior SEC officials have stated their view that Bitcoin is not a “security” for purposes of the federal securities laws, a contrary determination by the SEC could lead to our and/or American Bitcoin’s classification as an “investment company” under the 1940 Act. Such a change could require us and/or American Bitcoin (i) to register as an “investment company” under the 1940 Act, which would subject us and/or American Bitcoin to significant additional regulation that could have a material adverse effect on our business operations, financial condition, results of operations and stock price or (ii) to change our and/or American Bitcoin’s business or seek regulatory relief such that we and/or American Bitcoin are not required to register as an “investment company” under the 1940 Act, including by acquiring operating assets with cash and/or Bitcoin on hand or liquidating investment securities or Bitcoin or seeking a no-action letter from the SEC. Liquidating investment securities or Bitcoin could result in losses, and there is no guarantee that we or American Bitcoin could obtain a no-action letter from the SEC. In addition, if Bitcoin is determined to constitute a security for purposes of the federal securities laws, the additional regulatory restrictions imposed by such a determination could adversely affect the market price of Bitcoin and in turn adversely affect the market price of our listed securities.

We are involved in legal proceedings from time to time, which could adversely affect us.

From time to time, we have been, and may in the future be, a party to legal and regulatory proceedings, including matters involving governmental agencies or regulators, entities with whom we do business, and other proceedings, whether arising in the ordinary course of business or otherwise. We evaluate our exposure to legal and regulatory proceedings and establish reserves, if required, for the estimated liabilities in accordance with generally accepted accounting principles. Assessing and predicting the outcome of these matters involves substantial uncertainties and contingencies. Such matters can be time-consuming, divert management’s attention and resources, cause us to incur significant expenses or liabilities, or require us to change our business practices. The results of complex legal proceedings and governmental inquiries could adversely affect our business, financial condition, and results of operations, and we could incur substantial monetary liability and/or be required to change our business practices. In addition, the expenses and liabilities of litigation and other proceedings, and the timing of these expenses from period to period, are difficult to estimate, subject to change, and could adversely affect our business, financial condition, and results of operations. For a description of material legal proceedings in which we are involved, see Note 24. Commitments and contingencies to our Consolidated Financial Statements included elsewhere in this Annual Report.

Prior to the closing of the Business Combination, USBTC had completed a rescission offer of privately issued securities (the “Rescission Offer”).

In July 2021, prior to the closing of the Business Combination, USBTC offered to repurchase all of the shares of USBTC common stock and USBTC Series A preferred stock sold during the various fundraising rounds, as well as promissory notes with an aggregate principal amount of $5.87 million (collectively, the “Rescission Securities”). The Rescission Securities were originally purchased in private transactions by certain persons who are or were residents of California, Florida, Illinois, Maryland, Massachusetts, Pennsylvania, Nevada, New Jersey, New York, Texas, Virginia, Washington, Puerto Rico, Canada, the Cayman Islands, Hong Kong, and the United Arab Emirates at the time such Rescission Securities were purchased.

Management of USBTC became aware that (i) court orders against two of USBTC’s now-former stockholders, John Stetson and Mark Groussman, which, among other things, restrain and enjoin such stockholders from violating certain federal securities laws, may have precluded USBTC from relying on certain federal and state securities exemptions for the offerings since such stockholders may have been deemed “promoters” based on certain of their activities in one or more of the offerings, (ii) it is possible that payments made to certain persons may be deemed as a commission or finder’s fee in connection with one or more of the offerings, and (iii) given the fact that proper notification and/or other provisions for an exemption may not have been complied with, the sale of certain Rescission Securities may not have been in compliance with state securities, “blue sky” or other applicable laws. Because of the aforementioned items, it is possible that the disclosure provided to subscribers in the aforementioned offerings was incomplete. As a result, USBTC elected to conduct the Rescission Offer. All equity previously held by Messrs. Stetson and Groussman and any of their family members and/or affiliates has been sold to other equity holders of USBTC, and USBTC has taken all other actions necessary as of August 2021 so that Messrs. Stetson and Groussman no longer have any involvement with USBTC.

The Rescission Offer remained open until the earlier of (i) the date on which USBTC received written responses from all offerees and (ii) 30 days after delivery of the Rescission Offer. The Rescission Offer closed with only one holder of 126 shares of USBTC Series A Preferred Stock elected to have USBTC redeem his investment and rescind his purchase of the USBTC Series A Preferred Stock. If all securityholders were to have accepted the Rescission Offer, USBTC would have been required to pay approximately $41.2 million in the aggregate. USBTC has voluntarily paid off all of the promissory notes included within the Rescission Securities, and therefore those notes are no longer subject to potential rescission.

However, the Securities Act does not provide that a Rescission Offer will extinguish a holder’s right to rescind the purchase of a security that was not registered or exempt from the registration requirements under the Securities Act. Consequently, in the future, holders of Rescission Securities may choose to exercise their rescission rights. There is no guarantee that this will not happen, and, as such, we may remain liable under the Securities Act for the purchase price of the Rescission Securities subject to the Rescission Offer. Should additional holders of Rescission Securities seek to rescind their prior purchases or should the validity of the Rescission Offer be contested for any reason, we may not have enough cash or cash equivalents to pay any holders of Rescission Securities who may claim they continue to have a right to rescind their purchase of Rescission Securities.

We, through USBTC, are subject to orders in three states, Massachusetts, Maryland, and Virginia, and our failure to comply with federal and state securities laws and regulations in connection with the Rescission Offer could subject us to additional enforcement actions, monetary fines and penalties, disqualifications under federal securities laws, and impair our ability to raise capital in the future.

We are relying upon exemptions from the securities registration provisions of the federal and state securities laws and regulations in connection with the Rescission Offer. In relying upon such exemptions, we have the burden of ensuring compliance with such laws for the Rescission Offer, including the applicable state anti-fraud provisions. We have voluntarily disclosed the Rescission Offer and corresponded with the state securities regulators in the states of California, Maryland, New Jersey, Pennsylvania, Virginia, Massachusetts and Washington regarding the Rescission Offer and we have been advised by all such states that no further actions are necessary. Given that we believe that the Rescission Securities were exempt from registration under Section 4(a)(2) of the Securities Act, we do not believe there were any violations of federal securities laws, and as such, we have not notified any federal regulators regarding the Rescission Offer.

In connection with the Rescission Offer, the Commonwealth of Massachusetts, Office of the Secretary of the Commonwealth, Securities Division (the “Massachusetts Division”) issued a Consent Order, Docket No. E-2022-0011, on March 22, 2022 (the “Massachusetts Order”) in lieu of a hearing. The Massachusetts Order recited that the Massachusetts Division had conducted an investigation of USBTC pursuant to the Massachusetts Uniform Act, Mass. Gen. Laws c. 110A the (“Massachusetts Securities Act”) and the regulations promulgated thereunder (the “Massachusetts Regulations”), and reviewed self-reported allegations of alleged sales of unregistered securities of USBTC in the State of Massachusetts in potential violation of the Massachusetts Securities Act and Massachusetts Regulations which securities had not been determined to be exempt from registration requirements. As had been agreed by and consented to by USBTC, the Massachusetts Order, in summary, required USBTC to (i) permanently cease and desist from committing violations of the Massachusetts Securities Act; (ii) offer to rescind securities purchase transactions with five Massachusetts residents; (iii) submit the necessary paperwork and pay the necessary fees in order to register the sales to the Massachusetts residents with the Massachusetts Division; and (iv) pay an administrative fine in the amount of $1.0 million. With respect to the requirement to offer rescission, USBTC resent the Rescission Offer provided in July 2021, with additional Massachusetts-specific disclaimers, to the five Massachusetts residents, who collectively held 4,335 shares of USBTC Series A Preferred Stock, in April 2022. The Massachusetts investors reconfirmed their declination of the offer to rescind. In April 2022, USBTC paid the $1.0 million administrative fine.

In connection with the Rescission Offer, USBTC entered into a Stipulation for Consent Order, Case No. 2021-0127, on November 5, 2021 (the “Maryland Order”) in lieu of a hearing, following receipt of a Consent Order from the Maryland Securities Division of the Office of the Attorney General Division (the “Division”). The Maryland Order recited that the Commissioner had reviewed allegations that unregistered securities of USBTC were sold by USBTC in the State of Maryland in violation of Section 11-101 et seq. of the Maryland Securities Act, Md. Code Ann., Corps. And Ass’ns. (the “Maryland Securities Act”) which securities had not been determined to be exempt from registration requirements. As had been agreed by USBTC, the Maryland Order, in summary, required USBTC to offer to rescind securities purchase transactions with three Maryland residents, admit to the jurisdiction of the Division as to substance and entry of the Maryland Order, and comply with the provisions of the Maryland Securities Act in any and all such future Maryland offers and sales of securities. With respect to the requirement to offer rescission, USBTC resent the Rescission Offer provided in July 2021, with additional Maryland-specific disclaimers, to the three Maryland residents, who collectively held 1,876 Seed Shares and 126 shares of USBTC Series A Preferred Stock, in November 2021. The Maryland investors reconfirmed their declination of the offer to rescind.

In connection with the Rescission Offer, USBTC entered into a Settlement Order, Case No. 2021-00029, on October 26, 2021 (the “Virginia Order”) in lieu of a hearing, following receipt and approval of the Settlement Order from the Commonwealth of Virginia, State Corporation Commission’s (the “Commission”) Division of Securities and Retail Franchising (Richmond) (the “Virginia Division”). The Virginia Order recited that the Virginia Division had conducted an investigation of USBTC pursuant to Section 13.1-518 of the Virginia Securities Act (the “Virginia Act”) and Section 13.1-501 et seq. of the Code of Virginia, and reviewed self-reported allegations of alleged sales of unregistered securities of USBTC in the State of Virginia in violation of Section 13.1-507 of the Virginia Act which securities had not been determined to be exempt from registration requirements. As had been agreed by and consented to by USBTC, the Virginia Order, in summary, required USBTC to (i) offer to rescind securities purchase transactions with four Virginia residents; (ii) pay to Virginia a monetary penalty and fees to defray the Division investigatory costs in the amounts of $5,000 and $1,000, respectively; (iii) admit to the jurisdiction and authority of the Commission as to substance and entry of the Virginia Order, and (iv) comply with the provisions of the Virginia Securities Act in any and all such future Virginia offers and sales of securities. With respect to the requirement to offer rescission, USBTC resent the Rescission Offer provided in July 2021, with additional Virginia-specific disclaimers, to the four Virginia residents, who collectively held 750 shares of USBTC Common Stock from the USBTC Founder’s Round, 1,875 shares of USBTC Common Stock from the USBTC Seed Round and 441 shares of USBTC Series A Preferred Stock, in October 2021. The Virginia investors reconfirmed their declination of the offer to rescind.

If, for any reason, we fail to comply with the applicable state securities exemptions, or we have failed in the past to comply, we may, among other things, be subject to both investigations and administrative actions by federal and/or state regulatory agencies, administrative fines and penalties, disqualifications from use of exemptions under federal securities laws, or actions for rescission or for damages. There is no guarantee that we will not become subject to such actions in the future. Such actions, if commenced, could have a material adverse effect on our ability to raise necessary capital in the future. While we have always endeavored to fully comply with all such laws, there is no assurance that any non-compliance will not have a material adverse effect on us.

Changes in tax laws or unanticipated tax liabilities could adversely affect our effective income tax rate and profitability.

We are subject to income taxes in various jurisdictions in the United States and Canada, and may become subject to taxation in additional jurisdictions as we expand. Our effective tax rate could be adversely affected in the future by several factors, including changes in the valuation of deferred tax assets and liabilities, changes in tax laws and regulations or their interpretations and application, changes in the geographic mix of our earnings, and the outcome of income tax audits in any of the jurisdictions in which we operate or are otherwise subject to tax.

A significant change in U.S. or Canadian tax laws and regulations may materially and adversely impact our income tax liability, provision for income taxes, and effective tax rate. We regularly assess these matters to determine the adequacy of our income tax provision, which is subject to significant judgment.

In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although we believe our tax estimates are reasonable, the outcome of income tax audits and related litigation could be materially different than that reflected in our historical income tax provisions and accruals. There can be no assurance that the resolution of any audits or litigation will not have an adverse effect on our business, financial condition, and results of operations.

