Keel Infrastructure Corp.: Form 10-Q for the period ended Mar 31, 2026

I. OVERVIEW

1. Introduction

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) for Keel Infrastructure Corp. (together with its subsidiaries, “we”, “our”, the “Company” or “Keel”) should be read in conjunction with our unaudited condensed consolidated financial statements and its accompanying notes for the three months ended March 31, 2026 (the “Q1 2026 Financial Statements”) included elsewhere in this Quarterly Report on Form 10-Q (referred to herein as this “Quarterly Report”) and with our audited annual consolidated financial statements and its accompanying notes for the year ended December 31, 2025 (the “2025 Annual Financial Statements”) included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “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 Quarterly Report on Form 10-Q, particularly under “Item 1A. Risk Factors” of Part II. 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.

Our Financial Statements and this MD&A are reported in thousands of U.S. dollars and U.S. dollars, respectively, except where otherwise noted.

In this MD&A, the following terms shall have the following definitions:

2. Company Overview

We are a North American digital and energy infrastructure company that develops data centers and energy infrastructure to lease for HPC and AI workloads. We have a portfolio of Infrastructure Assets, which represents a 2.2 GW power capacity pipeline, that includes owned and operated power generation facilities with collocated Bitcoin Mining data centers, established grid interconnections within the wholesale electricity market administered by PJM Interconnection in Pennsylvania, and approximately 100% renewable hydroelectric energy provided by Hydro-Québec in Québec, Canada and by Grant County Public Utility District in Washington State, United States. We are developing our Infrastructure Assets to enable HPC data center operations, with the intention of leasing capacity to hyperscalers, cloud service providers, AI companies, and enterprises under long-term contracts, and expect to continue such development in the coming years.

We maintain our legacy Bitcoin Mining operations to maximize the value of those assets. These Bitcoin Mining operations primarily comprise selling computational power that performs hashing calculations for the purpose of cryptocurrency mining in the United States, Canada and Paraguay, with operations in Paraguay concluding following the sale of our final site there on April 21, 2026. Refer to Note 8 and 21 of the Q1 2026 Financial Statements for disclosures related to discontinued operations in Paraguay and Argentina.

I. OVERVIEW (Continued)

3. Factors Affecting our Performance

Ability to Secure Low-Cost Electricity

HPC and Bitcoin Mining data centers consume large amounts of energy, primarily as a result of the computation and cooling aspects of our operations. Additional energy can represent a significant portion of total operating expenses for energy-intensive compute operations like HPC and Bitcoin Mining. Given the recent and potential future growth in energy demand, largely due to global data center development and broader electrification initiatives, we believe that access to reliable, low-cost energy will become increasingly important for both HPC data centers and Bitcoin Mining operations.

Certain governments and regulators are increasingly focused on the energy and environmental impact of data centers used for HPC and Bitcoin Mining. This has led, and could lead, to new governmental measures regulating, restricting or prohibiting the use of electricity for Bitcoin Mining and HPC, or could result in increased power costs for these types of operations.

We currently maintain a portfolio of competitively priced electrical power. However, there is no guarantee that we will be able to negotiate additional power agreements on similar terms, or at all. The price we pay for electricity depends on numerous factors including sources of generation, regulatory environment, electricity market structure, commodity prices, transmission cost allocation, instantaneous supply/demand balances, counterparty consumption and procurement methods. These factors may be subject to change over time and result in increased power costs. In addition, developments in the United States, including actions by the current U.S. administration, signal a policy shift away from supporting renewable energy which could result in fewer such projects being constructed and lead to increases in electricity prices as demand increases. There have also been legislative proposals and other legal developments targeting renewable energy and large electrical loads in certain states. Any reductions or modifications to, or the elimination of laws, programs or incentives that provide electricity to Bitcoin Mining or HPC operations, support renewable energy, or result in the implementation of more arduous requirements for renewable energy projects, could potentially limit the availability of, and increase the costs we incur for, electricity in the United States and Canada.

Competitive Environment

We expect increasing global adoption of HPC and AI use cases as existing industries incorporate AI and other compute-intensive processes and as new industries emerge. We anticipate that the use of AI will expand to a broader set of enterprises that will utilize AI to drive internal efficiencies and implement AI into their products and services. As more non-AI-native organizations across a broader spectrum of industries run training and inference workloads on their own proprietary models, and as new industries with additional HPC and AI workload demands emerge, we believe we will be well-positioned to capture those workloads at our facilities given our utility relationships and power procurement capabilities, our behind-the meter power generation experience, and our experience with grid-management and flexible load operations, among other factors. Successful acquisitions of new customers will depend on our ability to provide sufficient, cost-competitive high-uptime supply for HPC and AI compute demands, demand from end-users of AI-enabled products and services, demand from end-users for HPC workloads, our overall pricing relative to competition, and the location and efficiency of our HPC data centers. If AI and other compute-intensive use cases are not broadly adopted by enterprises to the extent we expect, or if new use cases do not emerge, our market opportunity may be smaller than we expect.

I. OVERVIEW (Continued)

3. Factors Affecting our Performance (Continued)

Competitive Environment (Continued)

We compete with a variety of Bitcoin Mining companies globally, including individual hobbyists, Mining Pools and public and private companies. We also compete with HPC data center operators, which include large and well-funded companies. We believe that, even if the price of Bitcoin decreases, the Bitcoin Mining market will continue to draw new Mining companies, potentially increasing the scale and sophistication of competition in the Bitcoin Mining industry, which could result in an increase to the global hashrate, leading to a reduction in the percentage share of the fixed Bitcoin network rewards that Bitcoin Mining companies, including Keel, would earn. We believe that the digital infrastructure sector will continue to draw companies with significant resources to dedicate to growing their HPC data center business as well as expertise in the industry, which could make it more difficult for us to be competitive, including in attracting and retaining customers.

