Cipher Digital Inc.

Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to the risk factors as previously disclosed in Part I, Item 1A, “Risk Factors” of our 2025 Form 10-K, which is incorporated herein by reference. Other than the additional and updated risk factors set forth below, there have been no material changes to the risk factors previously disclosed in our 2025 Form 10-K.

Risks Related to Regulatory Framework

We may face electricity market risks relating to changes in laws, regulations and requirements of market operators, network operators and/or regulatory bodies, including with respect to interconnection of facilities of large electrical loads to the ERCOT grid (including ERCOT’s batch study process for large load interconnection requests and related governmental reviews), grid stability, voltage ride-through, frequency ride-through and curtailment obligations.

Certain governments and regulators are increasingly focused on the energy and environmental impact of HPC services and bitcoin mining. This has led, and could lead, to new governmental measures regulating, restricting or prohibiting the use of electricity for data center operators in the HPC industry, or could result in increased power costs for these types of power consumers. See “- Operating HPC data centers is energy-intensive, which may have a negative environmental impact. Changing environmental regulation and public energy policy may expose our business to new risks.” For example, in 2025, the Texas legislature enacted legislation SB 6 to support ERCOT’s grid reliability by proposing minimum transmission rates on certain large loads and removing phantom loads from its interconnection queue to enhance accuracy of actual future load growth. SB 6 requires the PUCT and ERCOT to create new processes and impose new requirements for the interconnection of facilities with large electrical loads of at least 75 MWs to the ERCOT system. SB 6 also requires security type payments as part of the initial interconnection request, and creates a new approval that is required for co-location of generation with large loads.

In September 2026, the PUCT adopted rules implementing SB 6’s large-load interconnection standards, including requirements relating to financial security, disclosures, interconnection agreements and funding of direct interconnection costs. These requirements became effective on October 8, 2026. SB 6 also requires the PUCT to amend its wholesale transmission cost-allocation rules by December 31, 2026, and the PUCT is considering measures that could require large loads to bear a greater share of transmission system upgrade costs, to pay minimum demand charges based on contracted peak demand and to move from the current four coincident peak (“4CP”) cost-allocation methodology to a twelve coincident peak (“12CP”) methodology, any of which could increase our or our tenants’ transmission-related costs. SB 6 further directs the PUCT and ERCOT to establish curtailment and demand-management obligations for large loads, including protocols to curtail large loads interconnected at transmission voltage after December 31, 2025 during firm load-shed events.

In addition, ERCOT has amended and continues to evaluate its processes for interconnection of large electrical loads to the ERCOT grid. In December 2025, ERCOT announced amendments to the approval process for large load interconnection requests and has since implemented a batch study process under which large load interconnection requests are grouped and evaluated collectively in periodic study cycles rather than on a first-come, first-served basis. The initial study under this process, known as “Batch Zero,” was established through revisions to ERCOT’s Planning Guide and Nodal Protocols that the PUCT approved on June 18, 2026, with an effective date of July 11, 2026. Under Batch Zero, large loads are classified as base load, studied load, or load that has not met the criteria for inclusion and will require study in a future process. The approval of any individual request may depend on the aggregate load requested in the same batch, the results of system-wide reliability studies and the scope and cost of required network upgrades, and our requests could be delayed to a later study cycle, conditioned on our funding network upgrades or posting financial security, or approved at less than the requested load. These developments, along with requirements relating to grid stability, voltage ride-through and frequency ride-through that ERCOT has adopted for large computational loads, and curtailment obligations, could increase costs, delay project timelines, or impose additional operational constraints. On August 3, 2026, the Governor of Texas directed the PUCT and ERCOT to conduct a comprehensive verification and audit of all data centers advancing through ERCOT’s interconnection process before additional data centers are approved to move forward, including the collection of project-level information regarding public financial incentives, reliance on the ERCOT grid versus on-site generation, water use and community impacts. ERCOT has indicated that its process to verify large loads included in Batch Zero is expected to take several months, and on August 20, 2026, the PUCT granted ERCOT’s request for additional time to develop and implement that process. We have completed submissions in connection with ERCOT’s initial Batch Zero eligibility verification and state and community impact review processes. ERCOT currently expects to issue the related reports by December 10, 2026. In the meantime, ERCOT has temporarily paused certain energization approvals for large data center loads pending completion of that process. We cannot predict the scope, duration or outcome of these reviews or any requirements or legislation that may result, and they could delay or prevent the interconnection or energization of our data centers. In 2024, the PUCT also required operators of large virtual currency mining operations connected to register their facilities with the PUCT. See “Business- Government Regulation” in our Annual Report on Form 10-K.

