AIB Data Centers Inc.: Form 10-Q for the period ended Mar 31, 2026

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025. This discussion contains forward-looking statements that are based on current expectations, estimates, and assumptions and involve risks and uncertainties, including, but not limited to, our plans, objectives, expectations, and intentions. Actual results and the timing of events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K.

We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements. Such statements speak only as of the date of this Quarterly Report on Form 10-Q, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

All dollar amounts referred to in this discussion and analysis are expressed in United States dollars, except where otherwise indicated. References in this section to “we,” “our,” “us,” “BlockchAIn,” and the “Company” generally refer to BlockchAIn Digital Infrastructure, Inc. and its consolidated subsidiaries, which include One Blockchain LLC, One Blockchain Nolan LLC (a wholly-owned subsidiary of One Blockchain LLC), and Signing Day Sports, Inc. (which became a wholly-owned subsidiary on March 16, 2026 in connection with the Business Combination described below).

Our management’s discussion and analysis of financial condition and results of operations is intended to assist readers in understanding our financial information from our management’s perspective and is presented as follows:

• Overview
• Recent Developments
• Results of Operations
• Non-GAAP Financial Measures
• Liquidity and Capital Resources
• Critical Accounting Policies and Estimates
• Recent Accounting Pronouncements

Overview

BlockchAIn is engaged in data center operations, digital asset infrastructure services and providing hosting services for digital asset mining operators. The Company primarily operates a 40 megawatt (“MW”) data center facility in Spartanburg County, South Carolina, providing power infrastructure, hosting services, and equipment leasing to customers engaged in blockchain computing, artificial intelligence (“AI”), and high-performance data processing.

The Company’s core operations include hosting services and the leasing of space, power capacity and equipment within its data center facility to customers requiring computing power.

Industry Overview

The global data center industry has experienced sustained growth over the past decade as enterprises increasingly rely on digital infrastructure to support cloud computing, data-intensive applications, and the continued growth of internet traffic. Organizations are generating and processing significantly larger volumes of data while simultaneously adopting distributed IT architectures designed to improve scalability, performance and resiliency.

A growing number of organizations are transitioning toward outsourcing their data center requirements to third-party providers in order to reduce capital expenditures, increase operational flexibility, and gain access to specialized infrastructure and connectivity ecosystems. Carrier-neutral multi-tenant data centers (“MTDCs”), which provide colocation space, power, cooling, physical security, and access to multiple network providers and cloud platforms, have become an increasingly important component of global digital infrastructure.

More recently, the rapid adoption of artificial intelligence, machine learning and other high-performance computing workloads has begun to materially increase demand for data center capacity capable of supporting high-density computing environments. These workloads require substantial power availability, advanced cooling systems and highly reliable infrastructure, which has increased the importance of purpose-built facilities designed to support higher power densities.

Management believes that several long-term industry trends — including enterprise digital transformation, the continued growth of cloud computing, increasing demand for interconnection between digital platforms, and the emergence of AI-driven workloads — are expected to continue driving demand for outsourced data center infrastructure. Management believes the Company’s operational capabilities and infrastructure position it to participate in the growing demand for data center capacity in its markets.

Expansion Opportunities

We continually evaluate opportunities to leverage our existing data center assets to support artificial intelligence, high-performance computing (“HPC”) and other emerging data-intensive computing workloads. Strategically, we will continue to look at attractive opportunities to grow our market share and selectively improve our footprint and offerings. Our expansion criteria depend on a number of factors, including but not limited to demand from new and existing customers, power availability and capacity, quality of design, access to networks, clouds and software partners, capacity availability in the current market location, the amount of incremental investment required, automation capabilities, developer talent pool, lead-time to break even on a free cash flow basis and in-place customers. Depending on the circumstances, these transactions may require additional capital expenditures funded by upfront cash payments or through long-term financing arrangements. Property expansion may take the form of purchases of real property, long-term leasing arrangements or acquisitions, and may be completed by us or with partners or potential customers in order to minimize cash outlay.

Growth Strategy

Our growth strategy focuses on transitioning from a primarily hosting-based model to expanding our owned and operated infrastructure and diversifying into HPC markets to enhance revenue generation and profitability.