Expansion into HPC Data Center Development and Operations

A key factor affecting our performance is our ability to expand into HPC data center development and operation. We are leveraging our existing development and operational expertise to develop HPC 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 secure and retain customers, manage capital efficiently, develop future sites, 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 data center landscape.

Market Value of Bitcoin

We primarily derive our revenues from Bitcoin Mining. We earn Bitcoin in exchange for computational power used for hashing calculations that we sell to Mining Pool operators. We currently liquidate Bitcoin earned into fiat currencies such as U.S. dollars or Canadian dollars as needed. Because the compensation received for computational power used for hashing calculations is paid in Bitcoin, our operating and financial results are tied to fluctuations in the value of Bitcoin. In addition, positive or negative changes in the global hashrate impact Mining difficulty and therefore the quantity of Bitcoin earned from our computational power used for hashing calculations, and as a result, materially affect our revenue and margins.

In a declining Bitcoin price environment, the Bitcoin Mining protocol may provide natural downside protection for low-cost Bitcoin Miners through an adjustment to the number of Bitcoin Mined. For example, when the Bitcoin price falls, the ability for higher cost Mining companies to pay their operating costs may be impacted, which in turn may lead to higher cost Mining companies switching off their operations (for example, if their marginal cost of power makes it unprofitable to continue Mining, they may exit the network). As a result, in such circumstances the global hashrate may fall, and remaining low-cost Mining companies may benefit from an increased percentage share of the fixed Bitcoin network rewards. Conversely, in a rising Bitcoin price environment, additional Mining-related equipment may be deployed by Mining companies, leading to increased global hashrate in the overall network.

I. OVERVIEW (Continued)

3. Factors Affecting our Performance (Continued)

Market Value Bitcoin (Continued)

While the total supply of Bitcoin is capped at 21 million, the price of Bitcoin fluctuates because of the dynamic nature of the market for Bitcoin. The market for Bitcoin is rapidly changing and subject to global regulatory, tax, political, environmental, cybersecurity, and market factors beyond our control. For a discussion of other factors that could lead to material adverse changes in the market value of Bitcoin, which could in turn result in substantial damage to or even the failure of our Bitcoin business, see “Item 1A. Risk Factors—Risks Related to Our Business and Operations” in our Annual Report.

Furthermore, the rewards for each Bitcoin mined are subject to “halving” adjustments at predetermined intervals. At the inception of Bitcoin, the reward for Mining each block was set at 50 Bitcoin and this was cut in half to 25 Bitcoin on November 28, 2012 at block 210,000, cut in half to 12.5 Bitcoin on July 9, 2016 at block 420,000, cut in half to 6.25 Bitcoin on May 11, 2020 at block 630,000, and cut in half again to 3.125 Bitcoin on April 19, 2024 at block 840,000. The next two halving events for Bitcoin are expected to take place in 2028 at block 1,050,000 (when the reward will reduce to 1.5625 Bitcoin), and in 2032 at block 1,260,000 (when the reward will reduce to 0.78125 Bitcoin).

Efficiency of Miners and Ability to Procure Data Center Equipment

As global Mining capacity increases, we would need to correspondingly increase our total hashrate capacity in order to maintain our proportionate share of Bitcoin network rewards to maintain the same amount of Bitcoin Mining revenue. Our Bitcoin Mining operations currently utilize the Bitmain S21 XP Miners, S21 Pro Miners, S21 Miners and T21 Miners. To remain cost competitive compared to other Mining industry participants, in addition to targeting cost effective sources of energy and operating efficient data center infrastructure, we would need to maintain an energy efficient Mining fleet, which would require capital outlays to purchase new Miners in order to make periodic upgrades to our existing Mining fleet.

As we plan to operate our facilities to support HPC and AI uses, our future performance and success will depend in part on our ability to procure latest-generation electrical, cooling, networking, and other equipment required to operate HPC data centers.

From time-to-time, disruption in global supply chains may result in shortages of advanced Mining-related equipment and HPC and AI infrastructure components that meet our standards of quality and efficiency.

II. RESULTS OF OPERATIONS

1. Production and Mining Operations1

Key Performance Indicators for HPC Data Center Projects

The following table presents our key performance indicators as of March 31, 2026 and 2025:

* The current energized capacity at the Panther Creek and Scrubgrass site of 60 MW and 63 MW, respectively, are not under an energy service agreement. The capacity is therefore excluded from Secured Gross Data Center Capacity.

Current Energized Capacity

Current Energized Capacity represents the gross power capacity provided by utilities being used at our U.S. Sites and Québec Sites.

Secured Growth Capacity

Secured Growth Capacity represents gross power capacity that is not currently available on site but for which we have executed an electric supply agreement with a utility, whereby the utility agrees to provide that power capacity at a specified future date.

Secured Gross Data Center Capacity

Secured Gross Data Center Capacity represents the total amount of gross power capacity that is subject to electric supply agreements with utilities, including both power capacity currently available on site and power capacity that utilities have agreed to deliver at a future date.

Identified Additional Gross Data Center Capacity

Gross power capacity that has not been contracted under an electric supply agreement but is currently being evaluated at the U.S. Sites and Quebec Sites. This includes capacity that is currently under utility load studies as well as potential on-site, behind-the-meter natural gas power generation at Scrubgrass.

Total Pipeline

Total Pipeline represents the sum of Secured Gross Data Center Capacity and Identified Additional Gross Capacity. This measure encompasses both committed capacity and early-stage opportunities under evaluation. Management monitors the total pipeline to understand the full spectrum of current and potential future growth and to prioritize development efforts aligned with strategic objectives.

1 Excluding discontinued operations in Rio Cuarto, Argentina, which have been abandoned due to the halting of the energy supply since May 12, 2025 and economic uncertainty in the region, and in Paso Pe, Paraguay, which met the criteria to be classified as held for sale as we make a strategic shift towards HPC data center projects in North America.

1. Production and Mining Operations1 (Continued)

Key Performance Indicators for Legacy Mining Operations

In addition to our financial results and U.S. GAAP financial measures, we use certain key performance indicators to evaluate our business, identify trends, and make strategic decisions.

