10-K – 2026-02-25 – hut-20251231x10k.htm

Hut 8 Corp._December 31, 2025
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM  10-K
(Mark One)
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☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the fiscal year ended December 31, 2025
OR
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☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the transition period from:
Commission file number 001-41864
Hut 8 Corp.
(Exact name of registrant as specified in its charter)
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Delaware
92-2056803

(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)

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1101 Brickell Avenue, Suite 1500
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Miami , Florida
33131

(Address of principal executive offices)
(Zip Code)

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( 305 ) 224-6427
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
Trading Symbol(s)
Name of each exchange on which registered

Common Stock, par value $0.01 per share
HUT
The Nasdaq Stock Market LLC
Toronto Stock Exchange

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes   ☒      No  ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.  Yes  ☐       No   ☒
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.
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
☐

If an emerging growth company, indicate by check mark 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.           ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error or previously issued financial statements.           ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).           ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).          Yes  ☐    No  ☒
The aggregate market value of the common stock held by non-affiliates computed by reference to the price at which the common stock was last sold as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately $ 1,747,264 thousand.
As of February 24, 2026, the registrant had 110,887,284 shares of its common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement relating to the Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, 2025.
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Table of Contents

TABLE OF CONTENTS
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PART I
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Item 1. Business
6

Item 1A. Risk Factors
17

Item 1B. Unresolved Staff Comments
51

Item 1C. Cybersecurity
51

Item 2. Properties
52

Item 3. Legal Proceedings
52

Item 4. Mine Safety Disclosures
52

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PART II

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Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
53

Item 6. [Reserved]
53

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
54

Item 7A. Quantitative and Qualitative Disclosures About Market Risk
79

Item 8. Financial Statements and Supplementary Data
81

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
155

Item 9A. Controls and Procedures
155

Item 9B. Other Information
156

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
156

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PART III

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Item 10. Directors, Executive Officers, and Corporate Governance
157

Item 11. Executive Compensation
157

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
157

Item 13. Certain Relationships and Related Transactions and Director Independence
157

Item 14. Principal Accountant Fees and Services
157

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PART IV

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Item 15. Exhibits and Financial Statement Schedules
158

Item 16. Form 10-K Summary
159

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Signatures
160

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2

Table of Contents

Introductory Note
Business Combination and Change in Fiscal Year End
On February 6, 2023, U.S. Data Mining Group, Inc., a Nevada corporation doing business as “US BITCOIN” (“USBTC”), Hut 8 Mining Corp., a corporation existing under the laws of British Columbia (“Legacy Hut”), and Hut 8 Corp., a newly-formed Delaware corporation, entered into a business combination agreement pursuant to which, among other things, Legacy Hut and its direct wholly-owned subsidiary, Hut 8 Holdings Inc., a corporation existing under the laws of British Columbia, amalgamated to continue as one British Columbia corporation (“Hut Amalco”) and both Hut Amalco and USBTC became wholly-owned subsidiaries of Hut 8 Corp. (the “Business Combination”). On November 30, 2023, the Business Combination was completed and Hut 8 Corp. began trading on the Nasdaq Stock Exchange LLC (“Nasdaq”) on December 4, 2023.
USBTC was deemed the accounting acquirer in the Business Combination and it historically had a June 30 fiscal year end. Effective July 1, 2023, USBTC changed its fiscal year end from June 30 to December 31. The six months ended December 31, 2023 served as a transition period. See our transition Annual Report on Form 10-KT filed with the Securities and Exchange Commission (the “SEC”) on March 28, 2024. Our fiscal year for 2024 commenced on January 1, 2024 and ended on December 31, 2024.
Given that the Business Combination closed on November 30, 2023, the information included in this Annual Report on Form 10-K (the “Annual Report”) principally describes Hut 8 Corp.’s business and operations following the closing of the Business Combination. However, the historical financial statements and related management’s discussion and analysis (“MD&A”) for the six months ended December 31, 2023 describe five months of USBTC results and one month of combined company results. This Annual Report includes audited financial statements for the twelve months ended December 31, 2025 compared to audited financials for the period twelve months ended December 31, 2024, and audited financial statements for the six months ended December 31, 2023
As used in this Annual Report, unless otherwise noted or the context otherwise requires:
● references to the “Company,” “Hut 8,” “we,” “us,” “our” and similar terms refer to Hut 8 Corp. and its consolidated subsidiaries including those existing prior to the consummation of the Business Combination;
● references to “USBTC” are to U.S. Data Mining Group, Inc. and its consolidated subsidiaries prior to the consummation of the Business Combination; and
● references to “Legacy Hut” are to Hut 8 Mining Corp. and its consolidated subsidiaries prior to the consummation of the Business Combination.

Change in Reporting Segments
We changed our reporting segments during the year ended December 31, 2024 to better align with our objectives and operations. Accordingly, all financial results included in this Annual Report have been restated to align with our new reporting segments: Power, Digital Infrastructure, Compute, and Other. Our previous reporting segments were Digital Asset Mining, Managed Services, High Performance Computing – Colocation and Cloud, and Other. Further details on the new reporting segments are included elsewhere in this Annual Report.
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Cautionary Statement Regarding Forward-Looking Statements
This Annual Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, as well as assumptions, that, if proven incorrect or do not materialize, could cause our results to differ materially from those expressed or implied by these forward-looking statements. Forward-looking statements generally are identified by the words “intend,” “plan,” “may,” “should,” “will,” “project,” “estimate,” “anticipate,” “believe,” “expect,” “continue,” “potential,” “opportunity,” and similar expressions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Such statements are based on management’s current expectations and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. There can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors, including the risk factors discussed in this Annual Report. Except as required by law, we do not assume any obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
Summary of Risk Factors
Our business is subject to numerous risks and uncertainties that make an investment in our securities speculative or risky, any one of which could materially adversely affect our business, financial condition, or results of operations. These risks include those listed below. This list is not complete, and should be read together with the “Risk Factors” found elsewhere in this Annual Report, as well as the other information in this Annual Report and the other filings that we make with the SEC.
Risks Related to Our Growth
● Our construction of new data centers, data center expansions, or data center redevelopment could involve significant risks to our business.
● We may experience liquidity constraints and may need to raise additional capital. We may be unable to raise the additional capital needed to operate and grow our business.
● If we do not accurately predict our facility requirements, it could have a material adverse effect on our business, financial condition, and results of operations.
● We face risks associated with the King Mountain JV and American Bitcoin, and may face similar risks in the future by entering into other joint ventures or launching or spinning out other consolidated businesses.
● We may acquire other businesses and/or assets or form strategic alliances or joint ventures that could negatively affect our operating results, dilute shareholder ownership, increase debt, or cause us to incur significant expenses.
● New offerings or lines of business may subject us to additional risks.
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Risks Related to Our Business and Operations
● Failure of critical systems related to our offerings and/or infrastructure could have a material adverse effect on our business, financial condition, and results of operations.
● We are subject to risks associated with our need for significant electrical power.
● We may not be able to attract, retain, or expand relationships with customers across our platform.
● Our operations and growth may be adversely affected by geographic concentration and market-specific conditions.
● We may not be able to compete effectively against our current and future competitors.
● Some of our infrastructure is located on leased premises and the termination or higher renewal rate of our leases could materially adversely affect our business, financial condition, and results of operations.
● We are required to obtain, maintain, and comply with the terms and conditions of government permits and approvals.
● We are subject to many hazards and operational risks that can disrupt our business, some of which may not be insured or fully covered by insurance.
● We may be exposed to cybersecurity threats and breaches.

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● We may face the risk of Internet-related disruptions.
● Our business may be heavily impacted by political, social, economic, and other events and circumstances in the United States, Canada, or elsewhere.
● We operate in the United States and Canada and may further expand our operations internationally, which may expose us to risks associated with doing business internationally.  
● Our success depends on key personnel whose continued service is not guaranteed.
● We are a growth-stage company with an evolving business model and strategy.
● We face risks associated with our current indebtedness, and our failure to service debt or remain in compliance with certain covenants may have a material adverse effect on our business, financial condition, and results of operations.
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Risks Related to Bitcoin, Including ASIC Compute
● We and our consolidated subsidiary, American Bitcoin, are highly concentrated in Bitcoin. Bitcoin is a highly volatile asset, and fluctuations in the price of Bitcoin have in the past influenced, and are likely to continue to influence, our business, financial condition, and results of operations and the market price of our common stock.
● We may be subject to additional risks associated with holding Bitcoin for our and American Bitcoin’s account.
● The further development and acceptance of the Bitcoin network and other digital assets is subject to a variety of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of Bitcoin and other digital asset systems may adversely affect our and American Bitcoin’s business, financial condition, and results of operations.
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Risks Related to Certain Regulations and Laws, Including Tax Laws
● Our operations are subject to various legal, regulatory, governmental, and technological uncertainties.
● We may be subject to substantial environmental or energy regulation and may be adversely affected by legislative or regulatory changes.
● We are involved in legal proceedings from time to time, which could adversely affect us.
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Risks Related to Ownership of Our Common Stock
● The market price of our common stock may be volatile and subject to wide fluctuations in response to numerous factors, many of which are beyond our control.
● Future issuances of our capital stock or rights to purchase capital stock could result in dilution to our stockholders and could cause our stock price to decline.
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PART I
Item 1. Business
Hut 8: Where Power Unlocks Potential
Hut 8 is an energy infrastructure platform that integrates power, digital infrastructure, and compute at scale to fuel next-generation, energy-intensive use cases. We take a power-first, innovation-driven approach to developing, commercializing, and operating the critical infrastructure that underpins the breakthrough technologies of today and tomorrow.
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Our Platform
Our platform consists of three layers: Power, Digital Infrastructure, and Compute. Together, these layers form a vertically integrated foundation for next-generation, energy-intensive technology applications. This structure enables us to participate selectively across the infrastructure value chain, including securing power and interconnections, developing and operating digital infrastructure assets that leverage that power, and deploying compute capacity on or alongside that infrastructure. Today, our core focus is on commercializing this platform primarily through the development and operation of data centers at scale, supporting AI, high-performance computing (“HPC”), ASIC compute, and other energy-intensive technology applications.
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Power. We acquire, develop, and manage critical energy assets such as powered land, interconnects, substations, switchyards, and related electrical systems designed to address the load demands of next-generation, energy-intensive technology applications. As of December 31, 2025, our Power layer comprised 1,020 megawatts (“MW”) of energy capacity under management across 15 sites in the United States and Canada, spanning energy assets we own, lease, or operate on behalf of third parties. Of this capacity, approximately 310 MW is associated with the four power generation assets we divested in Q1 2026.
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Digital Infrastructure. We design, build, commercialize, and operate purpose-built data center facilities for next-generation, energy-intensive technology applications with the aim of maximizing long-term returns from our Power layer. As of December 31, 2025, our Digital Infrastructure layer comprised five ASIC compute data centers, five traditional cloud and colocation data centers, and one non-operational ASIC compute site.
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In addition to these sites, we are actively advancing a scaled AI infrastructure development program. We are currently developing an AI data center at our River Bend campus in Louisiana. The project will commercialize 330 MW of utility capacity and is targeted for initial delivery and commissioning in Q2 2027.  In addition, we continue to advance the commercialization of 1,230 MW of utility capacity under development across multiple sites in our development pipeline.
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Compute. We own, operate, and scale purpose-built businesses that acquire, deploy, and monetize specialized hardware for next-generation, energy-intensive technologies like AI, HPC, and ASIC compute. Each business is typically launched and capitalized under a distinct brand tailored to a specific end market and structured to align with its strategic role within our broader platform. Through this structure, we provide direct exposure to the markets created by transformative technologies such as AI. As of December 31, 2025, our Compute layer primarily comprised three brands:
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1. American Bitcoin. Launched in 2025, American Bitcoin, a majority-owned subsidiary of Hut 8, is a publicly listed Bitcoin accumulation platform focused on industrial-scale ASIC compute and the development of a strategic Bitcoin reserve. The principal objective of American Bitcoin is to deliver increasing Bitcoin exposure to its shareholders, as measured by Bitcoin per Share. American Bitcoin’s Class A common stock is listed on Nasdaq under the symbol “ABTC.”
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2. Hut 8 Canada. Hut 8 Canada, formerly known as Hut 8 High Performance Computing, provides data center and cloud infrastructure services, including public and private cloud deployments, managed backup, business continuity and disaster recovery services, and high-capacity storage solutions. Hut 8 Canada operates though a wholly owned subsidiary of Hut 8 across five data centers in Canada, serving more than 200 customers.
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3. Highrise AI. Highrise AI is an AI Cloud business wholly owned by Hut 8, offering a cloud infrastructure platform purpose-built for AI. Designed for developers and enterprises operating in performance-critical and security-sensitive domains, Highrise AI delivers bare-metal performance with full-stack orchestration to support the training and deployment of production-scale AI models. As of December 31, 2025, Highrise AI operated 1,000 NVIDIA H100 GPUs and 96 NVIDIA H200 GPUs.
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Exhibit 1. Power and Digital Infrastructure assets under management as of December 31, 2025
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Asset
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Hut 8 Ownership (1)
​
Location
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Power Source
​
Application
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Total Capacity