Key Factors Affecting Our Financial Performance

Market Price of Digital Assets

Our customers who operate in our data center are heavily dependent on the spot price of bitcoin. The prices of digital assets, specifically bitcoin, have experienced substantial volatility, meaning that high or low prices may have little or no relationship to identifiable market forces, may be subject to rapidly changing investor sentiment, and may be influenced by factors such as technology, regulatory void or changes, fraudulent actors, manipulation, and media reporting. Bitcoin (as well as other digital assets) may have value based on various factors, including their acceptance as a means of exchange by consumers, scarcity and market demand .

Our financial performance and continued growth depend in large part on our customers’ ability to mine for digital assets profitably and on our ability to attract customers for our digital asset hosted mining services. Increases in power costs or the inability of our customers to mine digital assets efficiently and to sell digital assets at favorable prices will reduce customer operating margins, may impact our ability to attract customers and could have a material adverse effect on our business, financial condition and results of operations. While historical trends suggest increasing adoption of digital assets and blockchain technology, historical trends are not indicative of future adoption, and adoption may slow, take longer to develop or never be broadly adopted.

Business Mix Shift to HPC

The planned growth of our HPC data center hosting operations, through increased investment in conversion of our existing sites to HPC capacity over the next several years, is expected to gradually reduce our overall exposure to volatility in the spot price of bitcoin as HPC begins to account for a larger percentage of our financial results. The HPC data center hosting business is generally characterized by long-term contracts with customers, providing more stable and predictable revenue and cash flows over each period.

Electricity Costs

Electricity cost is the largest operating cost for the hosting services provided to customers. The cost and availability of electricity are affected primarily by changes in seasonal demand, with peak demand during the summer months driving higher costs and increased curtailments to support grid operators. Severe winter weather can increase the cost of electricity and the frequency of curtailments when it results in damage to power transmission infrastructure that reduces the grid’s ability to deliver power. Geopolitical and macroeconomic factors, such as overseas military or economic conflict, can adversely affect electricity costs by raising the cost of power generation inputs such as natural gas. Other events outside our control can also impact electricity costs and availability.

Our Competition and Customers

The success of our HPC hosting business depends on our ability to retain and develop opportunities with existing customers, secure additional infrastructure and attract new customers. Our business environment is constantly evolving, and we face significant competition in every aspect of our business, including the acquisition of new miners, the ability to raise capital, obtaining low-cost electricity, obtaining access to sites with reliable sources of high power, and evaluating new technology developments in the industry.

In hosting services we compete with other providers of high-power data center capacity, including major data center real estate investment trusts (“REITs”), data center developers, hyperscalers and bitcoin miners with capacity suitable for HPC hosting. This competition focuses primarily on the identification and acquisition of new, high-power sites, and includes competition for the capital required to build or modify existing sites to support HPC hosting. The modification of our existing data centers to accommodate HPC hosting also requires the procurement of critical equipment, technologies and skilled labor that are in high demand from other entities seeking to address the same market opportunity.

We believe that our operational high-power data center capacity, together with the experience, knowledge, capabilities and relationships of our development and operations team, position us to address the current strong demand for HPC capacity.

Recent Developments

Business Combination with Signing Day Sports, Inc.

On May 27, 2025, the Company entered into the BCA with Signing Day Sports, as amended on November 10, 2025 and as further amended on December 22, 2025.

Effective March 16, 2026 (the “transaction date”), the Company and SGN completed the business combination under the BCA. Following the closing, the Company is the parent entity of both SGN and One Blockchain LLC, and the Company commenced trading on the NYSE American on March 17, 2026 under the ticker symbol “AIB.”

The Business Combination was accounted for as a reverse merger. Refer to Note 4 for the impact of the BCA on the condensed consolidated financial statements.

Antbox Asset Acquisition

In May 2025, VCV Digital Infrastructure Holdings, a related party, entered into a purchase agreement to acquire 100% of the equity interest in Blue Ridge Digital Mining, making it a wholly-owned subsidiary. Concurrently with that transaction, the Company entered into a Purchase and Sale Agreement with Blue Ridge Digital Mining to acquire 60 Antbox containers for total contractual consideration of $2,332,000, payable in 24 equal monthly installments of $97,167 beginning August 15, 2025 and ending July 15, 2027. This transaction allowed the Company to restructure its tenancy composition and agreements to optimize profitability and to diffuse customer concentration credit risk by diversifying beyond a single anchor tenant. Management has concluded that the transaction qualifies as an asset acquisition under U.S. GAAP, as substantially all of the fair value is concentrated in a group of similar tangible assets (Antbox containers) based on valuations determined using the cost approach.

