WhiteFiber, Inc.

Previous wording

The following information should be read in conjunction with the combined financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q for the period ended June 30, 2025 as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our prospectus dated August 6, 2025. Except for the statements of historical fact, this report contains “forward-looking information” and “forward-looking statements reflecting our current expectations that involve risks and uncertainties (collectively, “forward-looking information”) that is based on expectations, estimates and projections as at the date of this report. All statements, other than statements of historical fact, included herein are “forward-looking statements.” These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “intends,” “expects,” or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investing in our securities involves a high degree of risk. The following discussion may contain forward-looking statements that reflect WhiteFiber, Inc.’s plans, estimates and beliefs. WhiteFiber, Inc.’s actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those factors discussed below and elsewhere in the prospectus dated August 6, 2025, particularly in the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors.” Before making an investment decision, you should carefully consider these risks, uncertainties and forward-looking statements.

Current wording

The following information should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q for the period ended September 30, 2025 as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our prospectus dated August 6, 2025. Except for the statements of historical fact, this report contains “forward-looking information” and “forward-looking statements reflecting our current expectations that involve risks and uncertainties (collectively, “forward-looking information”) that is based on expectations, estimates and projections as at the date of this report. All statements, other than statements of historical fact, included herein are “forward-looking statements.” These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “intends,” “expects,” or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investing in our securities involves a high degree of risk. The following discussion may contain forward-looking statements that reflect WhiteFiber, Inc.’s plans, estimates and beliefs. WhiteFiber, Inc.’s actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those factors discussed below, in the IPO Prospectus and in Part II, Item 1.A of this Form 10-Q, particularly in the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors.” Before making an investment decision, you should carefully consider these risks, uncertainties and forward-looking statements.

Previous wording

On July 30, 2025, we entered into a Contribution Agreement with Bit Digital, pursuant to which Bit Digital agreed to contribute its HPC business through the transfer of 100% of the capital shares of its cloud services subsidiary, WhiteFiber AI, Inc. and its wholly-owned subsidiaries WhiteFiber HPC, Inc., WhiteFiber Canada, Inc., WhiteFiber Japan G.K. and WhiteFiber Iceland, ehf, to WhiteFiber, upon the effectiveness of WhiteFiber’s registration statement on Form S-1 (the “Registration Statement”) in connection with WhiteFiber’s initial public offering (the “IPO”). For more information, see Note 21.Subsequent Events in our Notes to Unaudited Condensed Combined Financial Statements included elsewhere herein.

Current wording

On July 30, 2025, we entered into a Contribution Agreement with Bit Digital, pursuant to which Bit Digital agreed to contribute its HPC business through the transfer of 100% of the capital shares of its cloud services subsidiary, WhiteFiber AI, Inc. and its wholly-owned subsidiaries WhiteFiber HPC, Inc., WhiteFiber Canada, Inc., WhiteFiber Japan G.K. and WhiteFiber Iceland, ehf, to WhiteFiber, upon the effectiveness of WhiteFiber’s registration statement on Form S-1, as amended (File No. 333-288650) (the “Registration Statement”), on August 6, 2025 in connection with WhiteFiber’s initial public offering (the “IPO”).

Previous wording

On December 27, 2024, we acquired the real estate and building for a build-to-suit 5 MW (gross) Tier-3 data center expansion project near Montreal, Canada which we refer to as MTL-2. MTL-2, a 160,000 square foot site that was previously used as an encapsulation manufacturing facility, is located in Pointe-Claire, Quebec. We initially funded the purchase of CAD 33.5 million (approximately $23.3 million) with cash on hand. We expect to invest approximately $23.6 million to develop the site to Tier-3 standards with an initial load of 5 MW (gross). MTL-2 is expected to be completed and operational in the first half of 2026 as we prioritized other builds and preserved capital for more time-sensitive projects.

Current wording

On December 27, 2024, we acquired the real estate and building for a build-to-suit 5 MW (gross) Tier-3 data center expansion project near Montreal, Canada which we refer to as MTL-2. MTL-2, a 160,000 square foot site that was previously used as an encapsulation manufacturing facility, is located in Pointe-Claire, Quebec. We initially funded the purchase of CAD 33.5 million (approximately $23.3 million) with cash on hand. We expect to invest approximately $23.6 million to develop the site to Tier-3 standards with an initial load of 5 MW (gross). However, we have prioritized other builds and preserved capital for more time sensitive projects.

