Big Digital Energy, Inc.

CONSOLIDATED CONDENSED BALANCE SHEETS

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS

CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the Three Months Ended June 30, 2026

For the Three Months Ended June 30, 2025

CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the Six Months Ended June 30, 2026

For the Six Months Ended June 30, 2025

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

NOTE 1 – GENERAL

Nature of Operations

Big Digital Energy, Inc., whose name was changed from Mawson Infrastructure Group Inc. (“Mawson”) effective April 24, 2026 (“Big Digital”) (the “Company,” “we,” “us,” and “our”) is a technology company focused on digital infrastructure platforms, headquartered in the United States of America.

On April 20, 2026, Mawson filed with the Secretary of State of the State of Delaware a Certificate of Amendment (the “Certificate of Amendment”) to its Certificate of Incorporation, as amended (the “Charter”), to change its name from “Mawson Infrastructure Group Inc.” to “Big Digital Energy, Inc.” (the “Name Change”). The Certificate of Amendment became effective as of April 24, 2026, and the only change to the Company’s prior Charter was to change the Company’s name.

The Company’s Board of Directors (the “Board”) approved the Name Change pursuant to Section 242 of the General Corporation Law of the State of Delaware (“DGCL”). In accordance with the DGCL and the provisions of the Company’s organizational documents, approval of the Company’s stockholders was not required to effectuate the Name Change, and the Name Change will not affect the rights of the Company’s security holders.

The Company designs, builds and operates next-generation digital infrastructure platforms for enterprise customers and for its own purposes. The Company provides services spanning artificial intelligence (“AI”), high-performance computing (“HPC”), digital assets including Bitcoin mining, and other intensive compute applications. The Company delivers both self-mining operations and colocation services to enterprise customers with a vertically integrated infrastructure model built for scalability and efficiency. The Company also has an energy management business, which utilizes software and analysis, to generate revenue when the Company participates in energy management programs related to the real-time needs of the power grid.

The Company has a strategy to prioritize the usage of carbon-free energy sources, including nuclear energy, to power its digital infrastructure platforms and computational machines to support the rapid growth of the digital economy in an environmentally sustainable way.

The Company manages and operates digital infrastructure platforms and data centers delivering a total current capacity of approximately 129 megawatts (“MW”) with its current operational sites and more future capacity under development, all strategically located in locations served by the Pennsylvania-New Jersey-Maryland Interconnection Energy Market (the “PJM Energy Market”) in the United States. The PJM Energy Market is among the largest wholesale power markets in North America.

The accompanying consolidated financial statements, including the results of Cosmos Infrastructure LLC (“Cosmos”), Luna Squares LLC (“Luna Squares”), Mawson Bellefonte LLC, Luna Squares Repairs LLC, Luna Squares Property LLC, Mawson Midland LLC, Mawson Hosting LLC (“Mawson Hosting”), Mawson Ohio LLC, Mawson Mining LLC and Mawson Capital LLC (collectively referred to as the “Group”), have been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and in accordance with generally accepted accounting principles in the United States (“GAAP”).

Nature of Operations (Cont.)

These unaudited consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements of the Company as of December 31, 2025, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on March 31, 2026. The results of the interim period are not necessarily indicative of the results to be expected for the full year ending December 31, 2026. These unaudited consolidated condensed financial statements reflect all adjustments which, in the opinion of management, are necessary to present fairly the financial position, the results of operations and cash flows of the Company for the periods presented.

Going Concern

The accompanying unaudited consolidated condensed financial statements have been prepared assuming the Company will continue on a going concern basis and in accordance with GAAP. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

Pursuant to the requirements of the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 205-40,Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date these financial statements are issued. This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.

For the six months ended June 30, 2026, the Company incurred a net loss of$6.8 million and used $20.4 million in cash related to operations, and as of June 30, 2026, had negative working capital of $13.7 million, stockholders’ equity of $12.4 million and an accumulated deficit of $259.2 million. The Company’s cash position as of June 30, 2026, was $16.3 million.

The Company’s revenue is dependent on a number of external factors, including commercial terms, payments from customers, payments from partners, counterparty risks, and market conditions, including those related to digital assets, AI, HPC and other markets. These factors are outside the Company’s direct control, and the Company may not be able to practically mitigate their impact. The Company cannot predict with any certainty whether these trends will reverse or persist.

The Company has ongoing litigation related to the Marshall Loan, W Capital Loan, Celsius Promissory Note and Celsius Colocation Agreement (each defined below). See Note 8 – Commitments and Contingencies.

Going Concern (Cont.)

The Company has evaluated the above conditions and concluded that these conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of these consolidated financial statements.

To mitigate these conditions, the Company has explored various avenues to enhance liquidity, fund the Company’s expenditures, and meet debt servicing requirements. These strategies include, among others:

On October 16, 2025, the Company entered into an At the Market Offering Agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) to sell shares (the “Shares”) of our common stock, par value $0.001 per share (“Common Stock”) having an aggregate sales price of up to $9.6 million, from time to time, through an “at-the-market” offering program (the “ATM Program”) under which Wainwright will act as sales agent. On December 11, 2025, the Company filed a prospectus supplement (the “Prospectus Supplement”) with the SEC to increase the capacity of the ATM Program by $40 million.

During the six months ended June 30, 2026, the Company has sold 1,693,968 shares of Common Stock under the Sales Agreement at an average price of approximately $4.43 per share, which has resulted in cash proceeds to the Company of $7.3 million, net of issuance costs.

On May 28, 2026, the Company (the “Borrower”), and Endeavor Blockchain, LLC, an Arkansas limited liability company (“Endeavor” and the “Noteholder”), entered into a promissory note providing for a revolving line of credit, with the aggregate principal sum of all revolving loans advanced from time to time by the Noteholder to the Borrower not to exceed forty million dollars ($40,000,000) (the “Revolver”). Endeavor is wholly owned by Josh Kilgore, the Company’s Executive Chairman.

Pursuant to the Revolver, each revolving loan will bear interest at a fixed rate of 12% per annum, with principal and interest payable upon demand. The revolving line of credit is secured by assets of the Borrower listed in the Revolver.

The Revolver contains customary representations, warranties, covenants, events of default and security arrangements. Borrower is also subject to restrictions on incurring additional indebtedness and additional liens on the collateral. The Revolver provides for customary events of default, including, among others, failure to pay principal or interest, breach of representations and warranties, violation of covenants, bankruptcy or insolvency events. The Borrower may at any time, and without penalty, prepay outstanding amounts under the revolving loans, or if there are no outstanding amounts, terminate the Revolver. The outstanding balance including interest is $2.5 million as of June 30, 2026, all of which is classified as a current liability.

Going Concern (Cont.)

Series D Convertible Preferred Stock and Warrant

On June 30, 2026, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with Six Thirty AI, LLC (the “Purchaser”), pursuant to which the Company issued and sold to the Purchaser an aggregate of 16,700 shares of newly designated Series D Convertible Preferred Stock, par value $0.001 per share, with a stated value of $1,000 per share (“Series D Preferred Stock”), at a purchase price of $900.00 per share, for gross proceeds to the Company of $15.03 million, before deducting placement agent fees and other offering expenses. The Series D Preferred Stock is convertible into shares of Common Stock, as described below. The shares of Common Stock issuable upon conversion are referred to as the “Conversion Shares”. Under the Purchase Agreement, the Company also issued to the Purchaser a warrant (the “Warrant”) exercisable forfive years to purchase 926,748 shares of Common Stock (the “Warrant Shares”) at an exercise price of $10.81, which is 120% of the closing price of the Common Stock immediately before closing, subject to adjustment upon the occurrence of any stock split, stock dividend, stock combination or similar transaction. The Purchaser is wholly owned by Joshua Kilgore and Phillip Stanley, the Company’s Chief Executive Officer, and Cody Smith, the Company’s Chief Operating Officer.

