Csquare, Inc.

Overview and Summary of Significant Accounting Policies

Csquare, Inc. (collectively with its consolidated subsidiaries referred to as “Csquare”, or the “Company”, or “we”) was formed as a Delaware limited liability company under the name of BIF III US Aggregator (Delaware) LLC in 2018. The Company commenced operations on January 1, 2019 and is headquartered in Coppell, Texas. The Company is a wholly owned subsidiary of Dawn Topco L.P. (“Parent”), which is majority-owned by investment funds managed by Brookfield Corporation. On June 15, 2026, BIF III US Aggregator (Delaware) LLC converted its legal structure from a Delaware limited liability company, to a Delaware corporation named Csquare, Inc., pursuant to the provisions of the Delaware Limited Liability Company Act and the General Corporation Law of the State of Delaware.

The Company is a leading enterprise digital infrastructure platform, owning and operating a geographically diverse portfolio of highly engineered, carrier-neutral data centers located primarily in 21 of the largest population centers across the United States, Canada, and the United Kingdom. The Company provides carrier-neutral colocation and interconnection services that provide infrastructure, including secure space, redundant power, advanced cooling systems, physical security, and interconnection capabilities, enabling customers to deploy and operate critical IT and network infrastructure. The Company's facilities support enterprise, network, cloud, and technology customers, providing long-duration, and availability-sensitive workloads.

On January 12, 2024 and October 1, 2025, the Company acquiredtwo significant data center portfolios (the "2024 Portfolio Acquisition" and the "2025 Portfolio Acquisition"). These acquisitions substantially expanded the Company's data center footprint, enhanced its connectivity and service capabilities, diversified and broadened its customer base, and secured strategic real estate assets to support long-term growth.

On July 2, 2026, the Company approved and effected a reverse stock split of its common stock, which resulted in all 484,000,000 shares of the Company’s common stock combining into 103,887,373 shares of the Company’s common stock (the “Stock Split”). All information in the accompanying financial statements and notes thereto regarding common share amounts and price per share has been adjusted on a retroactive basis to give effect to the Stock Split.

Initial Public Offering -The Company’s registration statement on Form S-1 related to its initial public offering (“IPO”) was declared effective on July 15, 2026 and the Company’s common stock began trading on the New York Stock Exchange on July 16, 2026. The Company's final prospectus (the “IPO Prospectus”) was filed with the SEC on July 16, 2026. On July 17, 2026 (the “IPO Closing Date”), the Company closed its IPO pursuant to which 50,000,000 shares of its common stock were sold at a price to the public of $21.00 per share. The Company received net proceeds of approximately $1,010.0 million, after deducting the underwriting discounts and commissions of approximately $40.0 million. On July 27, 2026, the underwriters exercised their option to purchase an additional 7,499,000 shares of common stock at the initial public offering price of $21.00 per share, less underwriting discounts and commissions. As a result, the Company received additional net proceeds of approximately $149.6 million, increasing total net proceeds from the offering to approximately $1,159.6 million.

Basis of Presentation and Consolidation – The accompanying unaudited interim condensed consolidated financial statements included have been prepared in accordance with US GAAP for interim financial reporting and as required by Regulation S-X, Rule 10-01. These interim condensed consolidated financial statements are unaudited and, in the opinion of management, reflect all normal recurring adjustments necessary to fairly present the financial position, results of operations, cash flows, and change in equity for the periods presented. Results for the periods presented are not necessarily indicative of the results that may be expected for any subsequent period. The condensed consolidated balance sheet as of December 31, 2025 was derived from the audited annual financial statements but does not contain all of the footnote disclosures from the audited annual financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes as of and for the year ended December 31, 2025, included in the Company's IPO Prospectus. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). The Company’s unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

During the six months ended June 30, 2026, there have been no changes to the Company’s significant accounting policies described in Note 2 “Summary of Significant Accounting Policies” to the consolidated financial statements and notes as of and for the year ended December 31, 2025 included the Company's IPO Prospectus, that have had a material impact on the unaudited condensed consolidated financial statements and related notes, other than those described below.

Transaction and other costs - From time to time, the Company incurs transaction and other costs consisting primarily of acquisition and integration costs, restructuring costs related to organizational and operational optimization initiatives, and expenses associated with the Company's initial public offering. Transaction and other costs are expensed as incurred and are included in Transaction and other costs in the unaudited condensed consolidated statements of operations.

