UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2026
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 001-42780
Registrant’s telephone number: (646) 801-0779
Securities registered pursuant to Section 12(b) of the Exchange Act:
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of May 12, 2026, the registrant had 38,614,216 Ordinary Shares, $0.01 par value per share, outstanding.
TABLE OF CONTENTS
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements regarding us and our business strategies, market potential, future financial performance and other matters that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this report, including statements regarding our strategy, future financial condition, future operations, plans, objectives of management, and expected market growth, are forward-looking statements. The words “believe,” “expect,” “estimate,” “could,” “should,” “intend,” “may,” “might,” “will,” “target,” “potential,” “goal,” “objective,” “plan,” “seek,” “anticipate,” “project” and similar expressions, among others, generally identify “forward-looking statements,” which speak only as of the date the statements were made. In particular, information included under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and other sections of this report contain forward-looking statements. Where, in any forward-looking statement, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of WhiteFiber’s (as defined below) management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. Whether any such forward-looking statements are in fact achieved will depend on future events, some of which are beyond WhiteFiber’s control.
You should realize that if underlying assumptions prove inaccurate, or known or unknown risks or uncertainties materialize, our actual results and financial condition could vary materially from expectations and projections expressed or implied in our forward-looking statements. Risks and uncertainties include, but are not limited to:
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You should not place undue reliance upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this report primarily on our current expectations, estimates, forecasts and projections about future events and trends that we believe may affect our business, results of operations, financial condition and prospects. Although we believe that we have a reasonable basis for each forward-looking statement contained in this report, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur at all. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those matters discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report as well as other factors which may be identified from time to time in our other filings with the U.S. Securities and Exchange Commission, or in the documents where such forward-looking statements appear, include factors, risks, trends and uncertainties that could cause actual results or events to differ materially from those anticipated. Additional risks and uncertainties of which we are unaware, or that we currently deem immaterial, also may become important factors that affect us. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this report. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
All forward-looking statements made in this report are qualified by these cautionary statements. These forward-looking statements are made only as of the date of this report, and WhiteFiber does not undertake any obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, and changes in future operating results over time or otherwise. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.
Comparisons of results for current and any prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed as historical data.
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Item 1. Financial Statements and Supplementary Data
WHITEFIBER, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of March 31, 2026 and December 31, 2025
(Expressed in US dollars, except for the number of shares)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE (LOSS) INCOME
For the Three Months Ended March 31, 2026 and 2025
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
RetainedEarnings/(AccumulatedDeficit)
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in US dollars)
Reconciliation of cash, cash equivalents and restricted cash
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND PRINCIPAL ACTIVITIES
WhiteFiber, Inc. (“WhiteFiber” or “the Company”) is a leading provider of high-performance computing (“HPC”) data centers and cloud-based HPC graphics processing units (“GPU”) services, which we term cloud services, for customers such as artificial intelligence (“AI”) applications and machine learning (“ML”) developers. Our HPC Tier-3 data centers provide hosting and colocation services. Our cloud services support generative AI workstreams, especially training and inference. WhiteFiber ordinary shares, par value $0.01 per share (the “Ordinary Shares”), are listed on the Nasdaq Stock Market LLC (Nasdaq:WYFI). The terms “we,” “us,” “our” or the “Company” mean WhiteFiber and its consolidated or combined subsidiaries.
On August 8, 2025, we completed the initial public offering (“IPO” or “Offering”) of our Ordinary Shares at a public offering price of $17.00 per share. The Company and B. Riley Securities, Inc. and Needham & Company, LLC, as representatives of the several underwriters (the “Underwriters”), entered into an underwriting agreement (the “Underwriting Agreement”), pursuant to which the Company agreed to offer and sell, and the Underwriters agreed to purchase, 9,375,000 Ordinary Shares. The Underwriters were also granted a 30-day option (“over-allotment option”) to purchase up to an additional 1,406,250 Ordinary Shares. On September 2, 2025, the Underwriters fully exercised their option to purchase the additional 1,406,250 Ordinary Shares at the public offering price of $17.00 per share.
Prior to the consummation of the Offering, the Company entered into a contribution agreement (the “Contribution Agreement”) with Bit Digital Inc. (“Bit Digital” or “BTBT”), pursuant to which Bit Digital contributed (the “Contribution”) its HPC business through the transfer of 100% of the capital shares of its cloud services subsidiary, WhiteFiber AI, Inc. and its wholly-owned subsidiaries WhiteFiber HPC, Inc., WhiteFiber Canada, Inc., WhiteFiber Japan G.K. and WhiteFiber Iceland, ehf, to WhiteFiber in exchange for 27,043,749 ordinary shares of WhiteFiber (the “Reorganization”). Pursuant to the Contribution Agreement, the transfer was accounted for as a common control transaction immediately prior to the IPO. The Contribution became effective on August 6, 2025, when the registration statement on Form S-1, as amended (File No. 333-288650), of WhiteFiber (the “Registration Statement”) was declared effective by the SEC. WhiteFiber AI became a wholly-owned subsidiary of WhiteFiber, Inc. and Bit Digital became the direct shareholder of WhiteFiber after the Reorganization. As of the date of this Form 10-Q, Bit Digital owns approximately 70.1% of WhiteFiber.
The accompanying unaudited condensed consolidated financial statements reflect the activities of the Company and each of the following entities:
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation and principles of consolidation
The Company’s accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements presented for periods on or after August 6, 2025, the date on which the Contribution was completed, are presented on a consolidated basis, and include the financial position, results of operations and cash flows of the Company. The financial statements for the periods prior to August 6, 2025 are presented on a combined basis, and reflect the historical combined financial position, results of operations and cash flows of WhiteFiber, as the operations were under common control of Bit Digital and reflect the historical combined financial position, results of operations and cash flows of those legal entities. Intercompany transactions and balances have been eliminated.
The financial information for the periods prior to August 6, 2025 represents the historical combined financial position and results of operation of WhiteFiber AI, incorporated on October 19, 2023. The results of Enovum (as defined below) are reflected following its acquisition on October 11, 2024. This information is derived from the consolidated financial statements and accompanying records of Bit Digital using the historical results of operations and historical basis of assets and liabilities of the Company. All revenues and costs as well as assets and liabilities directly associated with the business activity of the Company are included in the condensed combined financial statements. The financial statements also include expense allocations for certain functions provided by Bit Digital, including, but not limited to, certain general corporate expenses related to finance, tax, investor relations, and marketing. These general corporate expenses are included in the condensed consolidated statements of operations within general and administrative expenses. Direct usage has been used to attribute expenses that are specifically identifiable to the Company, where practicable. In certain instances, these expenses have been allocated to the Company primarily based on the percentage of revenue or other allocation methodologies that are considered to be a reasonable reflection of the utilization of the services provided to the benefits received. The allocations may not, however, reflect the expense the Company would have incurred as a stand-alone company for the period presented. These costs also may not be indicative of the expenses that the Company will incur in the future or would have incurred if the Company had obtained these services from a third party.
For the period beginning August 6, 2025, the condensed consolidated financial information represents the Company’s financial position and results of operation as a stand-alone public company. Following the Reorganization and IPO, the Company may perform certain functions using its own resources or purchased services. For an interim period following the Reorganization and IPO, however, some of these functions will continue to be provided by Bit Digital, under the Transition Services Agreement entered into between WhiteFiber and Bit Digital on July 30, 2025 (the “Transition Services Agreement”).
The condensed consolidated financial information as of March 31, 2025 included herein has been derived from the unaudited condensed consolidated financial statements for the period ended March 31, 2025 included in the prospectus for our IPO dated August 6, 2025.
Management believes all adjustments necessary for a fair statement of balance sheet, results of operations, and cash flows have been made. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. The Company believes that the disclosures are adequate to make the information presented not misleading. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results for the full year.
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Use of estimates
In preparing the condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the condensed consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of current assets, useful lives of property, plant, and equipment, impairment of long-lived assets, intangible assets and goodwill, valuation of assets and liabilities acquired in business combinations, provision necessary for contingent liabilities and realization of deferred tax assets. Actual results could differ from those estimates.
Fair value of financial instruments
ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
Fair value of the Company’s financial instruments, including cash and cash equivalents, restricted cash, deposits, accounts receivable, other receivables, accounts payable, and other payables, approximate their fair values because of the short-term nature of these assets and liabilities. Non-financial assets, such as goodwill, intangible assets, right-of-use assets, and property, plant and equipment, are adjusted to fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only upon recognition of an impairment charge.
Fair value of the convertible notes at each reporting period was estimated based on significant inputs that are observable in the market, which represent Level 2 measurements within the fair value hierarchy.
Cash and cash equivalents
Cash includes cash on hand and demand deposits in accounts maintained with commercial banks. The Company considers all highly liquid investment instruments with an original maturity of three months or less from the date of purchase to be cash equivalents.
Restricted cash
Restricted cash represents cash balances that support an outstanding letter of credit to third parties related to security deposits and other purposes and are restricted from withdrawal.
Accounts receivable, net
Accounts receivable consist of amounts due from our customers. Receivables are recorded at the invoiced amount less current expected credit losses for any potentially uncollectable accounts under the current expected credit loss (“CECL”) impairment model and presents the net amount of the financial instrument expected to be collected. The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, that considers forecasts of future economic conditions in addition to information about past events and current conditions. In accordance with ASC 326, Measurement of Credit Losses on Financial Instruments (“ASC 326”), the Company evaluates the collectability of outstanding accounts receivable balances to determine current expected credit losses that reflects its best estimate of the lifetime expected credit losses. Uncollectible accounts are written off against the current expected credit losses when collection does not appear probable.
In determining the amount of the current expected credit losses, the Company considers historical collection history based on past due status, the current aging of receivables, customer-specific credit risk factors, including their current financial condition, current market conditions, and probable future economic conditions which inform adjustments to historical loss patterns. Credit loss expense, inclusive of credit loss expense on all categories of financial assets, is recorded within General and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss).
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Deposits for property, plant, and equipment
The deposits for property, plant and equipment represented advance payments for purchases of high performance computing equipment and other equipment used in our colocation services. The Company initially recognizes deposits for property, plant, and equipment when cash is advanced to our suppliers. Subsequently, the Company derecognizes and reclassifies deposits for property, plant, and equipment to property, plant, and equipment when control is transferred to and obtained by the Company.
Below is the roll forward of the balance of deposits for property, plant and equipment for the three months ended March 31, 2026 and for the year ended December 31, 2025, respectively.
Property, plant, and equipment, net
Property, plant, and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets or declining-balance method. Direct costs related to developing or obtaining software for internal use are capitalized as property, plant, and equipment. Capitalized software costs are amortized over the software’s useful life when the software is placed in service. The estimated useful lives by asset category are:
Land acquired by the Company has an unlimited useful life and therefore is not depreciated.
Impairment of long-lived assets
Management reviews long-lived assets, including finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is not subject to amortization, and instead, assessed for impairment annually at the end of each fiscal year, or more frequently when events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount in accordance with ASC 350 – Intangibles - Goodwill and Other.
The impairment assessment involves an option to first assess qualitative factors to determine whether events or circumstances exist that lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment is not performed, or after assessing the totality of the events or circumstances, we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative assessment for potential impairment is performed.
The quantitative goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not impaired. An impairment loss is recognized for any excess of the carrying amount of the reporting unit over its fair value up to the amount of goodwill allocated to the reporting unit.
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Finite-lived intangible assets
Intangible assets are recorded at cost less any accumulated amortization and any accumulated impairment losses. Intangible assets acquired through business combinations are measured at fair value at the acquisition date.
Intangible assets with finite lives are comprised of customer relationships and are amortized on straight-line basis over their estimated useful lives. The Company assesses the appropriateness of finite-lived classification at least annually. Additionally, the carrying value and remaining useful lives of finite lived assets are reviewed annually to identify any circumstances that may indicate potential impairment or the need for a revision to the amortization period. A finite-lived intangible asset is considered to be impaired if its carrying value exceeds the estimated future undiscounted cash flows expected to be generated from it. We apply judgment in selecting the assumptions used in the estimated future undiscounted cash flow analysis. Impairment is measured by the amount that the carrying value exceeds fair value. The useful lives of customer relationships is 19 years.
Business combinations
The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805 - Business Combinations, by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, measured at the acquisition date fair value. The determination of fair value involves assumptions, estimates, and judgments. The initial allocation of the purchase price is considered preliminary and therefore subject to change until the end of the measurement period (up to one year from the acquisition date). Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net assets acquired.
Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.
Investment security
As of March 31, 2026 and December 31, 2025, investment security represents the Company’s investment in a privately held company via a simple agreement for future equity (“SAFE”).
SAFE investments provide the Company with the right to participate in future equity financing of preferred stock. The Company accounted for this investment under ASC 320, Investments - Debt Securities and elected the fair value option for the SAFE investment under ASC 825, Financial Instruments, which requires financial instruments to be remeasured to fair value each reporting period, with changes in fair value recorded in the condensed consolidated statements of operations. The fair value estimate includes significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.
Leases
The Company determines whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the term of such lease is assessed based on the date on which the underlying asset is made available for the Company’s use by the lessor. The Company’s assessment of the lease term reflects the non-cancelable term of the lease, inclusive of any rent-free periods and/or periods covered by early-termination options which the Company is reasonably certain of not exercising, as well as periods covered by renewal options which the Company is reasonably certain of exercising. The Company also determines lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition, and the presentation reflected in the condensed consolidated statements of operations over the lease term.
For leases with a term exceeding 12 months, an operating lease liability is recorded on the Company’s condensed consolidated balance sheet at lease commencement reflecting the present value of its fixed minimum payment obligations over the lease term. A corresponding operating lease right-of-use asset equal to the initial lease liability is also recorded, adjusted for any prepayment and/or initial direct costs incurred in connection with execution of the lease and reduced by any lease incentives received. For purposes of measuring the present value of its fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in its leasing arrangements are typically not readily determinable. The Company’s incremental borrowing rate reflects the rate it would pay to borrow on a secured basis and incorporates the term and economic environment of the associated lease. Variable lease costs are recognized in the period in which the obligation for those payments is incurred and not included in the measurement of right-of-use assets and operating lease liabilities.
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For the Company’s operating leases, fixed lease payments are recognized as lease expense on a straight-line basis over the lease term. For leases with a term of 12 months or less, any fixed lease payments are recognized on a straight-line basis over the lease term and are not recognized on the Company’s condensed consolidated balance sheet as an accounting policy election. Leases qualifying for the short-term lease exception were insignificant.
For finance leases where the Company is the lessee, the Company recognizes a right-of-use asset and a corresponding lease liability at lease commencement, measured in a manner consistent with operating leases. Subsequently, fixed lease payments are recognized as amortization of the right-of-use asset and interest expense is recognized on the outstanding lease liability using the effective interest method. Finance lease right-of-use assets are amortized into depreciation and amortization expense on a straight-line basis over the lease term or, if the lease transfers ownership of the underlying asset to the Company, the life of the leased asset.
For sales-type leases where the Company is the lessor, the Company recognizes a net investment in lease, which comprises of the present value of the future lease payments and any unguaranteed residual value. Interest income is recognized over the lease term at a constant periodic discount rate on the remaining balance of the lease net investment using the rate implicit in the lease and is included in “Revenues.” Sales-type leases result in the recognition of gain or loss at the commencement of the lease, which will be recorded in “Other income, net.”
For operating subleases where the Company is the lessor, the Company recognizes lease payments in income over the lease term on a straight-line basis and is included in “Other income, net.”
Convertible note payable
The Company accounts for its convertible note under ASC 470-20, Debt with Conversion and Other Options and ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity and/or ASC 815, depending on the specific terms of the debt agreement.