Vega
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100%
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Texas Panhandle
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Wind + ERCOT (2) grid
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ASIC compute
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205 MW

Medicine Hat
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100%
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Medicine Hat, AB
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CCGT (3) + AESO (4) grid
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ASIC compute
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67 MW

Salt Creek
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100%
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Orla, TX
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ERCOT (2) grid
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ASIC compute
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63 MW

Alpha
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100%
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Niagara Falls, NY
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NYISO (5) grid
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ASIC compute
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50 MW

Drumheller
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100%
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Drumheller, AB
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AESO (4) grid
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Non-operational
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42 MW

Kelowna
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100%
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Kelowna, BC
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Grid (utility tariff)
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Cloud and colocation
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1.1 MW

Mississauga
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100%
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Toronto, ON
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Grid (utility tariff)
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Cloud and colocation
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0.9 MW

Vaughan
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100%
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Toronto, ON
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Grid (utility tariff)
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Cloud and colocation
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0.6 MW

Vancouver II
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100%
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Vancouver, BC
​
Grid (utility tariff)
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Cloud and colocation
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0.5 MW

Vancouver I
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100%
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Vancouver, BC
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Grid (utility tariff)
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Cloud and colocation
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0.3 MW

King Mountain
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50.0%
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McCamey, TX
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Wind + ERCOT (2) grid
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ASIC compute
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280 MW

Iroquois Falls (6)
​
80.1%
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Iroquois Falls, ON
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CCGT (3) power plant
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Power generation
​
120 MW

Kingston (6)
​
80.1%
​
Kingston, ON
​
CCGT (3) power plant
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Power generation
​
120 MW

North Bay (6)
​
80.1%
​
North Bay, ON
​
CCGT (3) power plant
​
Power generation
​
35 MW

Kapuskasing (6)
​
80.1%
​
Kapuskasing, ON
​
CCGT (3) power plant
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Power generation
​
35 MW

Energy Capacity Under Management
​
​
​
​
​
1,020 MW

(1) Generally, percentage owned denotes our ownership of power infrastructure at owned or leased sites, whereas for cloud and colocation sites, percentage owned denotes our ownership of mechanical and electrical infrastructure at leased data center locations.
(2) Electric Reliability Council of Texas (“ERCOT”)
(3) Combined cycle gas turbine (“CCGT”)
(4) Alberta Electric System Operator (“AESO”)
(5) New York Independent System Operator (“NYISO”)
(6) One of four sites comprising the 310 MW portfolio of power generation assets Hut 8 divested in Q1 2026

Exhibit 2. Power and digital infrastructure assets under development and construction as of December 31, 2025
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Asset
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Location
​
Application
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Stage
​
Total Utility Capacity

River Bend
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Louisiana
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AI infrastructure
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Construction
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330 MW

Site 02
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Texas
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TBD
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Development
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1,000 MW

Site 03
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Texas
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TBD
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Development
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180 MW

Site 04
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Illinois
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TBD
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Development
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50 MW

Energy Capacity Under Development and Construction
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​
​
​
​
1,560 MW

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Our Operating Segments
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We report across three core operating segments: Power, Digital Infrastructure, and Compute. Each segment corresponds directly to a layer of our platform. A fourth segment, Other, captures revenue from activities that are not core to our platform or do not meet the criteria for segment-level reporting.
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Power. Our Power segment comprises the origination, development, and management of powered land and energy infrastructure that enables large-scale, energy-intensive infrastructure deployment. This includes interconnects, substations, switchyards, generation assets, and related electrical systems. While our Power segment is designed primarily to support the scaling of our downstream Digital Infrastructure layer, we have also historically monetized our power capabilities through managed services arrangements and the operation of power generation assets. In the future, we may generate revenue in our Power layer through other commercial structures.

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Digital Infrastructure. Our Digital Infrastructure segment comprises the development, ownership, and operation of facilities designed to support next-generation, energy-intensive technology applications. This segment represents a downstream pathway through which certain Power assets within our platform are commercialized by developing and leasing data centers. We seek to monetize our Digital Infrastructure assets through a range of commercial structures, including long-term hosting, leasing, or colocation agreements. Our goal is to generate predictable, contracted cash flows supported by strong credit profiles, medium-to-long-term duration, and economic terms designed to deliver attractive returns on and of invested capital.
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For example, we build and operate facilities optimized for various chip architectures. For ASIC-based Bitcoin mining, we provide hosting services to third-party customers through fixed-fee or profit-sharing arrangements, often with reimbursement for pass-through costs such as electricity. Through our Hut 8 Canada business, we operate five data centers serving more than 200 customers and deliver services such as colocation, compute, storage, and networking. We are expanding into purpose-built infrastructure to support AI and high-performance computing (e.g., GPUs and TPUs), beginning with our River Bend campus in Louisiana.
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Compute. Our Compute segment comprises operating businesses that deploy and monetize compute assets across next-generation energy-intensive technology end markets. We generate revenue through the operation of owned compute infrastructure and the provision of compute-based services, with economics driven by hardware utilization, operating efficiency, and market demand.
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1. ASIC Compute. This segment reflects revenue generated primarily by American Bitcoin. Revenue is derived from Bitcoin mining rewards earned based on the computing power contributed to mining pools through the operation of owned mining infrastructure.
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2. Traditional Cloud. This segment reflects revenue generated by Hut 8 Canada. Revenue is generated through consumption-based arrangements under which customers commit to baseline levels of compute, storage, network, or power usage, with additional usage billed based on actual consumption.
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3. AI Cloud. This segment reflects revenue generated by Highrise AI. Revenue is generated through contracted infrastructure and service fees.
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Other. Our Other reporting segment includes activities that fall outside the scope of our Power, Digital Infrastructure, and Compute layers. We continuously evaluate opportunities to leverage our expertise in power, digital infrastructure, and compute to enhance our risk-adjusted returns. While our primary focus remains on the three core layers of our platform, we have previously, and may in the future, expand into complementary business lines we believe align with our strategic capabilities. Revenue from this segment is currently generated through Equipment Sales and Repairs.
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Our Strategy and Operating Model
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We believe the value of power will continue to rise as next-generation, energy-intensive technologies drive growing demand within a constrained electrical grid. In this increasingly supply-constrained energy environment, access to power has become a key gating factor for digital infrastructure development, often determining where, how, and what infrastructure can be built. Power availability, cost, scale, and timing directly shape the feasibility and economics of large-scale infrastructure projects.
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Consistent with this view, we treat power as the first variable in platform development. Rather than serving as a downstream input following real estate acquisition, power informs our site selection, infrastructure design, capital allocation, and commercialization decisions. We believe this power-first approach differentiates us from traditional data center operators, which have historically prioritized real estate availability and addressed power procurement reactively.
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Because power attributes vary materially across site-specific fundamentals, including cost structure, scale, timing, provision (front-of-the-meter vs. behind-the-meter), and generation technology, we apply a targeted, asset-by-asset monetization strategy designed to optimize project-level returns while managing exposure to secular market risk. Each asset is initially developed and commercialized for a specific use case determined at the time of investment through project-level underwriting and return analysis.
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As we look to develop and commercialize assets for a defined use case through project-level underwriting, we intend to design infrastructure, where appropriate, that preserves optionality. We believe this approach allows for the flexibility to adapt assets in response to changes in technology, market conditions, and customer demand, supporting long-term asset viability and value across the asset lifecycle. The ability to reposition assets across multiple potential use cases provides us with additional flexibility in asset selection.
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We execute our strategy through a development flywheel that governs how we originate, invest in, monetize, and optimize power assets (see Exhibit 2). We believe this flywheel provides a structured, scalable, and repeatable framework for disciplined capital deployment. Our objective is to build an investment-grade energy and digital infrastructure platform characterized by durable assets, contracted recurring revenue, and disciplined capital allocation.
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We believe this operating model differentiates us from traditional data center colocation providers, which are often constrained by legacy real estate footprints and incremental power procurement processes. It also distinguishes us from developers seeking to adapt existing facilities for emerging workloads with less integrated or fully outsourced power origination and greenfield development capabilities.
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Exhibit 3. Our development flywheel
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Stage
Description

Origination
Guided by rigorous due diligence, we identify high-potential assets that can support next-generation, energy-intensive technologies such as AI and HPC, as well as sites where ASIC compute can serve as a transitional load to enable more rapid, cost-effective monetization. This approach expands the universe of assets we can pursue, including stranded or underutilized power.

Investment
We integrate select assets from our development pipeline into our platform through targeted underwriting and disciplined capital deployment. In evaluating investments, we assess how interim or transitional use cases, such as ASIC compute, can support acquisition underwriting, accelerate time to cash flow, and mitigate development and enterprise risk.

Commercialization
We commercialize each power asset in our platform with the use case we believe will deliver the highest risk-adjusted returns based on prevailing market conditions, asset characteristics, and customer demand.

Optimization
We take an active approach to portfolio management, driving innovations in infrastructure design, development, and operations to enhance asset performance, expand optionality, and unlock return potential. Over time, we aim to maximize platform yield, including by transitioning suitable power assets to higher-return use cases where possible, while continuously examining how to lower our cost structure.

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

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

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ASIC compute data center development is one of our primary tools for commercializing power assets under our power-first strategy. In scenarios where AI or other HPC workloads may not be immediately viable due to commercialization timelines, land constraints, load dynamics, limited fiber access, or other factors, ASIC compute can serve as an initial load that enables near-term monetization while often preserving the ability to transition sites to higher-value use cases over time. This capability strengthens our power origination and acquisition underwriting capabilities by expanding the set of assets we can pursue and accelerating time to cash flow once secured.
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American Bitcoin anchors this approach under long-term commercial agreements pursuant to which we are its exclusive infrastructure development and operating partner. These arrangements provide a flexible source of offtake that can increase certainty at the earliest stages of commercialization and can reduce execution risk as assets move from origination into development.
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Case study: How ASIC compute enables rapid, cost-efficient power acquisition

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

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As technology and customer demand evolve, the workloads that support the strongest risk-adjusted returns on a given site may change over time. We aim to address this by securing power positions, including powered land and interconnection pathways, with a long-term view, and by commercializing those positions through the structure we believe is best suited to the asset and market at the time, including managed services arrangements, development and infrastructure management activities, and, where appropriate, the development and operation of data centers through our Digital Infrastructure layer. This approach allows us to preserve flexibility at the asset level, reduce reliance on any single demand driver, and support durable growth through market cycles.
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Execution of our power-first strategy is supported by a power-native organization with deep experience across the development and commercialization lifecycle of energy infrastructure. Our personnel have deep experience navigating regulatory frameworks, interconnection processes, and regional power markets, enabling disciplined execution across a range of geographies and load profiles. Across our organization and Board of Directors, this experience spans power origination, infrastructure development, commercialization, and capital markets execution, drawing on backgrounds at leading companies including NextEra Energy, Constellation Energy, Exelon Corporation, Clearway Energy, Invenergy, Duke Energy, Holtec International, Oriden Power, Pine Gate Renewables, Acciona Energy, J.P. Morgan, Citigroup, NV Energy, Ormat and GE Capital.
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Our Development Pipeline
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We execute our power-first strategy by building and advancing a scaled development pipeline. Capacity within this pipeline is converted to energy capacity under management upon commercialization. As of December 31, 2025, our development pipeline comprised approximately 8,500 MW of capacity (see Exhibit 4).
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Exhibit 4. Our development pipeline
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As of the end of