The Series D Preferred Stock ranks senior to Common Stock, accrues cumulative dividends at 5% per annum (18% upon an uncured triggering event). Each holder of Series D Preferred Stock may convert all, or any part, of its shares of Series D Preferred Stock, at any time on or after August 30, 2026, into Conversion Shares at a conversion price (the “Conversion Price”) equal to 95% of the lowest daily volume-weighted average price of the Common Stock over thefive consecutive trading days immediately preceding the conversion date, subject to a floor price of $1.80 and certain limitations. Conversion and exercise of the Warrant are subject in the aggregate to a 19.99% exchange cap on shares of Common Stock outstanding at closing, absent stockholder approval under Nasdaq Listing Rule 5635(d). The Company may redeem the Series D Preferred Stock at any time, in whole or in part, at a cash price equal to 105% of the aggregate Conversion Price for Conversion Shares that have been registered for resale and a higher aggregate Conversion Price for Conversion Shares that have not yet been registered for resale.

The Warrant is exercisable immediately, at an exercise price of $10.81 per share (120% of the closing price of the Common Stock immediately before closing), and expires June 30, 2031. Exercise is limited to 4.99% beneficial ownership of the Company’s outstanding Common Stock (waivable by the holder on 65 days’ notice), in addition to the 19.99% exchange cap described above.

Although the Company may have access to capital, debt, and/or other sources of funding, these may require additional time and cost, may impose operational restrictions and other covenants on the Company, may not be available on attractive terms, and may not be available at all. If the Company raises additional capital or debt, this could cause additional dilution to the Company’s stockholders. The terms of any future capital raise or debt issuance and the costs of any financing are uncertain and may be unfavorable to the Company. Should the Company be unable to source sufficient funding, the Company may not be able to realize assets at their recognized values and fulfill its liabilities in the normal course of business at the amounts stated in these consolidated financial statements.

The Company obtains advice from outside resources; however, it is important to note that strategic and other initiatives may not lead to any transaction or other outcome.

These unaudited consolidated condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and other commitments in the normal course of business. They do not include any adjustments relating to the recoverability and carrying amounts of assets and the amounts of liabilities should the Company be unable to continue as a going concern and meet its obligations and debts as and when they fall due.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Preparation

The accompanying unaudited consolidated condensed financial statements of the Company include the accounts of the Company and its wholly or majority owned and controlled subsidiaries. Intercompany investments, balances and transactions have been eliminated in consolidation. Certain reclassifications of current year amounts on the statement of operations have been made to improve presentation.

Use of Estimates and Assumptions

The preparation of the financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the unaudited consolidated condensed financial statements, and the reported amounts of income and expenses during the reporting periods. Actual results could differ from those estimates. The Company has considered the following to be significant estimates made by management, including but not limited to, going concern assumptions, estimating the useful lives of fixed assets, realization of long-lived assets, unrealized tax positions, and valuing the derivative asset classified under Level 3 fair value hierarchy.

Revenue recognition

The Company recognizes revenue under ASC 606,Revenue from Contracts with Customers. The core principle of ASC 606 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. Five steps are required to be followed in evaluating revenue recognition: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity 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: 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 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).

Digital colocation revenue

The Company offers other businesses and customers the opportunity to colocate their specialized computers used in mining digital assets and other equipment within our facilities. The Company generates revenue from these customers for their use of our digital colocation services and facilities. This offering is known as “colocation” and can be customized and tailored for each customer’s situation and strategy as well as the Company’s strategy. For example, customers may agree to be charged upfront digital infrastructure fees, minimum fees, and maintenance fees. The Company, on the other hand, charges colocation fees for the use of its facilities, and other related fees. In addition, digital colocation customers typically pay for energy used in connection with the customer colocation services agreement on a pass-through basis, which may be on a fixed or variable basis calculated on the portion of energy used by the customer on the site. The Company satisfies the performance obligation when the customer has the ability to direct the use and obtain substantially all of the remaining benefits of the good or service. Revenue is recognized over time as customers simultaneously receive and consume the benefits because another party would not need to substantially reperform the work completed by the Company in order to fulfill the remaining performance obligation to the customer. Revenue is recognized upon confirmation of the Company’s power usage by the electricity provider and billed at the rates outlined in each customer contract on a monthly basis.

Revenue recognition (Cont.)

The customer contracts contain variable consideration to be allocated to and recognized in the period to which the consideration relates. Usually this is when it is invoiced, rather than obtaining an estimation of variable consideration at the beginning of the customer contracts.

Energy management revenue

The Company has developed several energy management program capabilities and has an energy management business to generate revenue when the Company adapts its power usage to the real-time needs of the power grid. Energy management revenue consists of revenue for curtailing power and through a power pricing arrangement.

Revenue for curtailing power is recognized over the period that the services are being provided. The Company estimates the amount of curtailable power and the expected payment for that curtailment and recognizes revenue based on the proportion of the service that has been provided. In this arrangement, the Company is considered the principal and revenue is recognized on a gross basis.

Revenue through the Company’s power pricing arrangement is recognized over the period that the services are being provided. The Company estimates the amount of energy available for sale and the expected payment for that energy, and recognizes revenue based on the proportion of the service that has been provided. In this arrangement, the Company is considered the principal and revenue is recognized on a gross basis.

Digital assets mining revenue

The Company has a contract with mining pools and has undertaken the performance obligation of providing computing power in exchange for non-cash consideration in the form of digital assets. The provision of computing power is the only performance obligation in the Company’s contract with its pool operators. Where the consideration received is variable (for example, due to payment only being made upon successful mining), it is recognized when it is highly probable that the variability is resolved, which is generally when the digital asset is received.

The Company measures the non-cash consideration received at the fair market value of the digital asset received. Management estimates fair value on a daily basis, as the quantity of digital assets received multiplied by the price quoted on the exchange that the Company uses to dispose of digital assets.

Cost of revenue consists primarily of expenses that are directly related to providing the Company’s service to its paying customers. These primarily consist of costs associated with operating our colocation facilities such as direct power costs, energy costs, freight costs and material costs related to digital asset mining.

Income taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance may be established to reduce the deferred tax asset to the level at which it is “more likely than not” that the tax asset or benefits will be realized. Realization of tax benefits of deductible temporary differences and operating loss carryforwards depends on having sufficient taxable income of an appropriate character within the carryback or carryforward periods.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained upon review by the taxing authority. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

Functional currency

All subsidiaries of the Company have a functional currency of United States dollar (“USD”). Assets and liabilities denominated in Australian dollars are translated into USD at exchange rates in effect on the consolidated balance sheet dates. Revenue and expense accounts are translated using the monthly average exchange rates during the period. Translation of all the consolidated companies’ financial records into USD is required due to the reporting currency for these consolidated financial statements presented as USD and the functional currency of the parent company being that of USD. Translation adjustments are accumulated in other comprehensive income (loss). Gains or losses on foreign currency transactions and translation adjustments in highly inflationary economies are recorded as income (expense) in the period in which they are incurred.

Segment reporting

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision–making group in deciding how to allocate resources and in assessing performance. The Company’s CODM group is composed of the Chief Executive Officer.

The Company operates asone energy management and digital asset mining segment and uses net income as a measure of profit or loss on a consolidated basis in making decisions regarding resource allocation and performance assessment. All income is generated from operations located in the United States. Additionally, the Company’s CODM regularly reviews the Company’s expenses on a consolidated basis. The financial metrics used by the CODM help make key operating decisions, such as determination of purchases and significant acquisitions and allocation of budget between cost of revenues, general and administrative, research and development expenses and net income. The CODM does not evaluate performance or allocate resources based on segment asset or liability information.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, cash held with digital asset exchanges, and other short-term and highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less.