Developments regarding the treatment of Bitcoin for applicable U.S. and Canadian federal, state, provincial, local, and other tax purposes could adversely impact our business.

Our assets, and the assets of our consolidated subsidiary, American Bitcoin, are concentrated in Bitcoin holdings. Due to the new and evolving nature of Bitcoin and the absence of comprehensive guidance with respect to Bitcoin and related transactions, many significant aspects of the applicable U.S. and Canadian federal, state, provincial, local, and other tax treatment of transactions involving Bitcoin, such as the purchase and sale of Bitcoin and the receipt of staking rewards and other digital asset incentives and rewards products, are uncertain, and it is unclear what guidance may be issued in the future with respect to the tax treatment of Bitcoin and related transactions.

Current Internal Revenue Service (“IRS”) guidance indicates that for U.S. federal income tax purposes digital assets, including Bitcoin, should be treated and taxed as property and transactions involving the payment of Bitcoin for goods and services should be treated in effect as barter transactions. The IRS has also released guidance to the effect that, under certain circumstances, hard forks and airdrops of digital currencies may give rise to taxable events and guidance with respect to the determination of the tax basis of digital currencies. However, current IRS guidance does not address other significant aspects of the U.S. federal income tax treatment of digital assets and related transactions. Moreover, although current IRS guidance addresses the treatment of certain hard forks and airdrops, there continues to be uncertainty with respect to the timing and amount of income inclusions for various crypto asset transactions, including staking rewards, other digital asset incentives, and reward products. Generally, while current IRS guidance creates a potential tax reporting requirement for any circumstance where the ownership of a Bitcoin passes from one person to another, it preserves the right to apply capital gains treatment to those transactions, which may be favorable for investors in Bitcoin.

There can be no assurance that the IRS will not alter its existing position with respect to digital assets in the future or that Canadian federal, or applicable state, provincial, local, and other taxing authorities or courts will follow, or continue to follow, the approach of the IRS with respect to the treatment of digital assets, including Bitcoin. Generally, any alteration of existing guidance or issuance of new or different guidance may have negative consequences, including the imposition of a greater tax burden on investors in Bitcoin or imposing a greater cost on the acquisition and disposition of Bitcoin. In either case, this may have a negative effect on the trading price of Bitcoin or otherwise negatively impact our and American Bitcoin’s business, financial condition, and results of operations. In addition, future technological and operational developments that may arise with respect to digital currencies may increase the uncertainty of its treatment for applicable U.S. and Canadian federal, state, provincial, local, and other tax purposes.

We may not protect our intellectual property rights and other proprietary rights effectively, which would allow competitors to duplicate our offerings.

Our success and ability to compete in our markets depends, in part, upon our proprietary technology. We may not be able to obtain broad protection in the United States, Canada, or elsewhere for our existing and future intellectual property and other proprietary rights. Protecting our intellectual property rights and other proprietary rights may require significant expenditure of our financial, managerial, and operational resources. Any of our intellectual property rights and other proprietary rights, whether registered, unregistered, issued or unissued, may be challenged by others or invalidated through administrative proceedings and/or litigation. Moreover, the steps that we may take to protect our intellectual property and other proprietary rights may not be adequate to protect such rights or prevent third parties from infringing or misappropriating such rights. A third party might try to reverse engineer or otherwise obtain and use our technology without our permission, allowing competitors to duplicate our products. We cannot guarantee that others will not readily ascertain by proper means the proprietary technology used in or embodied by our products, services or technology or that others will not independently develop substantially equivalent products, services, or technology or that we can meaningfully protect the rights to unpatented products, services, or technology. We cannot guarantee that our agreements with our employees, consultants, advisors, sublicensees, and strategic partners restricting the disclosure and use of trade secrets, inventions, and confidential information relating to our products, services, or technology will provide meaningful protection for our intellectual property and other proprietary rights.

Our products, services, or technology may infringe claims of third-party intellectual property rights or other proprietary rights, which could adversely affect our business and profitability.

Our commercial success depends, in part, on our ability to operate without infringing third-party intellectual property rights or other proprietary rights. For example, there may be issued patents of which we are not aware that our products, services, or technology infringe on. Also, there may be patents that we believe we do not infringe on, but that we may ultimately be found to by a court of law or government regulatory agency. Moreover, patent applications, in some cases, are maintained in secrecy until patents are issued. Because patents can take many years to issue, there may be currently pending applications of which we are unaware that may later result in issued patents that our services or products allegedly infringe on.

If any third party asserts a claim against us based on third-party intellectual property rights and/or other proprietary rights, we may be required to spend significant resources to defend and challenge such claim, as well as to invalidate any such rights. Any claims against us, with or without merit, would likely be time-consuming, requiring our management team and technical personnel to dedicate substantial time to addressing the issues presented. Furthermore, the party bringing the claim may have greater resources than we do. In lieu of expensive intellectual property litigation, we may seek one or more patent or other intellectual property licenses, but we cannot assure you that we could secure a license on reasonable terms. Accordingly, any of these claims, whether or not it is resolved in our favor, could result in significant expense to us and divert management’s attention, which could have a material adverse effect on our business, financial condition, and results of operations.

Risks Related to Ownership of Our Common Stock

The market price of our common stock may be volatile and subject to wide fluctuations in response to numerous factors, many of which are beyond our control.

The trading price of our common stock has been, and is likely to continue to be, volatile, and may be influenced by market conditions, including the risks, uncertainties, and factors described in this Annual Report and our other filings with the SEC, as well as other factors beyond our control or of which we may be unaware. As a result, investment in our common stock is inherently risky and as a holder, you might not be able to sell your shares of our common stock at or above the price that you paid for them.

If the markets related to AI infrastructure, data center investments, Bitcoin, the broader digital asset ecosystem, or capital markets in general, experience a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition, or results of operations. That is, the trading price of our common stock is subject to arbitrary pricing factors that are not necessarily associated with traditional factors that influence share prices or the value of non-digital assets such as revenue, cash flows, profitability, growth prospects, or business activity levels since the value and price, as determined by the investing public, may be influenced by future anticipated adoption or appreciation in value of high-performance computing or AI workloads, AI-driven data centers, Bitcoin, other digital assets, or other factors over which we have little or no influence or control.

Factors that may contribute to market price fluctuations of our common stock include the following:

• actual or anticipated fluctuations in our results of operations and/or future prospects;
• recommendations by securities research analysts;
• changes in the economic performance or market valuations of companies in the industries in which we operate;
• actual or perceived changes in demand for AI, high-performance computing, or AI data center infrastructure, including expectations regarding capacity utilization, power availability, energy costs, customer concentration, technological change, and competition;
• actual or perceived changes in the value of our equity interest in American Bitcoin;
• volatility in the price of Bitcoin;
• addition to or departure of our executive officers, directors, and/or other key personnel;
• sales or perceived sales of additional shares of our common stock;
• operating and financial performance that vary from the expectations of management, securities analysts, and investors;
• regulatory changes affecting the industries in which we operate generally and our business and operations;
• announcements of developments and other material events by us or our competitors and related market expectations;
• fluctuations to the costs of vital products and services used by us in our business;
• changes in global financial markets, global economies, and/or general market conditions, such as interest rates;
• significant acquisitions or business combinations, strategic partnerships, joint ventures, or capital commitments by or involving us or our competitors;
• litigation or regulatory action against us;
• news reports, investor speculation, social media, chat rooms, rumors, and other methods of information dissemination concerning trends, concerns, technological, or competitive developments, regulatory matters, and other related issues regarding potential developments in our business, industries, or target markets;
• the level of short interest in our stock; and
• current and future global economic, political, and social conditions.

Securities class action litigation has often been brought against companies following periods of volatility in the market price of their securities. We have been, and may continue to be, the target of similar litigation in the future. Securities litigation could result in substantial costs and damages and divert management’s attention and resources.

Future issuances of our capital stock or rights to purchase capital stock could result in dilution to our stockholders and could cause our stock price to decline.

We have in the past, and may in the future, whether in the ordinary course of business or otherwise, issue shares of our common stock or securities convertible into or exchangeable for shares of our common stock, including as a result of the conversion or exercise, as applicable, of restricted stock units, performance stock units, or options. We have issued shares of common stock under our ATM program and may do so in the future. We may also issue shares of our common stock upon the possible conversion of our outstanding convertible note issued to Coatue Tactical Solutions Lending Holdings AIV 3 LP or in satisfaction of certain required payments or other obligations under an acquisition agreement, joint venture agreement, or other agreement. Any additional issuance of our common stock will dilute the ownership of our stockholders and may adversely affect prevailing market prices for our common stock.

We do not intend to pay dividends on our common stock for the foreseeable future.

We currently intend to retain all available funds and any future earnings to fund the development and growth of our business and execute our strategic initiatives. As a result, we do not anticipate declaring or paying any cash dividends on our common stock in the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of our Board and will depend on, among other things, our business, financial condition, results of operations, cash requirements and availability, industry trends, and other factors that the Board may deem relevant. Any such decision also will be subject to compliance with contractual restrictions and covenants in the agreements governing our indebtedness. We may also incur additional indebtedness, the terms of which may further restrict or prevent us from paying dividends on our common stock. As a result, you may have to sell some or all of your shares of our common stock after price appreciation in order to generate cash flow from your investment, which you may not be able to do. Our inability or decision not to pay dividends could also adversely affect the market price of our common stock.

We may issue shares of preferred stock in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our common stock, which could depress the price of our common stock.

Under the terms of the Amended and Restated Certificate of Incorporation of Hut 8 Corp. (our “Certificate of Incorporation”), our Board has the authority, without further action by our stockholders (except as required by Nasdaq or TSX listing standards or applicable law), to issue up to 25,000,000 shares of preferred stock in one or more series with such designations, powers, preferences, special rights, qualifications, limitations, and restrictions as our Board may determine from time to time. The potential issuance of preferred stock may delay or prevent a change in control of us, discouraging bids for our common stock at a premium to the market price, and materially and adversely affect the market price and the voting and other rights of the holders of our common stock.

Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and directors and depress the market price of our common stock.

Our Certificate of Incorporation, our amended and restated bylaws (our “Bylaws”), and Delaware law contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our Board. Among others, our Certificate of Incorporation and Bylaws include the following provisions:

• limitations on convening special stockholder meetings, which could make it difficult for our stockholders to adopt desired governance changes;
• advance notice procedures, which apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders;
• a prohibition on stockholder action by written consent, which means that our stockholders will only be able to take action at a meeting of stockholders; and
• a forum selection clause, which means certain litigation against us can only be brought in Delaware.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law (the “DGCL”), which prevents interested stockholders, such as certain stockholders holding more than 15% of our outstanding common stock from engaging in certain business combinations unless (i) prior to the time such stockholder became an interested stockholder, the board approved the transaction that resulted in such stockholder becoming an interested stockholder, (ii) upon consummation of the transaction that resulted in such stockholder becoming an interested stockholder, the interested stockholder owned 85% of the common stock, or (iii) following board approval, the business combination receives the approval of the holders of at least two-thirds of our outstanding common stock not held by such interested stockholder.

Any provision of our Certificate of Incorporation, our Bylaws, or Delaware law that has the effect of delaying, preventing or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.

Our Certificate of Incorporation and our Bylaws include a forum selection clause, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or other employees.

Our Certificate of Incorporation and our Bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for any derivative action or proceeding brought on Hut 8’s behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to any provisions of the DGCL, our Certificate of Incorporation, or our Bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine. Our Certificate of Incorporation and our Bylaws also provide that the federal district courts of the United States of America is the exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act. The exclusive forum provision does not apply to the resolution of any complaint asserting a cause of action arising under the Exchange Act. To the extent that any such claims may be based upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. The provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, and other employees. Alternatively, if a court were to find the choice of forum provision contained in our Certificate of Incorporation and our Bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially and adversely affect our business, financial condition, and results of operations.