Stage
Description
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Q1 2025
​
Q2 2025
​
Q3 2025
​
Q4 2025

Energy Capacity Under Diligence
Sites identified for large-load use cases such as AI, HPC, ASIC compute, industrial applications such as next generation manufacturing, and other energy-intensive technologies. At this stage, we assess site potential by engaging with utilities, landowners, and other stakeholders to evaluate critical factors, including power availability, infrastructure readiness, fiber connectivity, and overall commercial viability.
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8,190 MW
​
7,650 MW
​
5,865 MW
​
5,185 MW

Energy Capacity Under Exclusivity
Sites where we have secured a clear path to ownership through either: (i) an exclusivity agreement that prevents the sale of designated land and power capacity to another party or (ii) a tendered interconnection agreement, confirming a viable path to securing power and infrastructure for deployment.
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2,613 MW
​
3,113 MW
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1,255 MW
​
1,755 MW

Energy Capacity Under Development
Sites where we are actively investing in development and commercialization by executing definitive land and/or power agreements, advancing site design and infrastructure buildout, and engaging with prospective customers.
​
—
​
—
​
1,530 MW
​
1,230 MW

Energy Capacity Under Construction
Sites where we have executed a definitive offtake agreement and commenced construction activities.
​
205 MW
​
—
​
—
​
330 MW

Total
All sites under diligence, exclusivity, development, and construction
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11,008 MW
​
10,763 MW
​
8,650 MW
​
8,500 MW

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Our Investment Approach
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We invest in power, digital infrastructure, and compute assets that we believe will generate strong risk-adjusted returns, strengthen our competitive position, and drive long-term shareholder value creation. Our investment approach is defined by rigorous underwriting, disciplined capital allocation, and active portfolio management. As we expand and diversify our business, we expect that more predictable and financeable, lower-cost-of-capital segments will form a larger share of our revenue mix. This approach is intended to support the development of an investment-grade infrastructure platform characterized by predictable revenue, intelligent capital structuring, long-lived contracts, creditworthiness, and disciplined risk management.
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Underwriting and Diligence. Before deploying capital, we generally undertake a due diligence process to evaluate risk-adjusted returns across financial, operational, commercial, legal, macroeconomic, and geopolitical dimensions. Our framework incorporates scenario modeling, stress testing, and sensitivity analysis as appropriate to quantify expected downside risk and assess potential long-term value creation. Across our platform, we generally invest only when expected returns are projected to meet or exceed identified thresholds for value creation, and we favor investments supported by long-term contracts with creditworthy counterparties. Beyond financial metrics, we prioritize opportunities that support our broader strategic objectives, enhance operational performance and scale, build durable relationships with world-class partners, and strengthen our competitive differentiation. Each opportunity is assessed for its potential to unlock platform synergies, drive scalable efficiencies, and reinforce our competitive position.
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Portfolio Management. We take an active approach to portfolio management, driven by a dedicated portfolio management team that works cross-functionally to identify and address both asset-level and platform-wide value creation opportunities. Our approach includes targeted initiatives such as infrastructure upgrades, land expansion, and site-level use case transition. We leverage real-time energy market intelligence and analytics to optimize power costs, mitigate against volatility, and capitalize on arbitrage opportunities. We also maintain active engagement with governing bodies and grid operators to navigate regulatory complexities and to support the long-term reliability of our power assets and the grid.
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Our Capital Strategy
Our capital strategy centers on two objectives: securing the lowest possible cost of capital and minimizing enterprise risk. We aim to maintain a robust, liquid balance sheet that enables us to explore creative financing approaches and prioritize non-dilutive sources of funding whenever possible.
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Financing. We strive to optimize our cost of capital by taking a disciplined approach to capital formation and leveraging a range of financing instruments at the corporate and project levels. At the corporate level, we aim to balance equity issuance with strategic leverage in alignment with our view of the Company’s intrinsic value. While we remain sensitive to dilution, we recognize the importance of retaining the flexibility to raise capital when compelling growth opportunities arise or when market conditions are favorable. To support our disciplined approach, we employ tools such as at-the-market (“ATM”) offering programs and Bitcoin-backed credit facilities, which we view as strategic levers to optimize shareholder value, and enhance our ability to navigate market volatility. These tools enable us to fund growth initiatives and navigate the markets in which we operate. At the project level, we structure financing to align with the distinct objectives and needs of each opportunity we pursue, including traditional project financing for HPC data center development.
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Treasury Management. Our treasury management strategy is designed to maintain liquidity, support consistent cash flow generation, and preserve balance sheet flexibility as we pursue capital-intensive growth initiatives, including digital infrastructure development. We actively manage our treasury with the goal of optimizing return on invested capital while ensuring sufficient financial optionality to fund operations and growth across market conditions. Our approach emphasizes disciplined capital deployment, prudent risk management, and the ability to monetize assets or deploy capital opportunistically as conditions warrant. By aligning our capital and operating strategies, we seek to enhance capital efficiency, support self-funded growth, and maximize long-term value creation for shareholders (see Exhibit 5).
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Exhibit 5: Flywheel effect accelerates value creation across capital and operating strategies
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Capital Strategy
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Allocate capital to
projects with high ROIC
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Aim to minimize dilution
​
Maintain healthy leverage
levels and liquidity

Operating Strategy
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Expand Power layer in
both scale and geography
​
Scale and diversify Digital
Infrastructure layer
​
Build customer base

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Our Focus on Innovation
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We take a first-principles approach to digital infrastructure development, designing each facility based on the specific performance, resiliency, and cost requirements of the workload it is intended to support. Rather than starting with end use workloads such as ASIC compute or GPU-based AI compute, we begin with underlying technical and economic requirements of the workload and engineer solutions accordingly. This application-agnostic, first-principles framework allows us to allocate capital efficiently, avoid overbuilding, and preserve flexibility as technologies and end markets evolve.
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Our development model is organized around a tiered framework defined by redundancy and resiliency, which informs both capital intensity and operating economics. At one end of the spectrum are highly resilient, mission-critical facilities designed to support HPC workloads, where uptime and redundancy are often critical and capital requirements are meaningfully higher. At the other end are data centers optimized for ASIC compute, where minimal redundancy, relatively low capital intensity, and rapid deployment can drive superior cost structures and faster time to cash flow.
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Across this spectrum, we apply a first-principles approach to innovation, grounded in our vertically integrated platform spanning Power, Digital Infrastructure, and Compute. This end-to-end operating exposure gives us direct insight into the technical and commercial drivers of infrastructure performance, enabling us to design and deploy value-engineered solutions that reduce cost, improve efficiency, and enhance optionality across our asset base. As a result, innovation is not episodic or application-specific, but embedded in how we underwrite, design, and scale infrastructure.
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Case study: Applying operational insight to data center performance and innovation
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Highrise AI: Incubating and scaling an AI Cloud platform gave us first-hand visibility into the power density, cooling, networking, and uptime requirements of AI workloads, informing the design of a new AI-optimized data center infrastructure solution we co-developed with Vertiv for our River Bend campus.

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Hut 8 Canada: Operating enterprise cloud and colocation data centers strengthened our understanding of contracted service delivery, SLAs, and the operational discipline required to support durable, investment-grade colocation revenue.

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Power Generation: Owning and operating dispatchable generation assets deepened our expertise in power market dynamics, reliability, and operational control-capabilities that become increasingly important as behind-the-meter and bring-your-own-generation solutions gain relevance in large-load data center development.

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

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

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

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Our Technology-Driven Operating Philosophy
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Building on our deep infrastructure expertise, we operate with a technology-driven philosophy focused on optimizing the drivers of scale and returns. We implement scalable, data-driven processes that enhance the efficiency of our human capital, decrease operating expenses, and lower the marginal costs of expanding our operations. To support this approach, we have developed a proprietary software suite comprising three specialized applications (see Exhibit 5). Recognizing that energy costs represent a significant component of our overall cost structure, we have further embedded advanced data science capabilities within our Compute layer. This dedicated team develops server-level decision-making algorithms and profitability models that guide curtailment decisions, optimize energy consumption, and improve returns.
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Exhibit 6: Our proprietary software suite
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Application
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Description
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Key Functions

Operator
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A front-end platform designed to optimize on-the-ground operations
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– Delivers real-time operational visibility for onsite personnel
– Supports inventory, asset, and work-order management
– Streamlines daily task coordination and issue resolution

Overwatch
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A back-end system designed to ensure data integrity and actionable intelligence
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– Centralizes collection and analytics of all data displayed in Operator
– Ensures data integrity and system observability
– Provides actionable insights for performance optimization

Reactor
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An infrastructure control solution designed to optimize energy consumption
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– Automates curtailment control and demand response
– Enables dynamic energy management and resource allocation
– Integrates profitability modeling for optimized consumption decisions

