American Bitcoin Corp.

Condensed Consolidated and Combined Balance Sheets

(in USD thousands, except share and per share data)

Condensed Consolidated and Combined Statements of Operations and Comprehensive (Loss) Income

(Unaudited, in USD thousands, except share and per share data)

Condensed Consolidated and Combined Statements of Stockholders’ Equity

(Unaudited, in USD thousands, except share and per share data)

(1) Net loss of $100,623 from January 1, 2025 through March 31, 2025 is attributed to Hut 8 as it was the sole shareholder prior to March 31, 2025.

Condensed Consolidated and Combined Statements of Cash Flows

(Unaudited, in USD thousands)

Note 1. Description of business, the transactions and basis of presentation

Nature of operations and corporate information

American Bitcoin Corp. is a pure-play Bitcoin accumulation platform that integrates scaled Bitcoin mining operations with disciplined accumulation strategies. Its business is (i) the operation of application-specific integrated circuit ("ASIC") miners for the purpose of mining Bitcoin and (ii) the strategic accumulation of a Bitcoin reserve. References to the "Company" herein refer to:

(i)

the "ASIC compute" sub-segment of Hut 8 Corp.’s "Compute" segment prior to the effectiveness of the Transactions (as defined below) on March 31, 2025;

(ii)

American Bitcoin Corp. (formerly known as American Data Centers Inc.) following the effectiveness of the Transactions on April 1, 2025 until the consummation of the Mergers (as defined below) on September 3, 2025; and

(iii)

American Bitcoin Corp. (formerly known as Gryphon Digital Mining, Inc.) following the consummation of the Mergers on September 3, 2025.

The Transactions

Transaction with American Data Centers Inc.

On March 31, 2025, Hut 8 Corp. ("Hut 8"), American Data Centers Inc. ("ADC"), and the stockholders of ADC entered into a Contribution and Stock Purchase Agreement (the "Agreement"), pursuant to which Hut 8 contributed to ADC substantially all of Hut 8’s wholly-owned ASIC miners, representing the business of the Company, in exchange for newly issued Class B Common Stock of ADC, representing 80% of the total and combined voting power and 80% of the issued and outstanding equity interests of ADC after giving effect to the issuance (the "Transactions"). Prior to the effectiveness of the Transactions, the Company did not operate as a standalone company and instead operated as the "ASIC compute" sub-segment of Hut 8’s "Compute" segment. In connection with the Transactions, ADC was renamed American Bitcoin Corp. ("Historical ABTC") and became a majority-owned subsidiary of Hut 8. The Transactions did not meet the business combination criteria under FASB ASC Topic 805, Business Combinations. The net book value of the assets contributed by Hut 8, representing the business of the Company, was$126.4 million consisting of $121.1 million contributed in March 2025 and $5.3 million contributed in April 2025. Hut 8 incurred $1.5 million in transaction costs related to the Transactions.

In connection with the Transactions, Hut 8 and the Company entered into a Master Services Agreement and a Master Colocation Services Agreement providing for Hut 8 and its personnel to perform day-to-day commercial and operational management services and ASIC colocation services to the Company, respectively, in each case on an exclusive basis for so long as such agreements remain in effect. Hut 8 and the Company also entered into a Shared Services Agreement, pursuant to which Hut 8 and its personnel would provide back-office support services to the Company.

The following table presents a reconciliation of the Unaudited Condensed Consolidated and Combined Balance Sheets of the Company as of March 31, 2025, prior to the effectiveness of the Transactions, and the Unaudited Condensed Consolidated and Combined Balance Sheets of the Company as of March 31, 2025, following the effectiveness of the Transactions:

Mergers with Gryphon Digital Mining, Inc.

On May 9, 2025, Gryphon Digital Mining, Inc., a Delaware corporation (together with its consolidated subsidiaries and predecessors "Gryphon"), GDM Merger Sub I Inc., a Delaware corporation and wholly owned direct subsidiary of Gryphon ("Merger Sub Inc."), GDM Merger Sub II LLC, a Delaware limited liability company and wholly owned direct subsidiary of Gryphon ("Merger Sub LLC"), and Historical ABTC, entered into an Agreement and Plan of Merger (the "Merger Agreement").

On September 3, 2025, in accordance with the terms of the Merger Agreement, among other things, (i) Merger Sub Inc. merged with and into Historical ABTC, with Historical ABTC surviving the merger (the "First Merger") as a wholly owned direct subsidiary of Gryphon (the corporation surviving the First Merger, the "First Merger Surviving Corporation") and (ii) immediately after the First Merger, the First Merger Surviving Corporation merged with and into Merger Sub LLC, with Merger Sub LLC surviving the merger (the "Second Merger" and, taken together with the First Merger, the "Mergers") as a wholly owned direct subsidiary of Gryphon. Gryphon was renamed to American Bitcoin Corp. after the completion of the Mergers (the "Closing"). This transaction was accounted for under the acquisition method as a reverse acquisition with Historical ABTC identified as the accounting acquirer for financial statement reporting purposes. The transaction resulted in the recognition of $154.4 million of goodwill.

Note 2. Significant accounting policies and recent accounting pronouncements

Basis of presentation

Until the effectiveness of the Transactions on March 31, 2025, the Company’s operations historically operated as the "Bitcoin mining" sub-segment of Hut 8’s "Compute" segment and not as a standalone company; therefore, separate financial statements had not historically been prepared for the Company prior to April 1, 2025. The Company's Unaudited Condensed Consolidated and Combined Financial Statements represent the historical assets, liabilities, operations, and cash flows directly attributable to the Company starting April 1, 2025; the prior periods have been prepared on a carveout basis through the use of a management approach from Hut 8’s consolidated financial statements and accounting records and are presented on a standalone basis as if the operations had been conducted independently from Hut 8.

Following the effectiveness of the Transactions on March 31, 2025, the Company began operating as a standalone entity with its own accounting and financial records; therefore, starting April 1, 2025, the Company’s results of operations are the results directly attributed to its standalone operations rather than the Bitcoin mining operations of Hut 8. The Company’s Unaudited Condensed Consolidated and Combined Balance Sheets as of March 31, 2026, reflects the assets and liabilities that the Company directly owns or is legally obligated to satisfy post-Transactions.

Prior to the effectiveness of the Transactions on March 31, 2025, all revenues and costs, as well as assets and liabilities directly associated with Hut 8’s Bitcoin mining sub-segment activities were included in the Company’s Unaudited Condensed Consolidated and Combined Financial Statements, including Hut 8’s strategic Bitcoin reserve (which remained with Hut 8 following the effectiveness of the Transactions). Additional costs allocated to the Company include corporate general and administrative expenses which consisted of various categories, including but not limited to: employee compensation and benefits, professional services, facilities and corporate office expenses, information technology, interest expenses, and stock-based compensation. The corporate and general administrative expenses allocated were primarily based on a percentage of revenue basis that was considered to be a reasonable reflection of the utilization of the services provided or benefit received during the periods presented, depending on the nature of the service received. Management believes the assumptions underlying the Company’s Unaudited Condensed Consolidated and Combined Financial Statements, including the expense methodology and resulting allocation, are reasonable for all periods presented. However, the allocations may not include all of the actual expenses that would have been incurred by the Company had it operated as a standalone entity during such periods and may not reflect its results of operations, financial position and cash flows had it been a standalone company during the periods presented. Actual costs that might have been incurred had the Company been a standalone company would depend on a number of factors, including the Company’s organizational structure, what corporate functions the Company might have performed directly or outsourced, and strategic decisions the Company might have made in areas such as executive management, legal, and other professional services, and certain corporate overhead functions. These costs also may not be indicative of the expenses that the Company may incur in the future or would have incurred if the Company had obtained these services from a third party.