Cybersecurity Risk Management and Strategy

Given the inherent and growing risks of operating our business, we recognize the importance of incorporating, monitoring, and updating cybersecurity risk programs as part of operating, management, and governance practices. Our Cybersecurity Program has been designed to monitor, manage, and mitigate our cybersecurity risks. The supporting Cyber Security Policy establishes a cybersecurity framework by defining security responsibilities, access controls, data protection standards, and required technical safeguards to protect our systems, information, and assets. Our Cybersecurity Program and Policy are currently owned by our Chief Legal Officer and Corporate Secretary, working with our IT function. In addition, we leverage the insights and expertise of our retained Security Advisory Partner, who provides strategic and technical guidance to our internal team and supplements our internal staffing to assist with day-to-day cybersecurity and related tasks. Our Security Advisory Partner is responsible for the design and implementation of our information security strategy and works in conjunction with our internal team to collaboratively spearhead our cybersecurity efforts, focusing on standards, policy creation and implementation, architecture, and processes. We believe our internal team and Security Advisory Partner, boasting extensive experience and holding various industry-standard cybersecurity certifications, capably handle a wide range of complex cybersecurity demands, including assessments, operations, and remediation across the spectrum of cybersecurity challenges. Our internal team and Security Advisory Partner assess our security posture on a regular basis, and the results of those reviews are reported to members of senior management as well as to our Audit Committee, and where appropriate, our Board. Our Incident Response Team, which is comprised of members of our IT and legal teams and our Security Advisory Partner, is responsible for leading our response to cyber incidents. Our Incident Response Plan outlines the processes by which we identify, report, investigate, contain, and remediate cybersecurity incidents. It is designed to identify material risks, and appropriate controls for managing them, and ensure that necessary disclosures are made promptly to uphold transparency and compliance with relevant regulations.

We, our third-party suppliers, and our customers, along with other companies in our industry, have been subject to, and are likely to continue to be the target of, cyber-attacks, as discussed in more detail in “Risk Factors.” We have implemented a Third Party Risk Management process to oversee and identify material risks, including cybersecurity threats, stemming from our engagement with third-party service providers. Our process is designed to ensure that vendors presenting material technology or cybersecurity risks are subjected to a rigorous privacy and security review prior to engagement and thereafter monitored continuously for compliance with our stringent security standards. Despite the efforts and investments made, not all threats may be prevented. In light of the numerous cybersecurity risks that we face, it is reasonably likely that cybersecurity threats could materially affect our business, financial condition, or results of operations. See “Risk Factors.”

Cybersecurity Governance

We encounter a range of risks and continuously conduct comprehensive evaluations to refine our risk management strategies effectively. Management is principally responsible for identifying, evaluating, and managing the risks on a day-to-day basis, under the oversight of our Board and the Audit Committee. Our Audit Committee is responsible for overseeing our Enterprise Risk Management processes, including our guidelines and policies governing the process of risk assessment and risk management, which includes cybersecurity. In addition, our Audit Committee is presented with information at its regularly scheduled and special meetings, including on risk and security posture, security initiatives and programs, and emerging conditions, and management may provide more frequent, informal communications to the Board or Audit Committee between regularly scheduled meetings, as appropriate. Our Board or Audit Committee, as applicable, reviews this information and delivers strategic feedback, offers recommendations, and, when necessary, grants authorization or directs management to mitigate specific risk exposures.

We lease our corporate offices in Miami, Florida and Toronto, Ontario and maintain various leases for our data centers across Canada and the United States related to our Compute and Digital Infrastructure business segments. We own the 1.9 acres of land on which the Salt Creek substation sits and the 20 acres of land on which our Medicine Hat site sits. We also own 627 acres of land in West Feliciana Parish, Louisiana, 524 acres of land in Nueces County, Texas, and 7.2 acres of land in Batavia, Illinois.

We believe our existing facilities are sufficient for our current needs. However, as part of our growth strategy, we continually evaluate opportunities to expand our development pipeline, including our portfolio of powered land. In the future, we may reassess our existing facilities or add new facilities as we further expand our operations. We believe suitable space will be available on commercially reasonable terms to meet our future needs.

For a description of material legal proceedings in which we are involved, see Note 24. Commitments and contingencies to our consolidated financial statements included elsewhere in this Annual Report, which is incorporated herein by reference.

We are not presently a party to any other legal or regulatory proceedings that in the opinion of our management, if determined adversely to us, would individually or taken together have a material adverse effect on our business, financial condition, or results of operations. However, we are subject to regulatory oversight by numerous federal, state, provincial, local, and other regulators and we are, and we may become, subject to various legal proceedings, inquiries, investigations, and demand letters that arise in the course of our business. See “Risk Factors—Risks Related to Certain Regulations and Laws, Including Tax Laws—We are involved in legal proceedings from time to time, which could adversely affect us.”

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and the related notes and the other financial information included elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual business, financial condition, and results of operations could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Annual Report, particularly under “Item 1A. Risk Factors.” See also “Cautionary Statement Regarding Forward-Looking Statements.” Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Business Overview

Hut 8 is an energy infrastructure platform that integrates power, digital infrastructure, and compute at scale to fuel next-generation, energy-intensive use cases. We take a power-first, innovation-driven approach to developing, commercializing, and operating the critical infrastructure that underpins the breakthrough technologies of today and tomorrow. As of December 31, 2025, our platform spanned 1,020 megawatts of energy capacity under management across 15 sites in the United States and Canada: five ASIC compute, hosting, and managed services sites in Alberta, New York, and Texas, five cloud and colocation data centers in British Columbia and Ontario, four power generation assets in Ontario, and one non-operational site in Alberta; 330 megawatts of energy under construction at one site in Louisiana; 1,230 megawatts of energy capacity under development across three sites in Texas and Illinois; 1,755 megawatts of energy capacity under exclusivity; and 5,185 megawatts of energy capacity under diligence. Of this capacity, approximately 310 megawatts is associated with the four power generation assets we divested in Q1 2026.

2025 Highlights

• AI Infrastructure Partnership and River Bend Transaction. In December 2025, we announced a strategic partnership with Anthropic, PBC (“Anthropic”) and Fluidstack Ltd. (“Fluidstack”) to develop AI data center infrastructure. As part of the partnership, we entered into a 15-year, triple-net lease with Fluidstack for 245 MW of AI data center IT capacity at our River Bend campus (“River Bend”) in Louisiana. The agreement grants Fluidstack a Right of First Offer for up to an additional 1,000 MW of IT capacity at future expansion phases of campus, subject to the expansion of power at the site. The initial data hall at River Bend is scheduled for completion and commissioning in Q2 2027, with additional data halls scheduled to come online over the balance of 2027. The lease has a base contract value of approximately $7.0 billion, with the potential to increase to $17.7 billion through renewal options, and is supported by a financial backstop from Google, which covers the lease payments and related pass-through obligations for the initial 15-year base term of the lease. As part of the partnership, Hut 8 and Anthropic may jointly diligence and develop up to 1,050 MW of additional optional capacity across our broader pipeline for a total of up to 2,295 MW of AI data center infrastructure, reflecting our power-first development model and strategic focus on scaling AI infrastructure. The initial phase of the partnership is supported by blue-chip institutional counterparties, including Entergy, which will be providing power to the site, J.P. Morgan and Goldman Sachs, who are expected to serve as loan underwriters for the project-level financing, Vertiv, who is the power provider for the site, and Jacobs, who is serving as general contractor.
• Far North Capacity Contract Awards and the Subsequent Sale. In November 2025, we entered into a definitive agreement to sell our 310 MW portfolio of four natural gas-fired power plants in Ontario, Canada to TransAlta Corporation (“TransAlta”). The transaction closed on February 2, 2026, concluding a multi-phase program in which we stabilized and strengthened the assets following their acquisition out of bankruptcy. Prior to the sale, we secured five-year capacity contracts with the Ontario Independent Electricity System Operator (“IESO”) Medium-Term 2 (“MT2”) auction across the portfolio, transitioning the assets from short-term arrangements to long-term revenue commitments.
• Two Prime Loan. On August 25, 2025, we entered into a credit agreement with Two Prime Lending Limited (the “Two Prime Credit Agreement”). The Two Prime Credit Agreement provides for a revolving credit facility of up to $200 million. Amounts borrowed under the Two Prime Credit Agreement bear interest at a fixed rate equal to 7.99% per annum. The facility matures 364 days after the date of the first borrowing (the “Maturity Date”). We may prepay any outstanding amounts borrowed, in whole or in part, without premium or penalty, at any time prior to the Maturity Date. Amounts prepaid may be reborrowed, in whole or in part, at any time prior to the Maturity Date. On or prior to a drawdown, we are required to pledge, as collateral, Bitcoin with a custodian, to be held in a segregated custody account under our ownership, such that the initial margin ratio of principal outstanding amount of the loan and the fair value of collateral is equal to or greater than 160%. If the value of the collateral under the credit facility decreases past a specified margin, we may be required to post additional Bitcoin as collateral. As of December 31, 2025, we have not borrowed any amount under the Two Prime Credit Agreement.
• Launch of Hut 8 2025 At-The-Market Offering Program. On August 22, 2025, we established a $1.0 billion at-the-market equity program (the “2025 ATM”), which replaced our prior $500 million at-the-market equity program launched on December 4, 2024 (the “2024 ATM”). As of August 22, 2025, prior to its termination, we had issued and sold shares under the 2024 ATM for gross proceeds of $299.4 million at a weighted average price of $27.83 per share. For reference, our average share price from commencement of the 2024 ATM until August 22, 2025 was $18.61 per share. As of December 31, 2025, we had issued and sold 4,020,630 shares under the 2025 ATM for gross proceeds of $183.4 million at a weighted average issuance price of $45.62 per share.
• Coinbase Loan. On June 16, 2025, we entered into a Third Amended and Restated Credit Agreement with Coinbase Credit, Inc. (“Coinbase”) to, among other things, amend and expand our Bitcoin-backed credit facility from $65.0 million to up to $130.0 million, and extend the maturity date to June 16, 2026. Additionally, the interest rate structure was converted to a fixed interest rate of 9.0%, compared to a variable rate interest rate that was at 10.5% as of December 31, 2024. On December 22, 2025, we entered into a Fourth Amended and Restated Credit Agreement (“Credit Agreement”) with Coinbase primarily to increase the principal amount by up to $70.0 million of additional borrowings, if any, resulting in a total principal amount of up to $200.0 million. As of December 31, 2025, we have borrowed the full $200.0 million under the Credit Agreement.
• Energization of Vega Facility. In June 2025, we completed the initial energization of our Vega facility in the panhandle of Texas. The single-building facility, spanning 162,000 square feet, is powered by 205 MW of nameplate capacity behind-the-meter by a wind farm and front-of-the-meter by the ERCOT grid. At full energization, Vega supports up to approximately 15 exahash per second (“EH/s”) of direct-to-chip-liquid-cooled BITMAIN U3S21EXPH servers for ASIC compute. The facility was originally contracted with Bitmain and was subsequently transitioned to American Bitcoin.
• Miner Fleet Upgrade. We completed the deployment of new-generation ASIC miners across our Salt Creek and Medicine Hat facilities on April 4, 2025. These upgrades contributed to a significant increase in deployed hashrate from approximately 5.6EH/s to 9.3EH/s and an improvement in average fleet efficiency from approximately 31.7 J/TH to 20 J/TH. These miners were contributed to American Bitcoin as part of the launch of American Bitcoin discussed below.
• Launch and Go-Public Transaction of American Bitcoin. In March 2025, we launched American Bitcoin, a majority-owned subsidiary formed following the strategic contribution of substantially all of our ASIC miners in exchange for a majority ownership interest in American Data Centers Inc. In June 2025, American Bitcoin issued and sold 11,002,954 shares of its Class A common stock for aggregate gross proceeds in cash and Bitcoin of $220.1 million, and aggregate net proceeds of approximately $215.3 million after deducting certain fees and expenses incurred in connection with the issuance, including aggregate issuance cost of $4.8 million. On September 3, 2025, American Bitcoin began its trading on the Nasdaq Stock Market (“Nasdaq”) following the completion of its merger with Gryphon Digital Mining, Inc. (“Gryphon”) in which Gryphon acquired American Bitcoin in a stock-for-stock merger transaction (the “ABTC Merger”). At the closing of the ABTC Merger, the issued and outstanding capital stock of American Bitcoin was canceled and converted into newly issued stock representing, in the aggregate, approximately 98% of the issued and outstanding stock of Gryphon. Upon the completion of the ABTC Merger, Gryphon was renamed “American Bitcoin Corp.” and began trading on Nasdaq under the ticker symbol “ABTC.” Immediately following the completion of the ABTC Merger, we beneficially owned a majority of the voting interest of the combined company. Following the ABTC Merger, we have continued to serve as American Bitcoin’s exclusive infrastructure and operations partner through a series of long-term commercial agreements that generate stable, contracted revenue streams in our Power and Digital Infrastructure segments. However, as American Bitcoin is a consolidated subsidiary, all fees under our commercial agreements are eliminated in consolidation.