Concentrations of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. Cash and cash equivalents are invested in banks. If the counterparty completely failed to perform in accordance with the terms of the contract, the maximum amount of loss to the Company would be the balance. Management believes that the financial institutions that hold the Company’s investments are financially sound and, accordingly, minimal credit risk exists with respect to these investments. The Company has no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements.

Property, plant and equipment

Property, plant and equipment (“PP&E”) are stated at cost, net of accumulated depreciation. All other repair and maintenance costs are charged to operating expenses as incurred. The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met. PP&E transferred from customers is initially measured at the fair value at the date on which control is obtained.

PP&E are depreciated on a straight-line or declining balance basis based on the asset classification, over their useful lives to the economic entity, commencing from the time the assets arrive at their destination where they are ready for use. Low-cost assets are capitalized and immediately depreciated. Depreciation is calculated over the following estimated useful lives:

PP&E are derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the consolidated statement of operations.

The residual values, useful lives, and methods of depreciation of PP&E are reviewed at each financial year end and adjusted prospectively, if appropriate.

The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such an asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Fair value of financial instruments:

The Company accounts for financial instruments under ASC 820,Fair Value Measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in a principal or most advantageous market. To increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

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 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.

Level 1 Assets and Liabilities:

In accordance with ASU 2023-08, cryptocurrency that was mined from colocation services and held in a digital asset account controlled by the Company is measured at fair value and recognized separately on the cryptocurrencies line of the balance sheet. Due to a customer dispute that was resolved during the six months ended June 30, 2026, the Company had recognized corresponding cryptocurrencies due to customer liability included in trade and other payables on the balance sheet at December 31, 2025. The estimated fair value of the cryptocurrency and alleged liability was classified as Level 1 of the fair value hierarchy and was based on the quantity of cryptocurrency held in the digital asset account multiplied by the price quoted on the exchange the Company used to dispose of digital assets on December 31, 2025.

Level 3 Assets:

In June 2022, the Company entered into a power supply agreement (“PSA”) with Dynegy Inc., formerly Energy Harbor LLC, (“Dynegy”), the energy supplier to the Company’s Midland, Pennsylvania facility, to provide the delivery of a fixed portion of the total amount of electricity for a fixed price through December 2026. If the Midland, Pennsylvania facility uses more electricity than contracted, the cost of the excess is incurred at a new price quoted by Dynegy.

Fair value of financial instruments: (Cont.)

While the Company participates in energy management programs at its Midland, Pennsylvania facility, the Company does not consider such actions as trading activities. That is, the Company does not engage in speculation in the power market as part of its ordinary activities. Because the sale of any electricity under a curtailment program allows for net settlement, the Company has determined the PSA meets the definition of a derivative under ASC 815,Derivatives and Hedging. However, because the Company has the ability to sell the power back to the grid rather than take physical delivery, physical delivery is not probable through the entirety of the contract and therefore, the Company does not believe the normal purchases and normal sales scope exception applies to the PSA. Accordingly, the PSA (a non-hedging derivative contract) is recorded at estimated fair value each reporting period with the change in the fair value recorded in “change in fair value of derivative asset” in the consolidated statements of operations.

The PSA was classified as a derivative asset beginning in the quarter ended September 30, 2022, and measured at fair value on the date of the PSA, with changes in fair value recognized in the accompanying consolidated statements of operations. The estimated fair value of the Company’s derivative asset is classified in Level 3 of the fair value hierarchy due to the significant unobservable inputs utilized in the valuation. Specifically, the Company’s discounted cash flow estimation models contain quoted commodity exchange spot and forward prices and are adjusted for basis spreads for load zone-to-hub differentials through the term of the PSA, which expires in December 2026. In addition, the Company adopted a discount rate of approximately 20% above the terminal value of the observable market inputs, but also includes unobservable inputs based on qualitative judgment related to company-specific risk factors. The terms of the PSA require pre-payment of collateral, calculated as forward cost based on the market cost rate of electricity versus the fixed price stated in the contract.

Stock based compensation

The Company follows ASC 718-10,Compensation-Stock Compensation. The Company expenses stock-based compensation to directors, employees, and non-employees over the requisite service period based on the grant-date fair value of the awards. The Company determines the grant-date fair value of options using the Trinomial Lattice Method. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. These assumptions are the expected stock volatility, the risk-free interest rate, the expected life of the option, and the expected forfeiture rate. Expected volatility computes stock price volatility over expected terms based on the historical trading prices of the Common Stock. Risk–free interest rates are calculated based on the yield of a 3-year or 5-year United States Treasury constant maturity bond, depending on the agreement.

Recent accounting pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.

Recent Accounting Pronouncements (Cont.)

In July 2025, the FASB issued ASU 2025-05, Financials Instruments-Credit Losses (Topic 326). The amendments introduce two key simplifications for estimating expected credit losses on current accounts receivable and current contract assets under ASC 606, the practical expedient and an accounting policy election. Entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The updates in ASU 2025-05 are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim periods within those annual periods. Early adoption is permitted. In January 2026, the Company decided to elect a practical expedient allowing the assumption that current conditions at the balance sheet date remain unchanged over the asset’s remaining life—meaning no forward-looking forecasting is required for these short-term assets. Adoption of ASU 2025-05 did not have a material impact on our financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2025, the FASB issued ASU 2025-12, “Codification Improvements.” The amendments in this update clarify, correct, and otherwise improve a wide variety of Topics in the Codification. Notably, ASU 2025-12 clarifies that when an entity has a loss from continuing operations and a contract that may be settled in stock or cash that is reported as an asset or liability for accounting purposes, the entity should consider whether including the potential common shares has a dilutive effect on the diluted earnings per share (EPS) computation by evaluating the combined effect of the adjustments to the numerator and the denominator. ASU 2025-12 is effective for the Company for fiscal years beginning after December 15, 2026. The Company expects that these amendments will not have a material impact on its consolidated financial statements.

In January 2025, the FASB issued ASU 2025-01, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date” (“ASU 2025-01”). ASU 2025-01 amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. ASU 2024-03 improves financial reporting by requiring companies to disclose additional information about purchases of inventory, employee compensation, depreciation and amortization, in the notes to the financial statements. The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements.

NOTE 3 – BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

Net income (loss) per common share is calculated in accordance with ASC 260,Earnings Per Share. Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of Common Stock outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of shares of Common Stock outstanding plus the dilutive effect of unvested restricted stock units (“RSUs”), and outstanding warrants and options. For the periods presented with a net loss, the computation of diluted net loss per share does not include dilutive Common Stock equivalents in the weighted average shares outstanding, as they would be anti-dilutive.

Securities that could potentially dilute net income per share in the future but were excluded in the computation of net loss per share, as of June 30, 2026 and 2025, are as follows:

NOTE 4 – LEASES

The Company’s operating leases are for digital asset mining sites and its finance leases are primarily for related plant and equipment.

The Company’s lease costs recognized in the consolidated condensed statements of operations consist of the following:

The following is a schedule of the Company’s lease liabilities by contractual maturity as of June 30, 2026:

Other lease information as of and for the period ended June 30, 2026:

NOTE 5 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, net, consisted of the following:

The Company incurred depreciation and amortization expense in the amounts of $1.1 million and $1.5 million for the three months ended June 30, 2026 and 2025, respectively. The Company incurred depreciation and amortization expense in the amounts of $2.3 million and $3.0 million for the six months ended June 30, 2026 and 2025, respectively. There wereno impairment charges during the six months ended June 30, 2026 and 2025.