The following table presents our key performance indicators for the three months ended March 31, 2026 and 2025:

* Average Watts represents the average energy consumption of deployed Miners

Total Bitcoin earned

Total Bitcoin earned represents the aggregate number of Bitcoin received in exchange from its computational power used for hashing calculations during the period. This metric is a key indicator of our operational performance and Mining productivity, as it reflects uptime, fleet efficiency, network difficulty, and deployed hashrate.

During Q1 2026, we earned 388 Bitcoin, compared to 492 Bitcoin earned during Q1 2025, representing a decrease of 21% from the prior period as a result of a 27% higher average Network Difficulty, partially offset by an increase in hashrate from our expansions and upgrades to our Miner fleet with higher efficiency Miners.

Cost per kWh

Cost per kWh represents the average electricity price incurred to power our Mining operations. This metric allows users to assess our operational energy efficiency. Power cost is a key driver of Mining profitability.

During Q1 2026 the cost per kWh was $0.058 compared to $0.047 in Q1 2025. The 24% increase is mainly due to higher cost in the United States due to higher generation costs and the acquisition of Stronghold, late in the first quarter of 2025.

1 Excluding discontinued operations in Rio Cuarto, Argentina, which have been abandoned due to the halting of the energy supply since May 12, 2025 and economic uncertainty in the region, and in Paso Pe, Paraguay, which met the criteria to be classified as held for sale as we make a strategic shift towards HPC data center projects in North America.

1. Production and Mining Operations1 (Continued)

Key Performance Indicators for Legacy Mining Operations (Continued)

Average Watts/Average TH

Average watts/Average TH measures the energy efficiency of our active Mining fleet by calculating the average power consumption in watts required to generate one TH per second of computational capacity. Lower Watts/TH indicates greater fleet efficiency, which directly impacts operating costs and Mining margins.

Ending energy efficiency remained stable at 18 Watts/TH as of March 31, 2026, compared to March 31, 2025. This stability was supported by the average efficiency also holding constant at 18 average Watts/TH across both periods.

1 Excluding discontinued operations in Rio Cuarto, Argentina, which have been abandoned due to the halting of the energy supply since May 12, 2025 and economic uncertainty in the region, and in Paso Pe, Paraguay, which met the criteria to be classified as held for sale as we make a strategic shift towards HPC data center projects in North America.

2. Financial Performance

Consolidated Financial & Operational Results

(U.S.$ in thousands except where indicated)

nm: not meaningful

The financial performance discussed below for continuing operations does not include our Argentina and Paraguay operations.

1 Excluding discontinued operations in Rio Cuarto, Argentina, which have been abandoned due to the halting of the energy supply since May 12, 2025 and economic uncertainty in the region, and in Paso Pe, Paraguay, which met the criteria to be classified as held for sale as we make a strategic shift towards HPC data center projects in North America.

2. Financial Performance (Continued)

A. Revenues from continuing operations

Q1 2026 v. Q1 2025

Revenues were $37.0 million in Q1 2026 compared to $47.7 million in Q1 2025. The decrease of $10.7 million, or 22% is mainly due to a $16.0 million decrease in Bitcoin Mining revenue resulting from the decrease in average Bitcoin price and a higher Network Difficulty. During Q1 2026, we mined 388 Bitcoins with an average Bitcoin price of $75,840, compared to 492 Bitcoins with an average Bitcoin price of $92,138 in Q1 2025. In addition, following the acquisition of Stronghold, late in the first quarter of 2025, we recorded Energy Sales for only 17 days during Q1 2025, compared to 90 days in Q1 2026, resulting in a $5.6 million increase in Energy Sales.

We earned our revenues during Q1 2026 from our North American operations. Canada and the United States accounted for 48% and 52% of total revenues, respectively, compared to 61% and 39% in Q1 2025, respectively.

In Q1 2026, revenues from our operations in Canada decreased by $11.5 million compared to Q1 2025 due to the decrease in average Bitcoin price and the increase in Network Difficulty. Revenues from our operations in the United States increased by $0.8 million compared to Q1 2025 due to the $5.6 million increase in the sale of energy in the United States, partially offset by the factors explained above.

2. Financial Performance (Continued)

B. Cost of Revenues from continuing operations

Q1 2026 v. Q1 2025

Our cost of revenues was $63.3 million for Q1 2026, compared to $47.4 million for Q1 2025. The higher cost of revenues was largely due to a $9.2 million, or 50%, increase in non-cash depreciation and amortization expenses as we added new Miners and energy infrastructure in 2025 and electrical infrastructure as well as accelerated depreciation started during the fourth quarter of 2025 as we initiated a strategic transition from Bitcoin Mining operations to HPC; and a $9.6 million, or 223%, increase in infrastructure expenses. Infrastructure expenses increased by $11.0 million in relation to the operating expenses at the Panther Creek and Scrubgrass power plants following the acquisition of Stronghold, towards the end of the first quarter of 2025. The Stronghold infrastructure expenses in Q1 2026 consisted of $3.6 million of labor costs and other employee benefits, $3.9 million of plant maintenance costs and $3.8 million of other operating expenses.

Energy expenses in Q1 2026 increased by $5.1 million, or 32%, largely due to a $6.6 million increase in electricity costs, partially offset by $3.3 million of electricity credits received through the sale of energy. In addition, fuel expenses increased by $1.9 million for the Panther Creek and Scrubgrass power plants following the acquisition of Stronghold, towards the end of Q1 2025, partially offset by renewable energy credits (“RECs”) and waste tax credits (“WTCs”) of $1.1 million and $0.8 million, respectively, in Q1 2026.

The increase was partially offset by a $7.7 million decrease in hosting expense, resulting from our Miners no longer being hosted by Stronghold subsequent to the acquisition in Q1 2025.