Previous wording

On April 11, 2025, we entered into a lease for a new data center site in Saint-Jerome, Quebec, a suburb of Montreal, MTL-3. The MTL-3 facility spans approximately 202,000 square feet on 7.7 acres and is being developed to as a 7 MW (gross) Tier-3 data center. It will support current contracted capacity, with Cerebras (5 MW IT Load), with future expansion potential subject to utility approvals. The transaction was executed under a lease-to-own structure, which includes a fixed-price purchase option of CAD 24.2 million (approximately $17.3 million) exercisable by December 2025. The lease term is 20 years, with two 5-year extensions at the Company’s option. Subject to our receipt of all required permits, the facility is being retrofitted to Tier-3 standards, with development costs expected to total approximately $41 million, and is expected to be completed and operational in the fourth quarter of 2025, with a one-month delay before we expect to begin to generate revenue.

Current wording

On April 11, 2025, we entered into a lease for a new data center site in Saint-Jerome, Quebec, a suburb of Montreal, MTL-3. The MTL-3 facility spans approximately 202,000 square feet on 7.7 acres and is being developed to as a 7 MW (gross) Tier-3 data center. It will support current contracted capacity, with Cerebras (5 MW IT Load), with future expansion potential subject to utility approvals. The transaction was executed under a lease-to-own structure, which includes a fixed-price purchase option of CAD 24.2 million (approximately $17.3 million) exercisable by December 2025. The lease term is 20 years, with two 5-year extensions at the Company’s option. Subject to our receipt of all required permits, the facility is being retrofitted to Tier-3 standards, with development costs expected to total approximately $41 million. Construction at the site was substantially completed by October 2025. The site has commenced billing Cerebras as of November 1, 2025, in the amount of CAD 1.4 million (approximately $979 thousand) monthly for the duration of the five-year contract.

Previous wording

On May 20, 2025 (the “Closing Date”), we completed the purchase of a former industrial/manufacturing building from Unifi Manufacturing, Inc. (“UMI”). Pursuant to the Purchase Agreement we agreed to purchase from UMI, an industrial/manufacturing building together with the underlying land (“NC-1”) located in Madison, North Carolina, as well as certain machinery and equipment located thereon for a cash purchase price of $45 million. The purchase price will increase by (i) $8 million, if Duke Energy actually provides, or provides an Electric Services Agreement providing for, at least 99 MW (gross) within two years of the Closing Date, or (ii) $5 million, if Duke Energy actually provides, or provides an Electric Services Agreement providing for, at least 99 MW (gross) more than two years but less than three years after the Closing Date. Additionally, the purchase price will increase by an additional $200,000 per MW over 99 MW (gross) up to a maximum of $5 million if at least 99 MW (gross) are actually delivered, or Duke Energy provides an Electric Services Agreement for the provision of at least 99 MW (gross), within four years of the Closing Date. Separately, the Company entered into a Capacity Agreement with Duke Energy pursuant to which Duke Energy agreed to use commercially reasonable efforts to achieve 24 MW (gross) of service to the Property by September 1, 2025, 40 MW (gross) by April 1, 2026, and 99 MW (gross) within four years of May 16, 2025. Management believes based upon its review of the site and a Duke Energy preliminary transmission study, that the Property may receive and support up to 200 MW (gross) of total electrical supply over an extended period of time, subject to infrastructure upgrades, such as developing new substations and other conditions.