Prior to the effectiveness of the Transactions on March 31, 2025, the Company’s equity balance in its Unaudited Condensed Consolidated and Combined Financial Statements represented the excess of total liabilities over assets. Net Hut 8 investment is primarily impacted by contributions from Hut 8 that are the result of net funding provided by or distributed to Hut 8.

Prior to the effectiveness of the Transactions on March 31, 2025, cash was managed through bank accounts controlled and maintained by Hut 8. The Company did not have legal ownership of any bank accounts containing cash balances prior to March 31, 2025. As such, cash held in commingled accounts with Hut 8 is presented within net Hut 8 investment on the Company’s Unaudited Condensed Consolidated and Combined Balance Sheets. Subsequent to March 31, 2025, the Company has set up its own legally separate bank accounts to directly settle its liabilities and to manage its own cash.

Prior to the effectiveness of the Transactions on March 31, 2025, the Company was not a co-obligor on Hut 8’s third-party, long-term debt obligations nor was the Company expected to pay any portion of Hut 8’s third-party, long-term debt. However, proceeds from Hut 8’s third-party debts were used to finance the Company’s purchase of ASICs or directly used for the Company’s Bitcoin mining-related activities and were therefore included in the Company’s Unaudited Condensed Consolidated and Combined Financial Statements. While the Company is not a legal obligor, as of March 31, 2026, certain Bitcoin mining assets of the Company were pledged as collateral as disclosed in Note 4. Digital Assets. Following the effectiveness of the Transactions on March 31, 2025, the Company is no longer connected to any of Hut 8’s third-party debt obligations.

The Company’s Unaudited Condensed Consolidated and Combined Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial reporting. While these statements reflect all normal recurring adjustments which are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all the information and footnotes required by GAAP for complete financial statements. As such, the information included in these Unaudited Condensed Consolidated and Combined Financial Statements should be read in conjunction with the Company's Combined Financial Statements for the year ended December 31, 2025 and related notes included therewith.

Interim results are not necessarily indicative of results for a full year.

The U.S. Dollar is the functional and presentation currency of the Company.

Significant accounting policies followed by the Company in the preparation of the accompanying Unaudited Condensed Consolidated and Combined Financial Statements are summarized below.

Principles of consolidation

The Company's Unaudited Condensed Consolidated and Combined Financial Statements include the accounts of the Company and its controlled subsidiaries. Consolidated subsidiaries’ results are included from the date the subsidiary was formed or acquired. Intercompany balances and transactions have been eliminated in consolidation.

Recent accounting pronouncements

The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its Unaudited Condensed Consolidated and Combined Financial Statements and ensures that there are proper controls in place to ascertain that the Company’s Unaudited Condensed Consolidated and Combined Financial Statements properly reflect the change.

In December 2025, the Financial Accounting Standards Board ("FASB") issued Update 2025-12, Codification Improvements, ("ASU 2025-12"). ASU 2025-12 clarifies dilutive earnings per share treatment for certain contracts that may be settled in stock or cash when a company has a loss from continuing operations. This update is effective for interim and annual reporting periods beginning after December 31, 2026, with early adoption permitted. The Company is currently assessing the impact of adopting this standard. Adoption of ASU 2025-12 requires retrospective application to each prior reporting period presented.

In September 2025, FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) ("ASU 2025-07"). With respect to Topic 815, ASU 2025-07 refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting. This update is effective for interim and annual reporting periods beginning after December 15, 2026, with early adoption permitted. The Company is currently assessing the impact of adopting this standard. ASU 2025-07 may be applied using a prospective or modified retrospective transition approach.

In September 2025, FASB issued Update ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software("ASU 2025-06"). ASU 2025-06 modernizes the accounting for internal-use software to current development practices, clarifies when to begin capitalizing costs and enhances disclosure requirements. This update is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently assessing the impact of adopting the standard.

In January 2025, the FASB issued Update ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date("ASU 2025-01"). ASU 2025-01 was issued to clarify the effective date for Update ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses("ASU 2024-03"). ASU 2024-03 requires public business entities to provide additional disclosures in the notes to financial statements, disaggregating specific expense categories within relevant income statement captions. The prescribed categories include purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation, depletion, and amortization related to oil-and-gas producing activities. ASU 2024-03 is effective for the first annual reporting period beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently assessing the impact of adopting the standard.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements. The most significant accounting estimates inherent in the preparation of the Company’s Unaudited Condensed Consolidated and Combined Financial Statements include estimates associated with revenue recognition, determining the useful lives and recoverability of long-lived assets, goodwill and digital assets, the allocation of costs to the Company for certain corporate and shared service functions in preparing the Company’s Unaudited Condensed Consolidated and Combined Financial Statements on a carve-out basis, and current and deferred income tax assets (including the associated valuation allowance) and liabilities.

Cash

Cash includes cash on hand and demand deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal or use. The Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. As of March 31, 2026, the Company hadno cash equivalents. Periodically, the Company may maintain deposits in financial institutions in excess of government insured limits. Management believes that the Company is not exposed to significant credit risk as the Company’s deposits are held at financial institutions that management believes to be of high credit quality. To date, the Company has not experienced any losses on these deposits.

Fair value measurement

The Company’s financial assets and liabilities are accounted for in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820") which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs when measuring fair value and classifies those inputs into three levels:

Level 1— Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2— Observable, market-based inputs, other than quoted prices included in Level 1, for the assets or liabilities either directly or indirectly.

Level 3—Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or a liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management judgment.

Assets and liabilities measured at fair value on a recurring basis

The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of March 31, 2026 and December 31, 2025:

In determining the fair value of its digital assets, the Company is able to cite quoted prices as determined by the Company’s principal market, which is the Coinbase exchange. As such, the Company’s Digital assets were determined to be Level 1 assets. See Digital assets below for a description of the Company’s digital asset accounting policy.

The Company estimates the fair value of its Bitcoin redemption and put options using the Black model, which includes several inputs and assumptions, including the forward price of the underlying asset (Bitcoin), the underlying asset’s implied volatility, the risk-free interest rate, and the expected term of the redemption and put options.

See the Derivatives section below for a description of the Company’s derivative instrument accounting policy.

The Company estimated the fair value of its warrant liability, which it assumed in connection with the Mergers, using the Black-Scholes pricing model, which includes significant unobservable inputs, including the expected term of the warrants, and as a result, the Company determined that the warrant liability is a Level 3 liability. For quantitative disclosure on the inputs used to estimate the fair value of the Company’s warrant liability, see Note 7. Derivatives. See Warrant liability section below for a description of the Company’s warrant liability accounting policy.

Assets and liabilities measured at fair value on a non-recurring basis

In addition to assets and liabilities that are measured at fair value on a recurring basis, the Company also measures certain assets and liabilities at fair value on a non-recurring basis. The Company’s non-financial assets, including goodwill and property and equipment, are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at estimated fair value only when an impairment charge is recognized. The Company hadno impairment from its continuing operations related to its non-financial assets and liabilities measured on a non-recurring basis during the three months ended March 31, 2026 and 2025.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts payable and accrued expenses, approximate fair value due to the short-term nature of these instruments. The carrying value of long-term liabilities, such as lease liabilities, approximate fair value as the related interest rates approximate rates currently available to the Company.