C. General & Administrative Expenses from continuing operations

Q1 2026 v. Q1 2025

For Q1 2026, our G&A expenses were $26.8 million, compared to $17.6 million in Q1 2025. The increase in G&A expenses of $9.2 million, or 52%, was largely due to a $6.8 million increase in professional services related to our U.S. redomiciliation, U.S. GAAP conversion, and sale of Paso Pe Bitcoin data center that was completed on April 21, 2026.

Salaries and wages increased by $3.3 million due to (i) the increase in our overall headcount in Q1 2026 compared to Q1 2025 to support the expansion in the United States as well as merit and market-based adjustments and cost of living salary increases and (ii) the salaries paid to Stronghold employees following the acquisition, towards the end of Q1 2025.

The increase was partially offset by a $1.4 million decrease in stock-based compensation due to no restricted stock units (“RSUs”) granted in Q1 2026 compared to the RSUs granted in Q1 2025 in association with the Stronghold acquisition, with the majority of Q1 2025 RSUs already being fully vested.

2. Financial Performance (Continued)

D. Total other expenses from continuing operations

Q1 2026 v. Q1 2025

Interest expense was $3.6 million in Q1 2026, compared to $0.2 million for Q1 2025. This increase was primarily attributable to the interest incurred on both the Macquarie credit facility (the “Credit Facility”) and the $588,000 aggregate principal amount of convertible senior notes (the “Convertible Notes”), which were issued in the second and fourth quarters of 2025, respectively. During Q1 2026, the Credit Facility was fully repaid for a total of $117.0 million, including interest, principal and additional base return fees, and was no longer required to have restricted cash. We recorded a total $21.6 million loss related to the termination of the Credit Facility, which included $19.9 million from the extinguishment itself and $1.7 million in transaction costs recorded in long-term deposits and other related fees. These amounts are presented within Loss on extinguishment of long-term debt in the Q1 2026 Financial Statements.

Interest income was $3.7 million for Q1 2026, compared to $0.8 million for Q1 2025. The increase was due to our higher average cash balance during Q1 2026 compared to Q1 2025.

Our other expenses were $6.2 million in Q1 2026, compared to $0.2 million in Q1 2025. The $5.9 million unfavorable change was largely due to (i) the $4.2 million provision for receivables relating to our receivable position of Bitcoin options and selling contracts held in BlockFills, which filed for bankruptcy during Q1 2026; and (ii) a $1.6 million unfavorable change in amortization of transaction costs and debt discount related to the Credit Facility and the Convertible Notes.

E. Discontinued Operations

In 2025, we began a significant transformation in our corporate strategy, pivoting away from our Latin American Bitcoin Mining operations to concentrate on the North America HPC infrastructure market. As a result of these strategic decisions, we classified certain of our Latin American assets as “held for sale” and their operations as discontinued operations.

i. Argentina’s operations as discontinued operations

During the second quarter of 2025, our energy supplier halted the supply of electricity to our Rio Cuarto, Argentina Bitcoin data center. Following this event, on August 11, 2025, we determined that we would discontinue and abandon our operations in Rio Cuarto, Argentina. We negotiated to eliminate our asset retirement obligation and reduced the reserved power to a minimum. As of September 30, 2025, our Argentina operations were abandoned and classified as a discontinued operation.

Sale of Argentina Subsidiary

On May 8, 2026, the Company entered into a definitive share purchase agreement for the sale of Backbone Argentina.

The agreement includes the transfer of all assets and liabilities of Backbone Argentina, which previously operated the Company’s Bitcoin mining data center in Rio Cuarto, Argentina. The total cash consideration to be received at closing is $0.4 million. Closing remains subject to the satisfaction of conditions precedent and is expected during the second quarter of 2026.

E. Discontinued Operations (Continued)

i. Argentina’s operations as discontinued operations (Continued)

Sale of Argentina Subsidiary (Continued)

As of March 31, 2026, Backbone Argentina asset group subject to the proposed sale agreement had a carrying value of $1.7 million in total assets (excluding cash) and $2.0 million in total liabilities recorded on the Company’s consolidated balance sheet. The impact of this transaction will be determined and recognized in the Company’s consolidated financial statements for the quarter ending June 30, 2026.

2. Financial Performance (Continued)

ii. Paraguay’s operations as discontinued operations and assets held for sale

During the first quarter of 2025, we finalized the sale of our Yguazu Bitcoin data center in Paraguay. During the third quarter of 2025, we determined that the Paso Pe Bitcoin data center met the criteria to be classified as held for sale, and all operations in Paraguay were classified as discontinued operations as we make a strategic shift towards HPC infrastructure projects in North America. The sale of the Paso Pe Bitcoin data center operations is anticipated to close within twelve months of the date the Bitcoin data center was classified as “held for sale”.

Refer to Note 8 - Assets Held for Sale and Discontinued Operations to the Q1 2026 Financial Statements for more information on the results of Argentina’s and Paraguay’s operations and the impairment loss of our Paraguay and Argentina asset groups.

During the three months ended March 31, 2026, discontinued operations in Paraguay resulted in a net loss of $13.5 million, which is largely explained by an impairment loss of $12.8 million related to the Paraguay asset group, reflecting the write-down to fair value less costs to sell during Q1 2026.

On April 21, 2026, the Company completed the sale of Paso Pe Bitcoin data center pursuant to a January 2026 definitive share purchase agreement. The transaction involved the sale of the Company’s 100% ownership stake in the Company’s subsidiary, D&N Ingeniería S.A. The total agreed purchase price is approximately $13.0 million, which was fully received as of April 21, 2026.

F. Change in fair value of digital assets

Q1 2026 v. Q1 2025

In Q1 2026, a $41.4 million loss on the change in fair value of digital assets was recognized, compared to $23.0 million in Q1 2025, primarily due to a further decline in Bitcoin prices.