Current wording

On May 20, 2025 (the “Closing Date”), we completed the purchase of a former industrial/manufacturing building from Unifi Manufacturing, Inc. (“UMI”). Pursuant to the Purchase Agreement we agreed to purchase from UMI, an industrial/manufacturing building together with the underlying land (“NC-1”) located in Madison, North Carolina, as well as certain machinery and equipment located thereon for a cash purchase price of $45 million. The purchase price will increase by (i) $8 million, if Duke Energy actually provides, or provides an Electric Services Agreement providing for, at least 99 MW (gross) within two years of the Closing Date, or (ii) $5 million, if Duke Energy actually provides, or provides an Electric Services Agreement providing for, at least 99 MW (gross) more than two years but less than three years after the Closing Date. Additionally, the purchase price will increase by an additional $200,000 per MW over 99 MW (gross) up to a maximum of $5 million if at least 99 MW (gross) are actually delivered, or Duke Energy provides an Electric Services Agreement for the provision of at least 99 MW (gross), within four years of the Closing Date. Separately, the Company entered into a Capacity Agreement with Duke Energy pursuant to which Duke Energy agreed to use commercially reasonable efforts to achieve 24 MW (gross) of service to the Property by September 1, 2025, 40 MW (gross) by April 1, 2026, and 99 MW (gross) within four years of May 16, 2025. Management believes based upon its review of the site and a Duke Energy preliminary transmission study, that the Property may receive and support up to 200 MW (gross) of total electrical supply over an extended period of time, subject to infrastructure upgrades, such as developing new substations and other conditions. On August 4, 2025, Enovum NC-1 Bidco LLC, a subsidiary of the Company, entered into an Assignment and Assumption Agreement with Unifi Manufacturing and Duke Energy Carolinas, LLC, pursuant to which Enovum assumed Unifi’s rights and obligations under certain electric service agreements for facilities located in North Carolina. Duke Energy consented to the assignment. Refer to Note17. Commitments and contingenciesfor further detail.

Previous wording

We expect to leverage a global network of data centers for hosting capacity for our GPU business, in many instances, by negotiating with third-party providers to seamlessly integrate our cloud services at data centers across key regions in Europe, North America and Asia. Our initial data center partnership through which we lease capacity is at Blönduós Campus, Iceland, offering a world-class operations team with certified technicians and reliable engineers. The facility has a 45 kW rack density and 6 MW (gross) total capacity. We have executed contracts for 5.5 MW at the data center. The center’s energy source is 100% renewable energy, mainly from Blanda Hydro PowerStation, the winner of an IHA Blue Planet Award in 2017.

Current wording

We expect to leverage a global network of data centers for hosting capacity for our GPU business, in many instances, by negotiating with third-party providers to seamlessly integrate our cloud services at data centers across key regions in Europe, North America and Asia. Our initial data center partnership through which we lease capacity is at Blönduós Campus, Iceland, offering a world-class operations team with certified technicians and reliable engineers. The facility has a 45 kW rack density and 6 MW (gross) total capacity. We have executed contracts for 5.5 MW IT load at the data center. The center’s energy source is 100% renewable energy, mainly from Blanda Hydro PowerStation, the winner of an IHA Blue Planet Award in 2017.

Previous wording

On November 6, 2024, we entered into a Master Services Agreement (“MSA”) with a minimum purchase commitment of 16 GPUs, along with an associated purchase order, from a new customer. The purchase order provides for services utilizing a total of 16 H200 GPUs over a minimum of a six-month period, representing total contracted value of approximately $160,000 for the term. The deployment commenced on November 7, 2024, using the Company’s existing inventory of H200 GPUs. The service under the purchase order concluded in May 2025. Between May 2025 and September 2025, the Company signed six additional agreements on a month-to-month basis for a total of 80 H200 GPUs.

Current wording

On November 6, 2024, we entered into a Master Services Agreement (“MSA”) with a minimum purchase commitment of 16 GPUs, along with an associated purchase order, from a new customer. The purchase order provides for services utilizing a total of 16 H200 GPUs over a minimum of a six-month period, representing total contracted value of approximately $160,000 for the term. The deployment commenced on November 7, 2024, using the Company’s existing inventory of H200 GPUs. The service under the purchase order concluded in May 2025. Between May 2025 and September 2025, the Company signed six additional agreements on a month-to-month basis for a total of 88 H200 GPUs, of which 80 remained in deployment as of the date of this report.

Previous wording

On January 30, 2025, we entered into a Master Services Agreement (“MSA”) with a minimum purchase commitment of 40 GPUs, along with an associated purchase order, from a new customer. The purchase orders provide for services utilizing a total of 40 H200 GPUs over a minimum of 12 month period, representing total revenue of approximately $750,000 for the term. The deployment commenced and revenue generation began on January 24, 2025, using the Company’s existing inventory of H200 GPUs. Between April and July 2025, the Company signed four additional agreements on a month-to-month basis for a total of 184 H200 GPUs, which were terminated in August 2025.