Key Factors Affecting Our Performance

Power constraints

Access to energy is a key factor affecting our ability to meet growing demand for HPC, AI, and ASIC compute and to scale our digital infrastructure platform. Power is the foundation of our operations. We acquire, develop, and manage critical energy assets such as interconnects, powered land, and other electrical infrastructure to address the load demands of energy-intensive applications. As competition for power intensifies, our performance depends on originating, commercializing, and optimizing energy capacity at scale. We believe our experience in power origination, infrastructure design, and load optimization positions us to manage these constraints and support continued growth. Our portfolio currently provides access to competitively priced electrical power in the regions where we operate; however, there is no guarantee that we will be able to procure additional power on similar terms, or at all. Market prices for power, capacity, and ancillary services are unpredictable and tend to fluctuate substantially. See “Risk Factors—Risks Related to Our Business and Operations—We are subject to risks associated with our need for significant electrical power” in the Annual Report.

Expansion into AI infrastructure services and other energy-intensive use cases

A key factor affecting our performance is our ability to expand into AI infrastructure services and other energy-intensive use cases. We are leveraging our existing development and operational expertise to develop data centers that support specialized workloads for enterprise and hyperscale customers and other next-generation, energy-intensive use cases. Success in this area depends on various factors, including our ability to develop future sites, secure and retain customers, manage capital efficiently, and compete effectively in emerging technology markets. While this expansion may increase operating and capital costs and expose us to execution and market risks, management believes our experience in power origination, development, and management in large-scale digital infrastructure development position us to capture long-term growth opportunities in the evolving AI sector and other next-generation, energy-intensive use cases.

Price of Bitcoin

While we are migrating towards less volatile, lower cost-of-capital businesses, such as data centers, our current business remains heavily dependent on the price of Bitcoin, which has historically experienced significant volatility. Our exposure is driven primarily by the Bitcoin held on our consolidated balance sheet, including Bitcoin held directly by us and American Bitcoin in our respective strategic reserves. In addition, our consolidated results reflect American Bitcoin’s activities as a Bitcoin accumulation platform and its strategy of purchasing and holding Bitcoin. Lastly, we generate revenue from Bitcoin rewards that are earned through mining operations at our facilities, the majority of which are conducted through American Bitcoin.

Under ASU 2023-08, *Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“*ASU 2023-08”), Bitcoin is revalued at fair value at the end of each reporting period, with changes in fair value recognized in net income. As a result, fluctuations in the price of Bitcoin may significantly impact our results of operations.

Bitcoin network difficulty and hashrate

Our business is not only impacted by the volatility in Bitcoin prices, but also by increases in the competition for Bitcoin production, specifically for ASIC compute. This increased competition is described as the network hashrate resulting from the growth in the overall quantity and quality of miners working to solve blocks on the Bitcoin blockchain, and the difficulty index associated with the secure hashing algorithm employed in solving the blocks. Increased difficulty reduces the mining proceeds of the equipment proportionally and eventually requires Bitcoin miners like American Bitcoin, to upgrade their equipment to remain profitable and compete effectively with other miners. Conversely, a decline in network hashrate results in a decrease in difficulty, increasing mining proceeds and profitability.

Block reward and halving

The current Bitcoin reward for solving a block is 3.125 Bitcoin. The Bitcoin network is programmed such that the Bitcoin block reward is halved every 210,000 blocks mined, or approximately every four years. This reduction in reward spreads out the release of Bitcoin over a long period of time as fewer Bitcoin are mined with each halving event. Bitcoin halving events impact the number of Bitcoin that we mine, including through American Bitcoin which, in turn, may have a potential impact on our results of operations. The last halving event occurred in April 2024, and the next halving event is expected to occur in 2028.

Key Performance Indicators

In addition to our financial results and generally accepted accounting principles in the United States of America (“GAAP”) financial measures, we use certain key performance indicators to evaluate our business, identify trends, and make strategic decisions. Certain Key Performance Indicators for the prior period were reclassified to align with updated definitions.

The following table presents our key performance indicators as of December 31, 2025 and 2024.

Energy Capacity Under Diligence

Energy Capacity Under Diligence represents sites identified for large-load use cases such as AI, HPC, ASIC compute, industrial applications such as next generation manufacturing, and other energy-intensive technologies. At this stage, we assess site potential by engaging with utilities, landowners, power generators, local, state and regulatory bodies, and other stakeholders to evaluate critical factors, including power availability, infrastructure readiness, fiber connectivity, and overall commercial viability. This metric allows management to better understand our potential opportunities, allowing us to remain selective in our investment decisions while positioning us to respond to market demand signals and emerging opportunities. Energy Capacity Under Diligence as of December 31, 2025, was 5,185 MW compared to 8,599 MW as of December 31, 2024. The net decrease reflects both the advancement of certain sites into other development categories and the removal of sites that no longer met our strategic, commercial, infrastructure, or regulatory criteria.

Energy Capacity Under Exclusivity

Energy Capacity Under Exclusivity represents sites where we have secured a clear path to ownership through either: (i) an exclusivity agreement that prevents the sale of designated land and power capacity to another party or (ii) a tendered interconnection agreement, confirming a viable path to securing power and infrastructure for deployment. Management monitors Energy Capacity Under Exclusivity to evaluate potential near-term opportunities prior to making additional investment commitments. Energy Capacity Under Exclusivity as of December 31, 2025 was 1,755 MW compared to 2,768 MW as of December 31, 2024. The net decrease reflects both the advancement of certain sites into other development categories and the removal of sites that no longer met our strategic, commercial, infrastructure, or regulatory criteria.

Energy Capacity Under Development

Energy Capacity Under Development represents sites where we are actively investing in development and commercialization by executing definitive land and/or power agreements, advancing site design and infrastructure buildout, and engaging with prospective customers. This phase is monitored by management as it represents the projects that are closest to commencing construction. Energy Capacity Under Development as of December 31, 2025 was 1,230 MW compared to 0 MW as of December 31, 2024. The growth was driven by an increase of 1,230 MW in capacity advancing from exclusivity to development, including two sites in Texas totaling 1,180 MW, and one site in Illinois of 50 MW.

Energy Capacity Under Construction

Energy Capacity Under Construction represents sites where we have executed a definitive offtake or other commercial agreements and commenced construction activities. This stage includes oversight of contractors, equipment delivery, and commissioning schedules to ensure projects are completed safely, on time, and within budget. Progress at this stage is closely monitored to manage capital deployment and align project delivery with customer timelines and market demand. Energy capacity under construction as of December 31, 2025 was 330 MW related to the River Bend site compared to 205 MW as of December 31, 2024, related to the Vega site which was energized and moved to Energy Capacity Under Management in June 2025.

Energy Capacity Under Management

Energy Capacity Under Management comprises all Power assets: Power Generation, Managed Services, ASIC infrastructure, CPU infrastructure, ASIC Compute, Traditional Cloud, and non-operational sites. Management reviews this metric to assess total energy capacity utilization across our operations to drive an efficient allocation of resources. Energy Capacity Under Management as of December 31, 2025 was 1,020 MW, compared to 815 MW as of December 31, 2024. The increase reflects the energization of our 205 MW Vega site in June 2025. Subsequent to year-end, we completed the sale of four power generation facilities in Ontario totaling 310 MW, which will reduce Energy Capacity Under Management in future periods.

Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, we rely on Adjusted EBITDA to evaluate our business, measure our performance, and make strategic decisions. Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as net loss or income, adjusted for impacts of interest expense, income tax benefit or provision, depreciation and amortization, our share of unconsolidated joint venture depreciation and amortization, net of basis adjustments, foreign exchange gain or loss, loss or gain on sale of property and equipment, gain on debt extinguishment, gain on derivatives, gain on other financial liability, gain on warrant liability, gain on bargain purchase, the removal of non-recurring transactions, asset contribution costs, impairment charges, loss from discontinued operations, net of taxes, loss attributable to non-controlling interests, and stock-based compensation expense in the period presented. You are encouraged to evaluate each of these adjustments and the reasons our Board and management team consider them appropriate for supplemental analysis.

Our board of directors and management team use Adjusted EBITDA to assess our financial performance because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense and income), asset base (such as depreciation and amortization), and other items (such as non-recurring transactions mentioned above) that impact the comparability of financial results from period to period.

Net (loss) income is the GAAP measure most directly comparable to Adjusted EBITDA. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in such presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. There can be no assurance that we will not modify the presentation of Adjusted EBITDA in the future, and any such modification may be material. Adjusted EBITDA has important limitations as an analytical tool and you should not consider Adjusted EBITDA in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA may be defined differently by other companies in our industry, our definition of this non-GAAP financial measure may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.

For a reconciliation to our most directly comparable financial measure calculated and presented in accordance with GAAP, please see “—Results of Operations” below.

Business Segments

We have four reportable business segments: Power, Digital Infrastructure, Compute, and Other.

Power

The Power business segment consists of Power Generation and Managed Services.

Power Generation

We generate revenue from our 80.1% interest in a joint venture with Macquarie Group Limited (“Macquarie”), a global financial services and infrastructure investment firm, which provides capacity and energy to the electrical grid through four natural gas power plants in Ontario, Canada (the “Far North JV”). The power generation facilities were acquired in February 2024 and are connected to the IESO, which operates Ontario’s power grid. The power generation assets primarily generate revenue from capacity payments and electricity sales, both of which are variable and depend on several factors, including generation capacity in the market, the supply and demand for electricity, and the prevailing price of natural gas.

In June 2025, all four of the power plants were awarded five-year capacity contracts with IESO. The contracts were awarded to the Far North JV following successful bids submitted into the competitive IESO MT2 capacity auction and will commence on May 1, 2026.

In November 2025, Hut 8 announced the sale of the Far North JV to TransAlta following the successful optimization and long-term contract wins. The transaction closed on February 2, 2026.

Managed Services

Our Managed Services business provides institutional partners with an end-to-end partnership model for energy infrastructure development, including:

• Project inception: site design, procurement, and construction management;
• Project operationalization: software automation, process design, personnel hiring, and team training;
• Revenue management: utilities contracts, hosting operations, and customer management;
• Project optimization: energy portfolio optimization and strategic initiatives; and/or
• Compliance and reporting: finance, accounting, and safety.

Cash flows in our Managed Services business are generated through a fee structure that is typically fixed based on power capacity under management, with reimbursement of passthrough costs. In addition to the fixed fee, under certain agreements, further cash flows may be driven from incentive bonuses and certain energy management services.

As of December 31, 2025, we managed 280 MW of energy capacity under this program at one site in the United States owned by the King Mountain JV.

Starting April 1, 2025, we began operating as the exclusive provider of managed services to American Bitcoin via the execution of a Master Managed Services Agreement (“MSA”). Under the MSA, we provide American Bitcoin with management, oversight, strategy, compliance, operational, and other services for American Bitcoin’s mining operations. These operations are colocated at our facilities and include 205 MW of energy capacity under management currently deployed at our Vega site. The fee structure typically consists of (i) a fixed fee of $1.250/kW-month based on the power capacity of each facility, as well as (ii) designated site level reimbursements. As American Bitcoin is a consolidated subsidiary, all fees under the MSA are eliminated in consolidation.

Digital Infrastructure

Under our ASIC infrastructure business, we enter into contracts to host and operate mining equipment on behalf of third parties within our facilities. These services include the provision, if applicable, and hosting of mining equipment as well as the monitoring, troubleshooting, repair, and maintenance of such equipment. Revenues from ASIC infrastructure services are generated through fees that may be fixed or based on profit-sharing arrangements, often with reimbursement for certain pass-through costs, such as electricity.