NOTE 6 – INCOME TAXES

The Company records income taxes using the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax effects attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and operating loss and tax credit carryforwards. The Company establishes a valuation allowance if management believes it is more likely than not that the deferred tax assets will not be recovered based on an evaluation of objective verifiable evidence. Management has considered the Company’s history of book and tax income and losses incurred since inception, and the other positive and negative evidence, and has concluded that it is more likely than not that the Company will not realize the benefits of the net deferred tax assets as of June 30, 2026.

The Company recorded income tax benefit (expense) of approximately (0.4)% of loss before income taxes and 0.2% of loss before income taxes for the three months ended June 30, 2026 and 2025, respectively.

The Company recorded income tax benefit (expense) of approximately (2.5)% of losses before income taxes and (1.1)% of loss before income taxes for the six months ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, the Company hadno unrecognized tax benefits and does not anticipate any significant change to the unrecognized tax benefit balance.

NOTE 7 – LOANS

On May 28, 2026, the Company and Endeavor entered into the Revolver as discussed in Note 1.

Pursuant to the Revolver, each revolving loan bears interest at a fixed rate of 12% per annum, with principal and interest payable upon demand. The revolving line of credit is secured by assets of the Company listed in the Revolver.

The Revolver contains customary representations, warranties, covenants, events of default and security arrangements. Borrower is also subject to restrictions on incurring additional indebtedness and additional liens on the collateral. The Revolver provides for customary events of default, including, among others, failure to pay principal or interest, breach of representations and warranties, violation of covenants, bankruptcy or insolvency events. As of June 30, 2026, the Company was in compliance with the covenants in the Revolver.

The Company may at any time, and without penalty, prepay outstanding amounts under the revolving loans, or if there are no outstanding amounts, terminate the Revolver. The outstanding balance including interest is $2.5 million as of June 30, 2026, all of which is classified as a current liability.

Marshall Loan

The Company is included as a guarantor of the Marshall Loan. The loan matured in February 2024 and bears interest at a rate of 12% per annum (with an overdue rate provision of an additional 500bps), payable monthly with interest payments that commenced in December 2021. This loan facility is secured by direct assets of MIG No. 1 and a general security agreement given by the Company. Principal repayments began during November 2022. The outstanding balance including interest is $14.1 million as of June 30, 2026, all of which is classified as a current liability. There have been no principal or interest payments made since May 2023. See Note 8 – Commitments and Contingencies, Marshall Loan and W Capital Loan.

W Capital Loan

The Company is included as a guarantor of a Secured Loan Facility Agreement (the “W Capital Loan”) for working capital by Mawson PL with W Capital Advisors Pty Ltd for the W Capital Advisors Fund (collectively, “W Capital”). As of June 30, 2026, AUD $2.8 million (USD $1.9 million) has been drawn down from this facility, all of which is classified as a current liability. The W Capital Loan accrues interest daily at a rate of 12% per annum (with an overdue rate provision of an additional 800bps). The W Capital Loan expired in March 2023. See Note 8 – Commitments and Contingencies, Marshall Loan and W Capital Loan.

Celsius Promissory Note

On February 23, 2022, Luna Squares entered into a Digital Colocation Agreement (the “Digital Colocation Agreement”) with Celsius Mining LLC. In connection with this agreement, Celsius Mining LLC loaned Luna Squares a principal amount of $20.0 million for the purpose of funding the infrastructure required to meet the obligations of the Digital Colocation Agreement, for which Luna Squares issued a Secured Promissory Note (the “Celsius Promissory Note”) for repayment of such amount. The Celsius Promissory Note accrues interest daily at a rate of 12% per annum (with an overdue rate provision of an additional 200bps). Luna Squares is required to amortize the loan at a rate of 15% per quarter, principal repayments began at the end of September 2022. The Celsius Promissory Note had a maturity date of August 23, 2023. The outstanding balance, including interest, is $11.3 million as of June 30, 2026, all of which is currently classified as a current liability. See Note 8 – Commitments and Contingencies, Celsius Promissory Note and Digital Colocation Agreement.

Convertible Notes

On July 8, 2022, the Company issued secured convertible promissory notes (the “Secured Convertible Promissory Notes”) to investors in exchange for cash. The outstanding balance relates to the interest on the Secured Convertible Promissory Notes which has been accrued from July 2022 onwards and therefore the outstanding balance is $0.2 million as of June 30, 2026, all of which is classified as a current liability. On March 28, 2024, the Company was made a defendant in a civil suit before the Supreme Court of NSW in Sydney Australia, in the matter entitled W Capital Advisors Pty Ltd in its capacity as trustee for the W Capital Advisors Fund v. Mawson Infrastructure Group, Inc., alleging a claim to seek USD $0.2 million as unpaid interest under a Secured Convertible Promissory Note after the Company paid in full the principal of $0.5 million, and AUD $0.3 million under a loan deed, plus interest and costs for sums due claiming corporate guarantee by the Company under a Variation Deed to Loan Deed dated September 29, 2022, executed by its Australian entity, Mawson SPL. The Company sought dismissal of the Australian proceedings arguing jurisdiction of any claims against the Company should be in the United States as set forth in the agreements between the parties. Despite its objections, on May 31, 2024, the Australian court ruled in favor of the Australian claimant and rendered a judgment against the Company under Australian law for US $0.2 million as unpaid interest plus interest and costs for sums due.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

The Company accounts for its contingent liabilities in accordance with ASC 450Contingencies. A provision is recorded when it is both probable that a liability has been incurred, and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. Legal costs incurred in connection with loss contingencies are expensed as incurred.

The Company is subject to the various legal proceedings and claims discussed below (and in Note 1) that have not been fully resolved and that have arisen in the ordinary course of business. In the opinion of management, there was not at least a reasonable possibility the Company may have incurred a material loss, or a material loss in excess of a recorded accrual, with respect to loss contingencies. However, the outcome of legal proceedings and claims brought against the Company is subject to significant uncertainty. Therefore, although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters are resolved against the Company in a reporting period for amounts in excess of management’s expectations, the Company’s consolidated financial statements for that reporting period could be materially adversely affected.

Marshall Loan and W Capital Loan

The Marshall Loan was entered into with an Australian entity MIG No.1, which was placed into a court appointed liquidation and wind-up process and was deconsolidated from the Group on March 19, 2024. On March 19, 2024, Marshall appointed receivers and managers in Australia under the terms of their security relating to their secured loan facility. The direct assets that secure this loan include 5,372 Miners and 8 modular data centers (“MDCs”). These assets are held by MIG No.1 and therefore were included in the deconsolidation. The receiver’s statutory duty includes the obligation to sell the secured assets at market value or, if market value is not known, at the best price reasonably obtainable to maximize the prospects of there being sufficient proceeds available to satisfy the balance of the outstanding secured debt. It is therefore expected that this loan balance will be offset in the future by the amount received from the sale of these Miners and MDCs. On June 25, 2024, Marshall inspected and inventoried the Miners and MDCs located at the Company’s Midland facilities. The Company is currently not utilizing these Miners or MDCs for its operations and has asked Marshall to take these assets out of the Company’s storage. Marshall has not responded to the Company’s request for these Miners and MDCs to be removed from the Company’s storage. The Company is reserving all its rights and remedies against Marshall.

The W Capital Loan was originally with Mawson Infrastructure Group Pty Ltd (“Mawson PL”), and this Australian entity was placed into Australian voluntary administration on October 30, 2023. On November 3, 2023, W Capital appointed receivers and managers in Australia under the terms of their security relating to their working capital facility. The Company has corresponded with W Capital and/or its representatives, the Company’s ongoing significant concerns about W Capital and James Manning, a former board director and Chief Executive Officer of the Company (“Manning”), being related parties. W Capital has not responded to the Company’s concerns in a manner satisfactory to the Company.