Digital assets

Bitcoin, representing the Company’s digital assets, are measured at fair value as of each reporting period. The fair value of digital assets is measured using the period-end closing price from the Company’s principal market, which is Coinbase Prime, in accordance with ASC 820. Since the digital assets are traded on a 24-hour period, the Company utilizes the price as of midnight UTC time, which aligns with the Company’s Bitcoin mining revenue recognition cut-off. Changes in fair value are recognized in Losses on digital assets, in Operating expenseson the Company’s Unaudited Condensed Consolidated and Combined Statement of Operations and Comprehensive (Loss) Income. When the Company sells digital assets, gains or losses from such transactions are measured as the difference between the cash proceeds and the carrying basis of the digital assets as determined on a First In-First Out basis and are also recorded within the same line item Loss on digital assets.

Digital assets received by the Company through its revenue activities are accounted for in connection with the Company’s revenue recognition policy disclosed below.

Leases

The Company accounts for its leases under ASC Topic 842, Leases ("ASC 842"). Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the Unaudited Condensed Consolidated and Combined Balance Sheets as both a right-of-use ("ROU") asset and a lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the ROU asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the ROU asset result in straight-line rent expense over the lease term.

Upon adoption of ASC 842, for purposes of calculating the ROU asset and lease liability, the Company elected to combine lease and related non-lease components as permitted under ASC 842. The Company also elected the short-term lease exception for leases having an initial term of 12 months or less. Consequently, such leases are not recorded in the Company’s Unaudited Condensed Consolidated and Combined Balance Sheets. The Company recognizes rent expense from its operating leases on a straight-line basis over the lease term.

Property and equipment

Property and equipment, net are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Cost includes expenditures that are directly attributable to the acquisition of the asset, including those attributable to bringing the asset to its intended working condition. Construction in progress is not depreciated until the assets are placed in service.

Based on the currently available information and data, management has determined that the straight-line method of depreciation best reflects the current expected useful life of the Company's miners and mining equipment. Management reviews estimates at each reporting date and will revise such estimates as and when data become available. Management reviews the appropriateness of its assumptions related to residual value at each reporting date.

The estimated useful life of the Company's property and equipment is generally as follows:

Impairment of long-lived assets

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its long-lived assets, including property and equipment, may not be recoverable. When such events or changes in circumstances occur, the Company assesses recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows from it. If the expected future undiscounted cash flows from the assets are less than the carrying amount of these assets, the Company recognizes an impairment loss based on any excess of the carrying amount over the fair value of the assets.

When recognized, impairment losses related to long-lived assets to be held and used in operations are recorded as cost and expenses in the Company’s Unaudited Condensed Consolidated and Combined Statements of Operations and Comprehensive Income (Loss).

Goodwill

Goodwill represents the cost of a business acquisition in excess of the fair value of the net assets acquired. The Company reviews goodwill for impairment at the reporting unit level on an annual basis during the fourth quarter of each fiscal year and in between annual tests whenever events or changes in circumstances indicate that it is more likely than not that the carrying value of a reporting unit exceeds its fair value. In performing the goodwill impairment test, the Company first performs a qualitative assessment, which requires the Company to consider events or circumstances, including significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business, significant underperformance relative to expected historical or projected development milestones, significant negative regulatory or economic trends, and significant technological changes that could render the asset (or asset group) obsolete. If, after assessing the totality of events or circumstances, the Company determines that it is more likely than not that the fair value of its reporting unit is greater than the carrying amounts, then the quantitative goodwill impairment test is not performed.

If the qualitative assessment indicates that the quantitative analysis should be performed, the Company next evaluates goodwill for impairment by comparing the fair value of its reporting unit to its carrying value, including the associated goodwill. To determine the fair value, the Company uses the equal weighting of the market approach based on comparable publicly traded companies in similar lines of businesses and the income approach based on estimated discounted future cash flows. Cash flow assumptions consider historical and forecasted revenue, operating costs and other relevant factors.

The Company hasnot recorded an impairment to goodwill for thethree months ended March 31, 2026 and 2025

Derivatives

The Company accounts for the derivative contracts it enters into as follows:

Bitcoin redemption and put options

The Company has entered into agreements to purchase property and equipment that includes a pledge of Bitcoin and a right to redeem the pledged Bitcoin for a certain period after the redemption period starts. The redemption period starts when the purchased property and equipment is shipped. The amount of Bitcoin that can be redeemed is pro-rata of the percentage of property and equipment shipped. These Bitcoin redemption and put options do not qualify as an accounting hedge under FASB ASC Topic 815, Derivatives and Hedging ("ASC 815"). Accordingly, the Company carries the Bitcoin redemption and put options at fair value and any gains or losses are recognized in profit or loss, respectively.

Covered call options

From time to time, Hut 8 sold call options on Bitcoin that it owned (the "covered call options") to generate cash flows on a portion of its Bitcoin held. These options do not qualify as accounting hedges under ASC 815. Accordingly, the Company carries the covered call options at fair value and any gains or losses are recognized in profit or loss, respectively.

As of March 31, 2026, the Company had not entered into a covered call options transaction.

Warrant liability

The Company assumed certain warrants in the Mergers (as defined below) that meet the definition of a derivative under ASC 815, and due to the terms, the warrants are required to be classified as a liability. The warrant liability is carried at fair value and any gains or losses are recorded in profit or loss.

Segment reporting

Operating segments are defined as components of an enterprise for which separate financial information is available and regularly reviewed by the Chief Operating Decision Maker ("CODM") to make strategic decisions, allocate resources, and assess financial performance. The Company's Chief Executive Officer serves as the CODM, responsible for strategic decisions regarding operations and financial management. The Company operates withone operating segment anduses net income (loss) as measures of profit or loss on a combined basis in making decisions regarding resource allocation and performance assessment. Additionally, the Company's CODM regularly reviews expenses on a combined basis. The financial metrics used by the CODM help make key operating decisions.

Because the Company has asingle reportable segment, all required financial segment information can be found directly in our Unaudited Condensed Consolidated and Combined Financial Statements. The measure of segment assets is reported on the Unaudited Condensed Consolidated and Combined Balance Sheets as total assets. Significant segment expenses are consistent with those presented on the Unaudited Condensed Consolidated and Combined Statements of Operations and Comprehensive (Loss) Income. Depreciation and amortization expense is reported on the Unaudited Condensed Consolidated and Combined Statements of Cash Flows.

Revenue recognition

The Company recognizes revenue under ASC Topic 606, Revenue from Contracts with Customers("ASC 606"). The core principle of this standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

•

Step 1: Identify the contract with the customer

•

Step 2: Identify the performance obligations in the contract

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Step 3: Determine the transaction price

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Step 4: Allocate the transaction price to the performance obligations in the contract

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Step 5: Recognize revenue when the company satisfies a performance obligation

In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a "distinct" good or service (or bundle of goods or services) if both of the following criteria are met: (1) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and (2) the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:

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Variable consideration

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Constraining estimates of variable consideration

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The existence of a significant financing component in the contract

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Noncash consideration

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Consideration payable to a customer

Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

The Company earns revenue from Bitcoin mining. The Company has entered into arrangements, as amended from time to time, with mining pool operators to perform hash computations for the mining pools, which is an output of the Company’s ordinary activities. The Company has the right to decide the point in time and duration for which it will provide hash computation services to the mining pools. As a result, the Company’s enforceable right to compensation only begins when, and continues so long as, the Company provides hash computation services to the mining pools. The contracts are terminable at any time by either party without substantive compensation to the other party for such termination. Therefore, the Company has determined that the duration of the contract is less than 24 hours and that the contract continuously renews throughout the day. Upon termination, the mining pool operator (i.e., the customer) is required to pay the Company any amount due related to previously satisfied performance obligations. The Company has determined that the mining pool operator’s (i.e., the customer’s) renewal right is not a material right as the terms, conditions, and compensation amounts are at then market rates. There is no significant financing component in these transactions.