Current wording

On January 30, 2025, we entered into a Master Services Agreement (“MSA”) with a minimum purchase commitment of 40 GPUs, along with an associated purchase order, from a new customer. The purchase orders provide for services utilizing a total of 40 H200 GPUs over a minimum of 12 month period, representing total revenue of approximately $750,000 for the term. The deployment commenced and revenue generation began on January 24, 2025, using the Company’s existing inventory of H200 GPUs. In October 2025, the purchase order was amended to reduce the number of H200 GPUs from 40 to 8 and to extend the term of service through May 2027. Between April and July 2025, the Company signed four additional agreements on a month-to-month basis for a total of 184 H200 GPUs, which were terminated in August 2025.

Previous wording

We believe that the growth of our business and our future success are dependent upon many factors including those described under “Risk Factors” included elsewhere in this report and in our final prospectus to the Registration Statement filed with the Securities and Exchange Commission (“SEC”) on August 8, 2025, While these factors present significant opportunities for us, they also pose challenges that we must successfully address in order to sustain the growth of our business and enhance our results of operations.

Current wording

We believe that the growth of our business and our future success are dependent upon many factors including those described under “Risk Factors” included elsewhere in this report and under the heading “Risk Factors” in our IPO Prospectus. While these factors present significant opportunities for us, they also pose challenges that we must successfully address in order to sustain the growth of our business and enhance our results of operations.

Previous wording

Our future revenue growth is, in part, dependent on our ability to leverage our development capabilities at our data center sites. We intend to complete our MTL-2 facility in the first half of 2026 as we prioritized other builds and preserved capital for more time-sensitive projects, our MTL-3 facility in the fourth quarter of 2025, and the first 24 MW (gross) of NC-1 in the first quarter of 2026. While NC-1 is expected to be completed in the first quarter of 2026, management expects it will start generating revenue in May of 2026. We expect to increase revenue from our existing sites by securing additional allocations of utility power, subject to our receipt of funding and required permits through ongoing engagement with the utility and relevant authorities. In addition, at certain new and existing sites, we intend to deploy natural gas fuel cell generation technology to increase available power and revenue potential. Our ability to secure the required funding and permits in accordance with our implementation plans may cause variability in our revenue growth in future quarters.

Current wording

Our future revenue growth is, in part, dependent on our ability to leverage our development capabilities at our data center sites. We substantially completed construction of our MTL-3 facility by the end of October 2025. The site has commenced billing its customer, Cerebras, as of November 1, 2025, in the amount of CAD 1.4 million (approximately $979 thousand) monthly for the duration of the five-year contract. We intend to complete the first phase of construction 24 MW (gross) of NC-1 facility in the first quarter of 2026. Management expects NC-1 to start generating revenue in May of 2026. Management expects the second phase of construction 30 MW (gross) to be completed in the second quarter of 2026 and start generating revenues 30 days after completion. We have prioritized these projects and put a hold on the build for MTL-2. We expect to increase revenue from our existing sites by securing additional allocations of utility power, subject to our receipt of funding and required permits through ongoing engagement with the utility and relevant authorities. In addition, at certain new and existing sites, we intend to deploy natural gas fuel cell generation technology to increase available power and revenue potential. Our ability to secure the required funding and permits in accordance with our implementation plans may cause variability in our revenue growth in future quarters.

Previous wording

Cloud services revenue is derived from providing customers with access to high-performance computing infrastructure, including GPU clusters optimized for AI workloads. Our contracts are structured as usage-based or committed-capacity agreements, typically with pricing based on the type and quantity of GPUs deployed, duration of use, and associated infrastructure. Key factors that impact cloud services revenue include the number and performance class of GPUs deployed, hardware utilization, power availability at hosting sites, and the timing of new customer onboarding.

Current wording

Cloud services revenue is derived from providing customers with access to high-performance computing (“HPC”) infrastructure, including GPU clusters optimized for AI workloads. Our contracts are structured as usage-based or committed-capacity agreements, typically with pricing based on the type and quantity of GPUs deployed, duration of use, and associated infrastructure. Key factors that impact cloud services revenue include the number and performance class of GPUs deployed, hardware utilization, power availability at hosting sites, and the timing of new customer onboarding.