On October 3, 2024, a proceeding was filed by W Capital and Marshall against the Company before the Federal Court of Australia, New South Wales, in the matter entitled, “W Capital Advisors Pty Ltd, in its capacity as Trustee for the W Capital Advisors Fund, v. Mawson Infrastructure Group, Inc.”, No. NSD 1395/2024. In an effort to force the Company to pay the W Capital Loan and Marshall Loan, W Capital and Marshall sought to have the Company declared insolvent under Australian law on the grounds that the Company failed to pay W Capital the sums it claims the Company owed it under the aforesaid Australian judgment. On February 11, 2025, the Australian Court declared that Mawson be “wound up” under Australian law. However, Mawson has no assets, revenue or other business in Australia subject to Australian jurisdiction. It is unclear as to any adverse effect this ruling has on Mawson in the U.S. This Australian ruling completely disregarded the automatic stay in place as established by the Involuntary Petition (defined below). The Company has communicated its objections and concerns to these Australian liquidator and entities, the Australian Court, and to the U.S. Bankruptcy Court.

Concurrently with the above Australian litigation, on December 4, 2024, Marshall, W Capital, and Rayra Pty Ltd, as Trustee for the Mountainview Trust (“Rayra” and together with Marshall and W Capital, collectively, the “Original Petitioners”), all Australian entities, filed an involuntary petition (the “Involuntary Petition”) in the matter entitledIn Re Mawson Infrastructure Group, Alleged Debtor, Case No. 1:24-bk-12726, under chapter 11 (“Chapter 11”) of title 11, 11 U.S.C. § 101 through 1330 (the “Bankruptcy Code”), seeking a determination of the court to force the Company into a Chapter 11 proceeding. Subsequently, Liam Healy and Quentin Olde, in their capacity as Receivers and Managers of MIG No. 1 Pty Ltd (in Liq.), and John McInerney and Philip Campbell-Wilson of Grant Thornton Australia Limited, in their capacity as Joint and Several Liquidators of Mawson Services Pty Ltd. (In Liq.), later joined the Involuntary Petition as additional petitioning creditors (together with the Original Petitioners, collectively, the “Petitioning Creditors”). The Company disputed the validity of the Involuntary Petition and the Petitioning Creditors’ debt claims, and filed responsive pleadings and other remedies against the Petitioning Creditors for bad faith, pursue sanctions, and other damages as is allowed by applicable law.

During the course of this matter, the Company continued to operate in the ordinary course of business as authorized under 11 U.S.C. § 303(f). Nonetheless, under applicable federal law, all collection efforts by the Company’s creditors, including all of the Petitioning Creditors, continued to be stayed pending final resolution of the Involuntary Petition.

The parties filed pretrial motions seeking various remedies, including dismissal prior to trial, sanctions and attorneys’ fees. On May 5, 2025, the Company filed a motion for sanctions against the Petitioning Creditors seeking, among other things, compelling discovery against the Petitioning Creditors, sanctions for bad faith, and payment of the Company’s legal fees. The motions were heard by the Bankruptcy Court on August 11, 2025, wherein the Court ruled from the bench to sanction the Petitioning Creditors, required them to pay the Company’s attorney’s fees incurred to date and further ordered the Petitioning Creditors to post a cash bond of $1.5 million before being allowed to proceed any further. Following successful motions brought by the Company against the filing parties in the Involuntary Petition, Marshall, as the largest claimant of the Petitioning Creditors, filed a motion to dismiss the Involuntary Petition on August 25, 2025. On October 21, 2025, the United States Bankruptcy Court for the District of Delaware held a hearing on the motion to dismiss and ordered the dismissal of the Involuntary Petition against the Company, while preserving the Company’s rights to recover from the Petitioning Creditors all damages it incurred due to the bad faith filing of the Involuntary Petition. A written Order of Dismissal was signed by the judge on November 4, 2025 and the Involuntary Petition has been dismissed.

On December 29, 2025, the Company filed an adversary proceeding in the United States Bankruptcy Court for the District of Delaware against the Petitioning Creditors, seeking general and punitive damages, sanctions attorneys’ fees and costs against the Petitioning Creditors.

The Company learned that on or about October 20, 2025, one of the Australian Petitioning Creditors, W Capital, filed for commencement of Australian Insolvency Proceedings placing W Capital under receivership and ultimate liquidation in Australia. The Company is one of W Capital’s largest creditors. The Company expects to avail itself of all legal rights and remedies to which it may be entitled to recover from W Capital under applicable Australian and US laws.

Celsius Promissory Note and Celsius Colocation Agreement

Luna Squares has not repaid the Celsius Promissory Note by its stated maturity date and is claimed by Celsius to be in default. Celsius Mining LLC transferred the benefit of the Celsius Promissory Note to Celsius Network Ltd. and Celsius Network Ltd has notified Luna Squares that the default interest is payable.

On July 18, 2024, Celsius Network, LLC filed for arbitration of its claims against the Company with the American Arbitration Association in the matter entitledCelsius Network Ltd., Celsius Mining LLC and Ionic Digital Mining LLC (“Ionic”) v. Mawson Infrastructure Group, Luna Squares LLC and Cosmos Infrastructure LLC - Case 01-24-0006-4462. On January 23, 2025, the arbitrator issued a Partial Final Award (the “Partial Final Award”) granting in part Celsius’ claim against Luna Squares on the outstanding promissory note executed by Luna Squares in favor of Celsius. The Partial Final Award granted Celsius monetary damages in the amount of $8.1 million, plus interest and attorneys’ fees.

Celsius filed a motion seeking a partial award from the arbitrator against the Company based on its corporate guarantee. The arbitrator granted this partial award in favor of Celsius.

On October 7, 2025, Celsius filed a petition with the U.S. District Court of New York to confirm its partial arbitration award against Mawson. Following this, on November 6, 2025, both parties agreed to jointly file a consent judgment and execute a forbearance agreement, which provided additional time for the parties to continue their discussions toward an amicable settlement of all outstanding matters. The Court signed the consent judgment on November 10, 2025.

On February 5, 2026, Celsius took formal steps to domesticate the judgment outside of New York. Currently, the parties are engaged in negotiations to resolve the ongoing litigation. On or about March 6, 2026, Celsius announced that it would voluntarily dismiss its arbitration claims against the Company. On March 30, 2026, Celsius filed a Rule 34 dispositive motion to dismiss Mawson’s claims and counterclaims in the arbitration. On June 1, 2026, the arbitrator granted Celsius relief under its Rule 34 motion filed dismissing Mawson’s claims and counterclaims in the arbitration.

Ionic and Other Settlements

During the three months ended March 31, 2026, the Company reached a confidential settlement with Ionic to resolve all claims Ionic brought against the Company and two of its subsidiaries related to the Celsius Colocation Agreement, all settlement amounts have already been paid. On January 29, 2026, the $15.1 million Ionic claim was settled for $5.1 million, leaving a net gain of $10 million. In addition, on January 23, 2026, the Company entered into a separate, unrelated settlement to resolve a customer dispute over a hosting arrangement. These two settlements resulted in the Company recognizing net gains on legal settlements of aggregating $10.2 million.

Blockware

On April 19, 2024, a civil suit entitledBlockware Solutions, LLC v. Mawson Bellefonte LLC and Mawson Infrastructure Group, Inc. was filed in the United States District Court, Southern District of New York. The matter remains ongoing. However, the parties are actively pursuing informal settlement discussions.