In exchange for providing hash computation services, which represents the Company’s only performance obligation, the Company is entitled to noncash consideration in the form of Bitcoin, calculated under payout models determined by the mining pool operators. The payout model used by the mining pools in which the Company participated is the Full Pay Per Share ("FPPS") model, which contains three components: (1) a fractional share of the fixed Bitcoin award from the mining pool operator (referred to as a "block reward"), (2) transaction fees generated from (paid by) blockchain users to execute transactions and distributed (paid out) to individual miners by the mining pool operator, and (3) mining pool operating fees retained by the mining pool operator for operating the mining pool. The Company’s total compensation is calculated using the following formula: the sum of the Company’s share of (a) block rewards and (b)

transaction fees, less (c) mining pool operating fees. The following is a detailed description of each of the components of the FPPS model under which the Company receives payment from the mining pools in which it participates:

(1)

Block rewards represent the Company’s share of the total amount of block subsidies that are expected to be generated on the Bitcoin network as a whole during the 24-hour period beginning at midnight UTC daily (the "measurement period"). The block reward earned by the Company is calculated by dividing (a) the total amount of hashrate the Company provides to the mining pool operator, by (b) the total Bitcoin network’s implied hashrate (as determined by the Bitcoin network difficulty), multiplied by (c) the total amount of block subsidies that are expected to be generated on the Bitcoin network as a whole during the measurement period. The Company is entitled to its relative share of consideration even if a block is not successfully added to the blockchain by the mining pool in the measurement period.

(2)

Transaction fees refer to the total fees paid by users of the network to execute transactions. The Company is entitled to a pro-rata share of the total amount of transaction fees that are actually generated on the Bitcoin network as a whole during the measurement period. The transaction fees paid out by the mining pool operator to the Company is calculated by dividing (a) the total amount of transaction fees that are actually generated on the Bitcoin network as a whole, by (b) the total amount of block subsidies that are actually generated on the Bitcoin network as a whole, multiplied by (c) the Company’s block rewards earned as calculated in (1) above. The Company is entitled to its relative share of consideration even if a block is not successfully added to the blockchain by the mining pool in the measurement period.

(3)

Mining pool operating fees are charged by the mining pool operator for operating the mining pool as set forth on a rate schedule to the mining pool contract. The mining pool operating fees reduce the total amount of compensation the Company receives and are only incurred to the extent that the Company has generated mining revenue during the measurement period. For each contract, the Company measures noncash consideration at the Bitcoin spot price at the beginning of the day (midnight UTC time) on the date of contract inception, as determined by the Company’s principal market, which is the Coinbase exchange. The Company recognizes this noncash consideration on the same day that control of the contracted service transfers to the mining pool operator, which is the same day as the contract inception.

Cost of revenues (exclusive of depreciation and amortization)

The Company’s cost of revenue consists primarily of direct costs of generating revenue, including electric power costs, hosting costs, repairs and maintenance, occupancy, materials and supply costs, and labor.

Stock-based compensation

The Company grants stock-based compensation, primarily to employees, consultants, and non-employee directors of the Company and its affiliates. Restricted stock units ("RSUs") granted to employees generally either vest in quarterly or annual installments over three years and RSUs granted to non-employee directors generally vest on the date of the Company’s annual general meeting of stockholders.

Compensation expense for awards is predominantly recognized using the straight-line method over the requisite service period for the entire award and forfeitures are recognized as they occur. The cumulative amount of compensation cost recognized at any point in time equals at least the portion of the grant-date fair value of the award that is vested at that date. The fair value of RSUs is calculated at the market value of the Class A common stock on the measurement date.

Foreign currency

The U.S. Dollar is the functional and presentation currency of the Company. Hut 8 has consolidated subsidiaries that have a non-U.S. Dollar functional currency. Each of Hut 8's subsidiaries determines its own functional currency and items of each subsidiary included in the Unaudited Condensed Consolidated and Consolidated Financial Statements are measured using that functional currency. Assets and liabilities of foreign operations having a functional currency other than the U.S. Dollar are translated at the rate of exchange prevailing at the reporting date and revenues and expenses at average rates during the period. Foreign currency translation adjustments are reflected within accumulated other comprehensive income (loss) in stockholders’ equity. Gains and losses from foreign currency transactions are included in profit or loss for the period. Foreign currency-denominated monetary assets and liabilities of Hut 8 are translated using the rate of exchange prevailing at the reporting date, and non-monetary assets and liabilities measured at fair value are translated at the rate of exchange prevailing at the date when the fair value was determined. Resulting gains and losses arising from the translation of these assets and liabilities are recorded as a cumulative translation adjustment, a component of other comprehensive (loss) income in stockholders’ equity. Revenues and expenses are measured at average rates during the period. Gains or losses on translation of these items are included in earnings. Foreign currency denominated non-monetary assets and liabilities, measured at historic cost, are translated at the rate of exchange at the transaction date. Certain foreign operations have been carved out and allocated to the Company. Therefore, the Company allocated a portion of these foreign currency impacts to the Unaudited Condensed Consolidated and Combined Financial Statements.

Net (loss) income per share attributable to common stockholders

The Company does not have participating securities other than common stock. Basic net (loss) income per share of common stock from continuing operations attributable to the Company and basic net loss per share of common stock from discontinued operations attributable to the Company are computed by dividing net (loss) income from continuing operations attributable to the Company and net loss from discontinued operations attributable to the Company, respectively, by the weighted-average number of shares of common stock outstanding during the period. Diluted net (loss) income per share of common stock from continuing operations attributable to the Company is computed by giving effect to all potentially dilutive shares of common stock, including (if any) warrants to purchase common stock to the extent dilutive under the treasury-stock method, and the numerator adjustment from the impact of the warrant liability assumed from the Mergers to the extent dilutive. In computing potentially dilutive shares of common stock, each class of shares is applied to basic net (loss) income per share of common stock from continuing operations attributable to the Company on a most to least dilutive basis until a particular class no longer produces further dilution, if applicable. Diluted net loss per share of common stock from discontinued operations attributable to the Company is computed by using the same denominator used to calculate diluted net (loss) income per share of common stock from continuing operations attributable to the Company, as previously noted. For comparative purposes, periods prior to the Mergers have been retroactively recast to reflect the effects of the changes in equity structure resulting from the Mergers and assumes the same basic weighted average shares.

The Company has two classes of common stock outstanding: Class A common stock and Class B common stock. Holders of Class A common stock generally have the same rights, including rights to dividends, as holders of Class B common stock, except that holders of Class A common stock haveone vote per share while holders of Class B common stock have 10,000 votes per share. As such, basic and fully diluted earnings per share for Class A common stock and Class B common stock are the same. The Company has never declared or paid any cash dividends on either Class A or Class B common stock.