Previous wording

Our revenue from cloud services increased by $4.1 million, or 32.8%, to $16.6 million for the three months ended June 30, 2025 from $12.5 million for the three months ended June 30, 2024. The increase was primarily due to an increase in deployed GPU servers in the first quarter of 2025, and the $1.3 million service credit issued to the customer as compensation for decreased utilization during the initial deployment period, which included testing and optimization phases, in the first quarter of 2024.

Current wording

Our revenue from cloud services increased by $5.9 million, or 48.4%, to $18.0 million for the three months ended September 30, 2025 from $12.2 million for the three months ended September 30, 2024. The increase was primarily due to an increase in deployed GPU servers to new and existing customers in the third quarter of 2025, offset by a $2.0 million service credit accrued and expected to be issued to a customer under the terms of the contract.

Previous wording

Our revenue from colocation services was $1.7 million and $0 for the three months ended June 30, 2025 and 2024, respectively.

Current wording

Our revenue from colocation services was $1.7 million and $nil for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

For the three months ended June 30, 2025, electricity costs increased by $0.5 million, or 319%, compared to the electricity costs incurred for the three months ended June 30, 2024. The increase primarily resulted from an increase in the number of deployed GPU servers.

Current wording

For the three months ended September 30, 2025, electricity costs increased by $0.4 million, or 200%, compared to the electricity costs incurred for the three months ended September 30, 2024. The increase primarily resulted from an increase in the number of deployed GPU servers.

Previous wording

For the six months ended June 30, 2025, data center lease expenses increased by $1.3 million, or 102%, compared to the data center lease expenses incurred for the six months ended June 30, 2024. The increase primarily resulted from two additional datacenter leases entered after the second quarter of 2024.

Current wording

For the three months ended September 30, 2025, data center lease expenses increased by $0.4 million, or 35%, compared to the data center lease expenses incurred for the three months ended September 30, 2024. The increase primarily resulted from one additional datacenter lease entered after the third quarter of 2024.

Previous wording

For the three months ended June 30, 2025, wage expenses totaled $0.2 million. We had no wage expenses for the three months ended June 30, 2024 as we acquired Enovum in the fourth quarter of 2024, which provides colocation services.

Current wording

For the three months ended September 30, 2025, wage expenses totaled $0.1 million. We had no wage expenses for the three months ended September 30, 2024 as we acquired Enovum in the fourth quarter of 2024, which provides colocation services.

Previous wording

For the three months ended June 30, 2025 and 2024, depreciation and amortization expenses were $5.1 million and $4.3 million, respectively, based on an estimated useful life of property, plant, and equipment and intangible assets.

Current wording

For the three months ended September 30, 2025 and 2024, depreciation and amortization expenses were $6.4 million and $4.3 million, respectively, based on an estimated useful life of property, plant, and equipment and intangible assets.

Previous wording

Effective January 1, 2025, we changed our estimate of the useful lives for our cloud service equipment from three to five years. The change was made to better reflect the expected usage patterns and economic benefits of the assets. Refer to Note 2.Summary of Significant Accounting Policies to our combined financial statements.

Current wording

Effective January 1, 2025, we changed our estimate of the useful lives for our cloud service equipment from three to five years. The change was made to better reflect the expected usage patterns and economic benefits of the assets. Refer to Note 2.Summary of Significant Accounting Policies to our condensed consolidated financial statements.

Previous wording

For the six months ended June 30, 2025, our general and administrative expenses, totaling $19.8 million, were primarily comprised of share based compensation expenses of $6.7 million, salary and bonus expenses of $2.5 million, professional and consulting expenses of $7.4 million, marketing expenses of $0.8 million, and travel expenses of $0.3 million.

Current wording

For the three months ended September 30, 2025, our general and administrative expenses, totaling $21.3 million, were primarily comprised of share-based compensation expenses of $6.4 million, salary and bonus expenses of $1.5 million, professional and consulting expenses of $9.6 million, other expenses of $2.5 million, commission expenses of $0.3 million, marketing expenses of $0.7 million, and travel expenses of $0.2 million.