We are subject to environmental, health and safety laws and regulations, including applicable zoning, building-code and energy-efficiency standards and worker health and safety laws and regulations, and these laws and regulations and any changes to them may materially adversely affect our brand, reputation, business, results of operations and financial position.

We and our operations and properties are subject to laws and regulations governing health and safety, the discharge of pollutants into the environment or otherwise relating to health, safety and environmental protection requirements in the jurisdictions in which we operate. These laws and regulations may impose numerous obligations that are applicable to us, including acquisition of a permit or other approval before conducting construction or regulated activities; restrictions on the types, quantities and concentration of materials that can be released into the environment; limitation or prohibition of construction and operating activities in environmentally sensitive areas, such as wetlands or areas with endangered plants or species; imposition of specific health and safety standards addressing worker protection from work related health and safety risks; imposition of certain zoning, building code and energy-efficiency standards for the sites at which we operate; and imposition of significant liabilities for pollution, including investigation, remedial and clean-up costs, which can be joint and several. Failure to comply with these requirements may expose us to fines, penalties and/or interruptions in our operations, among other sanctions, that could have a material adverse effect on our financial position, results of operations and cash flows. Failure to obtain, secure renewal of, or maintain, permits or tightening of restrictions within our permits, or the failure to meet the zoning, building code, health and safety and energy-efficiency standards imposed by regulations applicable to our sites, could have a material adverse effect on our business, including our ability to recruit and retain personnel, or cause us to incur material expenses. Moreover, it is not uncommon for neighboring landowners, community groups, activists and other third parties to file claims for personal injury, property damage and nuisance allegedly caused by noise or the release of hazardous substances into the environment.

For example, on September 21, 2026, the Governor of Texas directed the Texas Commission on Environmental Quality (“TCEQ”) to halt all permits sought by data centers in Texas until completion of ERCOT’s audit of data centers in its interconnection queues. Although we do not expect the permitting pause to have a material impact on our near-term development timeline, the pause could delay future projects, expansions or modifications requiring additional or amended TCEQ authorizations. On-site gas-fired generation at our facilities could require air quality permits under the Clean Air Act and analogous Texas laws, including New Source Review requirements, and changes in federal or state emissions standards or permitting requirements could delay or prevent such generation or increase our costs.

In addition, a number of governments or governmental bodies have introduced or are contemplating environmental and energy legislative and regulatory changes in response to the increasing focus on power consumption required to operate industrial-scale data centers. A changing legislative environment could create economic and regulatory uncertainty for our business because the industries in which we operate, with their high energy demand, could become targets for future environmental and energy regulations.

The trend of increased environmental regulation is not linear and can fluctuate depending on the administration and jurisdiction, even within the same county. For example, although the Trump Administration initially withdrew the U.S. from the Paris Agreement in November 2020, the U.S. reentered the Paris Agreement in February 2021 under the Biden Administration, but the Trump Administration again withdrew from the Paris Agreement on January 20, 2025. Though we are closely following developments in this area and changes in the regulatory landscape in the United States, we cannot predict with precision or quantify how or when challenges may arise and ultimately impact our business.

Legislation and increased regulation regarding climate change could impose significant costs on us and our suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting, costs to purchase renewable energy credits or allowances, and other costs to comply with such regulations. Specifically, imposition of a tax or other regulatory fee in jurisdictions where we operate or on electricity that we purchase could result in substantially higher energy costs, and due to the significant amount of electrical power required to operate bitcoin mining machines, could in turn put our facilities at a competitive disadvantage. Any future climate change regulations could also negatively affect our ability to compete with companies situated in areas not subject to such limitations.

Given the political significance and uncertainty around the impact of climate change and how it should be addressed, we cannot predict how legislation and regulation will affect our financial condition, operating performance and ability to compete. Furthermore, even without such regulation, increasing awareness of climate change and any negative publicity in the global marketplace about potential impacts on climate change by us or other companies in our industry could harm our reputation. Any of the foregoing could have a material adverse effect on our financial position, prospects, results of operations and cash flows.

Risks Related to our Indebtedness

Our indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations and impair our ability to satisfy our debt obligations.