Income taxes

The Company complies with the accounting and reporting requirements of ASC Topic 740, Income Taxes which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

A valuation allowance is recorded if it is more-likely-than-not that some portion, or all, of a deferred tax asset will not be realized. In evaluating whether a valuation allowance is needed, the Company considers all relevant evidence, including past performance, recent cumulative losses, projections of future taxable income, and the viability of tax planning strategies. If the Company subsequently determines that there is sufficient evidence to indicate a deferred tax asset will be realized, the associated valuation allowance is reversed.

The Company will recognize positions taken or expected to be taken in a tax return in the Unaudited Condensed Consolidated and Combined Financial Statements when it is more-likely-than-not that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit with greater than 50% likelihood of being realized upon ultimate settlement. The Company will recognize any interest and penalties related to unrecognized tax benefits in income tax expense. There wereno interest or penalties related to income taxes that have been accrued or recognized as of March 31, 2026.

Note 3. Segment information

The Company reports results in asingle reportable segment, which reflects how our CODM allocates resources and evaluates the Company's financial results. Because the Company has a single reportable segment, all required financial segment information can be found directly in our Unaudited Condensed Consolidated and Combined Financial Statements.

The following table presents summarized information for revenue by geographic area:

The following table presents summarized information for long-lived assets by geographic area:

Note 4. Digital assets

The following table presents the changes in carrying amount of the Company's digital assets as of March 31, 2026 and March 31, 2025:

The Company’s digital assets have been or currently are held in segregated custody accounts for the benefit of the Company, held in segregated custody accounts under the Company’s ownership, or held by Bitmain Technologies Delaware Limited (together with its affiliates, "Bitmain") for the Bitcoin pledged in connection with the 2025 Bitmain Purchase Agreement (as defined below) and the 2026 Bitmain Purchase Agreement (as defined below) for miner purchases from them. As discussed in Note 1, Hut 8 contributed only ASIC miners as part of the Transactions. As a result, the Company's entire strategic Bitcoin reserve as of March 31, 2025, included in the carveout financial statements, remained with Hut 8 following the effectiveness of the Transactions. Starting April 1, 2025, the Company began to build its own strategic Bitcoin reserve through Bitcoin mining and at-market Bitcoin purchases. The Company accumulated 7,021 Bitcoin as a standalone entity as of March 31, 2026. The details of Bitcoin are as follows:

Bitmain Purchase Agreements

In November 2024, Hut 8 entered into a purchase agreement with Bitmain Technologies Delaware Limited (together with its affiliates, "Bitmain") to purchase approximately 30,000 Bitmain Antminer S21+ ASIC miners (the "Hut 8 Bitmain Purchase Agreement"). In December 2024, in connection with the Hut 8 Bitmain Purchase Agreement, Hut 8 pledged 968 Bitcoin attributed to the Company at the time into a segregated wallet with Bitmain, which was originally subject to a three-month redemption right from the shipment date of the purchased ASIC miners, whereby Hut 8 had the option to repurchase, with cash, the pledged Bitcoin at a mutually agreed upon fixed price. During the year ended December 31, 2025, Hut 8 amended the redemption period to end during the quarter ending December 31, 2025. This Bitcoin remained with Hut 8 following the effectiveness of the Transactions. Because the pledged Bitcoin with respect to the Hut 8 Bitmain Purchase Agreement remains with Hut 8 and was not part of the assets transferred to the Company on March 31, 2025, it is not included on the Company's Unaudited Condensed Consolidated and Combined Balance Sheets as of March 31, 2026.

As of March 31, 2025, Hut 8 pledged 968 Bitcoin attributed to the Company at the time with a fair value of $79.9 million, classified as Digital assets – pledged for miner purchase under current assets on the Company’s Unaudited Condensed Consolidated and Combined Balance Sheets. A corresponding liability of $100.9 million was recorded under Miner purchase liability under current liabilities on the Company’s Unaudited Condensed Consolidated and Combined Balance Sheets prior to the effectiveness of the Transactions, reflecting Hut 8’s obligation to either redeem the pledged Bitcoin for cash or put it towards the purchase of ASIC miners by not redeeming the pledged Bitcoin at the end of the redemption period.

On August 5, 2025, Hut 8 assigned its option to purchase up to approximately 17,280 Bitmain Antminer U3S21EXPH ASIC miners (collectively, the "Bitmain Miners"), representing a total of approximately 14.86 exahash per second ("EH/s"), to the Company. The Company exercised the option on August 5, 2025 and entered into an On-Rack Sales and Purchase Agreement (the "2025 Bitmain Purchase Agreement") with Bitmain to purchase the Bitmain Miners in one or more tranches for a total purchase price of up to approximately $320.0 million, not including any applicable tariffs, duties or similar charges.

Concurrently with the execution of the 2025 Bitmain Purchase Agreement, the Company purchased 16,299 of the Bitmain Miners, representing a total of approximately 14.02 EH/s, for a total purchase price of approximately $314.0 million, paid through the pledge of 2,234 Bitcoin at a mutually agreed upon fixed price. Such purchase price was reduced by the application of a deposit and certain expenses of approximately $46.0 million previously paid to Bitmain by Hut 8. In September 2025, the Company purchased the remaining 981 Bitmain Miners for a total purchase price of $18.9 million, paid through the pledge of 151 Bitcoin at a mutually agreed upon fixed price, net of certain hosting credits. In October 2025, the Company pledged an additional 391 Bitcoin at a mutually agreed upon fixed price, and Bitmain refunded $46.0 million comprising of Hut 8's deposit and certain expenses. The Bitcoin pledged under the 2025 Bitmain Purchase Agreement has a redemption period of approximately twenty-four months from the applicable pledge date.

In February 2026, the Company entered into a Future Sales and Purchase Agreement (the "2026 Bitmain Purchase Agreement") with Bitmain to purchase approximately 11,298 S21 XP ASIC miners, representing a total of approximately 3.05 EH/s, for a total purchase price of approximately $49.4 million. The agreement required an initial payment equal to 80% of the total purchase price, with the remaining 20% due one year following the shipment date. The 80% of the total purchase price was paid through the pledge of 314 Bitcoin at a mutually agreed upon fixed price. The remaining 20% of the purchase price is to be paid through cash, Bitcoin pledged, or a combination of both. The Bitcoin pledged under the 2026 Bitmain Purchase Agreement has a redemption period of approximately twenty-four months from the applicable pledge date. The Company may elect to extend the pledge period for an additional twelve months.

As of March 31, 2026, the Company pledged 3,090 Bitcoin to Bitmain with a fair value of $210.8 million, classified as Digital assets – pledged for miner purchase under current assets on its Unaudited Condensed Consolidated and Combined Balance Sheets. A corresponding liability of $364.3 million was recorded under Miner purchase liability under current liabilities on the Company’s Unaudited Condensed Consolidated and Combined Balance Sheets, reflecting its obligation to either redeem the pledged Bitcoin for cash or put it towards the purchase of the Bitmain Miners by not redeeming the pledged Bitcoin at the end of the redemption periods.

In accordance with FASB ASC Topic 610-20, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets, the Company assessed the transfer of Bitcoin as a nonfinancial asset under ASC 606. Specifically, the Company noted that the Bitcoin pledged to Bitmain under the 2025 Bitmain Purchase Agreement and the 2026 Bitmain Purchase Agreement constitute repurchase agreements under ASC 606. As a result, Bitcoin was not derecognized upon these transfers as both Hut 8 and the Company retain repurchase options.