Previous wording

For the three months ended June 30, 2025, our general and administrative expenses, totaling $15.5 million, were primarily comprised of share based compensation expenses of $6.5 million, salary and bonus expenses of $1.3 million, professional and consulting expenses of $5.7 million, marketing expenses of $0.5 million, and travel expenses of $0.2 million.

Current wording

For the three months ended September 30, 2024, our general and administrative expenses, totaling $3.3 million, were primarily comprised of share-based compensation expenses of $1.3 million, salary and bonus expenses of $0.5 million, professional and consulting expenses of $0.9 million, commission expense of $0.3 million, marketing expenses of $0.2 million, and travel expenses of $0.1 million.* *

Previous wording

Provision for income taxes consists of federal, state and foreign income taxes. Our income tax provision for the three months ended June 30, 2025, is primarily attributable to the mix of earnings and losses in countries with differing statutory tax rates, and the valuation allowance applied to the Company’s deferred tax assets in the United States and Canada. We continue to maintain a valuation allowance against the deferred tax assets in United States and Canada as the Company does not expect those deferred tax assets are “more likely than not” to be realized in the near future, particularly due to the uncertainty on macroeconomy, politics and profitability of the business.

Current wording

Provision for income taxes consists of federal, state and foreign income taxes. Our income tax provision for the three months ended September 30, 2025 is primarily attributable to the mix of earnings and losses in countries with differing statutory tax rates, and the valuation allowance applied to the Company’s deferred tax assets in the United States. We continue to maintain a valuation allowance against the deferred tax assets in United States as the Company does not expect those deferred tax assets are “more likely than not” to be realized in the near future, particularly due to the uncertainty on macroeconomics, politics and profitability of the business.

Previous wording

Our income tax provision was $0.4 million and $0.6 million for the three months ended June 30, 2025, and 2024, respectively. The income tax provision was lower during the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to the operating loss incurred by Enovum in Canada.

Current wording

Our income tax provision was $0.1 million and $0.4 million for the three months ended September 30, 2025 and 2024, respectively. The income tax provision during the three months ended September 30, 2025 was lower compared to the three months ended September 30, 2024 primarily due to the income tax benefits of $1.0 million generated from Enovum’s operating loss and partially offset by an increase of income tax expenses due to the higher operating profits from White Fiber Iceland.

Previous wording

Our revenue from cloud services increased by $10.9 million, or 52.9%, to $31.4 million for the six months ended June 30, 2025 from $20.6 million for the six months ended June 30, 2024. The increase was primarily due to an increase in deployed GPU servers in the first quarter of 2025, and the $1.3 million service credit issued to the customer as compensation for decreased utilization during the initial deployment period, which included testing and optimization phases, in the first quarter of 2024.

Current wording

Our revenue from cloud services increased by $16.8 million, or 51.2%, to $49.5 million for the nine months ended September 30, 2025 from $32.7 million for the nine months ended September 30, 2024. The increase was primarily due to an increase in deployed GPU servers to new and existing customers during the first nine months ended September 30, 2025.

Previous wording

For the six months ended June 30, 2025, electricity costs increased by $1.0 million, or 425%, compared to the electricity costs incurred for the six months ended June 30, 2024. The increase primarily resulted from an increase in the number of deployed GPU servers.

Current wording

For the nine months ended September 30, 2025, electricity costs increased by $1.4 million, or 317%, compared to the electricity costs incurred for the nine months ended September 30, 2024. The increase primarily resulted from an increase in the number of deployed GPU servers.

Previous wording

For the three months ended June 30, 2025, data center lease expenses increased by $0.8 million, or 126%, compared to the data center lease expenses incurred for the three months ended June 30, 2024. The increase primarily resulted from two additional datacenter leases entered after the second quarter of 2024.

Current wording

For the nine months ended September 30, 2025, data center lease expenses increased by $1.7 million, or 73%, compared to the data center lease expenses incurred for the nine months ended September 30, 2024. The increase primarily resulted from two additional datacenter leases entered into after the second quarter of 2024.

Previous wording

For the six months ended June 30, 2025, GPU servers lease expenses increased by $1.6 million, or 27%, compared to the GPU servers lease expenses incurred for the six months ended June 30, 2024. The increase primarily resulted from a higher average number of GPU servers leased.