During the fourth quarter of 2024, our agreement with Ionic Digital Inc. (“Ionic”) to host approximately 8,500 miners (0.8 EH/s) at our Alpha site was terminated. As a result, we ceased providing ASIC infrastructure services at Alpha and utilized the site solely for self-mining purposes.

Starting April 1, 2025, we began operating as the exclusive provider of ASIC infrastructure services to American Bitcoin via the execution of a Master Colocation Services Agreement (“CSA”). Under the CSA, we provide ASIC infrastructure services for American Bitcoin’s miners at our facilities. The fee structure typically includes (i) a fixed monthly fee that targets a 25% yield on cost of each facility as of the start of the specific service order under the CSA, subject to an annual increase, as well as (ii) infrastructure-related site level reimbursements. As American Bitcoin is a consolidated subsidiary, all fees under the CSA are eliminated in consolidation.

During 2024, we entered into an ASIC colocation contract with Bitmain Technologies Georgia Limited (“Bitmain”) to host miners at our Vega site. The agreement featured a fixed hosting fee with an option for us to purchase all or a portion of the hosted machines in up to three tranches at a fixed price within six months of energization of the relevant tranches. We completed energization of the miners during June and July 2025. In August 2025, pursuant to our Put Option Agreement with American Bitcoin entered into on March 31, 2025 (the “Put Option Agreement”), we assigned our option to purchase the hosted machines to American Bitcoin. In August 2025, American Bitcoin exercised this option to purchase all of the Bitmain miners hosted at the Vega site, where we then began to provide ASIC infrastructure services to American Bitcoin under the CSA.

Through our Hut 8 Canada business, we provide data center and cloud infrastructure services, including colocation solutions, supported by approximately 3 MW of energy capacity and more than 36,000 square feet of geo-diverse data center space across five locations in Canada. These services support customers operating compute, storage, and network workloads across traditional enterprise, B2B, machine learning, visual effects, and AI. Our CPU infrastructure offering is delivered in Mississauga, Ontario; Vaughan, Ontario; Kelowna, British Columbia; and two locations in Vancouver, British Columbia. The facilities are powered predominately by emission-free energy sources. This segment serves computing needs unrelated to ASIC Compute. These data centers are carrier neutral with network diversity and redundancy from multiple telecommunications providers.

Our CPU infrastructure business is based on a fixed-fee model. Customers pay a fixed recurring monthly fee based on a set amount of resources assigned.

We are expanding our Digital Infrastructure platform to support AI and other high-performance computing workloads through purpose-built data centers, beginning with the development of our River Bend campus in Louisiana.

Compute

Our Compute segment comprises operating businesses that deploy and monetize compute assets across next-generation energy-intensive technology end markets. We generate revenue through the operation of owned compute infrastructure and the provision of compute-based services, with economics driven by hardware utilization, operating efficiency, and market demand. The Compute business segment consists of ASIC Compute, Traditional Cloud, and AI Cloud.

ASIC Compute

The ASIC Compute segment reflects revenue generated primarily by American Bitcoin.

Our ASIC Compute business spanned five sites as of December 31, 2025, which are occupied by American Bitcoin miners and hosted at facilities supported by our ASIC Infrastructure:

• four sites with facilities we own and/or lease, and operate: (1) Alpha (Niagara Falls, New York), (2) Medicine Hat (Medicine Hat, Alberta), (3) Salt Creek (Orla, Texas), and (4) Vega (Amarillo, Texas); and
• one site that we own through a 50% joint venture, King Mountain (McCamey, Texas).

Until April 30, 2024, we also had ASIC Compute operations hosted at sites in Kearney, Nebraska and Granbury, Texas. We previously mined Bitcoin at a site in Drumheller, Alberta, which has been non-operational since March 2024 due to lack of profitability driven primarily by elevated energy costs and underlying voltage issues.

Bitcoin rewards are received from mining activity through third-party mining pool operators, which allow miners to combine their processing power, increasing their chances of solving a block and getting paid by the network. We provide computing power to mining pools, which use this computing power to operate nodes and validate blocks on the blockchain. The pools then distribute our pro-rata share of Bitcoin mined to us based on the computing power we contribute.

During February and March 2025, our mining activity was reduced due to a planned fleet upgrade, which was completed on April 4, 2025. The fleet upgrade resulted in higher efficiency Antminer S21+ miners at our Salt Creek and Medicine Hat sites, which improved ASIC Compute operations.

On March 31, 2025, we launched American Bitcoin. Beginning April 1, 2025, ASIC Compute operations previously reported under our Compute segment remain under this segment but operate generally through our majority-owned subsidiary, American Bitcoin.

On August 5, 2025, pursuant to the Put Option Agreement, we assigned our option to purchase up to approximately 17,280 Bitmain Antminer U3S21EXPH ASIC miners (collectively, the “Bitmain Miners”), representing a total of approximately 14.86 EH/s, to American Bitcoin. American Bitcoin exercised the option on August 5, 2025 and entered into an On-Rack Sales and Purchase Agreement (the “ABTC Bitmain Purchase Agreement”) with Bitmain to purchase the Bitmain Miners in one or more tranches for a total purchase price of up to approximately $320.0 million, not including any applicable tariffs, duties or similar charges.

Concurrently with the execution of the ABTC Bitmain Purchase Agreement, American Bitcoin purchased 16,299 of the Bitmain Miners, representing a total of approximately 14.02 EH/s, for a total purchase price of approximately $314 million, paid through the pledge of Bitcoin at a mutually agreed upon fixed price. Such purchase price was reduced by the application of a deposit and certain expenses of approximately $46.0 million we previously paid to Bitmain. American Bitcoin repaid the $46 million in October 2025, pursuant a pledge of additional Bitcoin to Bitmain at a mutually agreed upon fixed price, where upon Bitmain refunded the $46.0 million comprising of the deposit and certain expenses to us satisfying American Bitcoin’s repayment obligation. In September 2025, American Bitcoin purchased the remaining 981 Bitmain Miners for a total purchase price of $18.9 million, also paid through the pledge of Bitcoin at a mutually agreed upon fixed price. The Bitcoin pledged under the ABTC Bitmain Purchase Agreement has a redemption period of approximately 24 months from each pledge date.

Traditional Cloud

Our Traditional Cloud segment reflects revenue generated by Hut 8 Canada. Traditional Cloud services support both public and private cloud deployments, managed backup, business continuity and disaster recovery services, and high-performance, high-capacity storage solutions at our five HPC locations across Canada. We employ a consumption-based fee structure where customers commit to a baseline level of compute, storage, network, or power usage as defined in their service agreements. Any usage beyond this baseline is typically billed incrementally, so costs are aligned with actual resource consumption and customers are afforded flexibility as their needs evolve.

AI Cloud

Our AI Cloud assets are deployed under our wholly owned subsidiary, Highrise AI, Inc., at a third-party colocation site near Chicago, Illinois. This segment generates recurring revenue through payments made by the provider to us based on fixed infrastructure payments and a revenue share tied to AI Cloud utilization.

Other

Our Other reporting segment includes activities that fall outside the scope of our Power, Digital Infrastructure, and Compute layers.

Equipment Sales and Repairs

We may sell mining equipment when profitable opportunities arise (e.g., if market prices exceed our procurement cost). We may also repair miners for third parties in exchange for a fee, as we have a fully equipped, MicroBT-certified repair center space at our Medicine Hat site.

Results of Operations

Twelve Months Ended December 31, 2025 and 2024

Adjusted EBITDA reconciliation:

(1) Net of the accretion of fair value differences of depreciable and amortizable assets included in equity in earnings of unconsolidated joint venture in the Consolidated Statements of Operations and Comprehensive Income (Loss) in accordance with ASC 323. See Note 11. Investment in unconsolidated joint venture of the consolidated financial statements included elsewhere in this Annual Report for further detail.

(2) Non-recurring transactions for the twelve months ended December 31, 2025 represent approximately $8.7 million of American Bitcoin-related transaction costs, $1.1 million of Far North transaction costs, and $0.4 million in restructuring costs, offset by a $17.6 million sales tax refund. Non-recurring transactions for the twelve months ended December 31, 2024 represent approximately $4.0 million of restructuring costs and $1.9 million related to the Far North transaction costs, offset by a $13.5 million contract termination fee received from MARA, and a $2.2 million tax refund.

Revenue

Total revenue was $235.1 million and $162.4 million for the twelve months ended December 31, 2025, and 2024 respectively, and consisted of Power, Digital Infrastructure, Compute, and Other.

Power

Power revenue was $23.2 million and $56.6 million for the twelve months ended December 31, 2025 and 2024, respectively. This $33.4 million decrease was primarily driven by a $40.8 million decrease in Managed Services revenue due to the $13.5 million in contract termination fees received from MARA Holdings in the prior year period, as well as the termination of the managed services agreement with Ionic in December 2024. This decrease was partially offset by a $7.4 million increase in electricity sales through the Far North JV due to growth in electricity demand during 2025. We also generate intercompany revenue under the MSA between us and American Bitcoin, which is eliminated upon consolidation.

Digital Infrastructure

Digital Infrastructure revenue was $9.6 million and $17.5 million for the twelve months ended December 31, 2025 and 2024, respectively. This $7.9 million decrease was primarily driven by (i) a $7.6 million decrease in ASIC infrastructure revenue as a result of the termination of our colocation agreement with Ionic during the fourth quarter of 2024, and (ii) a $0.3 million decrease in CPU infrastructure revenue due to customer churn. We also generate intercompany revenue under the CSA between us and American Bitcoin, which is eliminated upon consolidation.

Compute

Compute revenue was $202.3 million and $80.7 million for the twelve months ended December 31, 2025 and 2024, respectively, representing an increase of $121.6 million year over year. This increase was primarily driven by (i) a $115.4 million increase in ASIC Compute revenue, largely attributable to an increase in the average revenue per Bitcoin mined from $60,436 to $103,647 and an increase in Bitcoin mined from 1,184 to 1,803. The increase in Bitcoin mined was primarily due to improved uptime following the fleet upgrade completed in April 2025 at the Salt Creek and Medicine Hat locations and the commencement of ASIC Compute revenue through American Bitcoin mining at the Vega site in August 2025, and (ii) a $7.4 million increase in revenues from our AI Cloud offering, driven by a full year of sales activity in 2025. These increases were partially offset by a $1.2 million decrease in Traditional Cloud revenue due to customer churn.

Other revenue was nil and $7.6 million for the twelve months ended December 31, 2025 and 2024, respectively. This decrease was primarily driven by (i) a $7.4 million decrease in equipment sales revenue, and (ii) equipment repair services revenue that was lower by $0.2 million.

Cost of Revenue

Total cost of revenue was $107.8 million and $86.7 million for the twelve months ended December 31, 2025, and 2024, respectively, and consisted of Power, Digital Infrastructure, Compute, and Other.

Power

Power cost of revenue was $20.5 million and $21.5 million for the twelve months ended December 31, 2025 and 2024, respectively. This $1.0 million decrease was primarily driven by a $9.2 million decrease in cost of revenue related to the termination of the managed services agreement with Ionic in December 2024. This decrease was partially offset by a $8.2 million increase in cost of revenue related to electricity sales through the Far North JV due to growth in electricity demand during 2025.

Digital Infrastructure

Digital Infrastructure cost of revenue was $8.9 million and $15.6 million for the twelve months ended December 31, 2025 and 2024, respectively. This $6.7 million decrease was primarily driven by a $7.5 million decrease in ASIC infrastructure-related costs as a result of the termination of our colocation agreement with Ionic during the fourth quarter of 2024. This decrease was partially offset by a $0.8 million increase in cost of sales related to CPU infrastructure operations, including rent, electricity, and connectivity costs.

Compute

Compute cost of revenue was $78.4 million and $45.0 million for the twelve months ended December 31, 2025 and 2024, respectively. This $33.4 million increase was primarily driven by (i) a $32.2 million rise in ASIC Compute costs due to higher uptime as a result of the fleet upgrade that was completed in April 2025 at the Salt Creek and Medicine Hat sites, as well as the energization of the Vega site in June 2025, and (ii) a $2.2 million increase in costs related to AI Cloud offerings due to having a full year of activity in 2025. These increases were partially offset by a $1.1 million decrease in Traditional Cloud costs due to customer churn.