As of September 30, 2026, our total consolidated indebtedness amounted to $6,016 million. In May 2025 and September 2025, we completed offerings of our 2030 Convertible Notes, 2031 Convertible Notes, from which we incurred $172.5 million and $1,300.0 million of additional indebtedness, respectively. In October 2026, we exchanged approximately $165.9 million of principal amount of the 2030 Convertible Notes for approximately 40.7 million shares of our common stock. Following this exchange, approximately $6.6 million aggregate principal amount of the 2030 Convertible Notes remains outstanding.

Additionally, in November 2025, Cipher Compute LLC, our wholly owned indirect subsidiary, incurred $1,733.0 million of indebtedness from offerings of $1,400.0 million and $333.0 million of our senior secured notes due 2030. In February 2026, Black Pearl Compute LLC, our wholly owned indirect subsidiary, incurred $2.0 billion of 6.125% senior secured notes due 2031. In March 2026, we entered into a $200.0 million revolving credit facility (the “Revolving Credit Facility”), under which, as of September 30, 2026, we had nothing drawn on revolving borrowings and $40.6 million of letters of credit outstanding. In June 2026, Stingray Compute LLC, our wholly owned indirect subsidiary, incurred $810.0 million of 6.000% senior secured notes due 2031. In October 2026, we completed an offering of our 2032 Convertible Notes, from which we incurred $850.0 million of additional indebtedness. We may also incur additional indebtedness to meet future financing needs. Our indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things:

•limiting our ability to obtain additional financing, such as in the event of adverse changes to our credit ratings;

•diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of the Convertible Notes; and

Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not generate sufficient funds, and we may otherwise be unable to maintain sufficient cash reserves, to pay amounts due under our indebtedness, including the Convertible Notes, and our cash needs may increase in the future. In addition, future indebtedness that we may incur may contain financial and other restrictive covenants that limit our ability to operate our business, raise capital or make payments under our other indebtedness. If we fail to comply with these covenants or to make payments under our indebtedness when due, then we would be in default under that indebtedness, which could, in turn, result in that and our other indebtedness becoming immediately payable in full.

We may be unable to raise the funds necessary to repurchase the Convertible Notes for cash following a fundamental change or on a specified optional repurchase date or to pay any cash amounts due upon maturity or conversion of the Convertible Notes, and our other indebtedness may limit our ability to repurchase the Convertible Notes or to pay any cash amounts due upon their maturity or conversion.

Holders of the Convertible Notes may, subject to limited exceptions, require us to repurchase their Convertible Notes on May 15, 2028 (for the 2030 Convertible Notes), October 1, 2029 (for the 2031 Convertible Notes) and November 1, 2030 (for the 2032 Convertible Notes), and following a fundamental change, at a cash repurchase price generally equal to the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid special interest and additional interest, if any. Upon maturity of the Convertible Notes, we must pay their principal amount and accrued and unpaid special interest and additional interest, if any, in cash, unless they have been previously repurchased, redeemed or converted.

In addition, upon conversion, we will satisfy part or all of our conversion obligation in cash unless we elect to settle conversions solely in shares of our common stock.

We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the Convertible Notes or pay any cash amounts due upon their maturity or conversion. In addition, applicable law, regulatory authorities and the agreements that we may have in the future governing our other indebtedness may restrict our ability to repurchase the Convertible Notes or to pay any cash amounts due upon their maturity or conversion. Our failure to repurchase Convertible Notes or to pay any cash amounts due upon their maturity or conversion when required will constitute a default under the applicable indenture. A default under the indenture or the fundamental change itself could also lead to a default under agreements governing our other indebtedness, which may result in that other indebtedness becoming immediately payable in full. We may not have sufficient funds to satisfy all amounts due under the other indebtedness and the Convertible Notes.

In the event the conditional conversion feature of the Convertible Notes is triggered, holders of such notes will be entitled to convert the Convertible Notes at any time during specified periods at their option. If one or more holders elect to convert their Convertible Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation in cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their Convertible Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Convertible Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

The accounting method for the Convertible Notes could adversely affect our reported financial condition and results.

The accounting method for reflecting the Convertible Notes on our balance sheet, accruing interest expense for the Convertible Notes and reflecting the underlying shares of our common stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition.

The issuance costs for the Convertible Notes are treated as a debt discount for accounting purposes and will be amortized into interest expense over the term of the Convertible Notes. As a result of this amortization, the interest expense that we expect to recognize for the Convertible Notes for accounting purposes will be greater than the cash special interest or additional interest payments, if any, we may be required to pay on the Convertible Notes, which will result in lower reported income.