Current wording

For the nine months ended September 30, 2025, GPU servers lease expenses increased by $1.2 million, or 12%, compared to the GPU servers lease expenses incurred for the nine months ended September 30, 2024. The increase primarily resulted from a higher average number of GPU servers leased.

Previous wording

In the fourth quarter of 2024, we acquired Enovum which provides colocation services. For the six months ended June 30, 2025 and 2024, the cost of revenue from colocation services was comprised of the following:

Current wording

In the fourth quarter of 2024, we acquired Enovum which provides colocation services. For the nine months ended September 30, 2025 and 2024, the cost of revenue from colocation services was comprised of the following:

Previous wording

For the six months ended June 30, 2025, electricity costs totaled $0.5 million. We had no electricity costs for the six months ended June 30, 2024 as we acquired Enovum in the fourth quarter of 2024, which provides colocation services.

Current wording

For the nine months ended September 30, 2025, electricity costs totaled $0.8 million. We had no electricity costs for the nine months ended September 30, 2024 as we acquired Enovum in the fourth quarter of 2024, which provides colocation services.

Previous wording

For the six months ended June 30, 2025, data center lease expenses totaled $0.3 million. We had no data center lease expenses for the six months ended June 30, 2024 as we acquired Enovum in the fourth quarter of 2024, which provides colocation services.

Current wording

For the nine months ended September 30, 2025, data center lease expenses totaled $0.5 million. We had no data center lease expenses for the nine months ended September 30, 2024 as we acquired Enovum in the fourth quarter of 2024, which provides colocation services.

Previous wording

For the six months ended June 30, 2025, wage expenses totaled $0.2 million. We had no wage expenses for the six months ended June 30, 2024 as we acquired Enovum in the fourth quarter of 2024, which provides colocation services.

Current wording

For the nine months ended September 30, 2025, wage expenses totaled $0.3 million. We had no wage expenses for the nine months ended September 30, 2024 as we acquired Enovum in the fourth quarter of 2024, which provides colocation services.

Previous wording

For the six months ended June 30, 2025 and 2024, depreciation and amortization expenses were $9.0 million and $7.2 million, respectively, based on an estimated useful life of property, plant, and equipment and intangible assets.

Current wording

For the nine months ended September 30, 2025 and 2024, depreciation and amortization expenses were $15.3 million and $11.5 million, respectively, based on an estimated useful life of property, plant, and equipment and intangible assets.

Previous wording

Effective January 1, 2025, we changed our estimate of the useful lives for our cloud service equipment from three to five years. The change was made to better reflect the expected usage patterns and economic benefits of the assets. Refer to Note 2.Summary of Significant Accounting Policies to our combined financial statements

Current wording

Effective January 1, 2025, we changed our estimate of the useful lives for our cloud service equipment from three to five years. The change was made to better reflect the expected usage patterns and economic benefits of the assets. Refer to Note 2.Summary of Significant Accounting Policies to our condensed consolidated financial statements

Previous wording

Provision for income taxes consists of federal, state and foreign income taxes. Our income tax provision for the six months ended June 30, 2025, is primarily attributable to the mix of earnings and losses in countries with differing statutory tax rates, and the valuation allowance applied to the Company’s deferred tax assets in the United States and Canada. We continue to maintain a valuation allowance against the deferred tax assets in United States and Canada as the Company does not expect those deferred tax assets are “more likely than not” to be realized in the near future, particularly due to the uncertainty on macroeconomy, politics and profitability of the business.

Current wording

Provision for income taxes consists of federal, state and foreign income taxes. Our income tax provision for the nine months ended September 30, 2025 is primarily attributable to the mix of earnings and losses in countries with differing statutory tax rates, and the valuation allowance applied to the Company’s deferred tax assets in the United States. We continue to maintain a valuation allowance against the deferred tax assets in United States as the Company does not expect those deferred tax assets are “more likely than not” to be realized in the near future, particularly due to the uncertainty on macroeconomics, politics and profitability of the business.

Previous wording

The following table sets forth selected information from our combined balance sheets as of June 30, 2025 and December 31, 2024. This information should be read together with our combined financial statements and related notes included elsewhere in this report.