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

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Competition
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Driven by the proliferation of next-generation, energy-intensive technologies such as ASIC compute and HPC, demand for energy capacity continues to outpace supply. For example, HPC workloads require high-density infrastructure with capacity demands multiples greater than many legacy data centers can provide, while ASIC compute remains a competitive market that requires operational efficiency and low-cost energy at scale. At the same time, grid interconnection bottlenecks have further constrained access to power and digital infrastructure development, while supply chain disruptions and regulatory constraints have extended lead times for critical infrastructure, including GPUs, ASICs, turbines, generators, and transformers.
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In this supply-constrained environment, we believe success depends on the ability to secure scarce assets like power, data center equipment, and customers. We compete with digital infrastructure developers and large-scale Bitcoin miners for access to powered land and key inputs for facility development, such as building materials, data center equipment, and skilled labor. Additionally, we compete with cloud services providers and digital infrastructure developers for customers and specialized hardware. Within ASIC Compute, we participate in mining pools that compete for block rewards. See “Risk Factors—Risks Related to Our Business and Operations—We may not be able to compete effectively against our current and future competitors.”
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Nonetheless, we believe we have established a defensible competitive advantage through our power-first, innovation-driven strategy, which is underpinned by a power-native team with a deep understanding of power markets, an application-agnostic framework for digital infrastructure design, end-to-end greenfield development capabilities, and our ability to use ASIC compute infrastructure development to rapidly and cost-effectively secure and monetize power.
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Customers and Partners
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Through our Digital Infrastructure layer, we aim to support energy-intensive workloads such as AI and ASIC compute for third-party customers. We are advancing scaled AI infrastructure development at our River Bend campus in Louisiana, where Fluidstack is expected to serve as tenant and Google is expected to provide a financial backstop that covers the lease payments and related pass-through obligations for the 15-year base lease term. We also provide managed services and ASIC colocation services to American Bitcoin through our Power and Digital Infrastructure segments, respectively; because American Bitcoin is a consolidated subsidiary, revenue from these intercompany agreements is eliminated in consolidation. Through our Hut 8 Canada brand, we provide cloud and colocation services to customers across a range of industries, including technology, financial services, government, and media. As of December 31, 2025, Hut 8 Canada served more than 200 customers through our five enterprise-grade data centers in Canada.
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At the corporate level, we actively pursue partnerships across five primary categories: (i) utilities and power market participants, (ii) energy developers and asset owners, (iii) digital infrastructure developers and operators, (iv) large-scale consumers of load capacity, including enterprise and institutional counterparties, and (v) capital providers that allow access to innovative, low cost of capital financing. Through these partnerships, we seek to leverage our expertise in power origination, grid interconnection, large-load site development, infrastructure commercialization, and corporate finance to accelerate development timelines, optimize capital deployment, and enhance risk-adjusted returns across the platform.
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Intellectual Property
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We actively use specialized hardware and software for our operations. In some instances, source code and other software assets may be subject to an open-source license, as much technology development in this sector is open source. We intend to adhere to the terms of any license agreements that may be in place for these works.
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We rely upon intellectual property protections, including trade secrets, trademarks, and copyright, and license the use of intellectual property rights owned and controlled by others. We have developed and may further develop specific proprietary hardware, software applications, or other intellectual property, and may choose to seek patents or other protections in the future.
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Regulatory Landscape
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The laws and regulations applicable to our offerings are evolving and subject to interpretation and change. We operate in a complex and rapidly evolving regulatory environment and we are subject to a wide range of laws and regulations enacted by federal, state, provincial, and local governments, governmental agencies, and regulatory authorities, including the SEC, the Commodity Futures Trading Commission (“CFTC”), the Federal Trade Commission, and the Financial Crimes Enforcement Network of the U.S. Department of the Treasury (“FinCEN”), as well as similar entities in Canada and other countries. Other regulatory bodies, governmental or semi-governmental, have shown an increased interest in companies operating energy-intensive technologies, including HPC and ASIC compute infrastructure. For example, the energy consumption and environmental impact of data center operations have received heightened regulatory scrutiny, and future regulations may emphasize energy efficiency, sustainability, and grid reliability.
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As we expand into the development and operation of large-scale data centers supporting HPC and AI workloads and, through Highrise AI, the operation of our AI cloud, our facilities are becoming subject to an increasing number of laws, ordinances, and regulations. Regulators and policymakers are increasingly focused on the governance, ethical use, and potential misuse of AI systems and advanced computing technologies, as well as cybersecurity, data protection, export controls, and compliance obligations applicable to large-scale data center and HPC infrastructure. Furthermore, Bitcoin and other digital assets are subject to anti-fraud regulations under federal and state commodity and/or securities laws, and digital asset derivative instruments are regulated by the CFTC and SEC. Certain jurisdictions have developed, or are developing, regulatory requirements specifically for digital assets and companies that transact in them. Regulatory frameworks applicable to AI and large-scale computing infrastructure are similarly developing and may vary significantly across jurisdictions. Regulations may substantially change in the future and it is presently not possible to know how regulations will apply to our business, or when they will be effective.
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As the regulatory and legal environment evolves, we may become subject to new laws and regulations, which may affect business model and operations. We are unable to predict the impact that any new standards, legislation, laws, or regulations may have on our business at the time of filing this Annual Report. For additional discussion regarding the potential risks existing and future regulations pose to our business, see “Risk Factors.”
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Additional Information
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Our principal executive offices are located at 1101 Brickell Avenue, Suite N-1500, Miami, FL 33131. We were incorporated in the State of Delaware on January 27, 2023 for the purposes of effecting the Business Combination.
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Our website address is hut8.com and our investor relations website is located at hut8.com/investors. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports are available on our investor relations website free of charge as soon as reasonably practicable after they are filed with the SEC. The information contained on our website is not included in, nor incorporated by reference into, this Annual Report. Reports filed with the SEC also may be viewed at sec.gov.
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Item 1A. Risk Factors
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A description of the risks and uncertainties associated with our business is set forth below. You should consider carefully the risks and uncertainties described below, together with the financial and other information contained in this Annual Report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes. If any of the following risks or uncertainties actually occur, our business, financial condition, and results of operations could be materially and adversely affected. In that case, the market price of our common stock could decline and you may lose all or a part of your investment. The risks discussed below are not the only risks we face. Additional risks or uncertainties not currently known to us, or that we currently deem immaterial, may also have a material adverse effect on our business, financial condition, and results of operations.
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Risks Related to Our Growth
Our construction of new data centers, data center expansions, or data center redevelopment could involve significant risks to our business.
In order to sustain our growth in certain of our existing and new markets, we may have to expand existing data centers, lease new facilities, or acquire suitable land, with or without structures, to build new data centers. Expansions or new builds are currently underway, or being contemplated, in new and existing markets. For example, we recently entered into a 15-year, 245 MW IT build to suit data center lease at our River Bend campus. The construction of such projects exposes us to many risks that could have an adverse effect on our business, financial condition, and results of operations, including:
● construction delays, which may result in material consequences, including penalties or liquidated damages payable to our customers, reputational harm, or an inability to satisfy our customer obligations or financing requirements;
● unexpected budget changes or cost overruns, which we may not be able to recover from our customers or which we may not have sufficient financing to cover;
● supply chain and logistical issues, including tariff and inflationary pressures and a lack of availability, increased prices, delays in obtaining building supplies, raw materials, and equipment for data centers, and/or failure of our infrastructure and equipment suppliers to deliver infrastructure and equipment on time and in accordance with agreed upon specifications;
● labor availability, labor disputes, work stoppages, and/or defaults by contractors, subcontractors, and other third parties, including any limitations on such third parties’ liability;
● unanticipated environmental issues and geological problems;
● permitting or regulatory hurdles, including permitting and approval delays;
● the exercise of any step-in rights by a customer, lender, or other third party;
● delays in site readiness, which may delay or otherwise impact the satisfaction of lease commencement conditions; and
● unanticipated customer requirements that would necessitate alternative data center design, making our sites less desirable or leading to increased costs in order to make necessary modifications or retrofits.

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We may experience liquidity constraints and may need to raise additional capital. We may be unable to raise the additional capital needed to operate and grow our business.
Liquidity risk is the risk that we will not be able to meet our financial obligations as they fall due. We currently settle our financial obligations out of cash and cash equivalents, including the net proceeds from the sale of common stock under our ATM program, and from any sales of Bitcoin. We have a planning and budgeting process to help determine the funds required to support our normal spending requirements on an ongoing basis and our expansionary plans. However, the capital required to operate our business and implement our growth initiatives is substantial. For example, the development of new data center campuses, including the River Bend campus, requires significant capital expenditures and long lead times before such projects may generate revenue, if at all. As a result, we expect to need to raise additional funds through equity or debt financings, which may be at the corporate level or the project level, in order to meet our operating and capital needs, fund our growth initiatives, and/or respond to competitive pressures or unanticipated working capital requirements.
Such financing may be secured by certain assets or cash flows, involve certain step-in, cure rights, or other remedies, impose certain financial maintenance covenants, operating covenants, or other limitations, or require certain guarantees or other credit enhancements, which may increase our overall risk exposure. Furthermore, we may be unable to secure such financing in a timely manner, in sufficient quantities, or on terms acceptable to us, if at all. Market conditions, including interest rate increases, declining equity valuations, volatility in credit markets, or tightening lending standards, as well as other external events, including impacts on the market’s perception of data center operators and their tenants, including hyperscalers and neoclouds, may further limit our ability to raise capital on favorable terms. In addition, debt financings, whether at the corporate level or the project level, may bear interest at floating rates, which could increase our interest expense in rising interest rate environments, even if a portion of such exposure is hedged.
If we are unable to raise the additional capital needed to maintain our operations and execute on our growth initiatives, we may be unable to fulfill our customer and third-party obligations and may be less competitive in our industry such that our business, financial condition, and results of operations may suffer, and the market price for our securities may be materially and adversely affected. If we were to raise additional equity financing, our stockholders may experience significant dilution of their ownership interest, and the value of their investment could decline. Furthermore, if we were to raise additional debt financing, our debtors would likely have priority over holders of equity with respect to order of payment preference. We may be required to accept terms that restrict our ability to incur additional indebtedness or take other actions, including terms that require us to maintain a specified level of liquidity or other balance sheet ratios that may restrict our business activities and ability to pursue certain growth opportunities and negatively impact our stockholders.
If we do not accurately predict our facility requirements, it could have a material adverse effect on our business, financial condition, and results of operations.
The costs of developing, leasing, operating, and maintaining our facilities may constitute a significant portion of our capital and operating expenses. In order to manage growth and ensure adequate capacity for our planned and existing projects while minimizing unnecessary excess capacity costs, we continuously evaluate our short- and long-term infrastructure requirements. There can be no assurance that we can accurately predict our short- and long-term facility requirements or that existing or future market demand will be sufficient to fully utilize the capacity we develop or secure.
In certain cases, we may develop or secure facility capacity in advance of obtaining customer commitments for all or a portion of such capacity. If we overestimate our facility requirements or the demand for our offerings and therefore secure excess capacity, our facilities may remain vacant or underutilized for extended periods. As a result, our operating margins could be materially reduced and we could experience operating losses, including due to fixed costs incurred regardless of utilization levels. In addition, we may be required to incur additional costs to reposition, retrofit, or otherwise market such capacity to attract customers. Conversely, if we underestimate our facility requirements, we may not be able to service our or our customers’ expanding needs, may be required to limit our growth opportunities or new customer acquisition, or we may lose existing or potential customers to competitors, any of which could have a material adverse effect on our business, financial condition, and results of operations.

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We face risks associated with the King Mountain JV and American Bitcoin, and may face similar risks in the future by entering into other joint ventures or launching or spinning out other consolidated businesses.
Joint ventures and majority-owned subsidiaries inherently involve operational, governance, and control risks that may differ from those associated with wholly owned operations, thereby potentially increasing the financial, legal, operational, regulatory, and/or compliance risks associated with them, and may require the diversion of financial and management resources from existing operations or alternative opportunities. We may be dependent on partners, other shareholders, management teams, or other persons or entities who control or influence the entity who may have business interests, strategies, or goals that are inconsistent or competitive with ours. Furthermore, these individuals may receive access to our intellectual property and other resources, which introduces the risk of theft and/or exploitation.
For example, we own a 50% membership interest in the King Mountain JV. Decision-making control over the King Mountain JV’s actions rests in a committee of four member managers, with two from Hut 8 and two from our partner. If the member managers from Hut 8 and our joint venture partner are not aligned with respect to business interests, strategies, or goals, or if the member managers from Hut 8 and our joint venture partner cannot reach agreement in decision-making processes, there is a risk that we may not be able to operate the King Mountain site optimally from a financial, legal, operational, regulatory, and/or compliance perspective. If this situation materializes, it may have a material adverse effect on our business, financial condition, and results of operations.
In addition, although we consolidate American Bitcoin’s results of operations in our financial statements, the presence of minority shareholders, separate management teams, contractual arrangements, fiduciary responsibilities, and regulatory constraints, among other things, limits our control over its operations, governance, and strategic decisions. Conflicts of interest may arise between us and minority shareholders or other stakeholders, and the resolution of such conflicts may not be favorable to us. Further, as we are the majority owner of American Bitcoin’s capital stock, we are also exposed to risks associated with the actual or perceived value of that equity interest. The market price of American Bitcoin’s Class A common stock has been, and may continue to be, volatile and subject to significant fluctuations due to a variety of factors, including changes in Bitcoin prices, market sentiment toward digital asset-related businesses, operating performance, regulatory developments, capital structure, liquidity, and broader equity market conditions. The value of our equity ownership in American Bitcoin may decline significantly, which could result in impairment charges or other adverse impacts to our financial statements, and we may not be able to monetize our ownership interest on favorable terms, or at all. In addition, market perception of American Bitcoin, including investor sentiment, media coverage, or developments affecting its business or industry, may also influence investor perception of Hut 8 and could adversely affect the market price and trading volatility of our common stock. Our investment in American Bitcoin is also subject to the risks described in American Bitcoin’s filings with the SEC, including the risk factors set forth therein, which, if realized, could adversely affect the value of our ownership interest. Any such decline in value, increased volatility, or adverse market perception could have a material adverse effect on our business, financial condition, results of operations, reputation, brand, and liquidity.
Although we expect that our interest in our joint ventures and consolidated businesses will result in benefits to us, we may not realize those benefits. If we fail to address the foregoing risks or other problems encountered in connection with current or future joint ventures or consolidated businesses, it could have a material adverse effect on our business, financial condition, and results of operations.