G. Realized gain (loss) on sale of digital assets from continuing operations

Q1 2026 v. Q1 2025

In Q1 2026, the realized loss on disposition of digital assets amounted to $1.8 million, compared to a $5.0 million gain for Q1 2025 as a result of a lower Bitcoin average selling price, partially offset by a lower quantity of Bitcoin sold.

3. Selected Quarterly Information from Continuing Operations1

Set forth below is unaudited supplemental quarterly financial information that reflects material retrospective adjustments to our consolidated statements of operations as a result of the transition to U.S. GAAP and is intended to assist investors in evaluating our results of operations on a consistent basis across periods. This data should be read in conjunction with our unaudited condensed consolidated financial statements and audited consolidated financial statements and related notes for the relevant period. These quarterly operating results are not necessarily indicative of our operating results for a full year or any future periods.

(U.S. $ in thousands except earnings per share)

Although the Bitcoin Mining industry experiences volatility, Bitcoin prices are not generally subject to seasonality or seasonal effects. Seasonal fluctuations in energy supply, however, may impact our operations. We had operations in Québec, Canada, where power was sourced from Hydro-Québec, Hydro-Magog, Hydro-Sherbrooke and the City of Baie-Comeau. We also had operations in Washington State, United States, that were powered by the Grant County Power Utility District, as well as operations in Pennsylvania, United States, that were powered by Stronghold and the PJM Interconnection Merchant Market. Among other phenomena, changing weather in Québec (Canada), Washington State and Pennsylvania (United States) may impact seasonal electricity needs and costs. Periods of extreme cold or extreme hot weather may contribute to service interruptions in Bitcoin Mining operations. Changes to supply and/or demand of electricity may result in curtailment of electricity to our Bitcoin Mining operations.

1 This data excludes the discontinued operations in Río Cuarto, Argentina and in Paraguay. On May 12, 2025, our energy provider GMSA, halted the supply of electricity to the Company’s Rio Cuarto Bitcoin data center with energized capacity of 58 MW. On August 11, 2025, three months after being informed that electricity supply was being halted and with no path forward to resume operations in the future, the decision was made to shut down the plant, which was abandoned by September 30, 2025. Additionally, as of September 30, 2025, the Paso Pe BTC data center met the criteria to be classified as “held for sale”, and all operations in Paraguay were designated as discontinued operations as we make a strategic shift towards HPC data center projects in North America.

4. Non-GAAP and Other Financial Measures and Ratios

Non-GAAP financial measures from continuing operations1

In addition to our results determined in accordance with U.S. GAAP, we utilize a number of non-GAAP financial measures and ratios in assessing operating performance, including “EBITDA”, “EBITDA margin”, “Adjusted EBITDA” and “Adjusted EBITDA margin”. Non-GAAP measures and ratios may exclude the impact of certain items and are used internally when analyzing operating performance. The definitions of the non-GAAP measures referenced herein, and the reasons the Board and Management use such non-GAAP measures, are set forth below.

These measures are provided as additional information to supplement U.S. GAAP measures by providing further understanding of our results of operations from Management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under U.S. GAAP. Furthermore, because our calculation of these non-GAAP financial measures may differ from other companies, our presentation of these measures may not be comparable to similarly-titled measures of other companies.

The definitions and the data in the non-GAAP section exclude the discontinued operations in Rio Cuarto, Argentina and in Paraguay.

1 This data excludes the discontinued operations in Río Cuarto, Argentina and in Paraguay. On May 12, 2025, our energy provider GMSA, halted the supply of electricity to the Company’s Rio Cuarto Bitcoin data center with energized capacity of 58 MW. On August 11, 2025, three months after being informed that electricity supply was being halted and with no path forward to resume operations in the future, the decision was made to shut down the plant, which was abandoned by September 30, 2025. Additionally, as of September 30, 2025, the Paso Pe BTC data center met the criteria to be classified as “held for sale”, and all operations in Paraguay were designated as discontinued operations as we make a strategic shift towards HPC data center projects in North America.

4. Non-GAAP and Other Financial Measures and Ratios (Continued)

A. Reconciliation of Consolidated Net (loss) income from continuing operations to EBITDA and Adjusted EBITDA from Continuing Operations

EBITDA is defined as net income (loss) from continuing operations adjusted to exclude: (i) interest expense; (ii) interest income; (iii) income tax expense; and (iv) depreciation and amortization. EBITDA Margin is defined as the percentage obtained when dividing EBITDA by Revenues. EBITDA and EBITDA Margin are used to:

• Assess profitability before the impact of different financing methods, income taxes, depreciation of capital assets and amortization of intangible assets;
• Provide the users of the MD&A with additional information to assist them in understanding components of our financial results, including a more complete understanding of factors and trends affecting our performance; and
• Facilitate comparisons of cash operating performance excluding the impact of charges and credits associated with financing our operations and growth from period to period and to assist Management in preparing annual operating budgets and forecasts.

Adjusted EBITDA is defined as EBITDA adjusted to exclude: (i) stock-based compensation; (ii) realized gain and loss on disposition of digital assets; (iii) change in fair value of digital assets; (iv) impairment of long-lived assets; (v) gain on settlement of Refundable Hosting Deposits, disposition of marketable securities, gains or losses on derivative assets and liabilities ; (vi) loss on currency exchange; (vii) other expense (income); and (viii) other non-recurring items that do not reflect our core performance. Adjusted EBITDA Margin is defined as the percentage obtained when dividing Adjusted EBITDA by Revenues. Adjusted EBITDA and Adjusted EBITDA Margin are used to:

• Assess profitability before the impact of all of the items in calculating EBITDA in addition to certain other non-cash expenses;
• Provide the users of the MD&A a consistent comparable metric for profitability of our core operations across time periods; and
• Facilitate comparisons of operating performance from period to period and to assist Management in preparing annual operating budgets and forecasts.