In addition, the shares underlying the Convertible Notes are reflected in our diluted earnings per share using the “if converted” method. Under that method, diluted earnings per share is generally calculated assuming that all the Convertible Notes were converted solely into shares of our common stock at the beginning of the reporting period, unless the result would be anti-dilutive. The application of the if-converted method may reduce our reported diluted earnings per share, and accounting standards may change in the future in a manner that may adversely affect our diluted earnings per share.

Furthermore, if any of the conditions to the convertibility of the Convertible Notes is satisfied, then we may be required under applicable accounting standards to reclassify the liability carrying value of the Convertible Notes as a current, rather than a long-term, liability. This reclassification could be required even if no investors convert their Convertible Notes and could materially reduce our reported working capital.

The capped call transactions may affect the value of the 2031 Convertible Notes and the 2032 Convertible Notes and the market price of our common stock.

In connection with the issuance of the 2031 Convertible Notes and the 2032 Convertible Notes, we entered into privately negotiated capped call transactions with certain financial institutions (collectively, the “option counterparties”). The capped call transactions are generally expected to reduce the potential dilution to our common stock upon any conversion of the 2031 Convertible Notes or the 2032 Convertible Notes and/or offset any potential cash payments we are required to make in excess of the principal amount of converted 2031 Convertible Notes or 2032 Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap. In connection with establishing their initial hedges of the capped call transactions, the option counterparties entered into various derivative transactions, which may be exited in the future. The option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling shares of our common stock or other securities of ours in secondary market transactions prior to the maturity of the applicable Convertible Notes (and are likely to do so during the 30 trading day period beginning on the 31st scheduled trading day prior to the maturity date of the applicable Convertible Notes and following any early conversion, repurchase or redemption of such notes, if we exercise the relevant election to terminate the corresponding portion of the capped call transactions). This activity could cause or avoid an increase or a decrease in the market price of our common stock.

We are subject to counterparty risk with respect to the capped call transactions and these capped call transactions may not operate as planned.

The option counterparties are financial institutions, and we will be subject to the risk that any or all of them might default under the capped call transactions. Our exposure to the credit risk of the option counterparties will not be secured by any collateral. Past global economic conditions have resulted in the actual or perceived failure or financial difficulties of many financial institutions and could adversely affect the option counterparties’ performance under the capped call transactions. If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the capped call transactions with such option counterparty. Our exposure will depend on many factors but, generally, an increase in our exposure will be correlated to an increase in the market price and in the volatility of our common stock. In addition, upon a default by an option counterparty, we may suffer more dilution, the effect of which would not be compensated for, than we currently anticipate with respect to our common stock. We can provide no assurance as to the financial stability or viability of the option counterparties.

In addition, the terms of the capped call transactions are complex, and they may not operate as planned. For example, the terms of these transactions may be subject to adjustment, modification or, in some cases, renegotiation in the event of certain corporate and other transactions. Accordingly, the capped call transactions may not operate as we intend in the event that we are required to adjust the terms of such instruments as a result of transactions in the future or in the event of other unanticipated developments that may adversely affect the functioning of the capped call transactions.

The capped call transactions are separate transactions (in each case entered into between us and the option counterparties), are not part of the terms of the 2031 Convertible Notes or the 2032 Convertible Notes and will not change the holders’ rights under the 2031 Convertible Notes or the 2032 Convertible Notes.

The issuance of shares of our common stock upon conversion of the Convertible Notes and in exchange transactions will dilute the ownership interests of our stockholders and could depress the trading price of our common stock.

Upon conversion of the Convertible Notes, we will satisfy part or all of our conversion obligations in shares of our common stock. The issuance of shares of our common stock upon conversion of the Convertible Notes will dilute the ownership interests of our stockholders, which could depress the trading price of our common stock. In addition, the market’s expectation that conversions may occur could depress the trading price of our common stock even in the absence of actual conversions. Moreover, the expectation of conversions could encourage the short selling of our common stock, which could place further downward pressure on the trading price of our common stock. In addition, in October 2026, we issued 40.7 million shares of our common stock in exchange transactions with certain holders of the 2030 Convertible Notes, and we may engage in additional exchanges of, or repurchases of, Convertible Notes. Holders that participate in any such exchanges may purchase or sell shares of our common stock or enter into or unwind derivative transactions in connection with hedge positions, which could adversely affect the market price of our common stock, and any issuance of shares in such exchanges will dilute our existing stockholders.