Current wording

The following table sets forth selected information from our condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024. This information should be read together with our condensed consolidated financial statements and related notes included elsewhere in this report.

Previous wording

Cash and cash equivalents primarily consist of funds deposited with banks, which are highly liquid and are unrestricted to withdrawal or use. The total balance of cash and cash equivalents were $16.4 million and $11.7 million as of June 30, 2025 and December 31, 2024, respectively. The increase in the balance of cash and cash equivalents was a result of net cash of $6.8 million used in operating activities, net cash of $131.0 million used in investing activities, and net cash of $142.7 million provided by financing activities.

Current wording

Cash and cash equivalents primarily consist of funds deposited with banks, which are highly liquid and are unrestricted to withdrawal or use. The total balance of cash and cash equivalents were $166.5 million and $11.7 million as of September 30, 2025 and December 31, 2024, respectively. The increase in the balance of cash and cash equivalents was a result of net cash of $327.0 million provided by financing activities, partially offset by net cash of $11.3 million used in operating activities and net cash of $160.8 million used in investing activities.

Previous wording

Accounts receivable, net consists of amounts due from our customers. The total balance of accounts receivable was $6.5 million and $5.3 million as of June 30, 2025 and December 31, 2024, respectively. The increase in the balance of accounts receivable is attributable to unpaid invoices from our customers.

Current wording

Accounts receivable, net consists of amounts due from our customers. The total balance of accounts receivable, net was $17.4 million and $5.3 million as of September 30, 2025 and December 31, 2024, respectively. The increase in the balance of accounts receivable is attributable to unpaid invoices from our customers.

Previous wording

Net investment in lease represents the present value of the lease payments not yet received from lessees. The current and non-current balance of net investment in lease was $3.5 million and $9.4 million, respectively as of June 30, 2025. The current and non-current balance of net investment in lease was $2.5 million and $6.8 million, respectively as of December 31, 2024.

Current wording

Net investment in lease, net represents the present value of the lease payments not yet received from lessees. The current and non-current balance of net investment in lease was $4.1 million and $10.8 million, respectively as of September 30, 2025 due to sales-type lease agreements as a lessor for its cloud service equipment. The current and non-current balance of net investment in lease was $2.5 million and $6.8 million, respectively as of December 31, 2024.

Previous wording

Other current assets were $20.2 million and $23.3 million as of June 30, 2025 and December 31, 2024, respectively. The decrease in the balance of other current assets was mainly attributable to a decrease in prepayment to third parties of $7.2 million and a decrease in receivable from third parties of $0.2 million, partially offset by an increase in prepaid consulting services of $1.8 million and an increase in contract assets of $0.8 million.

Current wording

Other current assets, net were $19.8 million and $23.3 million as of September 30, 2025 and December 31, 2024, respectively. The decrease in the balance of other current assets was mainly attributable to a decrease in prepayment to third parties of $7.2 million, partially offset by an increase in prepaid consulting services of $2.0 million, an increase in contract assets of $0.8 million, and an increase in receivable from third parties of $0.8 million.

Previous wording

Compared with December 31, 2024, the balance as of June 30, 2025 decreased by $21.4 million, mainly due to the receipt of property and equipment of $86.3 million offset by prepayment of $64.9 million for property and equipment.

Current wording

Compared with December 31, 2024, the balance as of September 30, 2025 decreased by $25.9 million, mainly due to the reclassification of property and equipment of $103.5 million offset by prepayment of $77.6 million for property and equipment.

Previous wording

As of June 30, 2025, the HPC equipment had a net book value of $230.0 million. As of December 31, 2024, the HPC equipment had a net book value of $89.2 million.

Current wording

As of September 30, 2025, the HPC equipment had a net book value of $244.1 million. As of December 31, 2024, the HPC equipment had a net book value of $89.2 million. Compared with December 31, 2024, the balance as of September 30, 2025 increased by $154.9 million, mainly due to the reclassification of property and equipment of $103.5 million from deposits for property, plant and equipment; the real estate acquisition of $45.0 million in North Carolina; and development costs incurred for the construction of MTL-3 in Montreal of $29.1 million offset, in part, by increase in accumulated depreciation of $14.8 million and reclassification of servers and network equipment of $7.9 million to net investment in leases upon commencement of leases of this equipment to customers.