Asset Optimization and Container Sales

During the first quarter of 2025, the Company completed the sale of all remaining modular mining containers. These assets had previously been classified as held for sale, and their disposition reflected the Company’s focus on streamlining operations and reallocating resources toward core infrastructure.

Utility Cost Management and True-Up Adjustments

The Company procures electricity through a local utility provider and is subject to an annual true-up process that reconciles estimated energy costs with actual consumption and final rates. Management must estimate the true-up accrual at each reporting period, which directly impacts cost of revenues. This estimate involves significant judgment, particularly in forecasting usage patterns, rate changes, and timing of adjustments. The annual true-up credit or charge is typically invoiced in Q3 of the following year.

The true-up expense was $262,906 for the three months ended March 31, 2026 and a reduction in expense of $291,717 for the three months ended March 31, 2025. The true-up estimated cost accrual was $734,325 as of March 31, 2026 which is comprised of $471,329 related to the estimated true-up as of December 31, 2025 and the estimated true-up of $262,906 recorded as of March 31, 2026. Since the true-up credit or charge had not yet been received, there had not yet been an actual true-up credit adjustment or charge for the three months ended March 31, 2026 or 2025. Other costs included in cost of revenues include fees for network services and water fees.

Results of Operations

Three Months Ended March 31, 2026 and 2025

Revenues

Revenue for the three months ended March 31, 2026 was $4.9 million, an increase of $0.4 million, or 9%, from $4.5 million for the three months ended March 31, 2025. The increase reflects a change in the customer mix following the Company’s diversification beyond a single anchor tenant, partially offset by capped energy usage and curtailment credits arising from standstill arrangements with the Company’s primary historical customer, Blue Ridge Digital Mining, which reduced billable usage of the Company’s services.

Costs and Operating Expenses

Cost of revenue and gross margin. The largest components of our cost of revenues are utility-related expenses, including electricity, bandwidth access and other infrastructure costs. Cost of revenues totaled $4.3 million for the three months ended March 31, 2026, an increase of $1.0 million, or 30%, compared to $3.3 million for the three months ended March 31, 2025.

Gross profit declined to $0.6 million for the three months ended March 31, 2026, compared to $1.2 million for the same period in 2025, a decrease of approximately $0.6 million. Gross margin decreased to approximately 12% for the three months ended March 31, 2026 from approximately 27% for the same period in 2025. Fluctuations in gross profit are largely affected by two principal factors:

1. Pricing. The average effective billing rate can fluctuate due to competitive pricing adjustments in alignment with contract provisions, bitcoin prices, and the evolving mix of customer contracts. However, the average effective billing rate per kWh remained relatively consistent period over period from approximately $0.063 in Q1 2025 to approximately $0.064 in Q1 2026.

2. Energy costs. While the average effective billing rate remained relatively consistent, the Company’s average per-kWh energy procurement cost increased from approximately $0.046 in Q1 2025 to approximately $0.056 in Q1 2026 under the terms of the Company’s existing energy supply agreement.

The decrease in gross profit was primarily attributable to increased energy costs, which were not able to be passed through to customers. The decrease in gross profit was partially offset by a modest year-over-year increase in billable energy volume. Total energy volume billed to customers increased to approximately 77 GWh for the three months ended March 31, 2026 from approximately 72 GWh for the three months ended March 31, 2025.

Operating expenses. Total costs and operating expenses were $5.2 million for the three months ended March 31, 2026, or 106% of total revenues, compared to $4.1 million, or 91% of total revenues, for the three months ended March 31, 2025. The increase of $1.1 million, or 27%, was primarily attributable to a $1.0 million increase in cost of revenues reflecting higher per-kWh energy costs and slightly higher billable volume.

Operating (Loss) / Income

Operating loss was $0.3 million for the three months ended March 31, 2026, compared to operating income of $0.4 million for the three months ended March 31, 2025, a swing of approximately $0.7 million. The change was primarily driven by the gross-margin compression discussed above.