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We may acquire other businesses and/or assets or form strategic alliances or joint ventures that could negatively affect our operating results, dilute shareholder ownership, increase debt, or cause us to incur significant expenses.
We have previously engaged in strategic transactions, including completing the Business Combination and, more recently, launching and taking public American Bitcoin. As part of our growth strategy, in the future, we may pursue additional acquisitions of businesses and/or assets and/or enter into strategic alliances, joint ventures, or other strategic transactions. However, we cannot offer any assurance that any such strategic transaction will be successful. We may not be able to identify suitable partners or acquisition candidates and may not be able to complete such transactions on favorable terms, if at all. Any such strategic transaction also could result in the issuance of stock, incurrence of debt, contingent liabilities, write-offs of intangible assets or goodwill, restructuring and other related expenses, or litigation, any of which could have a negative impact on our business, financial condition, and results of operations. If we complete any acquisitions, we may not be able to integrate these acquisitions successfully into our existing business. In addition, in the event that we acquire any existing businesses, we may assume unknown or contingent liabilities. Integration of an acquired company may also disrupt ongoing operations and carry substantial compliance burdens and costs, which may limit our ability to realize the anticipated benefits of such acquisitions, and which may require management resources that would otherwise be focused on developing and expanding our existing business. We may experience losses related to potential investments in other companies or other strategic transactions, which could materially and adversely affect our business, financial condition, and results of operations. Furthermore, the benefits of any acquisition, strategic alliance, joint venture or other strategic transaction may also take considerable time to develop, and we cannot be certain that any particular acquisition, strategic alliance, joint venture, or other strategic transaction will produce the intended benefits in a timely manner or to the extent anticipated or at all. 
New offerings or lines of business may subject us to additional risks.
We are a growth stage company with a small management team and are subject to the strains of ongoing development and growth, which will place significant demands on our management and operational and financial infrastructure. To remain competitive with peers, we may need to modify aspects of our business model or we may implement new offerings or lines of business, from time to time. For example, we signed our first large scale single tenant AI data center lease and commenced construction of the site at our River Bend campus. There are substantial risks and uncertainties associated with the modification or augmentation of our business model, particularly in instances where the markets are not fully developed or where the operational requirements of new offerings or lines of business differ substantially from existing offerings or lines of business. We cannot offer any assurance that these or any other changes will be successful or will not result in harm to our business. In developing and marketing new offerings or lines of business or expanding our current offerings or lines of business, we may invest significant time and resources. Initial timetables for the introduction and development of new offerings or lines of business may not be achieved and profitability targets may not prove feasible. External factors, such as compliance with regulations, competition, and shifting market preferences, may also impact the successful implementation of a new offering or line of business.
In addition, our personnel and technology systems may fail to adapt to the changes or we may fail to effectively integrate new offerings or lines of business into our existing operations and we may lack experience in managing new offerings or lines of business. We may also be unable to proceed with the operations as planned or compete effectively due to different competitive landscapes. Even if we expand our businesses into new jurisdictions or areas, the expansion may not yield intended profitable results. Furthermore, any new offering or line of business could have a significant impact on the effectiveness of our internal control system. Failure to successfully manage these risks in the development and implementation of new offerings or lines of business could have a material adverse effect on our business, financial condition, and results of operations. Finally, we cannot provide any assurance that we will successfully identify all emerging trends and growth opportunities in a market. As a result, we may not capture those potential opportunities or such opportunities may be taken by our competitors. Such circumstances could have a material adverse effect on our business, financial condition, and results of operations.

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Risks Related to Our Business and Operations
Failure of critical systems related to our offerings and/or infrastructure could have a material adverse effect on our business, financial condition, and results of operations.
The critical systems related to our offerings and infrastructure are subject to failure. Failure of any of our critical systems, including a breakdown in critical plant, equipment or services, routers, switches or other equipment, power supplies, or network connectivity, whether or not within our control, could result in service interruptions to us or our customers and/or damage to equipment, which could significantly disrupt the normal business operations of our customers, harm our reputation, reduce our revenue, and subject us to liability claims. The destruction or severe impairment of any of the facilities operated by us could result in significant downtime. For certain of our business lines, our ability to attract and retain customers depends on our ability to provide a reliable service, so even minor interruptions in service could harm our reputation and negatively impact our business, financial condition, and results of operations.
Our infrastructure and offerings are subject to temporary or permanent interruption by factors that include but are not limited to:
● failure by us or our suppliers to provide adequate service or maintain equipment;
● equipment failure, power loss, network connectivity downtime, fiber cuts, or plant downtimes;
● human error and accidents, including manmade disasters;
● theft, sabotage, and vandalism;
● service interruptions resulting from server relocation;
● physical and cybersecurity breaches, including security breaches of infrastructure;
● improper or inadequate building maintenance;
● the presence of construction or repair defects or other structural or building damage;
● animal incursions;
● fire, earthquake, hurricane, tornado, flood, winter storms, severe weather events, and other natural disasters, including as a result of climate change;
● water damage;
● public health emergencies; and
● terrorism.

The occurrence of any of these events may have a material adverse effect on our business, financial condition, and results of operations. Moreover, service interruptions and equipment failures may expose us to potential legal liability. As the services provided by us may be critical to our customers’ business operations, any disruption in services could result in lost profit or other indirect or consequential damages to our customers. Although customer contracts typically contain provisions limiting our liability, there can be no assurance that a court would enforce any contractual limitations on our liability in the event that one of our customers brings a lawsuit against us as the result of a service interruption that they ascribe to us. The outcome of any such lawsuit would depend on the specific facts of the case and any legal and policy considerations that we may not be able to mitigate. In such cases, we may be liable for substantial damage awards, which could have a material adverse effect on our business, financial condition, and results of operations.
We are subject to risks associated with our need for significant electrical power.
Our operations require significant amounts of electrical power and our business, financial condition, and results of operations may be impacted by the unavailability of power and/or price fluctuations in the power market. Market prices for power, capacity, and other ancillary services are unpredictable and tend to fluctuate substantially. Unlike most other commodities, electric power can only be stored on a very limited basis and generally must be produced concurrently with its use. As a result, power prices are subject to significant volatility due to supply and demand imbalances, especially in the day-ahead and spot markets. Power availability and prices may also be materially impacted by other factors outside of our control, including:

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

Such factors and the associated fluctuations in power availability and prices could affect the cost, reliability, and availability of power supply for our operations.
As part of our growth strategy, we pursue a “power first” approach to site development, under which we prioritize identifying and securing access to sufficient and reliable power before committing significant capital to the development or expansion of data center or ASIC compute sites. This approach includes evaluating power availability, grid capacity, interconnection feasibility, permitting requirements, expected timelines, and the commercial terms under which power may be obtained. However, there is significant competition for suitable locations with access to power and the existence of a power pipeline or preliminary arrangements does not guarantee that power will ultimately be delivered on the anticipated timeline, in the expected quantities, on commercially acceptable terms, or at all. Delays or failures in securing interconnection approvals, completing grid upgrades, satisfying regulatory or utility requirements, or finalizing definitive power arrangements could limit our ability to develop sites as planned, increase costs, or result in projects being delayed, scaled back, or abandoned. For example, in many markets, the requirements to secure access to power have become increasingly onerous and may include substantial security obligations, such as large deposits, letters of credit, minimum payment commitments, or other financial assurances, which may be required before power is delivered or before a facility is developed or occupied. In certain cases, we may be required to make such commitments before securing a customer or entering into revenue-generating agreements, which could expose us to increased financial risk if expected customer demand does not materialize.
Furthermore, there can be no assurance that power suppliers will service our facilities or that once we have entered into a power purchase agreement, such supplier will continue to provide us with power for any period of time, which may delay or otherwise impact the satisfaction of lease conditions. Power purchase agreements may be terminated or delayed, or we may lose access to power under certain other circumstances, including as a result of re-studies or other regulatory or utility-driven processes, and we may not be able to find an adequate replacement at a reasonable cost, or at all, especially in light of the limited availability of power and grid constraints in many markets.

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Our reliance on power grids subjects us to a variety of risks, including the breakdown or failure of equipment, accidents, security breaches, viruses or outages affecting information technology systems, labor disputes, obsolescence, delivery/transportation problems, disruptions of fuel supply, and performance below expected levels. These events may impact our ability to conduct our businesses efficiently and lead to increased costs, expenses, or losses. Although we maintain limited backup power at certain sites, it may not be feasible to run our operations on back-up power generators in the event of a restriction on electricity or a power outage. Planned or unplanned outages at the power grids that we rely on may require us to purchase power at then-current market prices, either to continue our operations or satisfy our commitments, which could be expensive and therefore have a material impact on the cost structure of our operations. To the extent we are unable to receive or provide adequate power supply and are forced to reduce or cease our operations due to the unavailability or high cost of electrical power, our business, financial condition, and results of operations would be adversely affected.
For example, our customer lease agreements for data centers typically include specific power delivery requirements and lease commencement conditions. If sufficient power is not available at or prior to lease commencement, we may be unable to satisfy such conditions, which could delay the commencement of leases, defer or eliminate expected revenues, or result in the termination of customer agreements. In addition, unavailability of contracted levels of power or power-related services during the term of a lease may constitute a breach of customer agreements in certain circumstances and could give rise to termination rights, damages, or other contractual remedies, any of which could adversely affect our business, financial condition, and results of operations.
Our ASIC compute operations, conducted mainly through American Bitcoin, are also highly dependent on the availability and cost of power. ASIC compute profitability is directly impacted by power costs and availability. Reductions in power availability or increases in power prices may require us to curtail operations, either voluntarily or through our agreements with utility providers. We may also encounter other situations where utilities or government entities restrict or prohibit the provision of electricity to ASIC compute operations. In these cases, our and American Bitcoin’s ability to mine Bitcoin may be negatively affected.
We may not be able to attract, retain, or expand relationships with customers across our platform.
As we look to expand our large-scale data center development, we expect to generate a significant portion of our revenue from a limited number of customers. For example, we recently entered into a 15-year, 245 MW IT lease at our River Bend campus valued at $7.0 billion over the base term and up to $17.7 billion if all renewal options are exercised. However, there can be no assurances that we will be able to attract or retain such customers across our platform on favorable terms, or at all. Our success in doing so is impacted by a variety of factors, including:
● macroeconomic conditions and demand trends in the industries we serve;
● our ability to provide offerings or launch new offerings that meet the needs of existing or potential customers;
● our ability to effectively market our brand and our offerings to potential customers and price our offerings attractively;
● our competitive position in the market relative to alternative offerings, including customers electing to build or operate facilities internally; and
● our ability to meet customers’ ongoing and evolving program qualification standards based on a range of factors, including delivery schedules, power availability requirements, preferred site design specifications, security considerations, and connectivity.
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Furthermore, any event leading to the early termination of a customer contract, including customer bankruptcy or force majeure events that disrupt facility operations or damage customer infrastructure, could result in the loss of revenue associated with those contracts. In addition, customer contracts for large-scale data center developments typically include termination rights that may be triggered by specified events or breaches. For example, our lease agreement for the River Bend data center campus provides the customer with certain termination rights, including in connection with certain breaches of the lease or power contract, casualty events, or other circumstances beyond our control. If a customer were to exercise termination rights under such an agreement, we could lose a significant source of expected revenue and may be required to incur additional costs to remarket or redevelop the affected facility. If we were unable to offset lost revenue, it could have a material adverse effect on our business, financial condition, and results of operations.