Due to the Company’s redemption rights under the 2025 Bitmain Purchase Agreement and 2026 Bitmain Purchase Agreement, and its continued economic exposure to Bitcoin, the pledged Bitcoin under these agreements is separately classified as Digital assets – pledged for miner purchase on the Company’s Condensed Consolidated and Combined Balance Sheets, which represents restricted Bitcoin.

Strategic Bitcoin reserve

Starting April 1, 2025, following the effectiveness of the Transactions, the Company began to accumulate its own strategic Bitcoin reserve through Bitcoin mining and at-market purchases, totaling 7,021 Bitcoin as of March 31, 2026.

Note 5. Property and equipment, net

The components of property and equipment were as follows:

Depreciation and amortization expense related to property and equipment was $26.6 million and $6.4 million for the three months ended March 31, 2026 and March 31, 2025, respectively.

Impairment of long-lived assets

There is considerable management judgment necessary to determine the estimated future cash flows and fair values of the Company’s long-lived assets, and, accordingly, actual results could vary significantly from such estimates, which fall under Level 3 within the fair value measurement hierarchy (see discussion of fair value measurements in Note 2. Significant accounting policies and recent accounting pronouncements).

Note 6. Stock-based compensation

In connection with the closing of the Mergers on September 3, 2025, the Company adopted the Amended and Restated American Bitcoin Corp. 2025 Omnibus Incentive Plan (the "ABTC 2025 Plan"), which amended and restated the predecessor Gryphon Digital Mining, Inc. 2024 Omnibus Incentive Plan. The ABTC 2025 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance grants, and other stock-based awards to employees, consultants, and directors of the Company and its affiliates. As of the ABTC 2025 Plan’s effective date,181,964,231 shares of the Company's common stock were reserved for issuance under the ABTC 2025 Plan, subject to an annual automatic increase on each January 1 from 2026 through 2035, equal to the lesser of (a) the excess of 20% of the Company's fully diluted shares outstanding as of the preceding December 31 over the shares then reserved under the ABTC 2025 Plan, and (b) such number as determined by the Company's board of directors. Shares subject to awards that are cancelled and forfeited, and shares returned through certain other mechanisms, are returned to the share reserve and become available for future grants.

In February 2026, the Company granted 1,875,007 RSUs with service-based vest conditions to certain employees and non-employee directors of the Company and its affiliates.

The Company recognized stock-based compensation expense of$0.3 million and $2.1 million for thethree months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, unrecognized stock-based compensation expense was $1.6 million, which is expected to be recognized over a weighted-average remaining vesting period of approximately 1.2 years.

Note 7. Derivatives

The following table presents the Company’s Unaudited Condensed Consolidated and Combined Balance Sheets classification of derivatives carried at fair value:

The following table presents the effect of derivatives on the Company’s Unaudited Condensed Consolidated and Combined Statements of Operations and Comprehensive Income (Loss):

Bitcoin redemption and put options

During December 2024, pursuant to the Hut 8 Bitmain Purchase Agreement, Hut 8 pledged approximately 968 Bitcoin attributed to the Company at the time to Bitmain in connection with a purchase of approximately 30,000 Bitmain Antminer S21+ ASIC miners. Hut 8 had the option to redeem the pledged Bitcoin at a mutually agreed upon price, during a redemption period that started on the shipment date of the purchased ASIC miners and originally ended three months thereafter. The Company accounted for this Bitcoin redemption option as a Level 3 derivative asset as of December 31, 2025, due to a significant unobservable input included in the fair value estimate of the Bitcoin redemption option, which was the estimated shipment date of the purchased ASIC miners. After the Transactions were effectuated on March 31, 2025, the Company no longer recorded the Bitcoin pledged by Hut 8.

As part of the 2025 Bitmain Purchase Agreement, in August, September, and October 2025, the Company pledged Bitcoin with Bitmain in connection with a purchase of the 17,280 U3S21EXPH ASIC miners. The total amount of Bitcoin pledged was approximately 2,776 Bitcoin. The Company pledged the Bitcoin infour tranches, two tranches in August 2025, one tranche in September 2025 andone tranche in October 2025. The Company has the option to redeem the pledged Bitcoin at a mutually agreed upon price starting from and for up to twenty-four months after the day immediately following each pledge date. The Company accounted for this Bitcoin redemption option as a Level 2 derivative asset as noted in Note 2. Significant accounting policies and recent accounting pronouncements – Derivatives. As part of the purchase of the U3S21EXPH ASIC miners, Hut 8 paid cash of approximately $46.0 million as a deposit and for certain expenses attributable to Hut 8. The Company had an option to replace the $46.0 million cash paid with a Bitcoin pledge on or before November 5, 2025. In October 2025, the Company exercised its option to replace the $46.0 million cash paid with a Bitcoin pledge by pledging an additional 391 Bitcoin at a mutually agreed upon fixed price, and Bitmain refunded the Company’s $46.0 million comprising of the deposit and certain expenses attributable to Hut 8.

In February 2026, in connection with the 2026 Bitmain Purchase Agreement, the Company pledged approximately 314 Bitcoin with Bitmain, representing 80% of the purchase price of approximately 11,298 S21 XP ASIC miners. The Company has the option to redeem the pledged Bitcoin at a mutually agreed upon price starting twenty-four months after the day immediately following the pledge date. As part of the agreement, there is an option to extend the pledge period for an additional twelve months. The Company also has the option to pay the remaining 20% of the purchase price under the 2026 Bitmain Purchase Agreement by pledging additional Bitcoin at a mutually agreed upon floor price, which is due one year after the shipment date of the S21 XP ASIC miners. The Company accounted for this Bitcoin redemption and put option as a Level 2 derivative asset as noted in Note 2. Summary of significant accounting policies and recent accounting pronouncements – Derivatives.

Covered call options

During October 2024, Hut 8 sold covered call options on 2,000 Bitcoin notional, which was attributed to the Company at the time, for proceeds of $2.9 million to generate cash flow on a portion of its digital assets. During November 2024, Hut 8 rolled these call options into new call options with the same Bitcoin notional. Hut 8 achieved this roll by exchanging its previous call options sold for new call options. Hut 8 pledged the Bitcoin attributed to the Company as collateral with one of its Bitcoin custodians in a quantity equal to the notional amount for these covered call options sold. The collateral continued to be pledged in the same manner after the roll. Following the effectiveness of the Transactions, Hut 8 retained the pledged Bitcoin and the covered call options. The covered call options exchanged in the roll were only exercisable upon the date of expiry, automatically exercised if the underlying reference price was greater than the strike price of the call option, and settled with delivery of the underlying Bitcoin. The reference price of the original covered call options was the CME CF Bitcoin Reference Rate (BRR) at 4:00pm London time for a given date and the reference price for the new call options was the Coinbase Prime Bitcoin price quoted in U.S. Dollars at 4:00pm London time for a given date. The covered call options were carried at fair value and were Level 2 liabilities as noted in Note 2.

During the three months ended March 31, 2025, covered call options on 1,500 Bitcoin notional expired with the underlying reference price below their strike price and the Company recorded a realized gain of $12.1 million and an unrealized gain of $5.4 million related to changes in the fair value of outstanding covered call options. As of March 31, 2026, the Company hadno outstanding covered call options.

