Digi Power X Inc.

In addition to the other information set forth in this Quarterly Report, including the cautionary statement under the caption “Cautionary Note Regarding Forward-Looking Statements,” Management’s Discussion and Analysis of Financial Condition and Results of Operations, the condensed consolidated financial statements and related notes, and the following additional risk factors, you should carefully consider the risks discussed in “Part I, Item 1A - Risk Factors” in the 2025 Annual Report, as updated and supplemented in “Part II, Item 1A – Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (the “Q1 Quarterly Report”). There have been no material changes with respect to the risk factors disclosed in our 2025 Annual Report and our Q1 Quarterly Report. However, we note that the risks described in this report, in our 2025 Annual Report, and in our Q1 Quarterly Report are not the only risks facing the Corporation, and such additional risks and uncertainties that we currently deem to be immaterial or are unknown to us could negatively impact our business, operations and/or financial results.

We expect to require additional financing, including project-level debt financing, to complete the buildout of our AI data center campus, and such financing may not be available on acceptable terms or at all.

The full deployment of Phase 2 (40 MW) of our purpose-built AI data center campus is conditioned on our securing adequate financing, and we are pursuing project-level debt financing to fund our data center buildout while seeking to limit dilution to our shareholders. There can be no assurance that we will complete any such financing on the terms we currently contemplate, or at all. If we are unable to obtain sufficient financing on acceptable terms, we may be required to delay, curtail or abandon all or a portion of our development plans, including our ability to satisfy our obligations under our AI colocation agreement, which could have a material adverse effect on our business, financial condition and results of operations.

We depend on a limited number of suppliers, including NVIDIA, for critical computing equipment and components, and any disruption in supply could materially harm our business.

Our AI data center and GPU-as-a-Service operations depend on a limited number of suppliers, particularly NVIDIA, for GPUs and related computing equipment. On June 3, 2026, we committed to purchase approximately $35 million of NVIDIA’s next-generation Vera Rubin systems. This reliance on a single supplier for critical computing hardware exposes us to risks including supply shortages, price increases, delayed product releases, changes in product specifications, and potential changes in the supplier relationship. NVIDIA’s products are in high demand globally, and we may face competition from other purchasers for limited supply. If we are unable to obtain the necessary equipment on acceptable terms or within required timeframes, or if NVIDIA experiences production delays or quality issues, our ability to expand our NeoCloudz platform, fulfill our obligations under the Cerebras Agreement, and execute our business strategy could be materially and adversely affected.

Our data center projects may be subject to new or rapidly evolving regulatory frameworks, and we may face increased public scrutiny or negative publicity as a result of our data center strategy.

Data centers are increasingly scrutinized by federal, state, and local authorities and have been subject to environmental activists and negative public perception, due to concerns regarding energy consumption, land use, carbon emissions, water usage, environmental impacts, data-sovereignty considerations and national-security-related issues. Regulators may impose new permitting requirements, energy-efficiency standards, carbon-reduction mandates, sustainability reporting rules, or operational restrictions specific to data centers, AI infrastructure, or high-density compute environments. For example, on July 14, 2026, New York State Governor Kathy Hochul signed an executive order barring the construction of new hyperscale data centers using 50 megawatts or more of power for up to one year in the state of New York. Additionally, in Texas, Governor Greg Abbott published a letter to the Electric Reliability Council of Texas and the Public Utility Commission of Texas, directing the Commission to conduct a comprehensive verification and audit of all data centers advancing through the interconnection process within the state before they are approved to move forward. Such governmental actions and regulations, at the federal level or by state and local governments in the States of Alabama, New York, and North Carolina, where we are building, or plan to build, our properties, could increase our capital expenditures, delay development timelines, limit expansion opportunities, limit projects from moving forward through commercialization, or require costly modifications to existing infrastructure. Any restrictions or new policy initiatives targeting large-scale compute operations, including those supporting AI/HPC workloads, could limit our opportunities to acquire additional properties and restrict our ability to build out our data center operations on any of our existing or future properties, which may adversely affect our data center business or limit the economic viability of our strategic diversification initiatives. Given the evolving nature of digital asset and data-center regulation, and the difficulty of predicting the outcomes of ongoing or future governmental actions, we cannot assure you that future regulatory or legislative developments will not have a material adverse effect on our business, prospects, financial condition, or operations. Even in the absence of new regulations or legislation, increased public scrutiny or negative publicity regarding the development and environmental impact of HPC data centers could harm our reputation, which may adversely affect our business, financial condition and results of operations.