For convertible notes for which the embedded conversion feature is determined not to be clearly and closely related to the debt host and does not qualify for the scope exception under ASC 815-40, the Company bifurcates the embedded conversion feature and accounts for it separately as a derivative liability. Such derivative liabilities are initially measured at fair value, with subsequent changes in fair value recognized in the condensed consolidated statements of operations. The remaining proceeds are allocated to the debt host, which is recorded as convertible notes, net of debt discount and issuance costs.
For convertible notes for which the embedded conversion feature is determined to be clearly and closely related to the debt host and does qualify for the scope exception under ASC 815-40, the Company records the entire convertible notes at face value net of debt issuance costs.
If any of the conditions to the convertibility of the convertible notes are satisfied, or the convertible notes become due within one year, then the Company may be required under applicable accounting standards to reclassify the carrying value of the convertible senior notes as a current, rather than a long-term liability.
Debt issuance costs related to the convertible notes were capitalized and recorded as a contra-liability and are presented net against the balance of the convertible notes on the condensed consolidated balance sheet. Debt issuance costs consist of underwriting, legal and other direct costs related to the issuance of the convertible notes and are amortized to interest expense over the term of the convertible notes using the effective interest method.
Zero-strike call
The Company accounts for Zero-strike call options as either equity instruments or liabilities in accordance with ASC 480 and/or derivative liabilities in accordance ASC 815, depending on the specific terms of the agreement. The Company evaluates the terms of such instruments to determine whether they are indexed to the Company’s own stock and qualify for equity classification under ASC 815-40. To the extent these criteria are met, the Zero-strike call option is equity-classified, which is not remeasured each reporting period and is recorded as a reduction to additional paid-in-capital within shareholders’ equity when purchased. The transaction is accounted for separately from the convertible notes and does not impact the accounting for convertible notes.
Revenue recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company recognizes revenue when it transfers its services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. Refer to Note 3. Revenue from Contracts with Customers for further information.
Contract costs
Capitalized contract costs represent the costs directly related and incremental to the origination of new contracts, including commissions that are incurred directly related to obtaining customer contracts. We amortize the deferred contract costs on a straight-line basis over the expected period of benefit. These amounts are included in the accompanying condensed consolidated balance sheets, with the capitalized costs to be amortized to commission expense over the expected period of benefit included in Other current assets and Non-current assets and commission expense payable included in Other current liabilities and Other long-term liabilities.
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Deferred revenue
Deferred revenue primarily pertains to prepayments received from customers for services that have not yet commenced as of March 31, 2026. Deferred revenues are recognized as revenue when recognition criteria have been met.
Remaining performance obligation
Remaining performance obligations represent the transaction price of contracts for work that has not yet been performed. The amount represents estimated revenue expected to be recognized in the future related to the unsatisfied portion of the performance obligation.
Cost of revenue
The Company’s cost of revenue consists primarily of (i) direct production costs related to our cloud services, including electricity costs, data center lease costs, data center employees’ wage expenses, and other relevant costs, and (ii) direct production costs related to our colocation services, including electricity costs, lease costs and other relevant costs.
Cost of revenue excludes depreciation expenses, which are separately stated in the Company’s condensed consolidated statements of operations.
Foreign currency
Accounts expressed in foreign currencies are translated into U.S. dollars. Functional currency assets and liabilities are translated into U.S. dollars generally using rates of exchange prevailing at the balance sheet date of each respective subsidiary and the related translation adjustments are recorded as a separate component of accumulated other comprehensive income, net of any related taxes, in total equity. Income statement accounts expressed in functional currencies are translated using average exchange rates during the period. Functional currencies are generally the currencies of the local operating environment. Financial statement accounts expressed in currencies other than the functional currency of a consolidated entity are remeasured into that entity’s functional currency resulting in exchange gains or losses recorded in other income (expense), net.
Operating segments
Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. Our CODM is comprised of the Chief Executive Officer and Chief Financial Officer who use segment gross profit (loss) to assess the performance of the business of our reportable operating segments. Asset information is not used by the CODM to evaluate performance or allocate resources.
Income taxes
We account for current and deferred income taxes in accordance with the authoritative guidance, which requires that the income tax impact is to be recognized in the period in which the law is enacted. Current income tax expense represents taxes paid or payable for the current period. Deferred tax assets and liabilities are recognized using enacted tax rates for the future tax impact of temporary differences between the financial statement and tax bases of recorded assets and liabilities. A valuation allowance is recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized based on historical and projected future taxable income over the periods in which the temporary differences are expected to be recovered or settled on each jurisdiction.
In accordance with the authoritative guidance on accounting for uncertainty in income taxes, we recognize liabilities for uncertain tax positions based on the two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained in audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.
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Earnings (loss) per share
Basic earnings (loss) per share is computed by dividing net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares or resulted in the issuance of ordinary share participating in the earnings of the entity.
Related party transactions
The Company accounts for related party transactions in accordance with ASC 850, Related Party Disclosures. Related parties include the Company’s principal shareholders, subsidiaries, affiliates, directors, executive officers, and entities under common control or significant influence, as well as any immediate family members of such persons.
Transactions with related parties are identified and recorded based on written agreements or other substantiating documentation and are undertaken in the ordinary course of business. Management evaluates whether terms of related party transactions are consistent with those that could be obtained in arm’s-length transactions. Significant related party balances and transactions are disclosed in the financial statements when material.
The Company discloses the nature of its related-party relationships, the type and amounts of transactions, outstanding balances (including receivables and payables), and any commitments or guarantees with related parties in the notes to the financial statements. Amounts due from or to related parties are generally unsecured, non-interest-bearing, and settled in cash unless otherwise disclosed.
In preparing the financial statements, management evaluates whether any related-party transactions require elimination upon consolidation, recognition of gain or loss, or reclassification, and ensures that appropriate disclosures are made for all material transactions.
Commitments and contingencies
In the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business, which cover a wide range of matters. Liabilities for contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
If the assessment of a contingency indicates that it is probable that a material loss is incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.
The Company may also enter into contractual arrangements that result in commitments, including purchase obligations. In addition, the Company may be subject to contingent consideration obligations related to asset acquisitions, which involve potential future payments contingent upon the achievement of specified conditions or milestones.
Share-based compensation
The Company’s eligible employees have traditionally participated in Bit Digital’s shared-based compensation plans and continued to do so until the IPO was completed. The Company recognized compensation expenses for its employees and non-employees, in addition to an allocation portion of share-based compensation expenses associated with Bit Digital’s shared employees.
On February 6, 2025, the Board of Directors of WhiteFiber adopted the 2025 Omnibus Equity Incentive Plan (the “2025 Plan”) pursuant to which 4,000,000 Ordinary Shares are authorized for issuance with respect to awards that may be granted to any directors, employees and consultants of the Company or affiliated companies. The 2025 Plan provides for Plan provides share-based compensation such as restricted stock units (“RSUs”), incentive and non-statutory stock options, restricted shares, share appreciation rights and share payments.
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After the IPO, the Company’s eligible employees participate in WhiteFiber’s shared-based compensation plans. The Company accounts for share-based compensation in accordance with ASC 718, Compensation and ASC 505, Equity, which require all share-based payments to employees and members of the board of directors to be recognized as expense in the consolidated financial statements based on their grant date fair values. The Company has elected not to estimate forfeitures of its share-based compensation awards but recognizes the reversal in compensation expense in the period in which the forfeiture occurs. The Company expenses stock-based compensation to employees and non-employees over the requisite service period based on the grant-date fair value of the awards.
The Company has granted RSUs to certain employees and non-employees. Some of the RSUs contain a performance condition, and vesting is determined based on achievement of a performance metric. Compensation expense is recognized on a straight-line basis over the service period based on the expected attainment of a performance metric. At each reporting period, the Company reassesses the probability of the achievement of the performance metric, and any increase or decrease in share-based compensation expense resulting from an adjustment in the number of shares expected to vest is treated as a cumulative catch-up in the period of adjustment.
Reclassification
Certain items in the financial statements of the comparative period have been reclassified to conform to the financial statements for the current period. The reclassification has no impact on the total assets and total liabilities as of March 31, 2026 or on the statements of operations for the three months ended March 31, 2026.
Recent accounting pronouncements
The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its condensed consolidated financial statements and ensures that there are proper controls in place to ascertain that the Company’s condensed consolidated financial statements properly reflect the change.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 requires, in the notes to the financial statements, disclosures of specified information about certain costs and expenses specified in the updated guidance. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact the updated guidance will have on its disclosures.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (“ASU 2025-03”), which amends the guidance for identifying the accounting acquirer in transactions involving the acquisition of a variable interest entity that meets the definition of a business. The new standard is effective for the Company for its annual periods beginning January 1, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard.
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3. REVENUE FROM CONTRACTS WITH CUSTOMERS
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).
To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.
The Company recognizes revenue when it transfers its services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange.
The Company is currently engaged in high performance computing (“HPC”) business, including cloud services and colocation services through its operation of HPC data centers.
Disaggregation of revenues
Revenue disaggregated by reportable segment is presented in Note 16. Segment Reporting.
Cloud services
The Company provides cloud services to support customers’ generative AI workstreams. We have determined that cloud services are a single continuous service comprised of a series of distinct services that are substantially the same and have the same pattern of transfer (i.e., distinct days of service).
These services are consumed as they are received, and the Company recognizes revenue over time using the variable allocation exception as it satisfies performance obligations. We apply this exception because we concluded that the nature of our obligations and the variability of the payment terms based on the number of GPUs providing HPC services are aligned and uncertainty related to the consideration is resolved on a daily basis as we satisfy our obligations. The Company recognizes revenue net of consideration payable to customers, such as service credits, and accounted for as a reduction of the transaction price in accordance with guidance in ASC 606-10-32-25.
The Company’s cloud services revenue has been generated from Iceland. Beginning in March 2026, the Company generated an immaterial amount of revenue in Canada, representing a small portion of total revenue, through services provided to a third-party customer following the deployment of the GPU server in one of its Canadian data centers.
Data center/Colocation services
Colocation services generate revenue from Canada by providing customers with physical space, power, and cooling within the data center facility.
Our revenue is primarily derived from recurring revenue streams, mainly (1) colocation, which is the leasing of cabinet space and power, and (2) connectivity services, which includes cross-connects. Additionally, the remainder of our revenue is from non-recurring revenue, which primarily includes installation services related to a customer’s initial deployment.
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Revenues from recurring revenue streams are billed monthly and recognized ratably over the term of the contract, generally one to five years for data center colocation customers. Non-recurring installation fees, although generally paid upfront upon installation, are deferred and recognized ratably over the contract term.
We guarantee certain service levels, such as uptime, as outlined in individual customer contracts. If these service levels are not achieved due to any failure of the physical infrastructure or offerings, or in the event of certain instances of damage to customer infrastructure within our data center, we would reduce revenue for any credits or cash payments given to the customer.
The Company capitalizes commission expenses directly related to obtaining customer contracts, which would not have been incurred if the contract had not been obtained. As of March 31, 2026, capitalized costs to obtain a contract totaled $24.2 million, and the outstanding commission expense payable was $12.3 million, which is included within Other payables and accrued liabilities. As of December 31, 2025, capitalized costs to obtain a contract totaled $25.2 million, and the outstanding commission expense payable was $13.7 million.
Contract assets
Contract assets primarily consist of revenue allocated to complimentary services provided to customers as part of contractual arrangements. As of March 31, 2026 and December 31, 2025, there were no contract assets.
Contract liabilities
The Company’s contract liabilities consist of deferred revenue and customer deposits. As of March 31, 2026 and December 31, 2025, contract liabilities were $144.5 million and $79.6 million, respectively.
During the three months ended March 31, 2026 and 2025, $0.7 million and $11.1 million, respectively, of the beginning balance of contract liabilities was recognized as revenue.
The following table presents estimated revenue expected to be recognized in the future related to the unsatisfied portion of the performance obligation as of March 31, 2026:
The amounts presented in the table above exclude variable consideration allocated entirely to wholly unsatisfied performance obligations. Such amounts have been excluded from the disclosure of remaining performance obligations in accordance with ASC 606, as the consideration is not fixed and determinable.
During the three months ended March 31, 2026 and 2025, $5.1 million and $2.0 million, respectively, were recognized as revenue as a result of satisfying performance obligations in previous periods.
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4. ACQUISITIONS
Real Estate Acquisition – Madison, North Carolina
On May 20, 2025, the Company acquired the building and land, together with all the related improvements owned by Unifi Manufacturing, Inc. (“Unifi Transaction”) that were located in Madison, North Carolina. The total consideration consisted of $45.0 million in cash, including the initial deposit of $2.2 million.
The acquired set of assets did not meet the definition of a business as defined in ASC 805, Business Combinations, as no substantive processes or employees were acquired. The assets acquired consisted primarily of land, building and related equipment, which are included in Property, plant, and equipment, net on the condensed consolidated balance sheets. The fair value of the tangible assets acquired was estimated to be $45.0 million. No identifiable intangible assets were acquired, no goodwill was recognized, and no liabilities were assumed in connection with the transaction.
In connection with the agreement, additional contingent consideration may become payable to the seller based on the timing and availability of power at the site (see Note 18. Commitments and Contingencies).
5. OTHER CURRENT ASSETS, NET
Other current assets were comprised of the following:
6. LEASES
Lease as Lessee
The Company leases data center capacity, cloud infrastructure, and office space under non-cancelable lease arrangements. These leases, including a data center lease acquired as part of the Enovum acquisition in 2024, generally have terms ranging from approximately 2 to 22 years and may include renewal options, purchase options, or both, depending on the nature of the underlying asset. Certain leases include variable payments based on usage, particularly for cloud services. Variable lease costs are recognized as incurred and are not included in the measurement of the right-of-use assets or lease liabilities.
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On April 11, 2025, the Company entered into a data center lease agreement in Saint-Jérôme for its data center colocation services. The initial lease term is for 20 years with two five-year extension options. The transaction also includes a fixed-price purchase option exercisable until December 31, 2025. In December 2025, the Company became reasonably certain to exercise the purchase option and remeasured the lease as a finance lease as of December 1, 2025. As a result of the remeasurement of the lease liability, there was a reduction of approximately $23.5 million to the lease right-of-use assets and lease liabilities. On December 31, 2025, the Company notified the lessor of its intent to exercise the purchase option. The Company had 90 days to complete the purchase, after which the purchase option would expire. The option was exercised on January 14, 2026 and the purchase of MTL-3 was expected to close during the second quarter of 2026. In the first quarter of 2026, the Company remeasured its finance lease liability and right-of-use asset due to a change in the expected closing date of the underlying purchase, which closed on May 8, 2026. As a result, the lease liability increased $30,435, and the right-of-use asset increased $30,435, reflecting the extended term and higher payments. No cash was exchanged in this transaction.
As of March 31, 2026 and December 31, 2025, right-of-use asset and lease liabilities consisted of the following:
Operating right-of-use assets are recorded net of accumulated amortization of $8.9 million and $7.4 million as of March 31, 2026 and December 31, 2025, respectively.
Finance lease right-of-use asset is recorded net of accumulated amortization of $0.2 million and $0.1 million as of March 31, 2026 and December 31, 2025, respectively.
For the three months ended March 31, 2026 and 2025, the Company’s amortization on the operating lease right-of-use assets totaled $1.5 million and $1.1 million, respectively.
For the three months ended March 31, 2026, the Company’s interest expense and amortization on the finance lease were $155,509 and $152,282, respectively. For the three months ended March 31, 2025, the Company’s interest expense and amortization on the finance lease were $nil.