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Our operations and growth may be adversely affected by geographic concentration and market-specific conditions.
Our results of operations and growth prospects may be disproportionately affected by conditions in the specific geographic markets in which our facilities are located or under development. While we operate across multiple locations, a significant portion of our data center capacity, capital investments, and development activities are presently concentrated in Texas and Louisiana, which increases our exposure to geographic and market-specific risks. Conditions in these and other markets may vary materially, including with respect to local demand and competing supply, permitting and zoning requirements, utility and grid practices, power availability, labor conditions, regulatory requirements, environmental or community considerations, and exposure to extreme weather or other natural events. Adverse developments arising from any of these geographic and market-specific factors could delay projects, increase costs, limit available capacity, reduce utilization, or adversely affect pricing and margins, which could have a material adverse effect on our business, financial condition, and results of operations.
We may not be able to compete effectively against our current and future competitors.
The industries in which we operate are highly competitive and continuously evolving. We expect competition to further intensify as existing and new competitors introduce new offerings or enhance existing offerings and as the industries that we operate in continue to grow. As we continue to expand in our existing markets and enter new markets, we compete against an increasing number of companies operating, both within North America and abroad, that may be more established or have greater financial and other resources and/or expertise.
Driven by the proliferation of next-generation, energy-intensive technologies such as ASIC compute and HPC, demand for energy capacity continues to outpace supply. For example, HPC workloads require high-density infrastructure with capacity demands multiples greater than many legacy data centers can provide, while ASIC compute remains a competitive market that requires operational efficiency and low-cost energy at scale. At the same time, grid interconnection bottlenecks have further constrained access to power and digital infrastructure development, while supply chain disruptions and regulatory constraints have extended lead times for critical infrastructure, including GPUs, ASICs, turbines, generators, and transformers.  
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In this evolving landscape, we compete directly with cloud services providers, digital infrastructure developers, and large-scale Bitcoin miners. The nature of competition varies across the layers of our platform:
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● Power: We compete primarily for access to powered land.
● Digital Infrastructure: We compete primarily for customers, as well as key inputs for facility development, including building materials, data center equipment, and skilled labor.
● Compute: We compete primarily for customers, specialized hardware, and Bitcoin rewards, including through our Hut 8 Canada, American Bitcoin, and Highrise AI brands.
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Taken as a whole, we believe success depends on the ability to secure, monetize, and optimize power capacity at scale. We believe we have established a defensible competitive advantage through our power-first, innovation-driven strategy, which is underpinned by a power-native team with deep access to power markets, an application-agnostic framework for digital infrastructure design, end-to-end greenfield development capabilities, and our ability to use ASIC compute infrastructure development to rapidly and cost-effectively secure and monetize power. However, these factors might not provide the competitive advantage we anticipate, or if they do, such competitive advantage might not endure. If we are unable to compete successfully, or if competing successfully requires us to take costly actions in response to the actions of our competitors, our business, financial condition, and results of operations could be adversely affected.

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Some of our infrastructure is located on leased premises and the termination or higher renewal rate of our leases could materially adversely affect our business, financial condition, and results of operations.
Some of our infrastructure is located on leased premises and there can be no assurance that we will remain in compliance with our leases, that our landlord will continue to support our operations, or that our leases will not be terminated despite negotiation for long term lease periods and renewal provisions. When the initial terms of our existing leases expire, in some instances, we have the right to extend the terms of our leases for one or more renewal periods. Upon the end of our initial term or, if applicable, the renewal periods, we would have to renegotiate our lease terms with the applicable landlords. If renewal rates are less favorable than those we currently have, we may be required to increase revenues to offset such increase in lease payments. Failure to increase revenues to sufficiently offset these projected higher costs could adversely impact our operating income. We may also not be able to renew such leases at all. The termination of a lease could have a material adverse effect on our business, financial condition, and results of operations.
We are required to obtain, maintain, and comply with the terms and conditions of government permits and approvals.
We are required to obtain, maintain, and comply with the terms and conditions of numerous permits, approvals, and licenses from federal, state, provincial, and local governmental agencies. The process of obtaining and renewing necessary permits and licenses can be lengthy and complex and can result in the establishment of conditions that make the project or activity for which the permit or license was sought unprofitable or otherwise unattractive. In addition, the permitting and approval process may be influenced by public input, community organizations, advocacy groups, or other local or regional stakeholders, as well as broader social, environmental, or political movements, which may increase scrutiny, result in additional conditions, delays, or challenges, or lead to opposition to our projects. Furthermore, such permits or licenses may be subject to denial, revocation, or modification under various circumstances and may be impacted by legal and regulatory changes. Failure to obtain or comply with the conditions of permits or licenses, or failure to comply with applicable laws or regulations, may result in the delay or temporary suspension of our development or operations, which could have a material adverse effect on our business, financial condition, and results of operations.
We are subject to many hazards and operational risks that can disrupt our business, some of which may not be insured or fully covered by insurance.
Our operations are subject to many hazards and operational risks inherent to our business, including:
● general business risks;
● the presence of construction or repair defects or other structural or building damage;
● operating large and often hazardous pieces of equipment;
● any noncompliance with or liabilities under applicable environmental, health, or safety regulations, or requirements or building permit requirements;
● any damage resulting from severe weather events, such as droughts, wildfires, flooding, heat waves, hurricanes, winter storms, and other natural or manmade disasters; and
● claims by employees, contractors, customers, or the general public as a result of exposure to potentially dangerous environments at or near our operations.

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

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We maintain an amount of insurance protection that we consider adequate, but we cannot provide any assurance that our insurance will be sufficient or effective under all circumstances and against all hazards or liabilities to which we may be subject and, even if we do have insurance coverage for a particular circumstance, we may be subject to a large deductible and maximum cap. We carry liability, property, business interruption, construction-related, and other insurance policies to cover certain insurable risks to our company. We select the types of insurance, the limits, and the deductibles based on our specific risk profile, the cost of the insurance coverage versus its perceived benefit, and general industry standards. Our insurance policies contain certain industry standard exclusions for events such as war and nuclear disasters. A successful claim for which we are not fully insured could materially harm our business, financial condition, and results of operations. For example, we are currently party to a securities class action claim. To the extent that we are unsuccessful in defending against this claim, we may owe an amount in excess of our insurance coverage, which could have a material adverse effect on our business, financial condition, and results of operations. Further, due to rising insurance costs and changes in the insurance markets, we cannot provide any assurance that our insurance coverage will continue to be available at all or at rates or on terms similar to those presently available. Any losses not covered by insurance could have a material adverse effect on our business, financial condition, and results of operations.
We may be exposed to cybersecurity threats and breaches.
Threats to network and data security are increasingly diverse and sophisticated, such that security breaches, computer malware, and computer hacking attacks have been an increasing concern. Despite our efforts and processes in place to prevent them, our computer servers and systems may be vulnerable to cybersecurity risks, including denial-of-service attacks, physical or electronic break-ins, social engineering attacks, including phishing and business email compromise, employee theft or misuse and similar disruptions from unauthorized tampering. As techniques used to breach security change frequently and are generally not recognized until launched against a target, we may not be able to promptly detect that a cyber breach has occurred, implement security measures in a timely manner or, if and when implemented, we may not be able to determine the extent to which these measures could be circumvented.
Recent developments in the cyber threat landscape include use of AI and machine learning, as well as an increased number of cyber extortion and ransomware attacks, with the potential for higher ransom demand amounts and increasing sophistication, using a variety of ransomware techniques and methodology. Further, any adoption of AI by us or by third parties may pose new security challenges. A party who is able to compromise the security measures on our networks or the security of our infrastructure could misappropriate the proprietary or sensitive information of us, our customers, or our employees, or cause interruptions or malfunctions in our operations or our customers’ operations.
We also may be required to expend significant capital and resources to protect against such threats or to alleviate problems caused by cyber breaches in our physical or virtual security systems. The cybersecurity regulatory landscape continues to evolve and compliance with the proposed reporting requirements could further complicate our ability to resolve cyberattacks. Although we maintain insurance coverage for certain cyber risks, such coverage may be unavailable or insufficient to cover our losses. Any breaches that may occur in the future could expose us to increased risk of lawsuits, regulatory penalties, loss of existing or potential customers, damage relating to loss of proprietary information, harm to our reputation, and increases in our security costs, which could have a material adverse effect on our business, financial condition, and results of operations. Furthermore, we hold our Bitcoin with third-party custodians. If our custodians are exposed to a cyberattack or breach, we may temporarily or permanently lose access to some or all of our Bitcoin, which would have a material adverse effect on our business, financial condition, and results of operations. See “Risks Related to Bitcoin—We may be subject to additional risks associated with holding Bitcoin for our and American Bitcoin’s account.” The cybersecurity regulatory landscape continues to evolve and compliance with the proposed reporting requirements could further complicate our ability to resolve cyberattacks. Although we maintain insurance coverage for certain cyber risks, such coverage may be unavailable or insufficient to cover our losses.

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We may face the risk of Internet-related disruptions.
Our digital infrastructure and compute offerings are dependent upon access to the Internet. We are not an Internet provider, and as such, we rely on third parties to provide us with access to the Internet. There can be no assurance that Internet providers will service our data centers or that once a provider has decided to deliver Internet connectivity to our data centers, it will continue to do so for any period of time. If we face a significant disruption in Internet connectivity, we may be required to reduce the impacted operations or cease them altogether. If this occurs, our business, financial condition, and results of operations may be materially and adversely affected.
Our business may be heavily impacted by political, social, economic, and other events and circumstances in the United States, Canada, or elsewhere.
Our business may be heavily impacted by political, social, economic, and other events and circumstances in the United States, Canada or elsewhere. These include natural disasters, pandemics (like the COVID-19 pandemic), political tensions, acts of terrorism, hostilities or the perception that hostilities may be imminent, military conflicts and acts of war (such as the Russia-Ukraine conflict) and related responses, including sanctions or other restrictive actions. In addition, shifts in political leadership, policy priorities, broader public sentiment relating to political matters, and any actual or perceived associations of our Company or certain of our business partners or affiliates with prominent political figures may, from time to time, subject us to heightened scrutiny, reputational risk, or adverse reactions from customers, investors, regulators, or other stakeholders. Further, interest rate fluctuations, inflationary issues and associated changes in monetary policy or potential economic recession, commodity prices, legislative and regulatory changes, foreign currency fluctuations, international tariffs, fluctuations in capital markets, and broad trends in industry and finance may also adversely affect our business. For example, equipment necessary for our operations and our offerings is manufactured in large part outside of the United States. There is currently significant uncertainty about the future relationship between the United States and other regions, including Canada, Mexico, China, the European Union, and others, with respect to trade policies, treaties, tariffs, and taxes. These events and circumstances are largely outside of our influence and control and, while the impact of such events or circumstances is not presently known, any of them could adversely affect our business, financial condition, and results of operations. See “Risks Related to Certain Regulations and Laws, Including Tax Laws—Our operations are subject to various regulatory, governmental, and technological uncertainties.”
We operate in the United States and Canada and may further expand our operations internationally, which may expose us to risks associated with doing business internationally.  
We currently operate in the United States and Canada and may further expand our operations internationally. We also engage with third parties outside of the United States. As a result, we are and may become increasingly exposed to risks inherent in conducting business outside of the United States. These risks include the following:
● adverse changes in foreign currency exchange rates;
● increased difficulty in protecting our intellectual property rights and trade secrets, including litigation costs and the outcome of such litigation in jurisdictions outside the United States;
● increased exposure to events that could impair our ability to operate internationally with third parties such as problems with such third parties’ operations, finances, insolvency, labor relations, manufacturing capabilities, costs, insurance, natural disasters, public health emergencies, or other catastrophic events;
● unexpected legal or government action or changes in legal or regulatory requirements;
● difficulties in managing, growing, and staffing international operations;
● social, economic, or political instability;
● potential negative consequences from changes to taxation or tariff policies;
● challenges to the transfer pricing of cross-border intercompany transactions;
● increased difficulty in ensuring compliance by employees, agents, and contractors with our policies as well as with the laws of multiple jurisdictions, including international environmental, health, and safety laws and increasingly complex regulations relating to the conduct of international commerce, including import/export laws and regulations, economic sanctions laws and regulations, and trade control; and
● increased exposure to cybersecurity risks in foreign jurisdictions.