Other cost of revenue was nil and $4.6 million for the twelve months ended December 31, 2025 and 2024, respectively. This $4.6 million decrease was primarily driven by (i) a $4.2 million decrease in equipment sales costs, and (ii) a $0.4 million decrease in costs related to our equipment repair services.

Depreciation and amortization

Depreciation and amortization expense was $101.9 million and $47.8 million for the twelve months ended December 31, 2025 and 2024, respectively. This $54.1 million increase was primarily driven by (i) a $35.5 million increase in depreciation of American Bitcoin’s ASIC miners as a result of the fleet upgrade that was completed in April 2025 at our Salt Creek and Medicine Hat sites, as well as American Bitcoin’s purchase of the Bitmain Miners at the Vega site in August 2025, (ii) an $11.5 million increase in depreciation of our mining infrastructure and related machinery and equipment related to the construction and energization of our Vega site in June 2025, and (iii) a $6.6 million increase in depreciation of our AI GPUs primarily related to a full year of ownership in 2025 compared to only a partial year in 2024.

General and administrative expenses

General and administrative (“G&A”) expenses were $122.8 million and $72.9 million for the twelve months ended December 31, 2025, and 2024, respectively. This $49.9 million uptick in G&A expenses was primarily driven by (i) a $37.0 increase in share based payments, (ii) an $11.2 million growth in salary and benefit expenses due to added headcount to support our growth initiatives, (iii) a $9.5 million increase in transaction costs related to the ABTC Merger, and (iv) a $6.5 million increase in general, marketing, travel, and other expenses in line with the rise in headcount to support our growth initiatives. These increases were partially offset by a $17.8 million decrease in sales tax expenses as we received a $17.8 million sales tax refund in Canada in December 2025 related to sales taxes paid in 2024 and prior periods.

Loss (gain) on digital assets

Loss on digital assets was $220.0 million for the twelve months ended December 31, 2025, compared to a gain on digital assets of $509.3 million for the twelve months ended December 31, 2024. The year-over-year unfavorable variance was primarily driven by a decrease in the price of Bitcoin, which declined from approximately $93,354 as of December 31, 2024 to approximately $87,498 as of December 31, 2025.

Other income (expense)

Other income was $22.2 million for the twelve months ended December 31, 2025, compared to other expense of $8.6 million for the twelve months ended December 31, 2024. This $30.8 million increase was primarily driven by (i) a $54.8 million increase in gain on derivatives related to our Bitcoin redemption option and call options, (ii) an $8.4 million increase in foreign exchange gain, (iii) a $1.0 million increase in gain on other financial liability, and (iv) a $0.4 million increase in gain on warrant liability. These gains were partially offset by (i) a $22.8 million increase in asset contributions costs related to the launch of American Bitcoin, (ii) a $6.0 million decrease in gain on debt extinguishment, (iii) a $3.1 million decrease in gain on bargain purchase related to the Far North JV acquisition in the prior period, (iv) a $1.6 million decrease in equity in earnings of unconsolidated joint venture, and (v) a $0.3 million decrease in interest expense due to lower interest rates on our outstanding debt.

Income tax benefit (provision)

Income tax benefit was $51.8 million for the twelve months ended December 31, 2025, compared to income tax provision of $113.5 million for the twelve months ended December 31, 2024. The income tax benefit for the twelve months ended December 31, 2025 was primarily driven by deferred tax impacts related to unrealized losses on digital assets, compared to an income tax provision for the twelve months ended December 31, 2024 that resulted from deferred tax impacts associated with unrealized gains on digital assets.

Loss from discontinued operations

Loss from discontinued operations was nil and $7.0 million for the twelve months ended December 31, 2025 and 2024, respectively. On March 6, 2024, we announced that we would cease operations at our Drumheller site in Alberta, Canada in connection with restructuring and optimization initiatives designed to strength financial performance. Of the $7.0 million loss related to the closure of our Drumheller site, the impairment of the long-term assets contributed $6.1 million and $3.2 million was from other operational activities. These losses were partially offset by a tax benefit of $2.3 million.

Twelve Months Ended December 31, 2024 and 2023

Adjusted EBITDA reconciliation:

(1) Net of the accretion of fair value differences of depreciable and amortizable assets included in equity in earnings of unconsolidated joint venture in the Consolidated Statements of Operations and Comprehensive Income (Loss) in accordance with ASC 323. See Note 11. Investments in unconsolidated joint venture of our Consolidated Financial Statements for further detail.

(2) Non-recurring transactions for the twelve months ended December 31, 2024 represent approximately $4.0 million of restructuring costs and $1.9 million related to the Far North transaction costs, offset by a $13.5 million contract termination fee received from MARA, and a $2.2 million tax

refund. Non-recurring transactions for the twelve months ended December 31, 2023 represent approximately $9.6 million related to a sales tax accrual and $2.4 million of transaction costs related to the Business Combination, partially offset by a gain from a legal settlement of $1.5 million.

Revenue

Total revenue was $162.4 million and $96.0 million for the twelve months ended December 31, 2024, and 2023, respectively, and consisted of Power, Digital Infrastructure, Compute, and Other.

Power

Power revenue was $56.6 million and $22.8 million for the twelve months ended December 31, 2024 and 2023, respectively. This $33.8 million increase was primarily driven by (i) a $13.5 million contract termination fee received from MARA, (ii) a $11.4 million increase in electricity sales through the Far North JV assets, which we acquired in February 2024, and (iii) an $8.9 million increase in Managed Services revenue related to the managed services agreement with Ionic, which was entered into during January 2024 and terminated effective December 2024.

Digital Infrastructure

Digital Infrastructure revenue was $17.5 million and $8.3 million for the twelve months ended December 31, 2024 and 2023, respectively. This $9.2 million increase was primarily driven by (i) a $5.2 million increase in CPU infrastructure revenue, reflecting a full year of revenue recognition following the Business Combination, and (ii) a $4.0 million increase in cost reimbursements related to the Ionic colocation agreement.

Compute

Compute revenue was $80.7 million and $64.9 million for the twelve months ended December 31, 2024 and 2023, respectively. This $15.8 million increase was primarily driven by (i) a $7.3 million increase in ASIC Compute revenue, largely due to an increase in the average revenue per Bitcoin mined from $30,398 to $60,436, partially offset by a decrease in Bitcoin mined, due to an increase in network difficulty and the Halving event (we mined 1,184 Bitcoin during the twelve months ended December 31, 2024 versus 2,138 Bitcoin mined during the twelve months ended December 31, 2023), (ii) a $6.7 million increase in recurring Traditional Cloud revenue, reflecting a full year of Traditional Cloud operations during twelve months ended December 31, 2024 compared to one month of Traditional Cloud operations following the Business Combination, and (iii) a $1.8 million contribution from our AI Cloud offering, which launched in September 2024.

Other revenue was $7.6 million and nil for the twelve months ended December 31, 2024 and 2023, respectively. This increase was primarily driven by (i) a $7.4 million increase in Equipment Sales revenue, reflecting higher demand for mining-related infrastructure, and (ii) a $0.2 million increase in Equipment Repair service revenue.

Cost of revenue

Total cost of revenue was $86.7 million and $54.2 million for the twelve months ended December 31, 2024, and 2023, respectively, and consisted of Power, Digital Infrastructure, Compute, and Other.

Power

Power cost of revenue was $21.5 million and $7.3 million for the twelve months ended December 31, 2024 and 2023, respectively. This $14.2 million increase was primarily driven by (i) a $12.8 million increase in cost of revenue related to the Far North JV assets, which were acquired in February 2024, and (ii) a $1.4 million increase in operating costs related to the managed services agreement with Ionic, which was terminated effective December 2024.

Digital Infrastructure

Digital Infrastructure cost of revenue was $15.6 million and $4.3 million for the twelve months ended December 31, 2024 and 2023, respectively. This $11.2 million increase was primarily driven by (i) a $7.5 million increase in colocation-related costs as a result of eleven months of costs related to the Ionic colocation agreement during 2024 compared to five months of costs during 2023, and (ii) a $3.8 million increase in cost of sales related to CPU infrastructure operations, including rent, electricity, and connectivity costs, reflecting a full year of operations subsequent to the Business Combination.

Compute

Compute cost of revenue was $45.0 million and $42.6 million for the twelve months ended December 31, 2024 and 2023, respectively. This $2.4 million increase was primarily driven by (i) a $5.5 million increase in Traditional Cloud costs, reflecting a full year of Traditional Cloud operations during twelve months ended December 31, 2024 compared to one month of Traditional Cloud operations during twelve months ended December 31, 2023 following the Business Combination, and (ii) a $1.0 million increase in costs related to our AI Cloud offering, which launched in September 2024. These increases were partially offset by $4.1 million decrease in ASIC Compute costs due to fleet relocation from higher cost hosted to lower cost self-mining sites and the deployment of Reactor, our proprietary energy curtailment software.

Other cost of revenue was $4.6 million and nil for the twelve months ended December 31, 2024 and 2023, respectively. This $4.6 million increase was primarily driven by (i) a $4.5 million increase in equipment sales costs as a result of the increased volume of equipment sold, and (ii) $0.1 million in costs related to our equipment repair service.

Depreciation and amortization

Depreciation and amortization expense was $47.8 million and $17.5 million for the twelve months ended December 31, 2024 and 2023, respectively. This $30.3 million increase was primarily driven by (i) higher depreciation from assets acquired in the Business Combination as we recognized twelve months of combined company depreciation in 2024 compared to one month of combined company depreciation in 2023, (ii) depreciation related to the Far North JV transaction, which was completed in February 2024, (iii) depreciation as a result of the development of the Salt Creek site, which went live in April 2024, and (iv) depreciation from the newly acquired assets related to our AI Cloud operations.

General and administrative expenses

G&A expenses were $72.9 million and $49.1 million for the twelve months ended December 31, 2024 and 2023, respectively. This $23.8 million increase was primarily driven by (i) a $10.6 million increase in salary and benefits due to twelve months of combined company expenses in 2024 compared to one month of combined company expenses in 2023 (our number of employees increased from 108 employees as of November 30, 2023, the date of the Business Combination, to 220 employees as of December 31, 2024), (ii) a $7.2 million increase in stock-based compensation due to new restricted stock unit and performance stock unit grants to retain and incentivize our talent, partially offset by no restricted stock award activity in 2024 compared to $8.5 million of restricted stock activity in 2023, (iii) a $3.9 million increase in restructuring expenses related to the Business Combination, and (iv) a $1.9 million increase in costs related to Far North JV acquisition.

Gains on digital assets

Gains on digital assets were $509.3 million and $32.6 million for the twelve months ended December 31, 2024 and 2023, respectively. This increase was due to the increased Bitcoin prices as of December 31, 2024 compared to the prior year period. The price of Bitcoin as of December 31, 2024 was approximately $93,354 compared to $42,288 as of December 31, 2023.

Other expense (income)

Other expense was $8.6 million for the twelve months ended December 31, 2024 compared to other income of $12.6 million for the twelve months ended December 31, 2023. This $21.2 million increase was primarily driven by (i) a $17.7 million decrease in gain on debt extinguishment related to the Anchorage debt-to-equity conversion of $6.0 million in 2024, compared to $23.7 million debt extinguishment related to the NYDIG loan recorded in 2023, (ii) a $3.6 million increase in interest expense due to an increase in the amount of borrowing in 2024 compared to 2023, which comprised of the $150.0 million Coatue note and the additional $15.0 million drawdown from our loan with Coinbase, (iii) a $6.0 million increase in foreign exchange loss due to our net U.S. dollar monetary liability position in our Canadian dollar functional currency subsidiaries and a decline in the Canadian dollar to U.S. dollar exchange rate of approximately 8% compared to a 2% increase during the twelve months ended December 31, 2023 (the increase noted in the prior period is for the period from the Business Combination to December 31, 2023, reflecting one month of combined company results), and (iv) a $2.0 million decrease in equity in earnings of King Mountain JV due to the impact of the Halving on ASIC Compute revenue. These increases were partially offset by (i) a $7.3 million gain on derivatives due to an increase in the mark-to-market value of our call options and Bitcoin redemption option, and (ii) a $3.1 million gain on bargain purchase related to the Far North JV acquisition driven by the fair value of the net assets acquired being greater than the consideration transferred.