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The following table presents the components of the Company’s lease expense. GPU lease expenses and data center lease expenses related to operational data centers are included in cost of revenue; data center lease expenses incurred during construction and office lease expenses are included in general and administrative expenses:
Additional information regarding the Company’s leasing activities as a lessee is as follows:
The following table represents our future minimum operating lease payments as of March 31, 2026:
The following table represents our future minimum finance lease payments as of March 31, 2026:
The Company entered into a GPU server lease agreement effective January 2024 for its cloud services designed to support generative AI workstreams. The lease payment depends on the usage of the GPU servers and the Company concludes that the lease payments are variable and will be recognized when they are incurred. For the three months ended March 31, 2026 and 2025, the GPU server lease expense amounted to $3.7 million and $3.7 million, respectively.
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Lease as Lessor
The Company enters into sales-type leases for data storage and cloud service equipment. These leases typically have terms ranging from approximately 2 to 6 years.
The Company also enters into sublease arrangements for portions of its leased data center capacity. These subleases generally include fixed payments with automatic renewal options, unless sub-tenant provides at least 90 days’ notice of non-renewal prior to the end of the then-current term.
Lease income from sales-type leases is primarily recognized as interest income over the lease term. The Company’s exposure to credit risk is limited to net investment in leases.
The components of lease income for the sales-type lease were as follows:
Interest income is included in the condensed consolidated statements of operations under the caption “Revenue - Other.”
The components of net investment in sales-type leases were as follows:
The following table illustrates the Company’s future minimum receipts for sales-type lease as of March 31, 2026:
The present value of minimum sales-type receipts of $12.9 million is included in the condensed consolidated balance sheets under the caption “Net investment in lease.”
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The following table illustrates the future lease payments to be received from the Company’s sublease tenant as of March 31, 2026 were as follows:
7. PROPERTY, PLANT, AND EQUIPMENT, NET
Property, plant, and equipment, net was comprised of the following:
For the three months ended March 31, 2026 and 2025, depreciation and amortization expenses were $6.4 million and $3.8 million, respectively. Construction in Progress represents assets received but not placed into service as of March 31, 2026 and December 31, 2025.
During 2024 and 2025, the Company purchased data storage and network equipment that was subsequently derecognized from property, plant and equipment upon entering into sales-type lease arrangements, with the related assets recorded as net investments in leases, totaling approximately $10.6 million and $7.9 million, respectively. No such transactions occurred during 2026.
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Disposals of Property, Plant and Equipment
For the three months ended March 31, 2026, the Company sold 126 H200s GPU for a total consideration of approximately $26.1 million. On the date of the transaction, the carrying amount of these GPUs was $24.3 million. The Company recognized a gain of $1.8 million from the sale which was recorded within Net gain from disposal of property, plant and equipment. As of the date of this Form 10-Q, the Company has collected the full cash consideration of $26.1 million.
8. INVESTMENT SECURITY
As of March 31, 2026 and December 31, 2025, investment security represents the Company’s investment of $1,000,000 in a privately held company via a simple agreement for future equity (“SAFE”).
On June 30, 2024 (the “Effective Date”), the Company entered into a SAFE agreement for an initial investment amount of $1 million in exchange for a right to participate in a future equity financing of preferred stock to be issued by Canopy Wave Inc. (“Canopy”). Alternatively, upon a liquidity event such as a change in control, a direct listing or an initial public offering, the Company is entitled to receive the greater of (i) the SAFE investment amount plus 15% annual accrued interest (the “cash-out amount”), or (ii) the SAFE investment amount divided by a discount to the price per share of Canopy’s ordinary shares. In a dissolution event, such as a bankruptcy, the Company is entitled to receive the cash-out amount. If the SAFE is outstanding on the three-year anniversary of the Effective Date, then the SAFE will expire and the Company would be entitled to receive the cash-out amount. In the event of a qualifying equity financing, the number of shares of preferred stock received by the Company would be determined by dividing the SAFE investment amount by a discounted price per share of the preferred stock issued in the respective equity financing. The Company recorded an investment of $1 million as an investment in the SAFE on the condensed consolidated balance sheets. Additionally, per the terms of the SAFE arrangement, the Company may be obligated to invest up to an additional $2 million into the SAFE arrangement if Canopy satisfies certain milestones prior to the expiration of the SAFE, or if an equity financing event occurs.
The Company accounted for this investment under ASC 320, Investments - Debt Securities and elected the fair value option for the SAFE investment pursuant to ASC 825, Financial Instruments, which requires financial instruments to be remeasured to fair value each reporting period, with changes in fair value recorded in the condensed consolidated statements of operations. The fair value estimate includes significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The decision to elect the fair value option is determined on an instrument-by-instrument basis on the date the instrument is initially recognized, is applied to the entire instrument and is irrevocable once elected. For instruments measured at fair value, embedded conversion or other features are not required to be separated from the host instrument. Issuance costs related to convertible securities carried at fair value are not deferred and are recognized as incurred on the condensed consolidated statements of operations.
At March 31, 2026, the Company performed a qualitative assessment to identify if events or circumstances indicate that the investment is impaired or that an observable price change has occurred. We considered available information about Canopy’s operations and industry conditions. No events or circumstances were identified that would indicate the investment is impaired or that an observable price change occurred. As of March 31, 2026, the investment continues to be reported at its original cost of $1,000,000. No upward or downward adjustments were recorded for the three months ended March 31, 2026.
9. OTHER NON-CURRENT ASSETS, NET
Other non-current assets were comprised of the following:
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10. DEBT
2031 Convertible notes
On January 26, 2026, the Company issued $230,000,000 aggregate principal amount of 4.50% convertible senior notes due 2031 (the “2031 Notes”), including the exercise in full by the initial purchasers of the 2031 Notes of their option to purchase up to an additional $20,000,000 principal amount of the 2031 Notes. The 2031 Notes bear interest at a rate of 4.500% per year, payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2026. The 2031 Notes will mature on February 1, 2031, unless earlier converted, redeemed or repurchased in accordance with their terms. The Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of January 26, 2026, between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).
The net proceeds from the 2031 Notes offering, after deducting initial purchasers’ discounts and offering expenses, were approximately $222.1 million, including the proceeds from the exercise in full of initial purchasers’ option to purchase an additional $20.0 million aggregate principal amount of 2031 Notes. The unamortized debt issuance costs as of March 31, 2026 were $7.7 million. The Company used approximately $120 million of the proceeds of the 2031 Notes offering to enter into a zero-strike call option transaction. The estimated fair value of the 2031 Notes was determined to be approximately $190.60 million as of March 31, 2026 based on quoted prices in markets that are not active, which is considered a Level 2 valuation input. While the 2031 Notes bear a 4.500% fixed interest rate, the effective interest rate for the notes as of March 31, 2026 was 5.37%, primarily reflecting the accretion of debt issuance costs.
Noteholders may convert their 2031 Notes at their option prior to the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the Company will satisfy its conversion obligation by paying or delivering, as the case may be, cash, its ordinary shares, or a combination of cash and ordinary shares, at the Company’s election, in the manner and subject to the terms and conditions set forth in the Indenture. The conversion rate is initially 38.5981 ordinary shares per $1,000 principal amount of the 2031 Notes (equivalent to an initial conversion price of approximately $25.91 per ordinary share), which represents an approximately 27.5% conversion premium over the last reported sale price of $20.32 per ordinary share on the Nasdaq Capital Market on January 21, 2026. The conversion rate is subject to customary adjustments upon the occurrence of certain events, as described in the Indenture.
On February 6, 2029, and if the Company undergoes a “Fundamental Change” (as defined in the Indenture), then, subject to certain conditions and except as set forth in the Indenture, noteholders may require the Company to repurchase for cash all or any portion of their 2031 Notes at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the relevant repurchase date.
The Company may not redeem the 2031 Notes prior to February 6, 2029. The Company may redeem for cash all or any portion of the 2031 Notes, at our option, on or after February 6, 2029 and prior to the 41st scheduled trading day immediately preceding the maturity date, if the last reported sale price of our ordinary shares has been at least 130% of the conversion price for the 2031 Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of optional redemption. However, the Company may not redeem less than all of the outstanding 2031 Notes at its option unless at least $75.0 million aggregate principal amount of 2031 Notes are outstanding and not called for optional redemption as of the time it sends the related notice of optional redemption (and after giving effect to the delivery of such notice of optional redemption). The Company may also redeem for cash, in whole but not in part, the 2031 Notes, subject to certain conditions, upon the occurrence of certain changes to the laws, rules or regulations of a relevant taxing jurisdiction (as defined in the Indenture). The redemption price is equal to 100% of the principal amount of the 2031 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
The Indenture contains customary terms and covenants, including certain bankruptcy and insolvency-related events of default, the occurrence of which will result in the outstanding 2031 Notes automatically becoming due and payable, and certain non-bankruptcy and insolvency-related events of default, upon the occurrence of which either the Trustee or the holders of at least 25% in aggregate principal amount of the outstanding 2031 Notes may declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the 2031 Notes to be due and payable.
The Company accounts for the 2031 Notes as a single instrument. As of March 31, 2026, none of the conditions permitting the holders of the 2031 Notes to convert their notes early had been met, and to require the Company to repurchase the 2031 Notes for cash. Therefore, the 2031 Notes are classified as long-term.
Zero-Strike Call Option Transaction
In connection with the issuance of the 2031 Notes, the Company entered into a zero-strike call option transaction (“Zero-Strike Call Option”) with one of the initial purchasers or its affiliate (the “Option Counterparty”). Pursuant to the Call Option Transaction, the Company paid a premium equal to approximately $120.0 million for the right to receive, without further payment, 5,905,511 ordinary shares (subject to customary adjustment), with delivery thereof by the Option Counterparty at expiry, subject to early settlement of the Zero-Strike Call Option in whole or in part at the Option Counterparty’s discretion. The Zero-Strike Call Option expires on the 40th non-disrupted day (as defined in the Zero-Strike Call Option) following February 1, 2031, or earlier if the Option Counterparty requests early settlement. The settlement method of the Zero-Strike Call Option is physical settlement. The Company will receive the fixed number of ordinary shares determined at the commencement date of the transaction upon expiration or for the portion thereof being settled early, provided that the Zero-Strike Call Option is exercised. The Zero-Strike Call Option is recognized as permanent equity at its fair value at inception as a reduction to additional paid in capital in the condensed consolidated balance sheet.
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The following table summarizes the balances of the convertible notes (in thousands):
Iceland Facility Agreement
On March 25, 2026, WhiteFiber Iceland ehf. (the “Borrower”), a subsidiary of the Company, entered into a secured term loan facility agreement (the “Facility”) with Landsbankinn hf, which provides for borrowings of up to $20 million. The obligations under the Facility are guaranteed by WhiteFiber, Inc. and WhiteFiber AI, Inc. (collectively, the “Guarantors”).
Borrowings under the Facility bear interest at a floating rate per annum equal to the sum of (i) three month CME Term SOFR (or any successor benchmark), and (ii) an applicable margin of 4.25% per annum. The base interest rate is subject to a floor of 0%, such that it will not be less than zero. The Facility has an initial maturity of two years from the date of the agreement, with the option to extend the maturity up to an additional two years, for a maximum term of four years, subject to the terms and conditions of the agreement. Principal repayments are required to be made in quarterly installments commencing three months after the initial drawdown date, with all remaining outstanding amounts due at the maturity date.
The Facility is secured by first-ranking security over (i) 100% of the Company’s shareholding in WhiteFiber Iceland ehf., (ii) designated assets (including GPU servers, CPU servers, IB switches and equipment accessories) at the date of the agreement, and (iii) material assets acquired thereafter (to be secured within 60 days), in each case until all obligations are fully satisfied. The Facility also includes customary events of default, the occurrence of which could result in the acceleration of amounts outstanding.
The Facility may be drawn in multiple tranches during an availability period, with up to two drawdowns permitted and a minimum draw amount of $5 million per draw. Any undrawn commitments are canceled at the end of the availability period. As of March 31, 2026, the Company had not yet drawn on the Facility. Subsequently, on April 24, 2026, the Company drew down $18 million.
In connection with the entry into the Facility, the Borrower is required to pay an arrangement fee to the lender. The Facility also includes customary financial maintenance covenants, including leverage, equity, and loan to value ratios.
The Facility permits voluntary prepayments, subject in certain cases to prepayment fees, and includes mandatory prepayment provisions in connection with specified events, including certain asset disposals and insurance proceeds, all as set out in the facility agreement.
11. SHARE-BASED COMPENSATION
Certain employees of the Company have historically participated in Bit Digital’s 2023 Omnibus Equity Incentive Plan and 2025 Omnibus Equity Incentive Plan (collectively, the “Bit Digital Plan”) which provide long-term incentive compensation to employees, consultants, officers and directors. Until the IPO was completed, certain employees of the Company continued to participate in the share-based compensation plans authorized and managed by Bit Digital.
On February 6, 2025, the Board of Directors of WhiteFiber adopted the 2025 Omnibus Equity Incentive Plan (the “2025 Plan”) which provides for share-based compensation such as restricted stock units (“RSUs”), incentive and non-statutory stock options, restricted shares, share appreciation rights and share payments may be granted to any directors, employees and consultants of the Company or affiliated companies and up to 4,000,000, as amended, ordinary shares. There have been 1,104,569 RSUs granted as of March 31, 2026.
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From time to time, the Company grants equity awards under its 2025 Plan to employees of Bit Digital as consideration for services rendered to the Company. These awards are settled in shares of the Company’s ordinary shares and might be accounted for as share-based compensation to non-employee consultants and included within general and administrative expenses.
All awards granted under 2025 plan will settle in WhiteFiber’s ordinary shares and are approved by WhiteFiber’s Compensation Committee of the Board of Directors.
Restricted Stock Units
As of December 31, 2025, the Company had 266,783 awarded and unvested RSUs.
In May 2025, the Company entered into a director agreement with Ms. Ichi Shih, Chair of the Audit Committee. Pursuant to the terms of the agreement, as amended on August 6, 2025, Ms. Shih was allocated 7,059 RSUs with an aggregate value of $120,000, determined based on the IPO price. The RSUs were granted upon the commencement of trading of the Company’s ordinary shares on the Nasdaq Capital Market.
In August 2025, in connection with WhiteFiber’s initial public offering, 1,329,037 outstanding and unvested equity awards under the 2023 and 2025 Bit Digital Plans held by WhiteFiber employees were cancelled and replaced with 222,739 RSUs under the 2025 Plan. The original aggregate value of these equity awards were preserved and the terms of the equity awards, such as the award period and vesting schedule continue unchanged.
In 2025, the Company granted 88,235 RSUs to each of the Company’s Chief Executive Officer and Chief Financial Officer in accordance with their compensation arrangements. All of these RSUs were immediately vested.
In 2025, the Company granted 303,281 RSUs to employees, which are subjected to a sixteen-quarter service with a one-year cliff vesting schedule.
In 2024, Bit Digital entered into equity award agreements with certain Enovum employees, pursuant to which such employees have the opportunity to earn additional compensation in the form of Bit Digital’s performance RSUs (“PSU”) tied to Enovum’s achievement of Growth EBITDA associated with new data center sites. Following WhiteFiber’s IPO, the agreements were amended such that any earned PSUs are issued pursuant to the WhiteFiber, Inc. 2025 Omnibus Incentive Plan and settled in WhiteFiber RSUs. PSUs vest upon cumulative Growth EBITDA reaching CAD $5.0 million (CAD $0.5 million initial value), plus 10% of incremental Growth EBITDA thereafter, capped at CAD $100.0 million cumulative Growth EBITDA and CAD $10.0 million in total PSU value. Measurements commenced on December 31, 2025 and occur semi-annually. For the three months ended March 31, 2026, the Company recognized share-based compensation expenses of $3,135,526 related to these PSU.