Warrant liability

In connection with the Mergers, the Company assumed 1,373,374 warrants to purchase Gryphon common stock (the "Gryphon Warrants") outstanding immediately before the Mergers. Following the completion of the Mergers, the warrant holders are entitled to receive, upon exercise, in lieu of Gryphon common stock, shares of Class A common stock of the Company. The Gryphon Warrants have an exercise price of $1.50 per share, after giving effect of the Mergers. These warrants expire in January 2035.

As of March 31, 2026, there were 89,222 Gryphon Warrants outstanding.

These warrants meet the definition of a derivative under ASC 815, and due to the terms of the warrants, are required to be liability classified. The warrant liabilities are carried at fair value, and are Level 3 liabilities as noted in Note 2. Significant accounting policies and recent accounting pronouncements.

As of March 31, 2026, the Company estimated the fair value of the warrant liability using the Black-Scholes pricing model with the following inputs:

The following table provides a summary of activity and change in fair value of the Company’s warrant liability (Level 3 derivative liability), and there was no activity during thethree months ended March 31, 2026:

Note 8. Leases

As further discussed in Note 11. Related party transactions, on March 31, 2025, in connection with the Transactions, the Company entered into a Master Colocation Services Agreement and Master Managed Services Agreement with Hut 8. Under both agreements, Hut 8 provides the Company with colocation, hosting, management, oversight, strategy, compliance, operational and other services for its Bitcoin mining operations located at Hut 8’s facilities. Pursuant to an Exclusivity Agreement between the Company and Hut 8, all of the Company’s Bitcoin miners are located at Hut 8’s facilities. The Company has determined that it has embedded operating leases at three of the facilities governed by this arrangement and has elected to combine lease and non-lease components as permitted under ASC 842. One of the facilities governed by this arrangement includes payments that are variable pass-through fees and facility costs and are therefore expensed as incurred. The Company recorded right-of-use ("ROU") assets of $11.4 million in exchange for operating lease obligations during thethree months ended March 31, 2026 related to Drumheller.

The following table shows the ROU assets and lease liabilities as of March 31, 2026 and December 31, 2025:

The Company’s lease costs are comprised of the following:

The following table presents supplemental lease information:

(1) The Company’s operating leases implicit interest rate cannot be determined, therefore the Company uses the incremental borrowing rate at the lease commencement date in determining the present value of lease payments. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis for similar assets over the term of the lease.

The following table presents the Company’s future minimum operating lease payments as of March 31, 2026:

Note 9. Income taxes

For the three months ended March 31, 2026, the Company’s income tax expense and effective tax rate were $1.0 million and -1.18%, respectively. This rate differed from the statutory federal income tax rate of 21.0% primarily due to a change in valuation allowance.

The Company is subject to U.S. federal income taxes as well as income taxes in various state jurisdictions. The Company’s tax returns for tax years beginning 2025 remain subject to potential examination by the taxing authorities.

Note 10. Concentrations

The only digital asset mined by the Company during the three months ended March 31, 2026 and 2025 has been Bitcoin. Therefore,100% of the Company’s revenue is related toone digital asset. The Company usedtwo mining pool operators during thethree months ended March 31, 2026 and March 31, 2025.

Note 11. Related party transactions

Parties are considered related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. This includes equity method investment entities. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all known related party transactions. As of March 31, 2026, the Company owed Hut 8 $65.8 million of which $35.5 million was recorded within Due to Hut 8 and $30.3 million was recorded within Operating lease liability on the Unaudited Condensed Consolidated and Combined Balance Sheets, related to the agreements discussed below.

Cost Allocations from Hut 8

Prior to the effectiveness of the Transactions on March 31, 2025, Hut 8 provided significant support functions to the Company, which did not operate as a standalone business. The Company's Unaudited Condensed Consolidated and Combined Financial Statements reflect an allocation of these costs. Allocated costs included in cost of revenue relate to support primarily consisting of electricity, facilities, repairs and maintenance, and labor, which are predominantly allocated based on revenue. Allocated costs included in general and administrative expenses primarily relate to finance, human resources, benefits administration, information technology, legal, corporate strategy, corporate governance, other professional services, and general commercial support functions and are predominantly allocated based on a percentage of revenue. See Note 1 for a discussion of these costs and the methodology used to allocate them.

Master Colocation Services Agreement

On March 31, 2025, in connection with the Transactions, the Company entered into a Master Colocation Services Agreement with Hut 8 (the "MCSA"). Under the MCSA and its service orders, Hut 8 provides the Company with colocation and hosting services at Hut 8 owned or leased facilities for the Company’s Bitcoin miners, on specific terms set forth in service orders to the MCSA.

Under the terms of the MCSA, the Company pays Hut 8 fees generally consisting of a monthly recurring charge, as set forth in each service order, plus 100% of the costs, fees, disbursements and expenses paid or incurred by Hut 8 in connection with the use, operation, maintenance of the relevant facility (including costs related to the delivery of contracted power) and any installation charges, and non-recurring costs or amounts for additional services incurred during the term of the applicable service order. For the three months ended March 31, 2026 and 2025, fees and expenses billed by Hut 8 to the Company under the MCSA were$27.7 million andnil, respectively. Pursuant to an Exclusivity Agreement between the Company and Hut 8, all of the Company’s Bitcoin miners are located at Hut 8’s facilities.

Master Management Services Agreement

On March 31, 2025, in connection with the Transactions, the Company entered into a Master Management Services Agreement with Hut 8 (the "MMSA"). Under the MMSA and its service orders, Hut 8 provides the Company with management, oversight, strategy, compliance, operational, and other services for its Bitcoin mining operations hosted at Hut 8’s facilities.

Under the terms of the MMSA, the Company pays to Hut 8 service fees generally consisting of a fixed fee, payable monthly, for general management, operational, compliance, and other services, plus a monthly fee equal to a combination of payroll related allocations and 100% of specified "pass through costs" incurred during the term of the applicable service order, including costs and expenses incurred by or on behalf of Hut 8 for labor, maintenance, repairs, and infrastructure expenses, and the provision of services by third parties. For the three months ended March 31, 2026 and 2025, fees and expenses billed by Hut 8 to the Company under the MMSA were$3.1 million andnil, respectively.

Shared Services Agreement

On March 31, 2025, in connection with the Transactions, the Company entered into a Services Agreement with Hut 8 (the "Shared Services Agreement"), pursuant to which Hut 8 agreed to provide back-office support services to the Company, including accounting and financial reporting, HR support, payroll, benefits, IT support and management, legal and compliance, and vendor management services. Under the terms of the Shared Services Agreement, the Company pays to Hut 8 a monthly fee equal to a combination of payroll related allocations and costs charged on a "pass through" basis, to Hut 8 for providing services under the Shared Services Agreement to the Company. For the three months ended March 31, 2026 and 2025, fees and expenses billed by Hut 8 to the Company under the Shared Services Agreement were$0.9 million andnil, respectively.

Note 12. Stockholders’ equity

Net Hut 8 Investment

The net transfers to and from Hut 8, as discussed above in Note 1, were as follows:

Authorized shares

As of March 31, 2026, the Company had the following capital authorized:

•

Preferred stock —100,000,000,000 shares authorized, par value $0.0001 per share;

•

Class A common stock —500,000,000,000 shares authorized, par value $0.0001 per share;

•

Class B common stock —10,000,000,000 shares authorized, par value $0.0001 per share; and

•

Class C common stock —125,000,000,000 shares authorized, par value $0.0001 per share.