Other Income

There was a small amount of other income for the three months ended March 31, 2026 consisting of interest income, compared to other income of $0.1 million for the three months ended March 31, 2025 primarily attributable to the gain on disposal of assets held for sale recognized during the three months ended March 31, 2025.

Net (Loss) / Income

Net loss was $0.3 million for the three months ended March 31, 2026, compared to net income of $0.5 million for the three months ended March 31, 2025, a swing of approximately $0.8 million from net income to net loss, driven by the items discussed above.

Adjusted EBITDA

Adjusted EBITDA is a key factor in how we assess the operating performance of our data center and develop our growth strategies and expansion decisions. We define Adjusted EBITDA as net income or loss excluding income tax expense, interest income, interest expense, other income and expense items, gain or loss on asset sales, depreciation, amortization and transaction costs, as presented below:

Adjusted EBITDA for the three months ended March 31, 2026 was a loss of $0.2 million, a decrease of $1.0 million, or 119%, from Adjusted EBITDA of $0.8 million for the three months ended March 31, 2025.

Non-GAAP Financial Measures

Non-GAAP financial measures are not a substitute for financial information prepared in accordance with U.S. GAAP. Non-GAAP financial measures should not be considered in isolation, but should be considered together with the most directly comparable GAAP financial measures and the reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures. We have presented Adjusted EBITDA to provide investors with an additional tool to evaluate our results of operations in a manner that focuses on what management believes to be our core, ongoing business operations. We believe the inclusion of this non-GAAP financial measure allows for meaningful comparisons between the Company’s core business operating results and those of other companies and provides the Company with an important tool for financial and operating decision-making and for evaluating its core business operating results over different periods of time.

Investors should note that the non-GAAP financial measure used by us may not be the same, or calculated in the same manner, as similarly titled measures of other companies. Investors should therefore exercise caution when comparing our non-GAAP financial measures to similarly titled measures of other companies.

Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to operating income or any other measure of performance derived in accordance with GAAP. Although management utilizes and presents Adjusted EBITDA, we do so only supplementally and do not consider it a substitute for, or superior to, the information provided by GAAP financial results. Adjusted EBITDA is not meant to be considered in isolation and should be read in conjunction with the consolidated financial statements.

We exclude depreciation and amortization from Adjusted EBITDA because they do not reflect our current or future cash spending levels to support our business and are based on the estimated useful lives of our data center assets, which estimates may vary from actual performance. We also exclude gain or loss on asset sales as it represents profit or loss not meaningful in evaluating current or future operating performance. Additionally, we exclude transaction costs and reimbursement transaction costs, which relate to costs incurred in connection with business combinations and the transaction with Signing Day Sports, including advisory, legal, accounting, valuation and other professional or consulting fees, to enhance comparability of our financial results with our historical operations. The frequency and amount of such charges vary significantly based on the size and timing of the transactions. Future transaction costs will depend on the Company executing additional transactions, which cannot be anticipated or estimated.

Liquidity and Capital Resources

The Company manages its liquidity through a combination of operating cash flows and related-party financing arrangements. The Company also maintains flexibility through related-party arrangements, including a non-interest-bearing loan receivable from VCV Digital and a standby letter of credit secured by a related party to support energy procurement obligations. Prior to the Business Combination with Signing Day Sports, Inc. on March 16, 2026, the Company also managed liquidity through member contributions; following the closing of the Business Combination, the Company has access to the public capital markets as a NYSE American-listed registrant.

Management believes that the combination of expected operating cash flows, available related-party support, and access to capital markets will be adequate to meet the Company’s obligations and planned expenditures for the foreseeable future.

Cash Flows:

Comparison of Cash Flows for the Three Months Ended March 31, 2026 and 2025

Cash was $1.3 million as of March 31, 2026, compared to $0.2 million as of March 31, 2025, an increase of approximately $1.1 million. The increase reflected the net impact of the following cash flow activities:

Operating activities. Net cash provided by operating activities was $1.3 million for the three months ended March 31, 2026, compared to net cash provided by operating activities of $0.4 million for the three months ended March 31, 2025, an increase of $0.9 million. The majority of cash provided by operating activities was due to a decrease in accounts receivable of $1.0 million. Although the Company recorded a net loss of $0.3 million in the current period compared to net income of $0.5 million in the prior-year period, operating cash flow also benefited from approximately $0.7 million of non-cash consulting and advisory share consideration recorded in connection with the Business Combination.