On January 13, 2026, the Company granted 10,251 RSUs to employees. All of these RSUs were immediately vested.
On January 20, 2026, the Company granted 16,627 RSUs to employees, which are subjected to a sixteen-quarter service vesting schedule.
On March 19, 2026, the Company granted 99,141 RSUs to each of the Company’s Chief Executive Officer and Chief Financial Officer in accordance with their compensation arrangements. All of these RSUs were immediately vested.
On March 19, 2026, the Company granted 40,084 RSUs to employees, which are subjected to a sixteen-quarter service with a one-year cliff vesting schedule.
For the three months ended March 31, 2026 and 2025, the Company recognized share-based compensation expenses of $5,108,298 and $nil, respectively, for RSUs issued to employees and directors. As of March 31, 2026, the Company had $4,148,287 unrecognized compensation costs related to these unvested RSUs.
As of March 31, 2026, the Company had 263,500 awarded and unvested RSUs.
Other share-based compensation
For the three months ended March 31, 2026 and 2025, the Company recognized share-based compensation expenses of $59,460 and $138,013, respectively for the RSUs issued to WhiteFiber employees and directors under the Bit Digital Plan.
For the three months ended March 31, 2026, the Company granted 152,444 RSUs to consultants under the 2025 Plan as consideration for services rendered. Of these, 139,225 shares were fully vested upon issuance, and the remainder of 13,219 shares will vest in May 2026 for one consultant. The Company recognized share-based compensation expense of $2,150,510 in connection with these grants.
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12. SHARE CAPITAL
Ordinary shares
On August 8, 2025, WhiteFiber completed its initial public offering (the “Offering”) of 9,375,000 ordinary shares, at a public offering price of $17.00 per share. The initial gross proceeds to WhiteFiber from the Offering were $159,375,000, before deducting underwriting discounts and commissions and offering expenses payable by WhiteFiber. Prior to the consummation of the Offering, Bit Digital held all of the issued and outstanding ordinary shares of WhiteFiber. On September 2, 2025, the underwriters fully exercised their option to purchase an additional 1,406,250 ordinary shares, resulting in additional gross proceeds to WhiteFiber of $23,906,250, before deducting underwriting discounts and commissions and offering expenses payable by WhiteFiber. As of the date of this Form 10-Q, Bit Digital holds approximately 70.1% of the issued and outstanding ordinary shares of WhiteFiber.
As of December 31, 2025, there were 38,344,239 ordinary shares issued and outstanding.
During the three months ended March 31, 2026, 264,099 ordinary shares were issued to the Company’s employees, directors, and consultants in settlement of an equal number of fully vested restricted share units awarded to such individuals and companies by the Company pursuant to grants made under the Company’s 2025 Plan.
As of March 31, 2026, there were 38,608,338 ordinary shares issued and outstanding.
13. GOODWILL AND INTANGIBLE ASSETS
The components of goodwill as of March 31, 2026 are as follows:
Finite-lived intangible assets consist of customer relationships. Intangible assets with definite lives are amortized over their estimated useful lives.
The following table presents the Company’s finite-lived intangible assets as of March 31, 2026:
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The following table presents the Company’s finite-lived intangible assets as of December 31, 2025:
The following table presents the Company’s estimated future amortization of finite-lived intangible assets as of March 31, 2026:
Amortization expense for finite-lived intangible assets for the three months ended March 31, 2026 and March 31, 2025 was $0.2 million and $0.2 million, respectively. The Company did not identify any impairment of its finite-lived intangible assets during the three months ended March 31, 2026.
14. INCOME TAXES
The following table provides details of income taxes:
Our income tax provision was $1.1 million and $0.6 million for the three months ended March 31, 2026 and 2025, respectively. The income tax provision was higher during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to geographic mix earning impacts and Net CFC Tested Income (“NCTI,” a.k.a GILTI) impact. As of March 31, 2026, the Company was not able to benefit from current year foreign loss before taxes due to foreign valuation allowance from certain foreign operations.
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15. EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share is computed by dividing net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. The computation of diluted net loss per share does not include dilutive ordinary share equivalents in the weighted average shares outstanding, as they would be anti-dilutive.
For the three months ended March 31, 2026, 263,500 unvested RSUs were excluded from the calculation of diluted earnings per share because they were anti-dilutive.
For the three months ended March 31, 2026, 8.9 million of ordinary shares of the 2031 Notes from the initial conversion rate of approximately $25.91 per ordinary share, were excluded from the calculation of diluted earnings per share because they were anti-dilutive.
For the three months ended March 31, 2025, the Company had no potentially dilutive ordinary share equivalents outstanding, as all outstanding shares were held by its parent and no equity awards or other convertible instruments were issued.
16. SEGMENT REPORTING
The Company has two reportable segments: cloud services and colocation services. The reportable segments are identified based on the types of service performed.
Gross profit (loss) is the segment performance measure the chief operating decision maker (“CODM”) uses to assess the Company’s reportable segments.
The cloud services segment generates revenue from providing high performance computing services to support generative AI workstreams. Cost of revenue consists of direct production costs, including electricity costs, data center lease expense, GPU servers lease expense, third-party customer support fees, and other relevant costs, but excluding depreciation and amortization.
Colocation services generate revenue by providing customers with physical space, power and cooling within the data center facility. Cost of revenue consists of direct production costs related to our HPC data center services, including electricity costs, lease costs, data center employees’ wage expenses, and other relevant costs but excluding depreciation and amortization.
The CODM analyzes the performance of the segments based on reportable segment revenue and reportable segment cost of revenue. No operating segments have been aggregated to form the reportable segments.
Other than the $19.8 million of goodwill from the Enovum acquisition allocated to the Colocation Services segment, the Company does not allocate all assets to the reporting segments as these are managed on an entity-wide basis. Therefore, the Company does not separately disclose the total assets of its reportable operating segments.
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All Other revenue is generated from equipment leases with external customers.
All revenue and cost of revenue from intersegment transactions have been eliminated in the condensed consolidated statements of operations and comprehensive (loss) income.
The following tables present segment revenue and segment gross profit reviewed by the CODM:
Three Months Ended March 31, 2026
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Three Months Ended March 31, 2025
The following table presents the reconciliation of segment gross profit to net income before taxes:
For the Three Months Ended March 31,
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17. RELATED PARTIES
Related-party transactions
WhiteFiber AI’s subsidiary, WhiteFiber Iceland ehf, appointed Daniel Jonsson as its part-time Chief Executive Officer starting November 7, 2023, for a six-month term with a three-month probation. After the initial period, the employment shall be automatically renewed for successive period(s) of 6 months each, unless agreed otherwise in writing or unless terminated earlier in accordance with the terms of the employment agreement. His compensation includes a monthly salary of $8,334, a $6,440 signing bonus, and eligibility for performance-based RSUs. Prior to February 2026, Daniel Jonsson is part of the management team at GreenBlocks ehf which not only provided bitcoin mining hosting services, but also benefited from a facility loan agreement extended by Bit Digital USA Inc., an affiliate of WhiteFiber Iceland ehf. In February 2026, the commercial relationship between Bit Digital USA Inc. and GreenBlocks ehf was terminated. Nonetheless, WhiteFiber Iceland ehf continues to engage GreenBlocks ehf under contract for consulting services pertaining to our high performance computing services in Iceland.
Bit Digital made a payment of $1 million on behalf of WhiteFiber Iceland ehf, when WhiteFiber Iceland ehf entered into a simple agreement for future equity (“SAFE”) agreement for an initial investment amount of $1 million in exchange for a right to participate in a future equity financing of preferred stock to be issued by Canopy Wave Inc. (“Canopy”). By the end of the third quarter of 2024, we had settled this outstanding amount with Bit Digital.
In August 2025, the Company entered into a Professional Services Agreement (“PSA”) with Pruitt Hall, a member of the Company’s Board of Directors, pursuant to which he provides consulting services in connection with the construction of the NC-1 facility. Under the PSA, the Company pays consulting fees ranging from $162 to $312 per hour, depending on the level of consultant involved, subject to a minimum of four hours, plus travel expenses, for the time spent on-site. The PSA may be terminated by either party upon thirty days prior written notice. There were no services provided under the PSA during the three months ended March 31, 2026.
Corporate Restructuring and Capital Contributions
Prior to the consummation of the Offering, the Company entered into a Contribution Agreement with Bit Digital, pursuant to which Bit Digital contributed its HPC business through the transfer of 100% of the capital shares of its cloud services subsidiary, WhiteFiber AI, Inc. and its wholly-owned subsidiaries WhiteFiber HPC, Inc., WhiteFiber Canada, Inc., WhiteFiber Japan G.K. and WhiteFiber Iceland, ehf, to WhiteFiber in exchange for 27,043,749 ordinary shares of WhiteFiber. The Contribution became effective on August 6, 2025, when the Registration Statement was declared effective by the SEC.
On August 8, 2025, WhiteFiber completed its initial public offering (the “Offering”) of 9,375,000 ordinary shares, at a public offering price of $17.00 per share. The initial gross proceeds to WhiteFiber from the Offering were $159,375,000, before deducting underwriting discounts and commissions and offering expenses payable by WhiteFiber. Prior to the consummation of the Offering, Bit Digital held all of the issued and outstanding ordinary shares of WhiteFiber. On September 2, 2025, the Underwriters fully exercised their option to purchase an additional 1,406,250 ordinary shares, resulting in additional gross proceeds to WhiteFiber of $23,906,250, before deducting underwriting discounts and commissions and offering expenses payable by WhiteFiber. After giving effect to the Offering, and the Underwriters’ exercise of their over-allotment option in full, Bit Digital held approximately 71.5% of the issued and outstanding ordinary shares of WhiteFiber. As of the date of this Form 10-Q, Bit Digital owns approximately 70.1% of WhiteFiber.
Transition Services Agreement post-IPO
In addition, prior to the consummation of the Offering, Bit Digital entered into the Transition Services Agreement with WhiteFiber, pursuant to which Bit Digital will provide certain services to WhiteFiber, on a transitional basis which will generally be up to 24 months following the effective date of the Registration Statement. The Transition Services Agreement provides for the performance of certain services by Bit Digital for the benefit of WhiteFiber, or in some cases certain services provided by WhiteFiber for the benefit of Bit Digital, for a limited period of time after the Offering, including certain services provided by Sam Tabar, our Chief Executive Officer, and Erke Huang, our Chief Financial Officer and a Director. During such transition period, Messrs. Tabar and Huang will continue to hold the same position with Bit Digital as well as WhiteFiber. Messrs. Tabar and Huang have committed to provide the requisite time and effort to fulfill their responsibilities as a full-time officer of WhiteFiber, supervising a full staff and are expected to provide certain services, representing not more than approximately 30% of their working time, in respect of Bit Digital’s operations. The services to be provided will include financial reporting, tax, legal, human resources, information technology and other general and administrative functions. All services are to be provided at cost, except if otherwise agreed to. Following the IPO, related intercompany balances are expected to be settled in cash or reflected as payable arrangement, rather than the historical parent investment treatment used before the IPO. For the three months ended March, 31, 2026, the fees for these services were $1.5 million. As of March 31, 2026, the fees payable by WhiteFiber to Bit Digital are $4.7 million.
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Allocation of pre-IPO corporate expenses
Prior to the IPO, Bit Digital provided certain corporate support services to WhiteFiber, including finance, tax, investor relations, and marketing, but did not historically charge the WhiteFiber entities for those services. Bit Digital allocated a portion of Bit Digital’s general corporate expenses to WhiteFiber to reflect the costs of services that benefited WhiteFiber during the periods presented in the financial statements up to the date of the IPO. For the three months ended March, 31, 2025, the Company was allocated $0.9 million for these corporate services. These expenses were allocated to the Company on the basis of direct usage when identifiable, with the remainder allocated on the basis of percent of revenue or other allocation methodologies that are considered to be a reasonable reflection of the utilization of the services provided to the benefits received. Management does not believe, however, that it is practicable to estimate what these expenses would have been had the Company operated as an independent entity, including any expenses associated with obtaining any of these services from unaffiliated entities. The pre-IPO allocated expenses were not expected to be settled in cash and were therefore treated as forgiven by Bit Digital and recorded within Parent company net investment.
Following the IPO, WhiteFiber became a separate public company, and certain services continued to be provided by Bit Digital only on a temporary basis under the Transition Services Agreement. Accordingly, the post-IPO treatment should reflect the actual services provided under that agreement. For further details, refer to “Transition Services Agreement post-IPO”.
Guarantees
Bit Digital previously issued a guarantee to a third party on behalf of WhiteFiber Iceland ehf, making Bit Digital jointly and severally liable for WhiteFiber Iceland’s payment obligations related to hosting Services fees and electrical costs pursuant to a colocation agreement.
On September 25, 2025, the guarantee was assumed by WhiteFiber which became directly responsible for such obligations. Following the assumption, Bit Digital is no longer a guarantor under the agreement. As of March 31, 2026, there were no amounts outstanding or payments due under the guarantee.
18. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
From time to time, the Company may be a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.
Contingent Consideration Liabilities
Unifi Transaction
As part of the Unifi Transaction (See Note 4. Acquisition), the Company may be required to make additional contingent payments to the seller based on the timing and availability of electric service to the property, as follows:
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As of March 31, 2026 the Company has not received an Electric Service Agreement of more than 99 MW. Thus, no contingent payment is payable as of the reporting date.
Royal Bank of Canada Facility Agreement
Agreement executed on June 18, 2025
On June 18, 2025, the Company entered into a definitive credit agreement with the Royal Bank of Canada (“RBC”), to finance its data centers business. The credit agreement provides for an aggregate amount of up to approximately $43.9 million of financing. The agreement is non-recourse and comprised of three separate facilities:
As of March 31, 2026, the Company agreed to certain financial covenants that were not yet in effect. The facilities had not yet been authorized for use by the lender, as certain conditions precedent had not yet been satisfied. Accordingly, no amounts were drawn, and no borrowings were available as of March 31, 2026.
Amended Agreement executed on April 27, 2026
On April 27, 2026, the Company entered into an amended credit agreement with RBC. This agreement replaces the original credit agreement dated June 18, 2025, as subsequently amended on July 4, 2025. The amended credit agreement provides for an authorized credit facility of CAD $28 million (approximately $20 million). The proceeds have been used as a real estate acquisition bridge loan to finance the acquisition of the MTL-3 facility, at a purchase price of CAD $24.2 million (approximately USD $17.4 million). The closing date occurred on May 8, 2026.
Borrowings under the facility bear interest, at the Company’s option, at either Daily Simple CORRA plus 2.75% per annum or Royal Bank Prime plus 1.00% per annum, with the prime-based rate serving as the default option.
The facility has a six-month term from the date of drawdown and requires interest-only payments during the term, with the outstanding principal due in full at maturity. The specific borrowing terms are established at the time of each drawdown pursuant to a borrowing request submitted by the Company and accepted by the lender.
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Additionally, RBC is providing a CAD $8 million (approximately $5.8 million) revolving facility in the form of Letters of Credit and Letters of Guarantee. The fees will be determined on a transaction-by-transaction basis, and the facility will be available for a 12-month term.
The Company has agreed to certain financial covenants, including a minimum debt service coverage ratio and a maximum Net funded debt to EBITDA ratio.