Each share of the Company's Class B common stock is entitled to 10,000 votes per share, each share of Class C common stock is entitled to 10 votes per share, and each share of Class A common stock is entitled toone vote per share. Additionally, the Company's Amended and Restated Certificate of Incorporation (the "Charter") provides that transfers by holders of the Company's Class B common stock and Class C common stock will not result in those shares automatically converting to Class A common stock. Moreover, the Company's Charter does not provide for any automatic conversion of shares of the Company's Class B common stock and Class C common stock into Class A common stock.

At-the-Market Offering

On September 3, 2025, the Company entered into a Controlled Equity Offering Sales Agreement to establish an at-the-market equity program, allowing the Company to offer and sell up to $2.1 billion of its Class A Shares from time to time (the "2025 ATM"). During the three months ended March 31, 2026, the Company issued and sold 84,068,493 Class A Shares under the 2025 ATM for gross proceeds of $111.0 million and incurred issuance costs of $0.5 million.

Contribution from Hut 8

In connection with the Transactions on March 31, 2025, the Company received $5.3 million of additional Bitcoin miners in April 2025. The transaction was accounted for as a contribution from Hut 8 and reflected within additional paid-in capital at the carrying value as a transfer under common control within the Company's Unaudited Condensed Consolidated and Combined Balance Sheets.

Akerna warrants

In connection with the Mergers on September 3, 2025, warrants to purchase shares of Gryphon common stock originally issued by and assumed from Akerna Corp. (the "Akerna Common Warrants") and warrants issued to underwriters to purchase shares of Gryphon common stock originally issued by and assumed from Akerna Corp. (the "Akerna Underwriter Warrants" and, collectively with the Akerna Common Warrants, the "Akerna Warrants") outstanding immediately before the Mergers were assumed by the Company. Post-Mergers, the warrant holders are entitled to receive, upon exercise, in lieu of Gryphon common stock, the Company's Class A Shares at an exchange ratio of 0.2000 and at an exercise price of the exercise price immediately preceding the Mergers divided by the exchange ratio of 0.2000. The Akerna Warrants include a net share settlement clause at the discretion of the warrant holder, which may result in a variable number of shares being issued for a fixed price. The Company accounts for the Akerna Warrants as equity instruments based on the specific terms of the relevant warrant agreements and has recorded them in additional paid-in capital in equity based on their fair value on the date of assumption. The classification of the Akerna Warrants, including whether such instruments should be recorded as liabilities, is reassessed at the end of each reporting period. The fair value of each Akerna Warrant was estimated on the date of assumption using the Black-Scholes pricing model.

The Akerna Common Warrants and Akerna Underwriter Warrants assumed in the Mergers expire on July 5, 2027, and June 29, 2027, respectively.

Transactions involving the Company's equity-classified warrants are summarized as follows:

Note 13. Earnings per share

Basic and diluted net income (loss) per share attributable to common stockholders is computed in accordance with Note 2. Significant accounting policies and recent accounting pronouncements – Net income (loss) per share attributable to common stockholders.

The following table presents potentially dilutive securities that were not included in the computation of diluted net (loss) income per share of common stock as their inclusion would have been anti-dilutive and or their issuance upon satisfying a contingency, if applicable, was not satisfied or deemed satisfied as of period end:

The following is a reconciliation of the denominator of the basic and diluted net income (loss) per share of common stock computations for the periods presented:

Note 14. Commitments and contingencies

Bitmain Purchase Agreements

In August 2025 and February 2026, the Company entered into the 2025 Bitmain Purchase Agreement and 2026 Bitmain Purchase Agreement, respective, each of which includes the following financial commitments: a Bitcoin redemption option, recognized as a derivative asset under ASC 815, measured at fair value at each reporting period, a Miner purchase liability representing a commitment to settle the obligation in cash if the redemption right is exercised before expiration, and a derecognition of Digital assets – pledged for miner purchaseif the redemption right is not exercised. See Note 4. Digital Assets, for further information on the 2025 Bitmain Purchase Agreement and 2026 Bitmain Purchase Agreement.

Legal and regulatory matters

The Company is subject at times to various claims, lawsuits, and governmental proceedings relating to the Company’s business and transactions arising in the ordinary course of business. The Company cannot predict the final outcome of such proceedings. Where appropriate, the Company vigorously defends such claims, lawsuits, and proceedings. Some of these claims, lawsuits, and proceedings seek damages, including consequential, exemplary, or punitive damages, in amounts that could, if awarded, be significant. Certain of the claims, lawsuits, and proceedings arising in ordinary course of business are covered by the Company’s insurance program. The Company maintains property and various types of liability insurance in an effort to protect the Company from such claims. In terms of any matters where there is no insurance coverage available to the Company, or where coverage is available and the Company maintains a retention or deductible associated with such insurance or elects not to purchase such insurance, the Company may establish an accrual for such loss, retention, or deductible based on current available information. In accordance with accounting guidance, if it is probable that an asset has been impaired or a liability has been incurred as of the date of the financial statements and the amount of loss is reasonably estimable, then an accrual for the cost to resolve or settle these claims is recorded by the Company in the accompanying Unaudited Condensed Consolidated and Combined Balance Sheets. If it is reasonably possible that an asset may be impaired as of the date of the financial statement, then the Company discloses the range of possible loss. Expenses related to the defense of such claims are recorded by the Company as incurred and included in the accompanying Combined Statements of Operations and Comprehensive Income (Loss). Management, with the assistance of outside counsel, may from time to time adjust such accruals according to new developments in the matter, court rulings, or changes in the strategy affecting the Company’s defense of such matters. The Company has established an accrued liability for certain legal and regulatory proceedings. The possible loss or range of loss resulting from such litigation and regulatory proceedings, if any, in excess of the amounts accrued is inherently unpredictable and uncertain. Consequently, no reasonable estimate can be made of any possible loss or range of loss in excess of the accrual.

PPP Loan

On April 21, 2020, Gryphon obtained a loan in the principal aggregate amount of $2.2 million (the "PPP Loan") pursuant to the Paycheck Protection Program under the CARES Act, which was forgiven in full, by the Small Business Administration (the "SBA"), on September 3, 2021.

On February 5, 2024, Gryphon received a letter, dated January 25, 2024, from the SBA, on behalf of Key Bank, in which the SBA indicated that, notwithstanding its prior notification of forgiveness, in full, of repayment of the PPP Loan, it was reviewing its prior determination of forgiveness for potential reversal. Specifically, the SBA indicated that based on its preliminary findings, the SBA is considering a full denial of the previously received forgiven amount based on the purported ineligibility of Gryphon to have received the PPP Loan under the SBA loan programs because Gryphon, operating as Akerna at the time of the PPP Loan, provided software support to the cannabis industry. Gryphon responded to the SBA on February 6, 2024, providing reasons as to why it believes it was eligible for the PPP Loan, but has not received any further correspondence from the SBA since that date and the SBA has not made any financial demands. The Company plans to continue to cooperate with any further inquiry from the SBA.

In January 2024, Gryphon received a civil investigative demand from the Department of Justice seeking information and documents about the PPP Loan. The Company is cooperating with the inquiry. At this time, there has been no formal demand for return of the PPP Loan proceeds, and no formal claim or lawsuit has been initiated against the Company.

Note 15. Subsequent events

The Company has completed an evaluation of all subsequent events after the balance sheet date up to the date that the Unaudited Condensed Consolidated and Combined Financial Statements were available to be issued. Except for the events that occurred after March 31, 2026 disclosed above, the Company has concluded no other subsequent events have occurred that require disclosure.