4. Non-GAAP and Other Financial Measures and Ratios (Continued)

A. Reconciliation of Consolidated Net (loss) income from continuing operations to EBITDA and Adjusted EBITDA from Continuing Operations (Continued)

(U.S.$ in thousands except where indicated)

nm: not meaningful

17

III. LIQUIDITY AND CAPITAL RESOURCES

1. Overview

As discussed below, our current financing strategy involves (a) strategically selling the Bitcoin we earn and the Bitcoin we hold in treasury and (b) utilizing short-term debt, long-term debt and equity instruments to fund our expansion activities, operating expenses and debt service requirements. We may require additional funds to complete our 2026 growth plans as the cash flows generated from Mining activities are expected to decrease as sites are transitioned to HPC Data Centers.

2. Cash Flows

The following discussion on cash flows include the discontinued operations in Rio Cuarto, Argentina and in Paraguay. On May 12, 2025, our energy provider Generación Mediterránea S.A (“GMSA”), halted the supply of electricity to our Rio Cuarto Bitcoin data center with energized capacity of 58 MW. On August 11, 2025, three months after being informed that electricity supply was being halted and with no path forward to resume operations in the future, the decision was made to shut down the plant, which was abandoned by September 30, 2025. Additionally, as of September 30, 2025, the Paso Pe Bitcoin data center met the criteria to be classified as “held for sale”, and all operations in Paraguay were designated as discontinued operations as we make a strategic shift towards HPC infrastructure in North America. Subsequently, on April 21, 2026, we sold the Paso Pe Bitcoin data center.

Cash Flows used in Operating Activities

Q1 2026 v. Q1 2025

Cash flows used in operating activities increased by $45.8 million during Q1 2026 compared to Q1 2025. Our operating cash flows are negative as the proceeds from the Bitcoin sold from our Mining operations are classified within investing activities.

The increase in cash flows used in operating activities is driven by higher cash G&A expenses from continuing operations of $10.6 million. We incurred higher cash energy costs of $5.1 million from continuing operations during Q1 2025 due to higher electricity costs, and higher infrastructure expenses from continuing operations of $9.6 million in relation to the operating expenses at the Panther Creek and Scrubgrass power plants. In addition, during Q1 2026, we paid interest expense of $3.6 million, mainly attributable to the complete settlement of both interest and principal on the Credit Facility, compared to interest expense paid of $0.6 million during Q1 2025. Our working capital decreased by $37.6 million as explained in the Working Capital Section of this MD&A.

The increase was partially offset by net proceeds of $8.6 million received from the disposition of RECs and WTCs in Q1 2026, compared to nil in Q1 2025.

2. Cash Flows (Continued)

Cash Flows used in Investing Activities

Q1 2026 v. Q1 2025

Cash flows used in investing activities increased by $29.2 million in Q1 2026 compared to Q1 2025.

The increase in cash flows used in investing activities is driven primarily by (i) lower proceeds earned from the sale of digital assets of $32.9 million as a result of lower Bitcoin prices when selling 64 Bitcoin in Q1 2026 compared to higher Bitcoin prices when selling 428 Bitcoin in Q1 2025, (ii) higher equipment and construction prepayments for the HPC infrastructure projects of $47.4 million in Q1 2026, compared to Q1 2025, mainly driven by our focus on HPC development activities, and (iii) the benefit from $32.0 million in proceeds from the sale of the Yguazu Bitcoin data center during Q1 2025.

The increase was partially offset by the net addition of $8.8 million of PPE during Q1 2026, compared to $41.2 million for Q1 2025, as last year’s focus was investing in the acquisition of Miners and infrastructure build-out. Additionally, the acquisition of Stronghold included a $48.1 million cash payment in Q1 2025. The net cash flow impact from derivative assets and liabilities improved to $3.0 million, with net proceeds of $1.4 million received in Q1 2026, compared to net payments of $1.6 million made in Q1 2025.

Cash flows used in financing activities

Cash flows used in financing activities increased by $136.7 million from $23.6 million of cash generated for Q1 2025 to cash used of $113.1 million for Q1 2026.

Q1 2026

The cash used of $113.1 million for Q1 2026 is mainly due to the repayment of the Credit Facility.

Macquarie Loan

In April 2025, we signed the Credit Facility for up to $300.0 million with Macquarie. In October 2025, we converted the entirety of the Credit Facility into a $300.0 million project debt facility for the development of the Panther Creek property and secured at the project level with a parent company guarantee. During the year ended December 31, 2025, we drew the initial tranche of $50.0 million and the second tranche of $50.0 million for a total of $100.0 million drawn. In February 2026, the Credit Facility was fully repaid, for a total of $117.0 million, including interest, principal and additional base return fees.

2. Cash Flows (Continued)

Cash flows used in financing activities

Q1 2025

We raised $23.6 million of net proceeds from our 2024 ATM Program as discussed below.

At-The-Market Equity Offering Program

We commenced the 2024 ATM Program on March 11, 2024, by means of a prospectus supplement dated March 8, 2024 (“March Supplement”), to our short form base shelf prospectus dated November 10, 2023 (“Base Shelf”), and U.S. registration statement on Form F-10, which included a prospectus supplement related to the 2024 ATM Program.

We filed amended and restated prospectus supplements dated October 4, 2024, and December 17, 2024, providing disclosure regarding the Stronghold Transaction and amending and restating the March Supplement, to our existing $375.0 million Base Shelf, with both the Base Shelf and amended and restated prospectus supplement forming a part of our registration statement on Form F-10.

On October 7, 2025, the 2024 ATM Program was completed, as we issued a total of 165,091,099 common shares in exchange for gross proceeds of $375.0 million, receiving net proceeds of $363.2 million since the inception of the 2024 ATM Program.

3. Capital Resources

Our capital management objective is to provide financial resources that will enable us to maximize the return to our shareholders while optimizing our cost of capital and ensuring we have sufficient liquidity to fund our operating and growth activities. In order to achieve this objective, we monitor our capital structure and make adjustments as required in light of our funding requirements, changes in economic conditions, the cost of providing and the availability of financing, and the risks to which we are exposed. Our financing strategy is to maintain a flexible capital structure that optimizes the cost of capital at an acceptable level of risk, to preserve our ability to meet financial obligations as they come due, and to ensure we have sufficient financial resources to fund our organic and acquisitive growth.