As of the reporting date, the April 27, 2026 bridge loan has been authorized and funded by RBC for the MTL-3 facility acquisition. The Company and RBC are currently in discussions regarding new syndicated credit facilities, including (i) a delayed draw term loan facility of CAD $115 million (approximately $82.5 million), which includes the CAD $24.2 million (approximately $17.4 million) bridge loan, (ii) an accordion facility of CAD $25 million (approximately $17.9 million) and (iii) the CAD $8 million (approximately $5.7million) revolving facility.
Electric Service Agreement with Duke Energy
An existing Electric Service Agreement (“ESA”) with Duke Energy Carolinas, LLC (“Duke Energy”) for the provision of electric power to the facility located at 805 Island Drive, Madison, North Carolina was assigned to the Company’s wholly owned subsidiary, Enovum NC-1 Bidco LLC, from Unifi as of August 4, 2025.
The ESA establishes a minimum monthly bill for electric service, based on Duke Energy’s Rate of $8,754, irrespective of actual usage levels. In addition to standard service, Duke Energy has installed and maintains “Extra Facilities” (including overhead lines, substations, transformers, breakers, and metering equipment). The cost of these Extra Facilities totals approximately $1,137,975, for which the Company pays a monthly facilities charge of $11,405.
The ESA represents a continuing commitment to purchase power at or above the established minimum levels throughout the contract term. As such, the Company is obligated to pay the minimum monthly charges regardless of operational activity.
Under the termination clause, either party may cancel the ESA with at least 60 days’ written notice. In the event of early termination, the Company remains liable for all amounts due under the ESA through the termination date and may incur additional charges associated with the Extra Facilities if service is discontinued prior to the expiration of the facilities term.
As of March 31, 2026 management has no present intention to reduce operations at Madison or terminate the ESA. Accordingly, no liability has been recognized in the financial statements in connection with the ESA.
19. SUBSEQUENT EVENTS
On April 24, 2026, the Company drew down $18.0 million under its existing credit facility with Landsbankinn hf. See Note 10. Debt for additional information.
Amendment to RBC Facility Agreement
On April 27, 2026, the Company entered into an amended credit agreement with RBC that provides for an authorized credit facility of CAD $28 million (approximately $20 million). The proceeds have been used for the acquisition of the MTL-3 facility which was closed on May 8, 2026. For further details, refer to Note 18. Commitments and Contingencies.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following information should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q for the period ended March 31, 2026 as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025 (Annual Report). Except for the statements of historical fact, this Form 10-Q contains “forward-looking information” and “forward-looking statements reflecting our current expectations that involve risks and uncertainties (collectively, “forward-looking information”) that is based on expectations, estimates and projections as at the date of this Form 10-Q. All statements, other than statements of historical fact, included herein are “forward-looking statements.” These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “intends,” “expects,” or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investing in our securities involves a high degree of risk. The following discussion may contain forward-looking statements that reflect WhiteFiber, Inc.’s plans, estimates and beliefs. WhiteFiber, Inc.’s actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those factors discussed below, in the Annual Report and in Part II, Item 1.A of this Form 10-Q, particularly in the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors.” Before making an investment decision, you should carefully consider these risks, uncertainties and forward-looking statements.
The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with the SEC and available on its website at http://www.sec.gov. If any material risk was to occur, our business, financial condition or results of operations would likely suffer. In that event, the value of our securities could decline and you could lose part of all of your investment. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. In addition, our past financial performance may not be a reliable indicate of future performance, and historical trends should not be used to anticipate results in the future. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the company does not assume a duty to update these forward-looking statements.
References to “WhiteFiber” or the “Company” refer to WhiteFiber, Inc. and its subsidiaries, giving effect to the Reorganization which occurred on August 6, 2025.
Overview
We believe we are a leading provider of artificial intelligence (“AI”) infrastructure solutions. We own high-performance computing (“HPC”) data centers and provide cloud-based HPC graphics processing units (“GPU”) services, which we term cloud services, for customers such as AI application and machine learning (“ML”) developers (the “HPC Business”). Our Tier-3 data centers provide hosting and colocation services. Our cloud services support generative AI workstreams, especially training and inference.
Our business model integrates our data center infrastructure and cloud services to provide scalable, high-performance computing solutions for enterprises, research institutions, and AI and ML driven businesses. Our integrated approach aligns specialized data center operations with GPU-focused cloud services, addressing the unique requirements of AI and ML workloads. These workloads demand greater power density, advanced cooling solutions, and robust bandwidth to handle large-scale data transfers. By operating our data centers, we are able to provide the power to support our cloud services and we believe we can better meet the needs of AI and ML workloads and reduce the complexity associated with procuring power and connectivity from external vendors. We can also design our facilities to accommodate the higher heat loads generated by modern GPUs, potentially shortening deployment timelines for customers who require rapid expansion of their computing infrastructure. From a financial standpoint, our vertically integrated solution allows us to capture additional margin for both our data center and cloud services businesses, avoiding expenses that would otherwise be due to third-party providers.
Colocation/Data center services
We design, develop, and operate data centers, through which we offer our hosting and colocation services. Our operational data centers meet the requirements of the Tier-3 standard, including N+1 redundancy architecture, concurrent maintainability, uninterruptible power supply, advanced and highly reliable cooling systems, strict monitoring and management systems, 99.982% uptime and no more than 1.6 hours of downtime annually, service organization control, SOC 2 Type 2, differentiated software supporting AI workloads, high density and robust bandwidth, and infrastructure to support AI workloads.
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Based on their collective industry experience, our data center team is adept at bringing new sites online on an accelerated timeline. We are aggressively pursuing our development pipeline and intend to achieve an estimated 76 MW (gross) of total data center capacity by the end of the fourth quarter of 2026, a target that is underpinned by assets including our MTL-2, MTL-3, and NC-1 facilities. As of March 31, 2026, our pipeline of potential data center projects represents approximately 1,500 MW (gross) under management review. We follow a disciplined process prioritizing projects that are backed by customer lease commitments. In select cases, we may pursue early-stage acquisitions based on strong customer demand signals and defined commercialization pathways. Accordingly, the foregoing timelines and capacities are subject to change based on many factors, many of which are outside of our control.
We use a well-defined set of criteria to select our data center sites. We typically target sites with proximity to metro areas and partial infrastructure in place, where we are retrofitting rather than developing greenfield projects. Metropolitan areas are positioned for low-latency to address long-term, specialized AI computer inference needs, and smaller sites reduce risks. A retrofit entails sourcing and acquiring an existing industrial building with underutilized, in-place power connectivity. The period of time from when a site is purchased until construction can begin varies from location to location depending upon, among other things, obtaining required permits and the availability of construction supplies and contractors. Average build time for retrofits is intended to be approximately six months from commencement of construction, which we believe is approximately one-third to one-half of the industry average development timeline for greenfield projects. This average building time is based upon senior management’s experience at Enovum prior to its acquisition by the Company, as well as their experience prior to Enovum. We also prioritize sites offering opportunities to increase site power over time, enabling our data centers to grow with customer demand. In addition, we selectively target certain larger opportunities with 50 MW (gross) of power or more, subject to customer demand, to drive AI-driven compute super-clusters. Finally, we prioritize sites powered by sustainable, green energy sources and locked-in power when available. Additionally, to enhance sustainability of certain of our data center projects, we are undertaking heat repurposing projects in connection with sustainability and commercial and residential projects.
We acquired Enovum on October 11, 2024. The transaction included the lease of MTL-1, our 4 MW (gross) Tier-3 high-performance computing (“HPC”) data center in Montreal, Canada, which was fully operational and fully leased to customers at the time of acquisition.
On December 27, 2024, we acquired the real estate and building for a build-to-suit 5 MW (gross) Tier-3 data center expansion project near Montreal, Canada which we refer to as MTL-2. MTL-2, a 160,000 square foot site that was previously used as an encapsulation manufacturing facility, is located in Pointe-Claire, Quebec. We initially funded the purchase of CAD 33.5 million (approximately $23.3 million) with cash on hand. We expected to invest approximately $23.6 million to develop the site to Tier-3 standards with an initial load of 5 MW (gross). However, we have prioritized other builds and preserved capital for more time sensitive projects.
On April 11, 2025, we entered into a lease for a new data center site in Saint-Jerome, Quebec, a suburb of Montreal, MTL-3. The MTL-3 facility spans approximately 202,000 square feet on 7.7 acres and is being developed into a 7 MW (gross) Tier-3 data center. It will support current contracted capacity, with Cerebras (5 MW IT Load), with future expansion potential subject to utility approvals. The transaction was executed under a lease-to-own structure, which includes a fixed-price purchase option of CAD 24.2 million (approximately $17.3 million) exercisable by December 2025. The lease term is 20 years, with two 5-year extensions at the Company’s option. In December 2025, we became reasonably certain to exercise the purchase option and notified the lessor of our intent to exercise the purchase option. We had 90 days to complete the purchase, after which the purchase option would expire. The option was exercised on January 14, 2026 and the purchase of MTL-3 closed on May 8, 2026. The facility has been retrofitted to Tier-3 standards and was completed and operational in November 2025. The site has commenced billing Cerebras as of November 1, 2025, in the amount of CAD 1.4 million (approximately 979 thousand USD) monthly for the duration of the five-year contract.
On May 20, 2025, we completed the purchase of a former industrial/manufacturing building from UMI. Pursuant to the Purchase Agreement we agreed to purchase from UMI, an industrial/manufacturing building together with the underlying land located in Madison, North Carolina, which we refer to as “NC-1”, as well as certain machinery and equipment located thereon for a cash purchase price of $45 million. The purchase price will increase by (i) $8 million, if Duke Energy actually provides, or provides an Electric Services Agreement providing for, at least 99 MW (gross) within two years of May 20, 2025, or (ii) $5 million, if Duke Energy actually provides, or provides an Electric Services Agreement providing for, at least 99 MW (gross) more than two years but less than three years after May 20, 2025. Additionally, the purchase price will increase by an additional $200,000 per MW over 99 MW (gross) up to a maximum of $5 million if at least 99 MW (gross) are actually delivered, or Duke Energy provides an Electric Services Agreement for the provision of at least 99 MW (gross), within four years of May 20, 2025. Separately, the Company entered into a Capacity Agreement with Duke Energy pursuant to which Duke Energy agreed to use commercially reasonable efforts to achieve 24 MW (gross) of service to NC-1 by September 1, 2025, 40 MW (gross) by April 1, 2026, and 99 MW (gross) within four years of May 16, 2025. Management believes based upon its review of the site and a Duke Energy preliminary transmission study, that NC-1 may receive and support up to 200 MW (gross) of total electrical supply over an extended period of time, subject to infrastructure upgrades, such as developing new substations and other conditions. On August 4, 2025, Enovum NC-1 Bidco LLC, a subsidiary of the Company, entered into an Assignment and Assumption Agreement with Unifi Manufacturing and Duke Energy Carolinas, LLC, pursuant to which Enovum assumed Unifi’s rights and obligations under certain electric service agreements for facilities located in North Carolina. Duke Energy consented to the assignment. Refer to Note 18. Commitments and contingencies to our condensed consolidated financial statements for further detail.
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RBC Facility Agreement Executed on June 18, 2025
On June 18, 2025, we entered into the Credit Facility with RBC. The Credit Facility provides for an aggregate of up to approximately CAD 60 million (approximately $43.8 million) of financing. The proceeds are to be used primarily to refinance the buildout of MTL-2 as well as $5.8 million of revolving term financing (the “Revolver”). The Credit Facility is non-recourse to the Company. We entered into a three-year USD $18.5 million non-revolving lease facility to finance equipment costs and building improvements to build out the site. The lease facility provides for straight-line amortization of six years and capital moratorium of six months after disbursement is complete. RBC may cancel any unutilized portion of the Credit Facility after March 31, 2026. The interest rate is fixed based on the rental rate determined by RBC for the three-year term of the lease.
As part of the Credit Facility, we entered into a three-year $19.6 million non-revolving real estate term loan facility. The purpose of this facility is to refinance the Company’s purchase of MTL-2. The interest rate of the real estate term loan facility will be determined at the time of borrowing, or a floating interest rate ranging from RBP plus 0.75% to CORRA (“Canadian Overnight Repo Rate Average”) plus 250 bps. Payment of principal and interest is due 30 days after drawdown and is repayable in full on the last day of the three-year term.
The Revolver is being provided by RBC by way of Letters of Credit and Letters of Guaranty with fees to be determined on a transaction by transaction basis. This facility will be available for the 36 month term subject to the issuance of the EDC (Export and Development Canada) Performance Security Guaranty in the amount of $5.8 million and other related supporting documents. We agreed to certain financial covenants included maintaining on a combined basis between MTL-1 and MTL-2: fixed charge coverage of not less than 1.20:1 and a ratio of Net Funded Debt to EBITDA of not greater than 4.25:1 and decreasing to 3.50:1 from December 31, 2027.
RBC Facility Agreement amended on April 27, 2026
As of the reporting date, the April 27, 2026 bridge loan has been authorized and funded by RBC for the MTL-3 facility acquisition. The Company and RBC are currently in discussions regarding new syndicated credit facilities, including (i) a delayed draw term loan facility of CAD $115 million (approximately $82.5 million), which includes the CAD $24.2 million (approximately $17.4 million) bridge loan (ii) an accordion facility of CAD $25 million (approximately $17.9 million) and (iii) the CAD $8 million (approximately $5.7million) revolving facility.
Nscale Services Agreement
In November 2025, our wholly owned subsidiary, Enovum NC-1 Bidco, LLC, entered into the Services Agreement with Nscale Services US Inc. and Nscale Global Holdings Limited (collectively, “Nscale”) for the provision of colocation and related services at our NC-1 facility. The agreement represents a significant commercial milestone for our high-density data center platform and provides long-term contracted revenue visibility. The initial Service Order pursuant to the Services Agreement represents approximately $865 million in total contracted revenue over a 10-year term, inclusive of contractual annual rate escalators and non-recurring installation services (“NRCs”). Electricity and certain other operating costs are structured as pass-through charges to Nscale. Billing is expected to commence during the second quarter, subject to completion of construction and commissioning. As a result, we expect full revenue contribution from this agreement to begin during the third quarter of 2026 as the facility reaches its contractual capacity.
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Cloud Services
We provide specialized cloud services to support generative AI workstreams, especially training and inference, emphasizing cost-effective utility and tailor-made solutions for each client. We are an authorized NVIDIA Preferred Partner through the NVIDIA Partner Network (“NPN”), an authorized partner with SuperMicro Computer Inc.®, an authorized Communications Service Provider (“CSP”) with Dell (through Dell’s exclusive distributor in Iceland, Advania), an official partnership with Hewlett Packard Enterprise and a commercial relationship with Quanta Computer Inc. (“QCT”). Based on management’s knowledge of the industry, we are proud to be among the first service providers to offer H200, B200, and GB200 servers. We provide a high-standard service lease with an Uptime percentage> 99.5%.
We expect to leverage a global network of data centers for hosting capacity for our GPU business, in many instances, by negotiating with third-party providers to seamlessly integrate our cloud services at data centers across key regions in Europe, North America and Asia. Our initial data center partnership through which we lease capacity is at Blönduós Campus, Iceland, offering a world-class operations team with certified technicians and reliable engineers. The facility has a 45 kW rack density and 6 MW (gross) total capacity. We have executed contracts for 5.5 MW IT load at the data center. The center’s energy source is 100% renewable energy, mainly from Blanda Hydro PowerStation, the winner of an IHA Blue Planet Award in 2017. In addition, we have leased additional capacity to install our data center in Atlanta, Georgia, USA to expand our cloud services offering. The capacity leases commenced in February 2026. We also intend to lease additional capacity to expand our cloud services offering.