CleanSpark

On July 16, 2024, the Company filed a civil lawsuit for its claims against CleanSpark, Inc. and CSRE Properties Sandersville, LLC with the United States District Court for the Southern District of New York in the matter entitled “Mawson Infrastructure Group, Inc. and Luna Squares, LLC v. CleanSpark, Inc. and CSRE Properties Sandersville, LLC”, Civil Action No. 1:24-cv-5379, for at least $2.0 million for breach of the Bill of Sale dated October 1, 2022, among the Company, CleanSpark Inc. and CSRE Properties Sandersville, LLC. On July 24, 2026, the parties entered into a confidential settlement agreement resolving all claims brought by the Company against CleanSpark, providing for dismissal with prejudice of the litigation and a full mutual release.

Vertua

On March 16, 2022, Luna Squares entered into a lease with respect to a property in the City of Sharon, Mercer County, Pennsylvania (the “Sharon Lease”) with Vertua, a subsidiary entity in which Vertua Ltd has a 100% ownership interest. Manning is a director of Vertua Ltd and has a material interest in the Sharon Lease as a significant stockholder of Vertua Ltd.

On October 17, 2024, the Company filed several claims in the matter captioned “Luna Squares Property, LLC v. Vertua Property, Inc.”, Court of Common Pleas of Mercer County, Pennsylvania, Case No. 2024-2332 against Vertua, including claims for breach of the lease agreement and wrongful termination of the lease, as well as for tortious interference with a business relationship. The Company is seeking reinstatement of the lease, compensatory damages, disgorgement of revenue, and exemplary and punitive damages, as well as reimbursement for its costs and litigation expenses. Vertua is a company related to Manning and also affiliated with Darron Wolter of W Capital. The matter remains ongoing.

Mewawalla Actions

On July 8, 2025, the Company filed a complaint in the Court of Chancery of the State of Delaware against the Company’s former CEO and President, Rahul Mewawalla captionedMawson Infrastructure Group Inc. v. Rahul Mewawalla, No. 2025-0789-JTL (the “Mewawalla Action”). The Mewawalla Action seeks to recover damages from Mr. Mewawalla arising out of his alleged breach of fiduciary duties as a director, as well as alleged fraud. Mr. Mewawalla has not filed an answer to the Mewawalla Action, but after an amended complaint was filed by the Company, Mr. Mewawalla filed a motion to dismiss on November 6, 2025. After hearing on the motion, the Delaware action against Rahul Mewawalla was dismissed without prejudice on June 1, 2026.

Mewawalla Actions (Cont.)

On December 8, 2025, Mr. Mewawalla filed a complaint in the King County Superior Court of Washington State against the Company, Ryan Costello, Steven Soles, and Jonathan Sites (the “Washington State Action”), asserting claims for alleged retaliation, breach of contract, wage violations, discrimination-related retaliation, whistleblower retaliation, and other statutory claims arising from his employment and the termination of his employment with the Company. Messrs. Costello and Soles were subsequently dismissed from the action for lack of personal jurisdiction. The remaining defendants categorically deny the allegations asserted in the Washington State Action and continue to vigorously defend against the claims.

Endeavor Blockchain, LLC Investor Group

On January 20, 2026, the Company filed a Complaint for Violation of Securities Laws, as well as a Motion for Expedited Injunctive Relief, in the United States District Court for the District of Delaware against Endeavor Blockchain, LLC (“Endeavor”), Joshua Kilgore, PM Squared, LLC, Cody Smith, and Phillip Stanley (collectively, the “Defendants”) asserting violation of Sections 13(d) and 10(b) of the Securities Exchange Act of 1934 and Rules 13d-1 and 10b-5 of the Securities and Exchange Commission. On March 2, 2026, the Complaint, as amended, was dismissed, as was the Motion for Expedited Injunctive Relief and Temporary Restraining Order, as amended, and the case was subsequently closed. Subsequently, on April 6, 2026, the parties settled their disputes entering into a Cooperation Agreement that implemented an immediate change in board control and governance at the Company, immediately removing the prior board members, Ryan Costello, Kathryn Schellenger, and Steven Soles, replacing them with a new board. Simultaneously, the Company appointed: Three independent directors: Kyle B. Danges, Rodger Davis, and Lisa R. Hough, two Endeavor-affiliated directors: Cody Smith and Phillip Stanley, resulting in a five-member board. Subsequently, Josh Kilgore and Daniel J. Morrison were added to the board resulting in a seven-member board.

NOTE 9 – STOCKHOLDERS’ EQUITY

Series D Convertible Preferred Stock and Warrant

On June 30, 2026, the Company entered into the Purchase Agreement with Six Thirty AI, LLC (“Six Thirty”), pursuant to which the Company issued and sold to the Purchaser an aggregate of 16,700 shares of Series D Convertible Preferred Stock, at a purchase price of $900.00 per share, for net proceeds of $14.0 million.

Six Thirty acquired the Series D Preferred Stock using borrowed funds. Concurrently with the execution of the Purchase Agreement, the Company entered into a letter agreement with Six Thirty and YA II PN, LTD, the administrative and collateral agent for the lenders (the “Agent”), pursuant to which the Company consented to (i) Six Thirty’s pledge of the shares of Series D Preferred Stock to the Agent for the ratable benefit of the lenders; (ii) Six Thirty’s assignment of the Warrant to the lenders as a commitment fee under the loan facility; and (iii) the lenders’ right to exchange all or any portion of the outstanding obligations under the loan and guaranty agreement for shares of the Series D Preferred Stock and settlement using the Series D Preferred Stock or Conversion Shares.

Concurrently with the execution of the Purchase Agreement, the Company entered into a registration rights agreement, pursuant to which the Company is obligated to file and maintain the effectiveness of one or more resale registration statements with the SEC registering the resale of the Conversion Shares and Warrant Shares on a continuous basis under Rule 415 of the Securities Act. The Company filed the initial registration statement for such purposes on July 20, 2026, and the Company is obligated to have such registration statement declared effective by the SEC no later than August 29, 2026 (or in the event of a “full review” by the SEC, no later than September 28, 2026).

The Series D Preferred Stock ranks senior to all other classes and series of the Company’s capital stock.

The Series D Preferred Stock accrues cumulative dividends at 5% per annum (18% upon certain Trigger Events, as defined in the Certificate of Designations for the Series D Preferred Stock), and dividends are payable quarterly in arrears through the issuance of additional shares of Series D Preferred Stock (i.e., PIK shares) or, at the Company’s election, in cash.

Each holder of Series D Preferred Stock may convert all, or any part, of its shares of Series D Preferred Stock, at any time on or after August 30, 2026, into the Conversion Shares at the Conversion Price equal to 95% of the lowest daily volume-weighted average price of the Common Stock over thefive consecutive trading days immediately preceding the conversion date, subject to a floor price of $1.80 and certain limitations on conversion.

The Series D Preferred Stock is non-voting, except as required by applicable law or as expressly set forth in the Certificate of Designations.

Series D Convertible Preferred Stock and Warrant (Cont.)

The Company may redeem the Series D Preferred Stock at any time, in whole or in part, at a cash price equal to 105% of the aggregate Conversion Price for the Series D Preferred Stock being redeemed, subject to customary conditions as set forth in the Certificate of Designations, including a 12–60 trading day notice window and the absence of any Equity Condition (as defined in the Certificate of Designations).

Among other negative covenants, and subject to customary exceptions, so long as the Series D Preferred Stock is outstanding, the Company will not, and will cause its subsidiaries not to, (i) redeem, repurchase or declare or pay any cash dividend or distribution on any of its capital stock; (ii) incur indebtedness or create liens, except for customary permitted indebtedness and permitted liens; or (iii) enter into any variable rate transaction.

Under the Purchase Agreement, the Company also issued the Warrant exercisable forfive years to purchase 926,748 shares of Common Stock (the “Warrant Shares”) at a fixed exercise price of $10.81, which is 120% of the closing price of the Common Stock immediately before closing of the Series D Preferred Stock offering. The Company is not required to settle the Warrant in cash including upon occurrence of a contingent event. The Warrant is classified in Stockholders’ equity. An estimate of the fair value of the Warrant using the Black-Scholes model was $7.6 million at June 30, 2026.