Based on our current plans and business conditions, we believe that our existing cash and Bitcoin, together with cash generated from operations and our future investing and financing activities, will be sufficient to satisfy our anticipated cash requirements for the next 12 months and beyond. Our expansion into HPC/AI infrastructure development is expected to increase capital intensity and shift the timing of cash inflows relative to capital outlays.

3. Capital Resources (Continued)

In October 2025, we drew an additional $50.0 million from the Macquarie Credit Facility, bringing the total drawn to $100.0 million and completed an offering of $588.0 million aggregate principal amount of convertible senior notes which included an over allotment option by the initial purchasers to purchase $88.0 million aggregate amount of convertible senior notes. Net proceeds were approximately $569.1 million after transaction fees and approximately $69.1 million was used to fund a 125% capped call transaction. In February 2026, the Macquarie Credit Facility was fully repaid and the restricted cash balance of $57.5 million as of December 31, 2025 was no longer restricted.

On July 22, 2025, we announced that the TSX had approved a normal course issuer bid (“NCIB”), under which we may repurchase up to 49,943,031 of our common shares, representing approximately 10% of our public float as of July 14, 2025. Purchases under the NCIB commenced on July 28, 2025. All common shares purchased on the TSX or Nasdaq under the NCIB were cancelled. Following the U.S. Redomiciliation Transaction, Keel is continuing the NCIB under the same terms.

Developing and constructing data centers requires substantial up-front capital expenditures for land, substations, interconnection and specialized cooling systems, which may temporarily reduce liquidity. Although we expect to fund a portion of these expenditures through the strategic use of cash available, we may also supplement this source with external financing depending on market conditions and project timing.

We are likely to require additional capital to respond to technological advancements, competitive dynamics or technologies, business opportunities, challenges, acquisitions or unforeseen circumstances and, in either the short-term or long-term, may determine to engage in equity or debt financings. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited. In particular, the ongoing impacts of inflation and fluctuations in interest rates, global conflicts and other macroeconomic factors, including the imposition and enforceability of tariffs or other changes in trade policies and related uncertainties, have resulted in, and may continue to result in, significant disruption and volatility in the global financial markets, reducing our ability to access capital. If we are unable to raise additional funds when or on the terms desired, our business, financial condition and results of operations could be adversely affected.

3. Capital Resources (Continued)

Digital Asset Management Program

We operate a digital asset management program under which we hold Bitcoin for its intrinsic value and as a source of liquidity. We maintain internal controls over the management of our digital assets and evaluate and enhance these controls as appropriate, on a quarterly basis.

Under this program, Management is authorized to sell Bitcoin from treasury at its discretion.

The following table presents the total Bitcoin sold and proceeds in Q1 2026, which was used to fund operations and expansion plans:

(U.S. $ in thousands except where indicated)

The sale of Bitcoin as described above, while we continued to earn Bitcoin, resulted in total holdings of 2,469 BTC as of March 31, 2026, valued at approximately $168.5 million based on a Bitcoin price of approximately $68,200, as of March 31, 2026.

Bitcoin 2.1 program for digital assets management

During the third quarter of 2025, we implemented a new program, Bitcoin 2.1. Bitcoin 2.1 is a multi-strategy program that primarily sells both short and long dated out of the money calls on the Bitcoin in treasury and future Bitcoin production in order to offset Bitcoin production costs and potentially achieve higher revenues per Bitcoin sold. Bitcoin 2.1 is designed as a low-cost and low-risk funding mechanism for energy infrastructure investments and has no objective around Bitcoin accumulation. The Board authorized the risk management committee to deploy up to (i) 100% of our Bitcoin in treasury, plus (ii) three months of expected forward production calculated on a rolling basis, plus (iii) $10.0 million under Bitcoin 2.1 to be actively managed and participate in volatility-targeting strategies.

On March 16, 2026, Reliz Ltd., the operating entity of BlockFills, a Chicago-based cryptocurrency brokerage, trading platform, and liquidity provider, filed voluntary petitions for relief under Chapter 11 restructuring proceedings of the United States Bankruptcy Code. Prior to March 16, 2026, in connection with our Bitcoin option and selling contracts, we settled all outstanding contracts with BlockFills. During the three months ended March 31, 2026, we recognized a net gain of $1.9 million to close all positions and a credit loss expense for the $4.2 million receivable from BlockFills after closing the contracts.

4. Contractual Obligations

The following table presents the future principal capital payment of long-term debt and the future minimum lease payments required under non-cancellable leases as of March 31, 2026:

* Minimum lease payments include $7.8 million of payments related to leases not yet commenced and $5.7 million of imputed interest.

5. Lawsuits

Our lawsuits are summarized in Note 20 (Commitments and Contingencies) to the Q1 2026 Financial Statements.

6. Commitments

Our commitments are summarized in Note 20 (Commitments and Contingencies) to the Q1 2026 Financial Statements.

7. Contingent liability

Our contingent liability is summarized in Note 20 (Commitments and Contingencies) to the Q1 2026 Financial Statements.

8. Working Capital

(U.S. $ in thousands except where indicated)

We continue to place importance on maintaining sufficient liquidity to fund our HPC development activities. We also anticipate requiring additional funds to complete our 2026 and 2027 growth plans. As of March 31, 2026, we had working capital of $515.7 million, compared to $678.4 million as of December 31, 2025.

The decrease in working capital was largely due to our cash decreasing by $216.2 million as explained in the “Liquidity and Capital Resources” section above. Our digital assets decreased by $11.8 million, mainly due to a lower Bitcoin price as of March 31, 2026, partially offset by our Bitcoin balance increasing by 409. In addition, we had a $7.7 million decrease in RECs and WTCs derived from Stronghold’s refuse operations due to the timing of sales of credits to third parties. Additionally, assets held for sale decreased by $14.6 million mainly due to the impairment loss of $12.8 million related to the Paraguay asset group, reflecting the write-down to fair value less costs to sell during Q1 2026.