In April 2025, we received our first shipment of NVIDIA GB200 Grace Blackwell Superchip powered NVIDIA GB200 NVL72 system chips, from Quanta Cloud Technology, a leading provider of data center solutions. We believe that support with proof of concept (POC) access from Quanta will enable us to meet and exceed expectations around delivery and timeline, performance and reliability.
The following summaries reflect selected GPU cloud service agreements that we consider to be material or representative. We have entered into additional agreements that are not individually material and are not included below.
On October 23, 2023, Bit Digital announced that it had commenced AI operations by signing a binding term sheet with a customer (the “Initial Customer”) to support the customer’s GPU workloads. On December 12, 2023, we finalized a Master Services and Lease Agreement (“MSA”), as amended, with our Initial Customer for the provision of cloud services from a total of 2,048 GPUs over a three-year period. To finance this operation, we entered into a sale-leaseback agreement with a third party, selling 96 AI servers (equivalent to 768 GPUs) and leasing them back for three years. The total contract value with the Initial Customer for the aggregated 2,048 GPUs was estimated to be worth more than $50 million of annualized revenue. On January 22, 2024, approximately 192 servers (equivalent to 1,536 GPUs) were deployed at a specialized data center and began generating revenue, and subsequently on February 2, 2024, approximately an additional 64 servers (equivalent to 512 GPUs) also started to generate revenue.
In the second quarter of 2024, we finalized an agreement to supply our Initial Customer with an additional 2,048 GPUs over a three-year period. To finance this operation, we entered into a sale-leaseback agreement with a third party, agreeing to sell 128 AI servers (equivalent to 1,024 GPUs) and leasing them back for three years. In late July, at the customer’s request, we agreed with the customer to temporarily delay the purchase order so the customer could evaluate an upgrade to newer generation Nvidia GPUs. Consequently, the Company and manufacturer postponed the purchase order. In early August, the customer made a non-refundable prepayment of $30.0 million for the services to be rendered under this agreement.
In January 2025, the Company entered into a new agreement to supply its Initial Customer with an additional 464 GPUs for a period of 18 months. This new agreement replaces the prior agreement whereby the Company was to provide the customer with an incremental 2,048 H100 GPUs. The contract represents approximately $15 million of annualized revenue and features a two-month prepayment from the customer. The customer elected to defer the commencement date until August 20, 2025, which is the latest allowable date under the agreement. Deployment commenced on August 20, 2025, using the Company’s inventory of B200 GPUs.
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In October 2025, the Company’s existing parent guaranty arrangement with the Initial Customer was scheduled to expire. Beginning in November 2025, the customer will provide a service deposit to the Company in lieu of the parent guaranty. The deposit will be funded through fifteen consecutive monthly payments of approximately $0.24 million each, totaling $3.6 million, payable from November 2025 through January 2027. The deposit will serve as security for the customer’s performance obligations under the amended service agreements. Each monthly payment is expected to be invoiced on the first day of the month and paid within thirty days. The Company will be required to return the deposit in cash upon termination or expiration of the service agreements, provided that all obligations have been fully satisfied and no payment defaults or material breaches exist.
As of the date of this Form 10-Q, the Company and the Initial Customer are engaged in discussions regarding a potential resolution of the existing service agreements following the agreed pause of services. No definitive termination or settlement agreement has been executed. In connection with these discussions, the parties are negotiating the treatment of the remaining non-refundable prepayment, service deposit, outstanding receivables, and a potential early termination fee, which the Company believes would be equal to 40% of the fees that would have accrued for services during the remainder of the term of the MSA and applicable purchase orders. Following the service pause, the Company has redeployed the GPUs previously allocated to the Initial Customer to three other customers and continues to evaluate the related financial and operational implications. There can be no assurance as to the timing, terms, or final outcome of these discussions.
On November 6, 2024, we entered into a Master Services Agreement (“MSA”) with a minimum purchase commitment of 16 GPUs, along with an associated purchase order, from a new customer. The purchase order provides for services utilizing a total of 16 H200 GPUs over a minimum of a six-month period, representing total contracted value of approximately $160,000 for the term. The deployment commenced on November 7, 2024, using the Company’s existing inventory of H200 GPUs. The service under the purchase order concluded in May 2025. Between May 2025 and September 2025, the Company signed six additional agreements on a month-to-month basis for a total of 88 H200 GPUs, which were terminated in January 2026.
In February 2026, we entered into another service order with the customer to provide services utilizing a total of 10 H200 GPU servers. The service order has an initial term of 14 months beginning on the services commencement date. The service order represents an aggregate revenue opportunity of approximately $1.3 million. The deployment and revenue generation began in March 2026.
In March 2026, we entered into another service order with the customer to provide services utilizing a total of 256 H100 GPU servers. The service order has an initial term of 24 months beginning on the services commencement date, with an option to renew for an additional twelve months. The service order represents an aggregate revenue opportunity of approximately $50.2 million. The deployment and revenue generation is expected to begin in April 2026.
On December 30, 2024, we entered into a Master Services Agreement (“MSA”) with an AI Compute Fund managed by DNA Holdings Venture Inc. (“DNA Fund”). The MSA had a minimum purchase commitment of 32 GPUs, along with an associated purchase order. The purchase order provides for services utilizing a total of 576 H200 GPUs over a 25-month period and terminable by either party upon at least 90 days’ written notice prior to any renewal date. Concurrently, we placed a purchase order for 130 H200 servers for approximately $30 million. The deployment commenced in February 2025.
In April 2025, the Company signed two additional cloud services agreements with DNA Fund. The first agreement includes 104 NVIDIA H200 GPUs under a 23-month term and was deployed in May 2025. The second agreement includes 512 H200 GPUs under a 24-month term and was deployed in July 2025. With these additions, DNA Fund’s total contracted deployment increased to 1,192 GPUs.
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In November 2025, we terminated the MSA and all related purchase orders with DNA Fund in accordance with the terms of the contract. At the time of termination, we had approximately $7.3 million in outstanding accounts receivable. Pursuant to the termination agreement, the customer agreed to repay the outstanding balance. As of the date of this Form 10-Q, we have collected $2.2 million of the outstanding amount.
On January 6, 2025, we entered into a Master Services Agreement (“MSA”) with a minimum purchase commitment of 32 GPUs, along with an associated purchase order, from a new customer. The purchase order provided for services utilizing a total of 32 H200 GPUs over a minimum of six-month period, representing total revenue of approximately $300,000 for the term. The deployment commenced and revenue generation began on January 8, 2025, using the Company’s existing inventory of H200 GPUs. The service under the purchase order concluded in April 2025 following a change in the customer’s ownership, and the customer paid the remaining contract value as an early termination penalty.
In January 2025, we entered into a Master Services Agreement (“MSA”), along with two associated purchase orders, from a new customer. The purchase orders provide for services utilizing a total of 24 H200 GPUs over a minimum 12-month period, representing total revenue of approximately $450,000 for the term. The deployment commenced and revenue generation began on January 27, 2025, using the Company’s existing inventory of H200 GPUs. The service under the purchase order concluded in March 2025 after the customer ceased operations.
On January 30, 2025, we entered into a Master Services Agreement (“MSA”) with a minimum purchase commitment of 40 GPUs, along with an associated purchase order, from a new customer. The purchase orders provide for services utilizing a total of 40 H200 GPUs over a minimum of 12 month period, representing total revenue of approximately $750,000 for the term. The deployment commenced and revenue generation began on January 24, 2025, using the Company’s existing inventory of H200 GPUs. In October 2025, the purchase order was amended to reduce the number of H200 GPUs from 40 to 8 and to extend the term of service through May 2027. This contract was terminated in January 2026. Between April and July 2025, the Company signed four additional agreements on a month-to-month basis for a total of 184 H200 GPUs, which were terminated in August 2025.
In March 2025, we entered a strategic partnership with Shadeform, Inc., the premier multi-cloud GPU marketplaces, to bring on-demand NVIDIA B200 GPUs to customers beginning in May 2025.
In August and September 2025, we entered into three service orders with a new customer. Each order form provides for services utilizing a total of 64 B200 GPUs on a weekly basis, which either party may terminate by not extending it with mutual written agreement. In September, the customer renewed one order form for an additional week for services utilizing a total of 64 B200 GPUs. As of the reporting date, no additional renewals have occurred.
In September 2025, we entered into a service order with a new customer, which provides services utilizing a total of 16 B200 GPUs on a monthly basis, automatically renewing for an additional one month period unless and until otherwise terminated upon at least seven days’ prior written notice. The deployment commenced and revenue generation began on September 23, 2025. The agreement was not renewed after the initial term.
In October 2025, we entered into a service order with a new customer to provide services utilizing a total of 48 H200 GPUs. The service order had an initial term of 36 months. The deployment commenced and revenue generation began on October 21, 2025. The contract was terminated in December 2025.
In October 2025, we entered into a two-week service order with a new customer to provide services utilizing a total of 72 B200 GPUs. In January 2026, we entered into an additional two-week service order with this customer for 72 B200 GPUs. These contracts were terminated as of February 2026. In February 2026, we entered into a further service order with this customer to provide services utilizing a total of 384 B200 GPUs. This service order has an initial term of 24 months commencing on the service commencement date, after which it will automatically renew for successive one-month periods unless terminated by either party. The service order represents an aggregate revenue opportunity of approximately $18.1 million. Deployment and revenue generation commenced on January 27, 2026.
In November 2025, we entered into a service order with a new customer to provide services utilizing a total of 128 B200 GPUs. The service order has an initial term of 12 months, representing total contracted value of approximately $3.0 million, after which it automatically renews for successive one-month periods unless terminated by either party. Deployment and revenue generation began on December 1, 2025.
In February 2026, we entered into a service order with a new customer to provide services utilizing a total of 256 GPUs. The service order has an initial term of 12 months beginning on the services commencement date, after which it automatically renews for successive one-month periods unless terminated by either party. The deployment and revenue generation began on February 1, 2026.
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In March 2026, we entered into a service order with a new customer to provide services utilizing a total of 72 GB200 GPUs. The service order has an initial term of 12 months beginning on the services commencement date, after which it automatically renews for successive one-month periods unless terminated by either party. The deployment and revenue generation began on March 7, 2026.
In February 2026, we entered into a service order with a new customer to provide services utilizing a total of 80 H200 GPUs. The service order has an initial term of 12 months beginning on the services commencement date. The deployment and revenue generation began on February 1, 2026.
In August 2024, we executed a binding term sheet with Boosteroid Inc. (“Boosteroid”), a global cloud gaming provider pursuant to which, we finalized initial orders of 489 GPUs, projected to generate approximately $7.9 million in contracted value in the aggregate through November 2029. The GPUs were delivered to respective data centers across the U.S. and Europe and began earning fees in November 2024. On October 9, 2024, we executed a Master Services and Lease Agreement (the “MSA”) with Boosteroid, pursuant to which Boosteroid may, from time to time, lease certain equipment, including GPUs, from the Company upon delivery of a purchase order. The MSA provides the general terms and conditions for such equipment leases. Pursuant to the MSA, we are granted a right of first refusal with respect to the next 5,000 servers that Boosteroid leases during the term of the MSA. The MSA provides Boosteroid with the option to expand in increments of 100 servers, up to 50,000 servers, representing a potential contract value of approximately $700 million over the five-year term assuming Boosteroid utilizes the GPUs and services at full capacity for the duration of the contract. Expansion depends upon the internal development roadmap of Boosteroid, Boosteroid has full discretion to decide when and the quantity to pursue separate source orders (for GPU servers) under the MSA. In the third quarter of 2025, the Company finalized additional purchase orders for 302, 120, and 279 GPUs, totaling approximately $10.4 million in contracted value over a five-year term.
Reorganization, Initial Public Offering, and Relationship with Bit Digital
We were incorporated by Bit Digital as a Cayman Islands exempted company on August 15, 2024 under the name Celer, Inc., as a holding company for the HPC Business. We changed our name to WhiteFiber, Inc. on October 17, 2024.
On August 6, 2025, we issued 27,043,749 ordinary shares, par value $0.01 per share (our “Ordinary Shares”, and such shares, the “Contribution Shares”), to Bit Digital pursuant to the terms of a Section 351 Contribution Agreement (the “Contribution Agreement”) entered into with Bit Digital on July 30, 2025. Pursuant to the Contribution Agreement, Bit Digital contributed its HPC Business through the transfer of 100% of the capital shares of its cloud services subsidiary, WhiteFiber AI, Inc. and its wholly-owned subsidiaries WhiteFiber HPC, Inc., WhiteFiber Canada, Inc., WhiteFiber Japan G.K. and WhiteFiber Iceland, ehf, to us, upon the effectiveness of the registration statement filed in connection with our IPO and prior to the consummation of the IPO, in exchange for the Contribution Shares. We refer to this transaction as the “Reorganization”. WhiteFiber AI became a wholly-owned subsidiary of WhiteFiber, Inc. and Bit Digital became the direct shareholder of WhiteFiber after the Reorganization.
On August 8, 2025, we completed our initial public offering (“IPO”) of 9,375,000 Ordinary Shares, at a public offering price of $17.00 per share. The gross proceeds to the Company from the IPO were approximately $159.4 million, before deducting underwriting discounts and commissions and offering expenses of $12.0 million. On September 2, 2025, B. Riley Securities, Inc. and Needham & Company, LLC, as representatives of the several Underwriters of the IPO, fully exercised their option to purchase an additional 1,406,250 Ordinary Shares at the public offering price of $17.00 per share, resulting in additional gross proceeds to the Company of approximately $23.9 million.
After giving effect to the IPO and the full exercise by the Underwriters of their over-allotment option, Bit Digital held approximately 71.5% of our issued and outstanding Ordinary Shares. As of the date of this Form 10-Q, Bit Digital owns approximately 70.1% of WhiteFiber.
Following our IPO, certain of our directors, executive officers and other members of senior management continue to serve as directors, officers and employees of Bit Digital. We have added additional executive officers and senior management to our senior executive team apart from those serving as officers and employees of Bit Digital. We have assembled a senior operating team with approximately 15 years of experience on average for each individual in the data center and cloud services industries. We also appointed additional independent directors upon the commencement of trading of our Ordinary Shares on Nasdaq.
Key Factors that May Affect Future Results of Operations
We believe that the growth of our business and our future success are dependent upon many factors including those described under “Risk Factors” included elsewhere in our Annual Report. While these factors present significant opportunities for us, they also pose challenges that we must successfully address in order to sustain the growth of our business and enhance our results of operations.
Timely Completion of, and Expansion of Capabilities at, our Existing Data Center Projects.
Our future revenue growth is, in part, dependent on our ability to leverage our development capabilities at our data center sites.
We substantially completed construction of our MTL-3 facility by the end of October 2025. The site has commenced billing its customer, Cerebras, as of November 1, 2025, in the amount of CAD 1.4 million (approximately $979 thousand USD) monthly for the duration of the five-year contract.
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Management expects to begin delivering capacity to Nscale during the second quarter and for NC-1 to start generating revenues 30 days after completion. We have prioritized these projects and put a hold on the build for MTL-2. We expect to increase revenue from our existing sites by securing additional allocations of utility power, subject to our receipt of funding and required permits through ongoing engagement with the utility and relevant authorities. In addition, at certain new and existing sites, we intend to deploy natural gas fuel cell generation technology to increase available power and revenue potential. Our ability to secure the required funding and permits in accordance with our implementation plans may cause variability in our revenue growth in future quarters.
Development of Data Center Pipeline.