Investing activities. There was $0.3 million in cash provided by investing activities for the three months ended March 31, 2026, compared to net cash provided by investing activities of $0.1 million for the three months ended March 31, 2025. Cash provided in the current period is due to the cash acquired in reverse merger. The prior period reflected $0.1 million of proceeds from the sale of assets previously classified as held for sale; there were no material investing transactions during the current period.

Financing activities. Net cash used in financing activities was $0.3 million for the three months ended March 31, 2026, compared to net cash used in financing activities of $0.4 million for the three months ended March 31, 2025. The current period reflected $0.3 million of repayments of consideration payable. The prior-year period reflected $0.7 million of distributions, partially offset by $0.3 million of contributions.

Related-Party Transactions

We engage in various transactions with related parties in the ordinary course of business. During the reporting periods, the Company reimbursed an affiliate for administrative and operational expenses incurred on its behalf. The Company also maintained a loan receivable from VCV Digital, used to support surety bond and letter of credit requirements. The loan is non-interest-bearing and is considered fully collectible based on the collateral structure and the financial condition of the borrower.

The Company also has receivables from and payables to other affiliated entities arising from operational activities. These balances are expected to be settled in the ordinary course of business.

Management monitors related-party balances and transactions to ensure transparency and compliance with applicable accounting standards. All related-party transactions are disclosed in the condensed consolidated financial statements and are reviewed periodically for appropriateness and collectability.

Recently Issued and Proposed Accounting Pronouncements

For information on new accounting pronouncements and the impact of these pronouncements on our condensed consolidated financial statements, see Note 2 – “Summary of Significant Accounting Policies” in the notes to our condensed consolidated financial statements.

Critical Accounting Estimates

We describe our most significant accounting policies in Note 2, “Summary of Significant Accounting Policies” in the notes to the condensed consolidated financial statements. We have identified the policies below as those that require significant judgments, assumptions and estimates and that have a significant impact on our financial condition and results of operations. These policies are considered critical because they may result in fluctuations in our reported results from period to period due to the significant judgments, estimates and assumptions about complex and inherently uncertain matters, and because the use of different judgments, assumptions or estimates could have a material impact on our financial condition or results of operations. We evaluate our critical accounting estimates on an ongoing basis and update them as appropriate based on changing conditions.

Utility True-Up Adjustment

The Company procures electricity through a local utility provider and is subject to an annual true-up process that reconciles estimated energy costs with actual consumption and final rates. Management must estimate the true-up accrual at each reporting period, which directly impacts cost of revenues. This estimate involves significant judgment, particularly in forecasting usage patterns, rate changes and the timing of adjustments.

Emerging Growth Company and Smaller Reporting Company Status

As an emerging growth company under the JOBS Act, we can take advantage of an extended transition period for complying with new or revised accounting standards. We may elect to avail ourselves of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we may adopt the new or revised standard at the time private companies adopt it, until such time that we either irrevocably elect to opt out of the extended transition period or no longer qualify as an emerging growth company. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

Subject to certain conditions set forth in the JOBS Act, if, as an emerging growth company, we choose to rely on such exemptions, we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, or (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of CEO compensation to median employee compensation. We will continue to remain an emerging growth company until the earliest of: (i) the last day of the fiscal year following the fifth anniversary of the date of our first sale of common equity securities pursuant to an effective registration statement; (ii) the last day of the fiscal year in which our total annual gross revenue is equal to or more than $1.235 billion; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer as defined in Rule 12b-2 under the Exchange Act.

We are also a smaller reporting company as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’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 our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls and Procedures

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2026. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were not effective due to two material weaknesses that have been identified by management. Specifically, it was determined that we had inadequate segregation of duties within accounting processes due to limited personnel and we had insufficient written policies and procedures for accounting, IT and financial reporting and record keeping. Following the completion of the Business Combination in March 2026, management has begun to address these issues.

Changes in Internal Control Over Financial Reporting

During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.