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Our failure to successfully manage these risks could harm our operations and growth opportunities internationally. We may also incur significant expenses as a result of our international operations and potential expansion, and we may not be successful in converting those expenditures into increased profitability. For example, our functional currency is the U.S. dollar and most purchases are transacted in U.S. dollars; however, our Canadian operations use Canadian dollars as their functional currency, we incur costs in Canadian dollars, and we hold cash balances in Canadian dollars. We currently do not hedge our foreign exchange risk and as a result, we are, and may increasingly become, exposed to fluctuations in currency exchange rates, which could negatively affect our business, financial condition and results of operations.
Our success depends on key personnel whose continued service is not guaranteed.
We depend on the efforts of our key personnel, including our senior leadership, many of whom have strong technology, finance, real estate, and/or power expertise and industry reputations. They are important to our success for many reasons, including that they attract investors and business and investment opportunities and assist us in negotiations with investors, lenders, existing and potential customers, and industry personnel. If we lost their services, our business and investment opportunities and our relationships with lenders and other capital markets participants, existing and prospective customers, and industry personnel could suffer. As the number of our competitors increases, it becomes more likely that a competitor would attempt to hire certain of these individuals away from us. The loss of any of these key personnel would result in the loss of these and other benefits and could materially and adversely affect our business, financial condition, and results of operations.
We also depend on the talents and efforts of highly skilled technical individuals. Our success depends on our continuing ability to identify, hire, develop, motivate, and retain highly skilled technical personnel for all areas of our business. Competition in our industry for qualified technical employees is intense, and the availability of qualified technical personnel is not guaranteed or may be costly to hire. We cannot assure you that we will be able to attract or retain the personnel we require. If we are unable to identify, hire, develop, motivate, and retain such personnel, it could have a material adverse effect on our business, financial condition, and results of operations.
The pace of technological change continues to accelerate, and our inability to adapt to rapidly evolving technologies and price dynamics could adversely affect our competitiveness and results of operations.
The pace of technological change is accelerating, and the continued creation, development, and advancement of new technologies, such as AI, quantum computing, data analytics, data storage, and other emerging technologies, are transforming the industries in which we operate. These industries are characterized by rapid technological changes, new product introductions, enhancements, evolving industry standards, and price fluctuations. In order to remain competitive, we must continue to stay abreast of technological developments, invest in and deploy new hardware, equipment, and systems, require our employees to continuously learn and adapt, and integrate new technologies into our existing and future business models.
New technologies, techniques, or offerings may emerge that provide superior performance, efficiency, or cost advantages compared to the technologies we currently utilize, and we may be required to manage complex and costly transitions to such technologies to remain competitive. There can be no assurance that we will be successful, either generally or relative to our competitors, in implementing new technologies in a timely or cost-effective manner, or at all. The implementation of new technologies may result in system interruptions, failures, or operational inefficiencies, and there can be no assurance that we will realize the anticipated benefits of such investments, if any.
In addition, increased use of emerging technologies, including AI, may expose us to social, ethical, regulatory, and reputational risks, including potential liability. We must also compete for and retain skilled personnel with expertise in these technologies, including through workforce upskilling, in an increasingly competitive labor market. If we fail to effectively respond to technological change, evolving pricing dynamics, or competitive pressures, our business, financial condition, and results of operations could be materially adversely affected.

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We are a growth-stage company with an evolving business model and strategy.
We are a growth-stage company currently and although we have achieved profitable quarters in the past, we have not maintained consistent profitability from period to period, and no assurances can be made that we will achieve consistent profitability in the near future, if ever. As a result of our growth-stage profile, our operating results may fluctuate significantly from quarter to quarter due to the timing of capital expenditures, expansion initiatives, market conditions, and other factors inherent in scaling our business. Accordingly, you should consider our business prospects in light of the costs, uncertainties, delays, and difficulties frequently encountered by growth-stage companies. Potential investors should carefully consider the risks and uncertainties that growth-stage company will face, including the risk that we may be unable to successfully implement or execute our evolving business plan, adjust to changing conditions, keep pace with increased demand, or raise sufficient funds to effectuate our business plan.
We face risks associated with our current indebtedness, and our failure to service debt or remain in compliance with certain covenants may have a material adverse effect on our business, financial condition, and results of operations.
We and certain of our subsidiaries are party to various arrangements with lenders as described in more detail in this Annual Report, and we may become party to additional debt financing arrangements in the future. As of December 31, 2025, we had approximately $411.1 million of outstanding debt. Our level of indebtedness could have the effect of, among other things, reducing our flexibility to respond to changing business and economic conditions. In addition, the increased amount of liquidity and capital required to pay interest on our indebtedness could reduce funds available for capital expenditures, growth initiatives and other activities, which may create competitive disadvantages for us relative to other companies with lower debt levels.
Agreements governing our current debt obligations, and any debt we may incur in the future, may contain financial covenants and covenants that restrict our and our subsidiaries’ ability to take certain corporate and operational actions. As a result of these covenants, we can be limited in the manner in which we conduct our business, and we may be unable to engage in favorable business activities or finance future operations or capital needs. Any violation by us of any of these covenants could provide the lender with the ability to accelerate the maturity of the indebtedness and exercise a variety of remedies, including foreclosing on any collateral securing the debt.
Risks Related to Bitcoin, Including ASIC Compute
We and our consolidated subsidiary, American Bitcoin, are highly concentrated in Bitcoin. Bitcoin is a highly volatile asset, and fluctuations in the price of Bitcoin have in the past influenced, and are likely to continue to influence, our business, financial condition, and results of operations and the market price of our common stock.
Currently, our investments are highly concentrated in Bitcoin, including through the Bitcoin held in our strategic reserve and through our consolidated subsidiary, American Bitcoin, which is a Bitcoin accumulation platform with its own strategic Bitcoin reserve. We also generate revenue from Bitcoin rewards that are earned through mining in our facilities, primarily by American Bitcoin. American Bitcoin also acquires additional Bitcoin through at-market purchases and strategic transactions to build its Bitcoin reserve. However, Bitcoin is a highly volatile asset, and fluctuations in the price of Bitcoin have in the past influenced, and are likely to continue to influence, our and American Bitcoin’s business, financial condition, and results of operations and the market price of our common stock and American Bitcoin’s Class A common stock. Our and American Bitcoin’s business, financial condition, and results of operations and the market price of our common stock and American Bitcoin’s Class A common stock may be adversely affected if the price of Bitcoin decreased substantially, including as a result of:
● decreased user and investor confidence in Bitcoin, including due to the various factors described herein;
● investment and trading activities, such as (i) trading activities of highly active retail and institutional users, speculators, Bitcoin miners, and investors, (ii) actual or expected significant dispositions of Bitcoin by large holders, including vehicles investing in Bitcoin or tracking Bitcoin markets, and (iii) actual or perceived manipulation of the spot or derivative markets for Bitcoin or spot Bitcoin exchange-traded products (“ETPs”);

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● negative publicity, media coverage, or sentiment due to events in or relating to, or perception of, Bitcoin or the broader digital assets industry, for example, (i) public perception that Bitcoin can be used as a vehicle to circumvent sanctions or to fund criminal or terrorist activities; (ii) expected or pending civil, criminal, regulatory enforcement, or other high profile actions against major participants in the Bitcoin ecosystem, including the SEC’s enforcement actions against Coinbase, Inc. and Binance Holdings Ltd.; (iii) additional filings for bankruptcy protection or bankruptcy proceedings of major digital asset industry participants, such as the bankruptcy proceeding of FTX Trading and its affiliates; and (iv) the actual or perceived environmental impact of ASIC compute and related activities, including environmental concerns raised by private individuals, governmental and non-governmental organizations, and other actors related to the energy resources consumed in the ASIC compute process;
● changes in consumer preferences and the perceived value or prospects of Bitcoin;
● competition from other digital assets that exhibit better speed, security, scalability, or energy efficiency, that feature other more favored characteristics, that are backed by governments or reserves of fiat currencies, or that represent ownership or security interests in physical assets;
● a decrease in the price of other digital assets, including stablecoins, or the crash or unavailability of stablecoins that are used as a medium of exchange for Bitcoin purchase and sale transactions, such as the crash of the stablecoin Terra USD in 2022, to the extent the decrease in the price of such other digital assets or the unavailability of such stablecoins may cause a decrease in the price of Bitcoin or adversely affect investor confidence in digital assets generally;
● disruptions, failures, unavailability, or interruptions in service of Bitcoin exchanges;
● cyber theft of Bitcoin from online wallet providers, or news of such theft from such providers or from individuals’ online wallets;
● the filing for bankruptcy protection by, liquidation of, or market concerns about the financial viability of digital asset custodians, exchanges, lending platforms, investment funds, or other digital asset industry participants;
● regulatory, legislative, enforcement, and judicial actions that adversely affect the price, ownership, transferability, trading volumes, legality, or public perception of Bitcoin, or that adversely affect the operations of or otherwise prevent digital asset custodians, exchanges, lending platforms, or other digital assets industry participants from operating in a manner that allows them to continue to deliver services to the digital assets industry;
● further reductions in mining rewards of Bitcoin, including block reward halving events;
● increases in the costs associated with ASIC compute, including increases in electricity costs and hardware and software used in mining, that may cause a decline in support for the Bitcoin network;
● scaling challenges, including transaction congestion or slow settlement times and higher transaction fees, associated with processing transactions on the Bitcoin network;
● macroeconomic changes, such as changes in the level of interest rates and inflation, fiscal and monetary policies of governments, trade restrictions, and fiat currency devaluations;
● developments in mathematics or technology, including in digital computing, algebraic geometry ,and quantum computing, that could result in the cryptography used by the Bitcoin blockchain becoming insecure or ineffective; and
● changes in national and international economic and political conditions.
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In addition, we and American Bitcoin have adopted ASU 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires us and American Bitcoin to measure our Bitcoin holdings at fair value in our balance sheets, with gains and losses in the fair value of our Bitcoin recognized in net income for each reporting period. Therefore, volatility and fluctuations in the price of Bitcoin has caused, and may in the future cause, our and American Bitcoin’s quarterly results to fluctuate significantly, which could have an adverse effect on our and American Bitcoin’s financial results and the value of our  and American Bitcoin’s securities.
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We may be subject to additional risks associated with holding Bitcoin for our and American Bitcoin’s account.
The Bitcoin we hold and that our consolidated subsidiary, American Bitcoin, holds, are not insured and or held at a banking institution or a member of the Federal Deposit Insurance Corporation (“FDIC”) or the Securities Investor Protection Corporation (“SIPC”). Therefore, such Bitcoin are not subject to the protections enjoyed by depositors with FDIC or SIPC member institutions. Instead, we and American Bitcoin safeguard and keep our Bitcoin private by utilizing storage solutions provided by custodians, including NYDIG Trust Company LLC (“NYDIG”), BitGo Trust Company Inc. (“BitGo”), and Coinbase Custody Trust Company, LLC (“Coinbase Custody”), and may also temporarily store Bitcoin on digital asset trading platforms or pledge Bitcoin to counterparties in connection with commercial arrangements.
Although our and American Bitcoin’s custodians, digital asset trading platforms, counterparties, and other third-party providers employ various security measures to mitigate the risk of loss, damage, or theft, neither they nor we can guarantee that such events will not occur, whether as a result of cyberattacks, malicious activity, computer or human error, natural disasters, terrorist acts, or other events. Digital asset trading platforms and counterparties have experienced hacks, security breaches, insolvencies, and operational failures in the past, including instances where platforms were undercapitalized or over-exposed, such as FTX, and may lack adequate insurance or otherwise be unable or unwilling to compensate us or American Bitcoin for losses. In addition, malicious actors may be able to intercept or divert our or American Bitcoin’s Bitcoin during transactions, transfers, or pledging activities. Given the significant amount of Bitcoin we and American Bitcoin hold and expect to continue to hold, any actual or perceived loss, whether temporary or permanent, could adversely affect our and American Bitcoin’s business, financial condition, and results of operations. Furthermore, as Bitcoin transactions are generally irreversible, any Bitcoin that is stolen, lost, or incorrectly transferred may be irretrievable, leaving us or American Bitcoin with limited or no effective means of recovery.
Bitcoin may only be controlled by the possessor of both the unique public key and private key relating to the digital wallet in which such Bitcoin are held. While we and American Bitcoin rely on third-party providers to safeguard private keys, to the extent a private key is lost, destroyed, or otherwise compromised and no backup is accessible, we or American Bitcoin will be unable to access the related Bitcoin, and such private key cannot be restored by the Bitcoin network. Any loss of private keys relating to digital wallets used to store our or American Bitcoin’s Bitcoin could adversely affect our and American Bitcoin’s business, financial condition, and results of operations.
We and American Bitcoin also face credit and counterparty risk in connection with custodied, stored, or pledged Bitcoin. For example, we currently pledge Bitcoin to Coinbase in connection with our Coinbase credit facility and American Bitcoin currently pledges Bitcoin to BITMAIN in connection with the purchase of mining equipment. Our and American Bitcoin’s ability to monitor the financial condition and operational stability of counterparties such as Coinbase and BITMAIN is limited, and any recovery efforts could be time-consuming, costly, and uncertain. If any such counterparty were to fail to perform its obligations, experience financial distress, or become subject to insolvency or bankruptcy proceedings, we or American Bitcoin could face delays in, or losses associated with, the recovery of our or American Bitcoin custodied, stored, or pledged Bitcoin, which could have a material adverse effect on our and American Bitcoin’s business, financial condition, and results of operations.
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Although we and American Bitcoin believe that existing law and the terms and conditions of our custodial arrangements would not result in Bitcoin held by our custodians being considered part of a custodian’s bankruptcy estate, applicable insolvency law is not fully developed with respect to digital assets held in custodial accounts. If our or American Bitcoin’s custodially held Bitcoin were nevertheless considered property of a bankruptcy estate, we or American Bitcoin could be treated as a general unsecured creditor, which could inhibit our or American Bitcoin’s ability to exercise ownership rights with respect to such Bitcoin and have a material adverse effect on our and American Bitcoin’s business, financial condition and results of operations.