We intend to rapidly develop additional sites from our expansion pipeline in targeted locations to secure a strategic presence across North America. By developing a robust HPC data center platform across North America, we expect to enhance redundancy, mitigate geo-location risks, and ensure our services are available where clients need them most. We expect our strategically placed WhiteFiber data centers in smaller urban areas will deliver carrier hotel-level connectivity, while our larger deployments will power AI-driven computing super-clusters, driving innovation and efficiency.
Expansion of Cloud Services.
We have made investments in research and development of our cloud service technology and services. Cloud services are highly competitive, rapidly evolving, and require significant investment, including development and operational costs, to meet the changing needs and expectations of our existing users and attract new users. Our ability to deploy certain cloud service technologies critical for our products and services and for our business strategy may depend on the availability and pricing of third-party equipment and technical infrastructure. In the future, we are looking to generate significant revenues from our cloud services, but such revenue growth depends upon certain third-party providers which may be beyond our control and creates uncertainty that we will be able to generate consistent revenue.
In addition to the key factors described above, we may also generate revenue through the monetization of excess or unused power capacity, resale or leasing of high-performance computing (HPC) hardware, licensing of software or infrastructure designs, and strategic partnerships that expand our service offerings. However, these potential revenue streams are at an early stage and are not expected to materially contribute to our near-term results.
Results of operations for the three months ended March 31, 2026 and 2025
The following discussion summarizes the results of operations for the three months ended March 31, 2026 and 2025. This information should be read together with our condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q.
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Revenue
We generate revenues primarily from providing cloud services and colocation services. Refer to Note 3. Revenue from Contracts with Customers for further information.
Cloud services revenue is derived from providing customers with access to high-performance computing (“HPC”) infrastructure, including GPU clusters optimized for AI workloads. Our contracts are structured as usage-based or committed-capacity agreements, typically with pricing based on the type and quantity of GPUs deployed, duration of use, and associated infrastructure. Key factors that impact cloud services revenue include the number and performance class of GPUs deployed, hardware utilization, power availability at hosting sites, and the timing of new customer onboarding.
Colocation services revenue is generated from leasing data center space, power, and related infrastructure to customers who operate their own hardware. These contracts are generally multi-year agreements with fixed monthly fees based on committed power capacity (typically measured in kilowatts). Factors that affect colocation revenue include timing of site development and energization, contracted power levels, and customer expansion activity.
Revenue from cloud services
In the fourth quarter of 2023, we established our cloud-based HPC graphics processing units services, which we term cloud services, a new business line to provide services to support generative AI workstreams. The Company commenced offering cloud services to customers in January 2024.
Our revenue from cloud services increased by $1.9 million, or 13.0%, to $16.8 million for the three months ended March 31, 2026 from $14.8 million for the three months ended March 31, 2025. The increase was primarily due to an increase in deployed GPU servers to new and existing customers in the first quarter of 2026.
Revenue from colocation services
In the fourth quarter of 2024, we acquired Enovum which holds our data center business that provides customers with physical space, power, and cooling within data center facilities.
Our revenue from colocation services was $4.8 million and $1.6 million for the three months ended March 31, 2026 and 2025, respectively. The increase was primarily due to the MTL-3 site becoming fully operational and generating revenues beginning November 2025.
We incur cost of revenue from cloud services and colocation services.
The Company’s cost of revenue consists primarily of direct production costs associated with its core operations, excluding depreciation and amortization, which are separately stated in the Company’s condensed consolidated statements of operations. Specifically, these costs consist of: (i) cloud services operations — electricity costs, datacenter lease expense, GPU servers lease expense, third-party customer support fees and other relevant costs and (ii) colocation services — electricity costs, lease costs, data center employees’ wage expenses, and other relevant costs.
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Cost of revenue — cloud services
For the three months ended March 31, 2026 and 2025, the cost of revenue from cloud services was comprised of the following:
Electricity costs. These expenses were incurred by the data centers for the HPC equipment and were closely correlated with the number of deployed GPU servers.
For the three months ended March 31, 2026, electricity costs increased by $0.3 million, or 53%, compared to the electricity costs incurred for the three months ended March 31, 2025. The increase primarily resulted from an increase in the number of GPU servers deployed.
Datacenter lease expenses. We entered into data center lease agreements for fixed monthly recurring costs.
For the three months ended March 31, 2026, data center lease expenses increased $0.1 million, or 10%, compared to the data center lease expense incurred for the three months ended March 31, 2025 due to a new lease entered in March 2025.
GPU servers lease expenses. We entered into a GPU servers lease agreement to support our cloud services. The lease payment depends on the usage of the GPU servers.
For the three months ended March 31, 2026, GPU server lease expenses remained consistent with the three months ended March 31, 2025.
Third-party customer support fees.We engaged a third party to provide customer support services.
For the three months ended March 31, 2026, third-party customer support fees were $0.1 million.
Cost of revenue — Colocation Services
In the fourth quarter of 2024, we acquired Enovum which provides colocation services. For the three months ended March 31, 2026 and 2025, the cost of revenue from colocation services was comprised of the following:
Electricity costs. These expenses were closely correlated with the number of deployed servers hosted by the data center.
For the three months ended March 31, 2026, electricity costs increased by $0.6 million, or 273%, compared to the electricity costs incurred for the three months ended March 31, 2025. Since March 31, 2025, the Company has expanded its data center footprint, including the MTL-3 facility. The increase in electricity costs is primarily attributable to the MTL-3 facility, which was operational during the period ended March 31, 2026 but not operational during the period ended March 31, 2025.
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Lease expenses. These expenses were incurred by the data center for lease agreement for a fixed monthly recurring cost.
For the three months ended March 31, 2026, datacenter lease expenses increased by $0.3 million, or 210%, compared to the datacenter lease expenses incurred for the three months ended March 31, 2025. The increase primarily resulted from the new MTL-3 lease entered in the second quarter of 2025.
Wage expenses. These expenses represent the salaries and benefits of data center employees involved in the operation of our facilities.
For the three months ended March 31, 2026, wage expenses were $0.2 million.
Depreciation and amortization expenses
For the three months ended March 31, 2026 and 2025, depreciation and amortization expenses were $6.4 million and $3.8 million, respectively, based on an estimated useful life of property, plant, and equipment and intangible assets. The increase in depreciation and amortization expenses is attributable to additional assets placed in service since March 31, 2025, specifically cloud equipment, resulting in higher expense being recognized.
General and administrative expenses
For the three months ended March 31, 2026, our general and administrative expenses, totaling $17.8 million, were primarily comprised of share-based compensation expenses for employees of $5.1 million, salary and bonus expenses of $2.2 million, professional and consulting expenses of $6.2 million (including $2.2 million of share-based compensation), marketing expenses of $0.4 million, travel expenses of $0.1 million and other expenses of $3.1 million,.
For the three months ended March 31, 2025, our general and administrative expenses, totaling $4.2 million, were primarily comprised of shared based compensation expenses of $0.1 million, salary and bonus expenses of $1.2 million, professional and consulting expenses of $1.7 million, marketing expenses of $0.3 million, and travel expenses of $0.1 million
The general and administrative expenses during the three months ended March 31, 2026 was significantly higher compared to the three months ended March 31, 2025 primarily attributable to higher share-based compensation expenses. In addition, salary and bonus expenses increased due to additional employees hired following the IPO. Professional and consulting fees were also higher, reflecting share-based compensation expenses for consultants as well as consulting costs charged by Bit Digital to WhiteFiber pursuant to the Transition Service Agreement. The increase further included start-up and development costs that did not qualify for capitalization.
Income tax expenses
Provision for income taxes consists of federal, state and foreign income taxes. Our income tax provision for the three months ended March 31, 2026 is primarily attributable to the mix of earnings and losses in countries with differing statutory tax rates, and the valuation allowance applied to the Company’s deferred tax assets in Canada and Japan. We continue to maintain a valuation allowance against the deferred tax assets in Canada and Japan as the Company does not expect those deferred tax assets are “more likely than not” to be realized in the near future, particularly due to the uncertainty on macroeconomy, politics and profitability of the business.
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Our future effective income tax rate depends on various factors, such as tax legislation, the geographic composition of our pre-tax income, the amount of our pre-tax income as business activities fluctuate, non-deductible expenses, non-taxable capital gain in certain jurisdiction, change of valuation allowance and the effectiveness of our tax planning strategies. The Organisation for Economic Co-operation and Development (“OECD”) has introduced a global minimum tax framework (“Pillar Two”) that generally applies to multinational enterprise groups with consolidated annual revenues of €750 million or more and is intended to ensure a minimum effective tax rate of 15% in each jurisdiction in which such groups operate. Certain jurisdictions have enacted, or are considering enacting, legislation implementing these rules. Based on the Company’s current consolidated revenue, for the three months ended March 31, 2026, the Company is not within the scope of the Pillar Two rules. However, the Company continues to monitor developments related to the implementation of these rules, and future growth or changes in the Company’s operations could result in the Company becoming subject to Pillar Two in future periods.
For more details on the Company’s tax profile, see Note 14. Income Taxes to our condensed consolidated financial statements.
Discussion of Certain Balance Sheet Items as of March 31, 2026 and December 31, 2025
The following table sets forth selected information from our condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025. This information should be read together with our condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q.
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Cash and cash equivalents primarily consist of funds deposited with banks, which are highly liquid and are unrestricted to withdrawal or use. The total balance of cash and cash equivalents were $75.8 million and $114.4 million as of March 31, 2026 and December 31, 2025, respectively. The decrease in the balance of cash and cash equivalents was a result of net cash of $141.7 million used in investing activities, partially offset by net cash of $101.8 million provided by financing activities and net cash of $1.8 million provided by operating activities.
Restricted cash represents cash balances that support an outstanding letter of credit to third parties related to security deposits and other purposes and are restricted from withdrawal. As of March 31, 2026 and December 31, 2025, restricted cash, which includes amounts supporting the letter of credit, was $4.3 million and $3.9 million, respectively.
Accounts receivable, net consists of amounts due from our customers. The total balance of accounts receivable, net was $91.7 million and $23.9 million as of March 31, 2026 and December 31, 2025, respectively. The increase in the balance of accounts receivable is attributable to unpaid invoices from our customers due to the timing of invoicing and cash collections. The increase further included activity with a new customer, including certain non-recurring charges recognized during the period.
Net investment in lease, net
Net investment in lease, net represents the present value of the lease payments not yet received from lessees. The current and non-current balance of net investment in lease was $3.9 million and $9.0 million, respectively as of March 31, 2026 due to sales-type lease agreements as a lessor for its cloud service equipment. The current and non-current balance of net investment in lease was $4.3 million and $9.7 million, respectively as of December 31, 2025. The decrease in the balance of net investment in lease was a result of $1.4 million of lease payments collected from equipment leasing customers, partially offset by $0.4 million in interest income earned.
Other current assets, net
Other current assets, net were $20.0 million and $21.3 million as of March 31, 2026 and December 31, 2025, respectively. The decrease in the balance of other current assets was mainly attributable to a decrease in receivable from third parties of $0.6 million, prepaid consulting services of $0.7 million, and deferred contract costs of $0.4 million, partially offset by $0.5 million in prepayment to third parties.
The deposits for property, plant, and equipment consists of advance payments for property, plant and equipment. The balance is derecognized once the control of the property, plant, and equipment is transferred to and obtained by us.
Compared with December 31, 2025, the balance as of March 31, 2026 increased by $15.1 million, mainly due to the reclassification of property, plant, and equipment of $6.5 million offset by prepayment of $21.6 million for property, plant, and equipment.
Property, plant, and equipment primarily consist of service equipment used in our Cloud services and Colocation businesses, internally developed software used in our Cloud services business, and construction in progress (“CIP”) representing assets received but not yet put into service in our Cloud services and Colocation businesses.
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As of March 31, 2026, the Cloud service equipment and internally developed software had a net book value, including CIP, of $100.0 million. As of December 31, 2025, the Cloud service equipment and internally developed software had a net book value, including CIP, of $124.0 million. Compared with December 31, 2025, the balance as of March 31, 2026 decreased by $24.1 million, mainly due to the sale of H200 servers with carrying value of $24.3 million.
As of March 31, 2026, the Colocation service equipment had a net book value, including CIP, of $332.0 million. As of December 31, 2025, the Colocation service equipment had a net book value, including CIP, of $212.6 million. Compared with December 31, 2025, the balance as of March 31, 2026 increased by $119.4 million, mainly due to $117.8 million of development costs for the construction of NC-1 facility as well as infrastructure costs incurred for MTL-3 in Montreal of $2.5 million, in part, by an increase in accumulated depreciation of $0.9 million.
Lease right-of-use assets and lease liabilities
As of March 31, 2026, right-of-use assets and lease liabilities were $30.4 million and $29.3 million, respectively. As of December 31, 2025, the Company’s right-of-use assets and lease liabilities were $24.2 million and $23.4 million, respectively.
The increase in right-of-use assets of $6.2 million was due to the addition of $8.1 million for five operating leases, partially offset by the amortization of the right-of-use assets totaling $1.7 million for the three months ended March 31, 2026.
The increase in lease liabilities of $5.9 million, was primarily due to the addition of $8.1 million for five operating leases as well as increase in interest accrued on lease liabilities of $0.4 million offset by the lease payments totaling $2.5 million for the three months ended March 31, 2026.
Other non-current assets, net
Other non-current assets, net were $23.5 million as of March 31, 2026, compared to $23.8 million as of December 31, 2025, a decrease of $0.3 million. The decrease was primarily due to $0.6 million decrease in deferred contract costs due to reclassification to other current assets, partially offset by increase of $0.3 million in deposits.
Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in relation to the Enovum acquisition. As of March 31, 2026 and December 31, 2025, the Company recorded goodwill in the amount of $19.8 million and $20.1 million, respectively, with the change attributable to foreign currency translation adjustments.
Intangible assets, net
Intangible assets pertain to customer relationships acquired in connection with the acquisition of Enovum. Refer to Note 13. Goodwill and Intangible Assets to our condensed consolidated financial statements for further information. As of March 31, 2026 and December 31, 2025, the total balance of intangible assets was $12.4 million and $12.8 million, respectively, with the change attributable to accumulated amortization.
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Accounts payable
Accounts payable primarily consists of amounts due for costs related to HPC services. Compared with December 31, 2025, the balance of accounts payable as of March 31, 2026 remained consistent.
As of March 31, 2026, the Company’s current and non-current portion of deferred revenue was $18.7 million and $125.8 million, respectively, compared to $8.0 million and $71.6 million, respectively, as of December 31, 2025. The increase in deferred revenue of $65.0 million reflects the recognition of $0.7 million in revenue related to the successful fulfillment of performance obligations from our cloud services and data center services, partially offset by $65.7 million prepayments from customers for cloud services and data center services to be rendered in the future.
Other payables and accrued liabilities
Other payables and accrued liabilities were $25.9 million as of March 31, 2026, compared to $48.3 million as of December 31, 2025, a decrease of $22.4 million. The decrease was primarily due to the decrease in payables of $27.0 million related to the NC-1 facility from unpaid invoices to our vendors due to the timing of invoicing and cash payments, partially offset by deferred share-based compensation liability of $3.1 million.
Convertible note payable, net
The convertible notes payable relates to the purchase agreement entered into by the Company in connection with the issuance of its 2031 Notes. In January 2026, the Company issued $230,000,000 aggregate principal amount of 4.50% convertible senior notes due 2031.
As of March 31, 2026 and December 31, 2025, the carrying amount of the Company’s convertible note payable was $222.3 million and $nil, respectively. Refer to Note 10. Debt, for more information.