Income tax provision

Our income tax provision was $113.5 million and $0.2 million for the twelve months ended December 31, 2024 and 2023, respectively. This $113.3 million increase was primarily due to $93.0 million in deferred taxes related to the gain on the fair value of our Bitcoin holdings, in addition to higher taxable income for the twelve months ended December 31, 2024.

Six Months Ended December 31, 2023 and 2022

Adjusted EBITDA reconciliation:

(1) Net of the accretion of fair value differences of depreciable and amortizable assets included in equity in earnings of unconsolidated joint venture in the Consolidated Statements of Operations and Comprehensive Income (Loss) in accordance with ASC 323. See Note 11. Investment in unconsolidated joint venture of the Consolidated Financial Statements for further detail.

(2) Non-recurring transactions for the six months ended December 31, 2023 represent approximately $2.4 million of transaction costs related to the Business Combination and $9.6 million related to a sales tax accrual.

Revenue

Total revenue for the six months ended December 31, 2023 and 2022 was $59.9 million and $46.0 million, respectively, consisting of Power, Digital Infrastructure, Compute, and Other.

Power

Power revenue was $12.6 million for the six months ended December 31, 2023, consisting of (i) $9.6 million in fees from Managed Services and (ii) $3.0 million in cost reimbursements. Power revenue was $2.6 million for the six months ended December 31, 2022, primarily consisting of (i) $1.5 million in managed service fees and (ii) $1.1 million in cost reimbursements. We began our Managed Services offerings for third parties in November 2022; therefore, the six months ended December 31, 2023 reflects a full period of activity related to Managed Services, whereas the comparative period of the six months ended December 31, 2022 reflects less than two months of activity. The six months ended December 31, 2023 also includes revenue from an interim Managed Services agreement with Celsius Mining LLC, which was signed in December 2023.

Digital Infrastructure

Digital Infrastructure revenue was $5.8 million and $14.0 million for the six months ended December 31, 2023, and 2022, respectively. Revenue for the six months ended December 31, 2023 primarily consisted of (i) hosting services revenue from our Alpha site and (ii) one month of recurring CPU infrastructure revenue as a result of the Business Combination. Revenue for the six months ended December 31, 2022 consisted of $14.0 million of hosting services revenue. During six months ended December 31, 2022, one of our hosting customers defaulted on its contract, resulting in contract termination without a refund obligation for prepaid amounts. This resulted in the recognition of $13.1 million in remaining deferred revenue related to this customer.

Compute

Compute revenue consisted of ASIC Compute revenue of $41.3 million and $25.7 million for the six months ended December 31, 2023 and 2022, respectively. This was primarily driven by (i) an increase in the average price per Bitcoin mined and (ii) one month of combined company activity after the Business Combination. The average revenue per Bitcoin mined was approximately $33,331 as of December 31, 2023 compared to approximately $20,218 as of December 31, 2022. This was partially offset by a decrease of approximately 29 Bitcoin mined, exclusive of our net share of the King Mountain JV, period over period due to increased Bitcoin network difficulty.

Other revenue was $0.1 million and $3.6 million for the six months ended December 31, 2023 and 2022, respectively. Other revenue for the six months ended December 31, 2023 consisted of $0.1 million in equipment repair services revenue. Other revenue for the six months ended December 31, 2022 consisted of $3.6 million in equipment sales revenue.

Cost of revenue

Power

Cost of revenue for Power for the six months ended December 31, 2023 and 2022 were $3.4 million and $1.1 million, respectively, primarily consisting of reimbursable payroll and other site operating costs. The increase in costs is primarily attributable to the full six months of activity in the 2023 period compared to only two months of activity related to Managed Services in the 2022 period.

Digital Infrastructure

Cost of revenue for Digital Infrastructure for the six months ended December 31, 2023 and 2022 were $4.3 million and $0.4 million, respectively, primarily driven by an increase in the cost of hosting services, including power costs, at our Alpha site due to an increase in hosted miners at the site.

Compute

Cost of revenue for Compute for the six months ended December 31, 2023 and 2022 were $26.0 million and $23.2 million, respectively, driven primarily by a 46% increase in electricity utilized, partially offset by a lower average power rate during the period ($61.17 compared to $73.95 for the six months ended December 31, 2023 and 2022, respectively).

Other

Cost of revenue for Other for the six months ended December 31, 2023 was less than $0.1 million due to low activity, as there were no equipment sales. Cost of revenue for Other for the six months ended December 31, 2022 was $3.1 million due to the cost of mining equipment sold.

Depreciation and amortization

Depreciation and amortization expense was $10.6 million and $11.8 million for the six months ended December 31, 2023 and 2022, respectively. The decrease in depreciation and amortization expense was primarily driven by the lower net book value of plant and equipment after the recognition of a non-cash impairment charge during the six months ended December 31, 2022 as part of annual impairment testing, partially offset by property and equipment acquired as part of the Business Combination.

General and administrative expenses

G&A expenses were $37.5 million and $10.6 million for the six months ended December 31, 2023 and 2022, respectively. The increase in G&A expenses was driven by (i) a $9.0 million increase in stock-based compensation due to certain stock options granted and restricted stock awards that were accelerated upon the closing of the Business Combination and certain stock options and restricted stock awards that were issued and immediately vested before the closing of the Business Combination, (ii) a $3.7 million increase in salary and benefit costs due to the headcount increasing from 49 to 208 employees as part of the Business Combination and to support the our growth, and (iii) a $9.6 million sales tax provision from a non-recurring state tax accrual related to a facility build out. G&A expenses for the six months ended December 31, 2023 also include one-time transaction costs of $2.4 million primarily related to the Business Combination.

Gains on digital assets

Gains on digital assets were $32.6 million and nil for the six months ended December 31, 2023 and 2022, respectively. The increase was due to our early adoption of ASU 2023-08 for the six months ended December 31, 2023, which requires us to recognize our digital assets at fair value with changes recognized in net income during the reporting period.

Impairment of long-lived assets

Impairment of long-lived assets, including right-of-use assets, was nil and $63.6 million for the six months ended December 31, 2023 and 2022, respectively. During the six months ended December 31, 2022, adverse changes in the business climate, including decrease in the price of Bitcoin to approximately $16,530 as of December 31, 2022, and the resulting decrease in the market price of miners and mining equipment, indicated that an impairment triggering event had occurred. Testing performed indicated that the estimated fair value of our miners, mining equipment, and other mining operation assets were less than their net carrying value as of December 31, 2022. An impairment charge of approximately $63.6 million was recognized, decreasing the net carrying value of these assets to their estimated fair value.

Other expense

Other expense totaled $4.5 million for the six months ended December 31, 2023 compared to $15.2 million for the six months ended December 31, 2022. The decrease of $10.7 million was primarily driven by a $6.7 million increase in equity in earnings of our unconsolidated joint venture and a decrease of $3.0 million in interest expense driven by the NYDIG debt restructuring in February 2023.

Income tax benefit

Our income tax benefit was $0.4 million and $1.8 million for the six months ended December 31, 2023 and 2022, respectively. This $1.4 million decrease was primarily due to lower taxable income for the six months ended December 31, 2023 compared to the prior period.

King Mountain JV

The King Mountain JV is a 50% joint venture with one of the world’s largest renewable energy producers. The King Mountain JV has 280 MW of behind-the-meter self-mining and hosting operations located at a wind farm in McCamey, Texas.

As of December 31, 2025, the King Mountain JV owned approximately 18,000 miners for self-mining (about 1.8EH/s) and hosted approximately 56,562 miners (about 10.2 EH/s) for a single hosting customer at its King Mountain site, which has a total capacity of 280 MW.

We account for the King Mountain JV using the equity method of accounting, resulting in reporting the King Mountain JV as an unconsolidated joint venture. Additionally, our 50% portion of any distributions from the King Mountain JV are used to pay down the TZRC Secured Promissory Note. See Note 11. Investment in unconsolidated joint venture and Note 15. Loans, notes payable, and other financial liabilities to the consolidated financial statements found elsewhere in this Annual Report for additional information on the King Mountain JV and TZRC Secured Promissory Note.

Below are the condensed consolidated income statements for the King Mountain JV for the twelve months ended December 31, 2025 and December 31, 2024, and the six months ended December 31, 2023 and December 31, 2022.

Condensed Consolidated Income Statement

Our board of directors and management team also evaluate Adjusted EBITDA for the King Mountain JV, which is a non-GAAP financial measure. We define Adjusted EBITDA as net income (loss) before depreciation and amortization and interest income. We use Adjusted EBITDA to assess the King Mountain JV’s financial performance because it allows us to compare the operating performance on a consistent basis across periods by removing the effects of the King Mountain JV’s capital structure.

Net income (loss) is the GAAP measure most directly comparable to Adjusted EBITDA. This non-GAAP financial measure should not be considered as an alternative to the most directly comparable GAAP financial measure. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in such presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. There can be no assurance that we will not modify the presentation of Adjusted EBITDA in the future, and any such modification may be material. Adjusted EBITDA has important limitations as an analytical tool and you should not consider Adjusted EBITDA in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA may be defined differently by other companies in our industry, our definition of this non-GAAP financial measure may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.

Liquidity and Capital Resources

Our primary sources of liquidity include our cash and cash equivalents, debt facilities, Bitcoin on our balance sheet, equity sales, and the cash flows generated from operations. We are exploring additional financing structures, including the use of project-level financing, to finance our development initiatives, including infrastructure build outs. Under our lease agreement with Fluidstack, we are required to build and deliver a data center with 245 MW IT capacity in phases with initial delivery targeted for Q2 2027. We have partnered with Jacobs and Vertiv to build the data center at a cost of $9-$11 million per MW.

Historically, our primary cash needs have been for working capital to support growth initiatives, including infrastructure purchases and development, acquisitions, and equipment financing, including the purchase of additional Bitcoin miners. Going forward, we will continue to prioritize infrastructure development while our ASIC compute operations will mainly be conducted through American Bitcoin, our consolidated subsidiary. In addition to equipment financing for the purchase of additional Bitcoin miners, American Bitcoin’s primary cash needs are to support its Bitcoin accumulation efforts, including at-market purchases of Bitcoin.

In June 2025, we amended our Credit Agreement with Coinbase to, among other things, amend and increase available capacity under the credit facility from $65.0 million to up to $130.0 million. In August 2025, we borrowed the remaining $65.0 million of the available capacity. In December 2025, we further amended the Coinbase Credit Agreement to increase the facility from $130.0 million to $200.0 million and borrowed an additional $70.0 million.

As of December 31, 2025, we had access to $200.0 million from the Two Prime Credit Agreement. We did not draw on this facility during the twelve months ended December 31, 2025.

On August 22, 2025, we established our $1.0 billion 2025 ATM, which replaced our prior $500 million 2024 ATM program that launched on December 4, 2024. As of August 22, 2025, prior to its termination, we had issued and sold shares under the 2024 ATM for gross proceeds of $299.4 million at a weighted average price of $27.83 per share. For reference, our average share price from commencement of the 2024 ATM until August 22, 2025 was $18.61 per share. As of December 31, 2025, we issued and sold 4,020,630 shares under the 2025 ATM for gross proceeds of $183.4 million at a weighted average issuance price of $45.62 per share.

On September 3, 2025, American Bitcoin established a $2.1 billion at-the-market equity program (the “American Bitcoin 2025 ATM”). As of December 31, 2025, American Bitcoin issued and sold 65,485,198 shares of Class A common stock under the American Bitcoin 2025 ATM for gross proceeds of $240.5 million at a weighted average issuance price per share of $3.67.

Our ability to meet our anticipated cash requirements will depend on various factors including our ability to maintain our existing business, enter into new lines of business, provide new offerings, compete with existing and new competitors in existing and new markets and offerings, acquire new businesses or pursue strategic transactions, access public and private capital markets, and respond to global and domestic economic, geopolitical, social conditions and their impact on demand for our offerings.