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We may be subject to risks associated with holding World Liberty Financial, Inc. tokens.
In addition to Bitcoin, we have acquired 100 million World Liberty Financial, Inc. tokens (the “WLFI Tokens”), which are subject to many of the same risks applicable to Bitcoin and other digital assets, including price volatility, limited liquidity, regulatory uncertainty, technological risks, cybersecurity risks, and changes in market sentiment. Unlike Bitcoin, our WLFI Tokens are subject to an indefinite lock-up, with a minimum of twelve months from the purchase date, and may not be freely transferable. The WLFI Tokens are also subject to the governance procedures of the World Liberty Financial, Inc. protocol, which may be amended or administered in the discretion of World Liberty Financial, Inc. or its affiliates. As a result, we may have limited ability to influence decisions affecting the WLFI Tokens or its underlying protocol, and the value, utility, or transferability of the WLFI Tokens could be adversely affected by governance actions or other decisions beyond our control.
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From time to time, we have entered, and we and American Bitcoin may continue to enter, into certain hedging transactions to generate income and partially offset volatility in Bitcoin prices, which may expose us and American Bitcoin to risks associated with such transactions.
From time to time, we have entered, and we and American Bitcoin may continue to enter, into certain hedging transactions, which may expose us or American Bitcoin to various risks, including counterparty risk. Hedging transactions may limit the opportunity for gains or result in realized losses, margin requirements, or liquidity constraints. For example, selling call options does not protect us from declines in the price of Bitcoin and may require us to deliver Bitcoin at a predetermined strike price if the market price exceeds such strike price, capping our participation in Bitcoin price appreciation above the applicable strike price. Moreover, it may not be possible to hedge against a particular fluctuation that is so generally anticipated by the markets that a hedging transaction at an acceptable price is unavailable. In light of these and other factors, we or American Bitcoin may not be successful in mitigating our exposure to volatile Bitcoin prices through any hedging transactions we or American Bitcoin undertake.
If our consolidated subsidiary, American Bitcoin, fails to grow its hashrate, it may be unable to compete, and our and American Bitcoin’s business, financial condition, and results of operations could suffer.
Generally, a Bitcoin miner’s chance of solving a block on the Bitcoin blockchain and earning a Bitcoin reward is a function of the miner’s hashrate (i.e., the amount of computing power devoted to supporting the Bitcoin blockchain), relative to the global network hashrate. As demand for Bitcoin has increased, the global network hashrate has increased, and to the extent more adoption of Bitcoin occurs, we would expect the demand for Bitcoin would increase, drawing more mining companies into the industry and further increasing the global network hashrate. As new and more powerful miners are deployed, the global network hashrate will continue to increase, meaning a miner’s percentage of the total daily rewards will decline unless it deploys additional hashrate at pace with the growth of global hashrate. Accordingly, to compete, we believe that American Bitcoin will need to continue to acquire new miners, both to replace those lost to ordinary wear-and-tear and other damage, and to increase hashrate to keep up with a growing global network hashrate. However, there can be no assurance that American Bitcoin will have the resources to acquire new miners and increase hashrate in order to maintain the profitability of its mining operations. See “—We may be unable to purchase miners at scale or face delays or difficulty in obtaining new miners at scale.”
Furthermore, predicting the growth in network hashrate is extremely difficult. Generally, we would expect hashrate increases to be correlated with increases in Bitcoin price, but that has not always been the case, including recently during 2022 and 2023. To the extent that hashrate increases but the price of Bitcoin does not, there can be no assurance that American Bitcoin would be able to recover its investment in the hardware and processing power required to expand or upgrade its mining operations, and the results of our ASIC compute operations will suffer.

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Our consolidated subsidiary, American Bitcoin, may be unable to purchase miners at scale or face delays or difficulty in obtaining new miners at scale.
The ASIC compute operations mainly conducted through our consolidated subsidiary, American Bitcoin, can only be profitable if the costs, inclusive of hardware and electricity costs, associated with mining Bitcoin are lower than the price of the Bitcoin mined at the time of sale. As the cost of obtaining new miners increases, the cost of producing Bitcoin also increases. For example, miners experience ordinary wear-and-tear from operation and may also face more significant malfunctions caused by factors which may be beyond American Bitcoin’s control. Additionally, as technology evolves, American Bitcoin may acquire newer models of miners to remain competitive in the market. The continual upgrade and refresh of mining machines requires substantial capital investment, and American Bitcoin may face challenges in doing so on a timely basis based on the price and availability of new miners and its access to adequate capital resources.
In the past, we have observed periods of shortage in new miners available for purchase and a delay in delivery schedules for new miner purchases. There is no assurance that miner manufacturers or any other equipment manufacturers will be able to keep pace with potential surges in demand for mining equipment. It is uncertain how manufacturers will respond to increased global demand and whether they fulfill purchase orders fully and in a timely manner. Supply chain issues or geopolitical matters, including the relationship of the United States and Canada between each other and with China and other countries may also impact equipment manufacturers’ ability to fully and timely fulfill purchase orders. In the event that miner manufacturers or other suppliers are not able to keep pace with, or fail to satisfy, demand, American Bitcoin may not be able to purchase miners or other equipment in sufficient quantities or on the delivery schedules required to meet its business needs. In the past, including for American Bitcoin’s recent purchase of BITMAIN Antminer S21+ miners, miner manufacturers have required advance deposits for miner purchases. If this continues in the future, American Bitcoin may need to tie up significant amounts of capital for prolonged periods before it receives and is able to deploy purchased miners to generate revenue. Should any suppliers default on purchase agreements with American Bitcoin, it may need to pursue recourse under international jurisdictions, which could be costly and time-consuming. The outcome of any actions initiated in such international jurisdictions, and American Bitcoin’s ability to enforce judgments (if any) issued in its favor on such jurisdictions is inherently uncertain given differences in legal systems, biases against foreign litigants in certain jurisdictions, and other factors outside our control.  Furthermore, there is no guarantee that American Bitcoin would succeed in recovering any of the deposits paid for such purchases, which could materially and adversely affect our and American Bitcoin’s business, financial condition, and results of operations.
Our and American Bitcoin’s reliance on third-party mining pool service providers, including Foundry and Luxor, for our mining revenue payouts may have a negative impact on our and American Bitcoin’s business, financial condition, and results of operations.
We and American Bitcoin receive Bitcoin rewards from our mining activity through third-party mining pool operators, including Foundry and Luxor. Mining pools allow miners to combine their processing power, increasing their chances of solving a block and getting paid by the network. We and American Bitcoin provide computing power to mining pools, which use this computing power to operate nodes and validate blocks on the blockchain. The pools then distribute our or American Bitcoin’s pro-rata share of Bitcoin mined based on the computing power we contribute. Under our and American Bitcoin’s mining pool agreements with Foundry and Luxor, our daily payout is calculated based on the hashrate contribution delivered to the pool in the applicable calculation period, after deducting the applicable pool fee, if any. Our and American Bitcoin’s pool fees in relation to these agreements is currently below 1.0% of our daily payout.

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Should one of our or American Bitcoin’s pool operator’s systems suffer downtime due to a cyberattack, software malfunction or other similar issues, it will negatively impact our or American Bitcoin’s ability to receive Bitcoin mining rewards. Furthermore, we and American Bitcoin are dependent on the accuracy of the mining pool operators’ record keeping and internal controls to prevent any fraud and to accurately record the total processing power provided by us, American Bitcoin, and other mining pool participants for a given Bitcoin mining application in order to assess the proportion of that total processing power we provided. While we and American Bitcoin have internal methods of tracking both our processing power provided and the total used by the pool, the mining pool operator uses its own recordkeeping to determine our proportion of a given reward. We and American Bitcoin have little means of recourse against mining pool operators if we determine the proportion of the reward paid out to us or American Bitcoin by the mining pool operator is incorrect, other than leaving the pool. If we or American Bitcoin are unable to consistently obtain accurate proportionate rewards from our mining pool operators, we or American Bitcoin may experience reduced reward for our efforts, which would have an adverse effect on our and American Bitcoin’s business, financial condition, and results of operations.
The further development and acceptance of the Bitcoin network and other digital assets is subject to a variety of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of Bitcoin and other digital asset systems may adversely affect our and American Bitcoin’s business, financial condition, and results of operations.
The use of digital assets to, among other things, buy and sell goods and services and complete transactions, is part of a new and rapidly evolving industry that employs digital assets, including Bitcoin, based upon a computer-generated mathematical and/or cryptographic protocol. The growth of this industry in general, and the use of Bitcoin in particular, is subject to a high degree of uncertainty, and the slowing or stopping of the development or acceptance of developing protocols may occur unpredictably.
During 2022 and early 2023, some well-known digital asset market participants, including Celsius Network, Voyager Digital Ltd., Three Arrows Capital, and Genesis Global Holdco LLC, declared bankruptcy, resulting in a loss of confidence in participants of the digital asset ecosystem, negative publicity surrounding digital assets more broadly, decreased liquidity, and extreme price volatility. Even if there was no direct material impact on our business from such bankruptcies, we have been and may continue to be impacted indirectly, including through American Bitcoin.
Furthermore, the closure and temporary shutdown of major digital asset exchanges and trading platforms, such as FTX, due to fraud or business failure, has disrupted investor confidence in digital assets and led to a rapid escalation of oversight of the digital asset industry. Thus, the failures of key market participants and systemic contagion risk are expected to, as a consequence, invite stricter regulatory scrutiny. This could have a negative impact on further development and acceptance of digital asset networks and digital assets, including Bitcoin.
Other factors that could affect further development and acceptance of digital asset networks and other digital assets include:
● continued worldwide growth in the adoption and use of digital assets as a medium of exchange or store of value;
● governmental regulation of Bitcoin and its use, or restrictions on or regulation of access to and operation of the Bitcoin network or similar digital asset systems;
● limitations on financial institutions processing funds for Bitcoin transactions, processing wire transfers to or from Bitcoin exchanges, Bitcoin-related companies or service providers, or servicing or maintaining accounts for persons or entities transacting in Bitcoin;
● changes in consumer demographics and public tastes and preferences;
● the maintenance and development of the open-source software protocol of the network, including software updates and changes to network protocols that could introduce bugs or security risks;
● the increased consolidation of contributors to the Bitcoin blockchain through mining pools;
● the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies;
● the use of the networks supporting digital assets for developing smart contracts and distributed applications;
● general economic conditions and the regulatory environment relating to digital assets;

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● environmental and other regulatory restrictions on the use of power to mine Bitcoin and a resulting decrease in global Bitcoin mining operations;
● an increase in Bitcoin transaction costs and a resultant reduction in the use of and demand for Bitcoin; and
● negative consumer sentiment and perception of Bitcoin specifically and digital assets generally.