Non-GAAP Financial Measures
In addition to consolidated U.S. GAAP financial measures, we consistently evaluate our use of and calculation of the non-GAAP financial measures, such as EBITDA and Adjusted EBITDA. These non-GAAP financial measures have not been calculated in accordance with GAAP and should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, GAAP results. In addition, EBITDA and Adjusted EBITDA should not be construed as indicators of our operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that they fail to address. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions. Therefore, its use can make it difficult to compare our current results with our results from other reporting periods and with the results of other companies.
EBITDA is computed as net income before interest, taxes, depreciation, and amortization. Adjusted EBITDA is a financial measure defined as our EBITDA adjusted to eliminate the effects of certain non-cash and/or non-recurring items that do not reflect our ongoing strategic business operations, which management believes results in a performance measurement that represents a key indicator of the Company’s core business operations. The adjustments currently include non-cash expenses such as share-based compensation expenses.
We believe Adjusted EBITDA can be an important financial measure because it allows management, investors, and our board of directors to evaluate and compare our operating results, including our return on capital and operating efficiencies, from period-to-period by making such adjustments.
Adjusted EBITDA is provided in addition to and should not be considered to be a substitute for, or superior to net income, the comparable measures under U.S. GAAP. Further, Adjusted EBITDA should not be considered as an alternative to revenue growth, net income, diluted earnings per share or any other performance measure derived in accordance with U.S. GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity. Adjusted EBITDA has limitations as an analytical tool, and you should not consider such measures either in isolation or as substitutes for analyzing our results as reported under U.S. GAAP.
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Reconciliations of Adjusted EBITDA to the most comparable U.S. GAAP financial metric for the three months ended and three months ended March 31, 2026 and 2025 are presented in the table below:
Liquidity and capital resources
As of March 31, 2026, our principal sources of liquidity were cash and cash equivalents of $75.8 million, and accounts receivable, net of $91.7 million.
As of March 31, 2026, we had working capital of $124.9 million as compared with working capital of $85.2 million as of December 31, 2025. Working capital is the difference between the Company’s current assets and current liabilities.
Prior to the Reorganization, as part of Bit Digital, the Company relied on Bit Digital to meet its working capital and financing requirements prior to generating revenue. We had primarily funded our operations through operating cash flows and equity financing provided by Bit Digital via public and private securities offerings of Bit Digital’s ordinary shares.
Following the Reorganization, our capital structure and sources of liquidity changed from our historical capital structure because we are no longer participating in Bit Digital’s cash management process. The Company’s ability to fund its operating needs in the future will depend on the ongoing ability to generate positive cash flow from our operations and raise capital in the capital markets on our own. Based upon our history of generating strong cash flows, we believe that we will be able to meet our short-term liquidity needs.
Convertible note
In January 2026, we issued $230.0 million aggregate principal amount of 4.50% convertible senior notes due 2031, resulting in net proceeds of approximately $102.5 million after deducting the Zero Strike Call Option premium, initial purchasers’ discounts and offering expenses. The issuance enhances our liquidity and provides additional capital to fund upcoming development projects, including construction activities and other strategic growth initiatives.
The 2031 Notes bear interest at 4.500% per annum, payable semiannually in arrears on February 1 and August 1 of each year, beginning August 1, 2026, and mature on February 1, 2031, unless earlier converted, redeemed, or repurchased. The Notes increase our long-term indebtedness and will require annual cash interest payments of approximately $10.4 million.
Iceland facility agreement
WhiteFiber Iceland ehf., a subsidiary of the Company, entered into a secured term loan facility with Landsbankinn hf. in March 2026, providing up to $20 million of available borrowings. The Facility bears interest at a floating rate per annum equal to the sum of (i) three month CME Term SOFR (or any successor benchmark), and (ii) an applicable margin of 4.25% per annum and has an initial two-year term, extendable up to four years. The loan is guaranteed by WhiteFiber, Inc. and WhiteFiber AI, Inc.
The Facility allows for up to two drawdowns (minimum $5 million each), with quarterly principal repayments beginning three months after initial borrowing. As of March 31, 2026, the Company had not yet drawn on the Facility. Subsequently, on April 24, 2026, the Company drew down $18 million. The Facility is secured by first-ranking security over (i) 100% of the Company’s shareholding in WhiteFiber Iceland ehf., (ii) designated assets (including GPU servers, CPU servers, IB switches and equipment accessories) at the date of the agreement, and (iii) material assets acquired thereafter (to be secured within 60 days), in each case until all obligations are fully satisfied.
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Royal Bank of Canada credit facility
On April 27, 2026, the Company entered into an amended credit agreement with RBC. This agreement replaces the original credit agreement dated June 18, 2025, as subsequently amended on July 4, 2025. The amended credit agreement provides an authorized credit facility of CAD $28 million (approximately $20 million). The proceeds have been used as a real estate acquisition bridge loan to finance the acquisition of the MTL-3 facility, at a purchase price of CAD $24.2 million (approximately USD $17.4 million). The closing date occurred on May 8, 2026.
As of the reporting date, the April 27, 2026 bridge loan has been authorized and funded by RBC for the MTL-3 facility acquisition. The Company and RBC are currently in discussions regarding new syndicated credit facilities, including i) a delayed draw term loan facility of CAD $115 million (approximately $82.5 million), which includes the CAD $24.2 million (approximately $17.4 million) bridge loan ii) an accordion facility of CAD $25 million (approximately $17.9 million) and iii) the CAD $8 million (approximately $5.7million) revolving facility.
We believe that our cash on hand and anticipated cash from operations, together with the net proceeds from our IPO as well as the Notes and the facility agreements, will be sufficient to finance our operations for at least the next twelve months from the date of this Form 10-Q. However, there can be no assurance that we will not require additional financing or that future financing can obtain these funds on acceptable terms or at all or that we can maintain or increase our current revenues.
Our future capital requirements will depend on many factors, including the revenue growth rate, the success of future product development and capital investment required, and the timing and extent of spending to support further sales and marketing and research and development efforts. In addition, we expect to incur additional costs as a result of operating as a public company. In the event that additional financing is required from outside sources, we cannot be sure that any additional financing will be available to us on acceptable terms if at all. If we are unable to raise additional capital when desired, our business, operating results, and financial condition could be adversely affected.
Cash flows
Operating Activities
Net cash provided by operating activities was $3.2 million for the three months ended March 31, 2026, derived mainly from (i) a net loss of $12.0 million for the three months ended March 31, 2026 adjusted for depreciation and amortization expenses of property and equipment of $6.4 million and share based compensation of $7.3 million and a (ii) net changes in our operating assets and liabilities, principally comprising of a decrease to other assets of $1.5 million, a decrease in right-of-use assets of $1.7 million, an increase in accounts receivable of $67.8 million, a decrease in net investment in lease of $1.0 million, an increase in deferred revenue of $65.0 million, a decrease in lease liabilities of $1.7 million, and an increase in amounts due to related parties of $2.0 million.
Net cash used in operating activities was $2.9 million for the three months ended March 31, 2025, derived mainly from (i) a net income of $1.4 million for the three months ended March 31, 2025 adjusted for depreciation and amortization expenses of property and equipment of $3.8 million and (ii) net changes in our operating assets and liabilities, principally comprising of an increase in other assets of $11.1 million, a decrease in right-of-use assets of $1.1 million, a decrease in accounts receivable of $2.7 million, an increase in right-of use assets of $1.1 million, a decrease in net investment in lease of $0.6 million, a decrease in deferred revenue of $9.5 million, a decrease in lease liabilities of $1.0 million, a decrease in accounts payable of $1.0 million, an increase in other payables and accrued expenses of $9.7 million, and an increase in deferred tax liabilities of $0.6 million.
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Investing Activity
Net cash used in investing activity was $143.1 million for the three months ended March 31, 2026, attributable to purchases of and deposits made for property, plant, and equipment of $169.2 million, partially offset by proceeds from disposal of property, plant and equipment of $26.1 million.
Net cash used in investing activities was $50.2 million for the three months ended March 31, 2025, primarily attributable to purchases of and deposits made for property and equipment of $50.2 million.
Financing Activity
Net cash provided by financing activity was $101.8 million for the three months ended March 31, 2026, attributable to $222.1 million net proceeds from issuance of convertible debt, partially offset by purchase of zero-strike call option of $120.0 million.
Net cash provided by financing activity was $50.0 million for the three months ended March 31, 2025, attributable to net transfers from parent.
Off-Balance Sheet Arrangements
During the periods presented, we did not have any off-balance sheet arrangements.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements. These financial statements are prepared in accordance with U.S. GAAP, which requires the Company to make estimates and assumptions that affect the reported amounts of our assets, liabilities, revenues, and expenses, to disclose contingent assets and liabilities on the dates of the condensed consolidated financial statements, and to disclose the reported amounts of revenues and expenses incurred during the financial reporting periods. The most significant estimates and assumptions include, but are not limited to, the valuation of current assets, useful lives of property, plant, and equipment, impairment of long-lived assets, intangible assets and goodwill, valuation of assets and liabilities acquired in business combinations, provision necessary for contingent liabilities and realization of deferred tax assets. We continue to evaluate these estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates as a result of changes in our estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe critical accounting policies as disclosed in this release reflect the more significant judgments and estimates used in preparation of our condensed consolidated financial statements. For a summary of significant accounting policies, refer to Note 2. Summary of Significant Accounting Policies in our Notes to Unaudited Condensed Consolidated Financial Statements included elsewhere herein.
Recently Issued Accounting Pronouncements
There have been no recently issued accounting pronouncements that have had, or are expected to have, a material impact on our results of operations, financial position and/or cash flows.
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Emerging Growth Company Status
We are an “emerging growth company,” as defined in the JOBS Act, enacted in April 2012. We intend to take advantage of certain exemptions under the JOBS Act from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. In addition, an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this provision of the JOBS Act. As a result, we will not be subject to new or revised accounting standards at the same time as other public companies that are not emerging growth companies. Therefore, our consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates.
We will remain an emerging growth company and may take advantage of these exemptions until the earliest of: (i) the last day of the fiscal year following the fifth anniversary of the consummation of our IPO; (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion; (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) which would occur if the market value of our Ordinary Shares held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year; or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable. A smaller reporting company is not required to provide the information required by this Item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Principal Executive Officer and our Principal Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosures.
Based on this evaluation, our management, with the participation of our Principal Executive Officer and our Principal Financial Officer, concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this Form 10-Q.
Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in conducting a cost-benefit analysis of possible controls and procedures.
Changes in Internal Control over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting during the quarter-ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may become involved in various disputes and litigation matters that arise in the ordinary course of business. We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, results of operations, cash flows or financial condition. For more information, refer to Note 18. Commitments and Contingencies in our Notes to Unaudited Condensed Consolidated Financial Statements included elsewhere herein.
Item 1A. Risk Factors
In addition to the information set forth in this Quarterly Report on Form 10-Q, including the information set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in our condensed consolidated financial statements and the related notes, you should carefully consider the risk factors disclosed in the section entitled “Risk Factors” in our Annual Report and the other reports that we have filed with the SEC. Any of the risks discussed in such reports, as well as additional risks and uncertainties not currently known to us or that we currently deem immaterial, could materially and adversely affect our results of operations, financial condition or prospects. During the period covered by this Quarterly Report on Form 10-Q, there have been no material changes in our risk factors as previously disclosed.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities
On January 26, 2026, we completed a private offering of $230.0 million aggregate principal amount of 4.500% Convertible Senior Notes due 2031 (the “2031 Notes”), including the exercise in full of the initial purchasers’ option to purchase an additional $20.0 million aggregate principal amount of 2031 Notes. The 2031 Notes are general senior unsecured obligations of the Company. The 2031 Notes were issued pursuant to an Indenture, dated January 26, 2026 (the “Indenture”), between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The 2031 Notes will mature on February 1, 2031 (the “Maturity Date”), unless earlier converted, redeemed or repurchased. The 2031 Notes will bear interest at a rate of 4.500% per year, payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2026. Holders may convert their 2031 Notes at their option prior to the close of business on the second scheduled trading day immediately preceding the Maturity Date. Upon conversion, the Company will satisfy its conversion obligation by paying or delivering, as the case may be, cash, its Ordinary Shares, or a combination of cash and Ordinary Shares, at the Company’s election, in the manner and subject to the terms and conditions set forth in the Indenture. The conversion rate is initially 38.5981 ordinary shares per $1,000 principal amount of the 2031 Notes (equivalent to an initial conversion price of approximately $25.91 per ordinary share), which represents an approximately 27.5% conversion premium over the last reported sale price of $20.32 per ordinary share on the Nasdaq Capital Market on January 21, 2026. The conversion rate is subject to customary adjustments upon the occurrence of certain events, as described in the Indenture.
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In connection with the issuance of the 2031 Notes, the Company entered into a privately negotiated zero-strike call option transaction with Barclays Bank PLC, through its agent Barclays Capital Inc. (the “Option Counterparty” and, such transaction, the “Call Option Transaction”), with an expiration date that is scheduled to occur shortly after the Maturity Date. Pursuant to the Call Option Transaction, the Company paid a premium equal to approximately $120.0 million for the right to receive, without further payment, 5,905,511 Ordinary Shares (subject to customary adjustment), with delivery thereof by the Option Counterparty at expiry, subject to early settlement of the Call Option Transaction in whole or in part at the Option Counterparty’s discretion.
The net proceeds from the sale of the 2031 Notes were approximately $222.1 million, after deducting the initial purchasers’ discounts and offering expenses payable by the Company. The Company used approximately $120.0 million of the net proceeds from the 2031 Notes to pay the cost of the Call Option Transaction. The remaining net proceeds are expected to be used primarily for data center expansion, including to partially fund the lease or purchase of additional property or properties on which to build additional WhiteFiber data centers, to construct those facilities, to enter into additional energy service agreements for each additional site, to purchase related equipment, and for potential acquisitions, partnerships and joint ventures related thereto, and for working capital and general corporate purposes.
The Company offered and sold the Notes to the initial purchasers in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and the Notes were initially resold by the initial purchasers to persons whom the initial purchasers reasonably believed to be qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A under the Securities Act. The Company relied on these exemptions from registration based in part on representations made by the initial purchasers in purchase agreement, dated January 21, 2026, by and among the Company and the representatives of the initial purchasers named therein. The Notes and the Ordinary Shares issuable upon conversion of the Notes, if any, have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. To the extent that any Ordinary Shares are issued upon conversion of the Notes, they will be issued in transactions anticipated to be exempt from registration under the Securities Act by virtue of Section 3(a)(9) thereof, because no commission or other remuneration is expected to be paid in connection with conversion of the Notes, and any resulting issuance of Ordinary Shares. Initially, a maximum of 11,318,898 Ordinary Shares may be issued upon conversion of the Notes based on the initial maximum conversion rate of 49.2126 Ordinary Shares per $1,000 principal amount of the Notes, which is subject to customary anti-dilution adjustment provisions.
Use of Proceeds
On August 6, 2025, our registration statement on Form S-1 (File No. 333-288650) (the “Registration Statement”) for our IPO was declared effective by the SEC. There has been no material change in the expected use of the net proceeds from our IPO as described in our Registration Statement. As of March 31, 2026, the Company had expended approximately $246.5 million of the net proceeds of the IPO for the construction of plant, building and facilities, $45.9 million for the purchase and installment of machinery and equipment, and $0.2 million for real estate.
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Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Amendment and Replacement of Royal Bank of Canada Credit Facility
10b5-1 Trading Arrangements
During the three months ended March 31, 2026, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K, nor did the Company during such fiscal quarter adopt or terminate any “Rule 10b5-1 trading arrangement.”.
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Item 6. Exhibits.
(a) Exhibits.
Amended and Restated Memorandum and Articles of Association of WhiteFiber, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed on August 8, 2025).
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SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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