We believe that cash flows generated from operating activities, Bitcoin held on our consolidated balance sheet, and other financings will be sufficient to meet our anticipated short-term cash requirements. With respect to the construction of our River Bend data center facility, we currently expect to fund our capital expenditures through a combination of cash and Bitcoin on our balance sheet and project-level financing of up to 85% LTC, which is expected to be underwritten by J.P. Morgan, as lead left arranger, and Goldman Sachs, each anticipated to serve as a loan underwriter, subject to the negotiation and execution of definitive transaction agreements and the satisfaction of customary closing conditions. On a long-term basis, we plan to rely on access to public and private capital markets for any long-term funding not provided by operating cash flows, cash on hand, Bitcoin on our consolidated balance sheet, and debt and project financing.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

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Operating Activities

Net cash used in operating activities was $139.2 million for the twelve months ended December 31, 2025, resulting from net loss of $248.0 million, offset by adjustments to reconcile net income to net cash used in operating activities of $159.6 million and changes in assets and liabilities of $50.8 million. Net cash used in operating activities was $68.5 million for the twelve months ended December 31, 2024, resulting from net income of $331.4 million, offset by adjustments to reconcile net income to net cash used in operating activities of $385.5 million and changes in assets and liabilities of $14.4 million.

Investing Activities

Net cash used in investing activities totaled $754.2 million for the twelve months ended December 31, 2025, primarily consisting of (i) $405.1 million in Bitcoin purchases by American Bitcoin for its strategic reserve, (ii) $202.9 million in property and equipment purchases primarily related to Vega and River Bend construction, (iii) $162.7 million in deposits for future site land and infrastructure purchases, (iv) $25.0 million in purchases of other digital assets, and (v) $14.0 million in deposits paid to purchase miners and mining equipment. These outflows were partially offset by (i) $46.0 million in cash received from the Bitmain deposit refund, (ii) $5.9 million in proceeds from the sale of property and equipment, and (iii) $3.7 million in proceeds from the sale of digital assets. Net cash provided by investing activities totaled $188.5 million for the twelve months ended December 31, 2024, primarily consisting of (i) $124.0 million in property and equipment purchases, (ii) $100.7 in Bitcoin purchases for our strategic reserve, and (iii) a $39.6 million deposit for acquiring miners. These inflows were partially offset by $74.5 million in proceeds from the sale of Bitcoin.

Financing Activities

Net cash provided by financing activities was $856.1 million for the twelve months ended December 31, 2025, primarily consisting of (i) $314.4 million in net proceeds from the issuance of common stock through our 2024 ATM and 2025 ATM, (ii) $237.7 million in net proceeds from the issuance of American Bitcoin’s Class A common stock through the American Bitcoin 2025 ATM, (iii) $205.3 million in net cash proceeds from the issuance and sale of American Bitcoin’s Class A common stock through a Common Stock Purchase Agreement for a private placement with certain accredited investors, and (iv) $135 million in proceeds under the Coinbase Credit Agreement. These inflows were partially offset by $45.6 million in loan repayments. Net cash provided by financing activities was $311.9 million for the twelve months ended December 31, 2024, primarily consisting of (i) $150.0 million in net proceeds from notes payable from the Coatue note, (ii) $162.0 million in net proceeds from the issuance of common stock through our 2024 ATM, and (iii) $22.2 million in net proceeds from covered call options premiums.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, as well as related disclosures. We evaluate our estimates and assumptions on an ongoing basis and base them on historical experience and other factors we believe to be reasonable under the circumstances. Because these estimates involve judgments about future events and are inherently uncertain, actual results may differ materially from those estimates. Changes in these estimates or assumptions could have a material impact on our results of operations, financial position, and statement of cash flows.

While our significant accounting policies are described in more detail in Note 2, Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements, included elsewhere in this Annual Report, we believe the following accounting policies and estimates are most critical to understanding and evaluating this management discussion and analysis:

Digital Assets

Accounting for digital assets requires significant judgment, including classification, measurement, presentation, and the determination of fair value. Digital assets pledged as collateral, including under arrangements with Bitmain, require additional judgment in evaluating the appropriate accounting treatment, including whether such assets remain recognized on our Consolidated Balance Sheets. Pledged digital assets remain recognized because we retain ownership and continue to be exposed to changes in market value.

Stock-Based Compensation

We recognize compensation expense for all stock-based payment awards made to employees, directors, consultants, and service providers, if any, including incentive stock options, non-qualified stock options, stock awards, and stock units based upon the estimated grant-date fair value of the awards. For more complex performance awards, including awards with market-based performance conditions, we employ a Monte Carlo simulation valuation method to calculate the fair value of the awards based on the most likely outcome. Under the Monte Carlo simulation, a number of variables and assumptions are used including, but not limited to, the expected stock price volatility over the term of the award, the risk-free rate, and dividend yield, if any.

Finite-Lived Intangible Assets

We evaluate the useful lives of our intangible assets to determine if they are finite or indefinite-lived. Reaching a determination on useful life requires significant judgments and assumptions regarding the future effects of obsolescence, demand, competition, and other economic factors. Finite-lived intangible assets are amortized over their estimated useful lives and evaluated for impairment at least annually, or when events or changes in circumstances indicate that their carrying amounts may not be recoverable. Determining useful lives and assessing recoverability require management judgment and the use of estimates, including assumptions regarding future cash flows and economic conditions. Changes in these assumptions could materially affect amortization expense or result in impairment charges in future periods.

Tariff Risk

Changes in government and economic policies, incentives, trade regulations, or tariffs may have a material impact on equipment that we import. While the final scope, timing, and application of recently announced or proposed changes in U.S. trade policy remain uncertain, increases in tariffs on imported equipment, as well as the potential imposition of retaliatory tariffs by foreign jurisdictions, could materially increase our equipment and infrastructure costs or limit the availability of certain components. Such developments could adversely affect our ability to procure equipment on a timely basis or at cost-effective levels, which in turn may impact project timelines, capital expenditures, and operating margins. We continuously monitor developments in trade policy and may adjust our procurement strategies, sourcing arrangements, or deployment plans in response to such changes; however, there can be no assurance that such actions will fully mitigate the impact of adverse tariff or trade policy developments.

Foreign Exchange Risk

Foreign exchange risk arises from fluctuations in currency exchange rates that impact our results of operations, financial position, and cash flows. A portion of our operations is conducted through Hut 8 Canada, and we incur operating expenses, capital expenditures, and other costs denominated primarily in Canadian dollars, while our reporting currency is the U.S. dollar. In addition, a significant portion of our Bitcoin holdings are held by our Canadian subsidiary.

Changes in the U.S. dollar and Canadian dollar exchange rate may affect the U.S. dollar value of our operating costs, capital expenditures, intercompany balances, and the translation of the financial results and Bitcoin holdings of Hut 8 Canada into U.S. dollars for financial reporting purposes. Adverse movements in foreign exchange rates could increase our costs or reduce reported revenues, asset values, and earnings. While we may seek to manage foreign exchange exposure through operational strategies from time to time, we do not currently engage in foreign currency hedging activities and therefore remain exposed to fluctuations in exchange rates.

Market Price Risk of Bitcoin

We hold a significant amount of Bitcoin; therefore, we are exposed to the impact of market price changes in Bitcoin.

As of December 31, 2025, we held 15,679 Bitcoin, comprising 10,278 Bitcoin held by Hut 8 and 5,401 Bitcoin held by American Bitcoin. Based on a fair value of approximately $87,498 per Bitcoin, the aggregate fair value of these holdings as of December 31, 2025 was approximately $1.37 billion. Declines in the fair market value of Bitcoin will impact the cash value that would be realized if we were to sell our Bitcoin for cash, therefore having a negative impact on our liquidity.

Custodian Risk

Our Bitcoin is held with third-party custodians, Coinbase Custody, NYDIG, Anchorage, and BitGo, which we select based on various factors, including their financial strength and industry reputation. Custodian risk refers to the potential loss, theft, or misappropriation of our Bitcoin assets due to operational failures, cybersecurity breaches, or financial difficulties experienced by these third parties. Although we periodically monitor the financial health, insurance coverage, and security measures of our custodians, reliance on such third parties inherently exposes us to risks that we cannot fully mitigate.

Credit Risk

Credit risk arises from our practice of pledging Bitcoin as collateral in transactions with counterparties. We mitigate this risk by engaging with counterparties that we believe possess strong creditworthiness based on their size, credit quality, and reputation, among other factors. During the twelve months ended December 31, 2025, we have not incurred any material loss from such transactions. However, there remains a risk that a counterparty could default on its obligations to us, which might result in a material loss. We continually assess the credit risk associated with our counterparties and, if necessary, recognize a loss provision or write-down. Credit risk also arises from us placing our cash and demand deposits in financial institutions. Although we strive to limit our exposure by placing cash and demand deposits with financial institutions with a high credit standing, there can be no assurances that we are able to mitigate our credit risk. In addition, we are exposed to credit risk associated with the creditworthiness of our customers and other counterparties, as non-performance or financial deterioration of these parties could adversely impact cash flows and liquidity.

Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

We have one loan that maintains a variable interest rate, the TZRC Secured Promissory Note, which includes a maximum interest rate of 15.25%. As a result, changes in market interest rates could affect our operations over certain periods and may also impact our ability to finance projects. For more information regarding the TZRC Secured Promissory Note, see Note 15. Loans, notes payable, and other financial liabilities to the consolidated financial statements included elsewhere in this Annual Report.

We also earn interest income on the cash balances at variable rates. Changes in the short-term interest rates are not expected to have a material impact on the fair value of our cash balances.

We may enter into project-level financing arrangements that include floating rate components, including rates based on a Secured Overnight Financing Rate benchmark. To the extent that we enter into such arrangements, our exposure to interest rate variability could increase. We may seek to manage a portion of this exposure through the use of financial hedging instruments; however, such instruments may not be available on acceptable terms, may not be effective in mitigating interest rate risk, or may introduce additional risks.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(e) under the Exchange Act, as of the end of the period covered by this Annual Report.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2025, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the specified time periods, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Management has assessed the effectiveness of the Company’s internal control over financial reporting for the year ended December 31, 2025, based on the criteria set forth in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Under the supervision and participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our internal control over financial reporting based on the framework set forth in Internal Control - Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission. Our management concluded that our internal control over financial reporting was effective as of December 31, 2025. Management reviewed the results of its assessment with our Audit Committee.

The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by KPMG LLP, our independent registered public accounting firm, as stated in its report which is included in Part II, Item 8 of this Annual Report.

Remediation of Previously Reported Material Weaknesses

As previously reported in our Annual Report on Form 10-K for fiscal year ended December 31, 2024, we identified material weaknesses in internal control over financial reporting. The material weaknesses were related to (i) inadequate review of the calculation of the deferred tax provision for Bitcoin held in an international jurisdiction and (ii) inadequate review of a complex accounting transaction related to our Bitmain miner purchase agreement. While these material weaknesses did not result in a material misstatement of our financial statements, there was a reasonable possibility that these material weaknesses could have resulted in a material misstatement in our annual or interim consolidated financial statements that would not be detected.

With respect to the material weaknesses above, management, under the oversight of the Audit Committee, completed the remediation activities over the twelve months ended December 31, 2025, which included (i) replacing our third-party advisor who prepared and supported our review of the deferred taxes calculation with an advisor who has additional expertise in calculating deferred income taxes in the international jurisdictions in which we operate, (ii) replacing our third-party advisor who supported our review of the Bitmain miner purchase agreement with an advisor who has additional expertise in Bitcoin-related transactions, and (iii) designing and implementing enhanced controls related to the review of certain of our third-party advisors’ evaluation of tax provision and certain complex accounting transactions. During the twelve months ended December 31, 2025, we completed our testing of the operating effectiveness of internal controls impacted by these remediation efforts and determined the material weaknesses have been remediated as of December 31, 2025.

Changes in Internal Control Over Financial Reporting

Except for the material weaknesses remedial measures described above, there have been no changes in our internal control over financial reporting during the quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Internal Controls

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness for future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. No evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.