The decrease was partially offset by a $88.2 million decrease in current liabilities, mainly due to the full reimbursement of the Credit Facility with the principal amounting to $100.0 million during Q1 2026.

IV. CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We describe our most significant accounting policies in detail in Note 2 (Significant Accounting Policies) to our 2025 Annual Financial Statements (Part II, Item 8), included in the Annual Report. Management regularly evaluates its estimates and their underlying assumptions using historical experience and other factors it believes to be reasonable under the circumstances. The following select accounting policies and estimates are believed to be critical to understanding this MD&A, but are not limited to:

Estimation of useful lives of property, plant, and equipment

Property, plant and equipment are carried at cost, including directly attributable costs, less accumulated depreciation, accumulated impairment losses and any related investment grants, and include the initial estimate of the costs of dismantling and removing the item and restoring the site on which the item is located when a legal obligation exists at the time the asset is placed in service. We determine the estimated useful lives, residual values and related depreciation expense based on historical experience, anticipated usage, technological changes and replacements schedules. Determining useful lives requires judgment regarding the expected period over which the assets will provide economic benefits, and is subject to uncertainty, particularly in industries where assets may become obsolete due to technological innovation or changes in business strategy. Management periodically reviews these estimates and adjusts them when events or changes in circumstances indicate that the current estimated useful lives may no longer be appropriate, which would affect the timing and amount of depreciation expense, resulting in changes that could have a material impact on our financial results in future periods.

Impairment of long-lived assets

Our long-lived assets (including property, plant, and equipment, right-of-use assets and intangible assets with finite useful lives) are assessed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When indicators of potential impairment are present, we prepare a projected undiscounted cash flow analysis for the respective asset or asset group, and if the sum of the undiscounted cash flow is less than the carrying amount of the asset or asset group, an impairment loss is recognized equal to the excess of the carrying amount over the fair value of the asset or asset group. Impairment losses are recognized in the consolidated statements of operations in the period in which the impairment is identified and are not reversed in subsequent periods.

Indicators of impairment may include significant declines in market demand, adverse changes in business or economic conditions, technological obsolescence, or a decision to significantly modify or dispose of an asset. These estimates require significant judgment and are sensitive to changes in assumptions regarding future revenues, operating costs and market conditions. Actual future outcomes could result in different conclusions that could materially affect the consolidated financial statements.

Measurement of financial instruments

We measure certain derivative financial instruments and assets at fair value either on a recurring or non-recurring basis depending on their nature. Derivative financial instruments reflect the estimated amounts that we would receive or pay, taking into consideration counterparty risk or our credit risk, and in the case of embedded derivatives, are determined using a combination of the Monte Carlo simulation model to simulate future prices based on probability factors and the Black-Scholes Model. Derivative financial instruments include, but are not limited, to Bitcoin option and selling contracts, Bitcoin redemption options and capped calls. Changes in fair value are recognized in Loss on derivative assets and liabilities, and may have a material impact on the amounts reported in our financial statements.

V. RECENT AND SUBSEQUENT EVENTS

Our recent and subsequent events are summarized in Note 21 to the Q1 2026 Financial Statements.

We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates.

Market value and price risk of Bitcoin

We hold a significant amount of Bitcoin, and therefore are exposed to the impact of market price changes in Bitcoin. The price of Bitcoin is volatile, and is impacted by factors such as global economic conditions, regulatory developments affecting digital assets, technological changes in the blockchain ecosystem, market liquidity and shifts in investor demand. Further, the rewards for each Bitcoin mined are subject to “halving” adjustments at predetermined intervals.

As of March 31, 2026, we held 2,469 Bitcoin with a fair value of $168.5 million, reflecting a fair value of a single Bitcoin of approximately $68,200. A decline in the market price of Bitcoin could reduce the value of our digital asset holdings and negatively affect our revenue and profitability and could also reduce the amount of cash available to us upon disposition of these holdings, which may adversely affect our liquidity. A 10% increase or decrease in the market price of Bitcoin over the course of the three months ended March 31, 2026, would have increased or decreased our revenue by $3.0 million for the quarter and would have had a material effect on our total revenue as at that date.

Impact of tariffs

Changes in government and economic policies, incentives, trade regulations, or tariffs may have a material adverse impact on hardware and equipment that we import, our business, prospects, operations and financial performance. In addition to those tariffs which have already come into effect, additional tariffs and trade restrictions may be suggested in the future, which, if they were to be enacted, could further impact our business. 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, 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. Any such developments could negatively affect our overall financial performance.

Interest rate risk

We have limited exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of changes in the market interest rates on variable interest-bearing financial instruments. As of March 31, 2026, we do not use derivatives to mitigate interest rate exposures. We only hold cash and maintain our cash balance with major financial institutions that are insured by the Federal Deposit Insurance Corporation.

Disclosure Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our Management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Management, under the supervision of and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures and concluded that they were effective as of March 31, 2026.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that its objectives are met. Due to inherent limitations in all such systems, no evaluation of controls can provide absolute assurance that all control issues within a company have been detected. Accordingly, our disclosure controls and procedures are designed to provide reasonable, but not absolute, assurance that the objectives of our disclosure control system are met.

Changes in internal control over financial reporting

We did not identify any changes in our internal control over financial reporting, in connection with our evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act, that occurred during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no material changes from the risk factors set forth in Part I, Item 1A of our Annual Report. We are subject to various risks and uncertainties that could materially adversely affect our business, financial condition, results of operations, and the trading price of our common stock. You should carefully read and consider the risks and uncertainties included in the Annual Report, together with all of the other information in the Annual Report and this Quarterly Report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, and other documents that we file with the SEC. The risks and uncertainties described in these reports may not be the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business, financial condition, or results of operations.