Conversion of the Series D Preferred Stock and exercise of the Warrant are subject in the aggregate to a 19.99% exchange cap based on shares of Common Stock outstanding at closing, absent stockholder approval under Nasdaq Listing Rule 5635(d). Furthermore, conversion of the Series D Preferred Stock is limited to 4.99% beneficial ownership of the Company’s outstanding Common Stock (waivable by the holder on 65 days’ notice), in addition to the 19.99% exchange cap described above.

Common Stock

On October 16, 2025, the Company entered into the Sales Agreement with Wainwright to sell Shares of our Common Stock having an aggregate sales price of up to $9.6 million, from time to time, through the ATM Program under which Wainwright will act as sales agent. On December 11, 2025, the Company filed the Prospectus Supplement with the SEC to increase the capacity of the ATM Program by $40 million.

During the six months ended June 30, 2026, the Company has sold 1,693,968 shares of Common Stock under the Sales Agreement at an average price of approximately $4.43 per share, which has resulted in cash proceeds to the Company of $7.3 million, net of issuance costs.

Restricted Stock Units

During the six months ended June 30, 2026, vested and outstanding RSUs were settled into 337,562 shares of Common Stock of the Company.

Common Stock Warrants

The Company’s outstanding and exercisable stock warrants as of June 30, 2026, vested and unvested, are exercisable for 1,150,794 shares of Common Stock, with a weighted average remaining contractual life (in years) of 4.31 and a weighted average exercise price of $25.58. The vested stock warrants as of June 30, 2026 are 224,046 with a weighted average remaining contractual life (in years) of 1.43 and a weighted average exercise price of $86.69.

Equity plans

On April 9, 2024, the Board approved the 2024 Omnibus Equity Plan (the “2024 Plan”) which provides an initial 500,000 shares of Common Stock available for grant per the terms of the 2024 Plan and alignment with long-term stockholder value creation. The 2024 Plan also provides for annual automatic increases in the number of shares of Common Stock reserved for issuance under the Plan, subject to any lesser number set by the Board. The 2024 Plan was approved by the stockholders at the Company’s annual general meeting held on June 12, 2024. The 2024 Plan replaced and succeeded the Company’s 2018 Equity Incentive Plan and 2021 Equity Incentive Plan. The 2024 Plan provides that awards issued under the 2024 Plan, the 2018 Plan or the 2021 Plan that expire, lapse or are terminated, surrendered or canceled without having been fully exercised or are forfeited in whole or in part, in any case in a manner that results in any share of Common Stock covered by such award being reacquired by the Company or otherwise not being issued, such share of Common Stock shall again be available for the grant of awards under the 2024 Plan. Further, shares of Common Stock delivered (either by actual delivery or attestation) to the Company by a participant to (1) satisfy the applicable exercise or purchase price of an award, and/or (2) satisfy any applicable tax withholding obligation, in each case, shall be added to the number of shares of Common Stock available for the grant of awards under the 2024 Plan.

As of June 30, 2026, the number of shares allocated and available under the 2024 Plan were 824,173 shares and 50,827 shares, respectively.

Common Stock (Cont.)

Adoption of Rights Agreement

On February 1, 2026, the Board of the Company authorized and declared a dividend distribution of one right (each, a “Right”) for each outstanding share of Common Stock to stockholders of record as of the close of business on February 12, 2026. Each Right entitled the registered holder to purchase from the Company one one-thousandth of a share of Series C Junior Participating Preferred Stock, par value $1.00 per share (the “Preferred Stock”), of the Company at an exercise price of $20.60 (the “Exercise Price”), subject to adjustment. The complete terms of the Rights are set forth in a Rights Agreement (the “Rights Agreement”), dated as of February 2, 2026, between the Company and Computershare Trust Company, N.A. (“Computershare”), a federally chartered trust company, as rights agent (the “Rights Agent”).

The Board adopted the Rights Agreement to protect the interests of Company stockholders at the time. In general terms, subject to certain enumerated exceptions, it worked by imposing significant dilution upon any person or group that acquires beneficial ownership of 20% or more of the shares of Common Stock, or if a person or group with beneficial ownership of 20% or more at the time the adoption of the Rights Agreement was announced acquires any additional shares of Common Stock, without the prior approval of the Board. In general, any person would have been deemed to beneficially own any securities (a) as to which such person had any agreement, arrangement or understanding with another person for the purpose of acquiring, holding, voting or disposing of any shares of Common Stock or (b) that were the subject of a derivative transaction or constitute a derivative security. As a result, the overall effect of the Rights Agreement and the issuance of the Rights was to render more difficult or discourage a merger, tender or exchange offer or other business combination involving the Company that was not approved by the Board. However, neither the Rights Agreement nor the Rights would have interfered with any merger, tender or exchange offer or other business combination approved by the Board.

Termination of Rights Agreement

On June 5, 2026, the Company and Computershare executed Amendment No. 1 (the “Amendment”) to the Rights Agreement.

The Amendment accelerated the expiration date of the Rights Agreement to the earlier of June 8, 2026, and the Redemption Date (as defined in the Rights Agreement). At the time of the termination of the Rights Agreement, all of the Rights expired that were previously distributed to holders of the Company’s issued and outstanding common stock pursuant to the Rights Agreement. In deciding to accelerate the expiration date to June 8, 2026, the Company’s Board determined that an active Rights Agreement is no longer needed to protect stockholder value at this time.

Stock-Based Compensation:

The Company recognized stock-based compensation expense during the three and six months ended June 30, 2026 and 2025, as follows:

Stock-Based Compensation: (Cont.)

Performance-based awards

Performance-based awards generally vest over a three-year performance period upon the successful completion of specified market and performance conditions.

The Company granted 18,750 RSUs in October 2025 to certain employees that vest solely upon the occurrence of a Change in Control, as defined in the 2024 Plan. These awards are classified as equity awards with performance-based vesting conditions. The Company determined that a Change in Control occurred on April 6, 2026. The Company settled 15,000 RSUs and cash settled the remaining 3,750 RSUs.

The following table presents a summary of the Company’s performance-based restricted stock awards activity:

Service-based restricted stock awards

Service-based awards generally vest over a one-year service period or as otherwise defined.

The following table presents a summary of the Company’s service-based awards activity:

As of June 30, 2026, there wasno unrecognized compensation costs related to the service-based restricted stock awards.

Stock option awards

Stock option awards vest upon the successful completion of specified market conditions.

The following table presents a summary of the Company’s Stock option awards activity:

NOTE 10 – RELATED PARTY TRANSACTIONS

Joint Mining Agreement

In April 2026, the Company entered into a Joint Mining Agreement (the “Colocation Agreement”) with Big Digital Energy, LLC (now Six Thirty AI, LLC), an affiliate of the Endeavor Group (“Six Thirty AI”). Under the terms of the Colocation Agreement, Six Thirty AI will purchase and deliver approximately 25,000 s19xp mining computers, and the Company will provide Six Thirty AI with approximately 75MW of computing capacity at its facility in Midland, PA. The Parties will operate under a 50%/50% profit-sharing structure, pursuant to which Big Digital will receive all cash net proceeds from the mining operations. The cash revenue will be used for general corporate purposes and asset purchases to ensure the Company’s use of all available power across its facility locations. As its share of the profit-sharing structure, Six Thirty AI will receive monthly grants consisting of a combination of (i) shares of the Company’s Common Stock, where the number of shares will equal 20% of its share of the monthly cash net proceeds divided by 30-day volume weighted average price of the Company’s Common Stock on the grant date, and (ii) warrants to purchase the Company’s Common Stock, where the number of underlying shares will equal 80% of its share of the monthly cash net proceeds divided by $20. The prefunded warrants will be classified in Stockholders’ equity and will allow Six Thirty AI to purchase the Company’s Common Stock at an exercise price of $20 per share and will have a five-year term. Six Thirty AI is deemed an affiliate of the Company because it is owned and/or controlled by Joshua Kilgore, the Company’s Executive Chairman, Phillip Stanley, the Company’s CEO, and Cody Smith, the Company’s COO, who also serve as members of the Company’s Board. The Colocation Agreement had an immaterial impact on our result of operations for the three-month period ended June 30, 2026.

Revolving Line of Credit

As more fully set forth in Note 1, on May 28, 2026, the Company and Endeavor entered into the Revolver. Endeavor is wholly owned by Josh Kilgore.

Pursuant to the Revolver, each revolving loan bears interest at a fixed rate of 12% per annum, with principal and interest payable upon demand. The revolving line of credit is secured by assets of the Borrower listed in the Revolver.

The Revolver contains customary representations, warranties, covenants, events of default and security arrangements. Borrower is also subject to restrictions on incurring additional indebtedness and additional liens on the collateral. The Revolver provides for customary events of default, including, among others, failure to pay principal or interest, breach of representations and warranties, violation of covenants, bankruptcy or insolvency events. The Borrower may at any time, and without penalty, prepay outstanding amounts under the revolving loans, or if there are no outstanding amounts, terminate the Revolver. The outstanding balance including interest is $2.5 million as of June 30, 2026, all of which is classified as a current liability.

Series D Convertible Preferred Stock and Warrant

As more fully set forth in Note 1 and Note 9, on June 30, 2026, the Company entered into the Purchase Agreement with Six Thirty AI, pursuant to which the Company issued and sold to the Purchaser an aggregate of 16,700 shares of Series D Preferred Stock, at a purchase price of $900.00 per share, for gross proceeds to the Company of $15.03 million, before deducting placement agent fees and other offering expenses. The Series D Preferred Stock is convertible into shares of Common Stock, and such shares, when issued upon conversion, are referred to as the “Conversion Shares.” Under the Purchase Agreement, the Company also issued Six Thirty AI as purchaser a warrant (the “Warrant”) exercisable for five years to purchase the Purchase and Warrant Shares at an exercise price of $10.81, which is 120% of the closing price of the Common Stock immediately before closing, subject to adjustment upon the occurrence of any stock split, stock dividend, stock combination or similar transaction. The Purchaser is wholly owned by Joshua Kilgore, Phillip Stanley and Cody Smith.

The Series D Preferred Stock ranks senior to Common Stock, accrues cumulative dividends at 5% per annum (18% upon an uncured triggering event). Each holder of Series D Preferred Stock may convert all, or any part, of its shares of Series D Preferred Stock, at any time on or after August 30, 2026, into Conversion Shares at the Conversion Price. Conversion and exercise of the Warrant are subject in the aggregate to a 19.99% exchange cap on shares of Common Stock outstanding at closing, absent stockholder approval under Nasdaq Listing Rule 5635(d). The Company may redeem the Series D Preferred Stock at any time, in whole or in part, at a cash price equal to 105% of the aggregate Conversion Price for Conversion Shares that have been registered for resale and a higher aggregate Conversion Price for Conversion Shares that have not yet been registered for resale.

The Warrant is exercisable immediately, at an exercise price of $10.81 per share (120% of the closing price of the Common Stock immediately before closing), and expires June 30, 2031. Exercise is limited to 4.99% beneficial ownership of the Company’s outstanding Common Stock (waivable by the holder on 65 days’ notice), in addition to the 19.99% exchange cap described above.

NOTE 11 – SUBSEQUENT EVENTS

Litigation

For updates subsequent to June 30, 2026, regarding the Marshall Loan, W Capital Loan, Celsius Promissory Note and Celsius Colocation Agreement, Mewawalla Washington State Actions, and CleanSpark, see Note 8 – Commitments and Contingencies.

Hood County Site Acquisition

On July 14, 2026 and July 15, 2026, the Company entered into and closed on a series of definitive agreements with 10NetZero, Inc. (“10NZ”) as joint venture partners, including (i) the Operating Agreement of Texas Load House, LLC (the “Operating Agreement”), (ii) a Loan and Security Agreement between the joint venture partners (the “Loan and Security Agreement”), and (iii) a Side Agreement regarding the Interim Management of Texas Load House, LLC (the “Side Agreement,” and collectively with the other definitive agreements, the “Joint Venture Agreements”), to establish a joint venture for the acquisition, ownership, and development of certain real property located in Hood County, Texas (the “Hood County Site”). Subject to the terms of the Joint Venture Agreements, the Company initially owns a 50% membership interest in the joint venture and 10NZ initially owns the remaining 50% membership interest.

On July 15, 2026, the joint venture acquired 30 acres of the Hood County Site from Century Oaks Independence Farms, LLC (“Century Oaks”), for an aggregate purchase price of approximately $10 million in cash, with an option to purchase the remainder of the site for an additional $600,000. The Hood County Site consists of a 50-acre site containing over 30,000 square feet of existing structures which the joint venture intends to repurpose for datacenter use as well as an administrative office which will be utilized as the command center. The Hood County Site carries 17 MW of operational power and will be expandable up to 111 MW of grid power, subject to validation by the Electric Reliability Council of Texas. On-site are two 12-inch and one 20-inch natural-gas pipelines providing the option to add behind-the-meter generation, supporting a total buildout of up to 300 MW.

In connection with the acquisition of the Hood County Site, the Company also entered into the Loan and Security Agreement with 10NZ pursuant to which the Company agreed to provide $4.9 million of financing to 10NZ to fund a portion of 10NZ’s capital contribution required for the acquisition of the Hood County Site (the “JV Loan”). The JV Loan bears interest at the short term applicable federal rate in effect on the date the loan is funded, computed on an actual/360-day basis, with accrued interest payable in full at maturity together with principal, matures on October 13, 2026, and is otherwise subject to customary terms and conditions.

Under the terms of the Operating Agreement, 10NZ’s 50% ownership interest in the joint venture is transferable to the Company at a rate of 10% ownership interest per month, prorated daily, for each month past the maturity date that 10NZ fails to repay the entire JV Loan, so that 10NZ’s entire ownership interest shall have transferred in full to the Company if the JV Loan is not paid in full within five months of the maturity date.

Except for the limited protective approval rights expressly set forth in the Operating Agreement, according to the Side Agreement, the business, affairs, activities, policies and operations of the joint venture shall be managed exclusively by or under the direction of the Company, as the sole Manager of Texas Load House, LLC, until such time as 10NZ shall have paid the JV Loan in full, at which time 10NZ will assume the role of sole Manager of Texas Load House, LLC. Certain significant actions require the approval of both the Company and 10NZ as members.

Equity Plan

On July 20, 2026, the Company filed a Registration Statement on Form S-8 to register an additional 375,000 shares of the Company’s Common Stock issuable under the Plan. The registration of 250,000 additional shares under the Plan is pursuant to the provision in the Plan which provides for annual automatic increases in the number of shares of Common Stock reserved for issuance under the Plan and reflects the 1-for-20 reverse stock split effective November 20, 2025. In addition, shares of Common Stock delivered (either by actual delivery or attestation) to the Company by a participant that were (A) subject to forfeited awards, (B) delivered (either by actual delivery or attestation) to the Company by a participant to satisfy the applicable exercise or purchase price of an award, and/or to satisfy any applicable tax withholding obligation or (C) subject to awards denominated in shares, but paid or settled in cash, in each case, shall be added to the number of shares of Common Stock available for the grant of awards under the Plan. Therefore, an additional 125,000 shares of Common Stock were registered for such purposes.