Deferred Offering Costs - The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs will be reclassed to stockholders' deficit and recorded as a reduction of the proceeds from the offering. Should the planned equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the unaudited condensed consolidated statements of operations and comprehensive loss. As of June 30, 2026, the Company recorded $15.0 million of deferred offering costs, which are included in Other assets in the unaudited condensed consolidated balance sheet. No deferred offering costs were recorded as of December 31, 2025. Refer to Note 16 - Subsequent Events, for information regarding events occurring after June 30, 2026.

Parent Incentive Units for Certain Key Employees -In April 2026, Parent amended its limited partnership agreement in order to grant incentive units to key employees for the purpose of providing incentives that align the interests of grantees with the long-term growth and financial performance of the Company. The incentive units vest over a period of time specified in the corresponding grant agreements, typically over five years. Once vested, certain qualifying liquidity events, such as a change in control event or public offering events, are required for any payment related to the incentive units. Vesting is accelerated in the event of a qualifying liquidity event subject to the participant’s continued employment through the applicable vesting date. Any payment to a participant is dependent on a market-based condition which requires the Parent to achieve a minimum specified internal rate of return on its investment in the Company through the qualifying liquidity event.

The incentive units are accounted for under ASC 710, Compensation—General (“Topic 710”). Compensation cost is recognized when the obligation to make a cash payment to employees becomes probable and reasonably estimable in accordance with ASC 450, Contingencies (“Topic 450”). As of June 30, 2026 and December 31, 2025, no qualifying liquidity events have occurred or are probable of occurring, no incentive units have vested and no liability or compensation expense has been recognized by the Company. Furthermore, no amounts have been paid for the incentive units. Refer to Note 16 - Subsequent Events, for information regarding events occurring after June 30, 2026.

Recent Accounting Pronouncements – Accounting Standards Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03: Disaggregation of Income Statement Expenses ("DISE"). The ASU requires additional disclosure of the nature of expenses included in the income statement. The ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. We are currently evaluating the extent of the impact of this ASU on disclosures in our unaudited condensed consolidated financial statements.

We determined that all other recently issued accounting pronouncements that have yet to be adopted by the Company will not have a material impact on our unaudited condensed consolidated financial statements or do not apply to our operations.

Disaggregation of revenues

The following table presents the Company’s revenues disaggregated by revenue stream (in thousands):

(1) Our non-recurring revenues consist of installation services and other one-time charges such as termination fees and storage fees. These services are considered to be non-recurring because they are billed typically once, upon completion of the installation, professional service work performed, or based on customer consumption of power, rather than on a fixed, recurring basis.

(2) Refer to Note 5 - Leases for additional disclosures related to the Company’s lease arrangements under Topic 842.

Contract Balances

The following table provides a summary of the opening and closing balances of accounts receivable, net, as well as current and non-current contract assets and contract liabilities (in thousands):

During the six months ended June 30, 2026, the change in the Company’s accounts receivable, net, contract assets, and contract liabilities primarily results from the timing difference between the satisfaction of our performance obligations, the customer's invoicing and the customer's payment. The amounts of revenue recognized during the six months ended June 30, 2026 and 2025 from the opening contract liabilities balance were $80.0 million and $78.8 million, respectively. For thesix months ended June 30, 2026 and 2025, no impairment loss related to contract balances was recognized in the unaudited condensed consolidated statements of operations.

In accordance with Topic 326, the Company maintains an allowance for expected credit losses consisting of (i) a general reserve based on historical loss experience, current conditions, and reasonable and supportable forecasts, and (ii) specific reserves for customers with identified collectability concerns. The following table summarizes the activity of our allowance for expected credit losses (in thousands):

Remaining performance obligations

The following table presents estimated revenue expected to be recognized in the future related to the unsatisfied portion of the performance obligation as of June 30, 2026 (in thousands):

Property and Equipment, Net

Property and equipment, net consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands):

Depreciation on property and equipment was $73.5 million and $50.4 million for thethree months ended June 30, 2026 and 2025, respectively, $144.1 million and $100.4 million for thesix months ended June 30, 2026 and 2025, respectively, which was included in depreciation and amortization expense on the unaudited condensed consolidated statements of operations.

Business Combinations

On October 1, 2025, the Company entered into an Interest Purchase Agreement (the “Purchase Agreement”) and acquired 100% of a data center portfolio from an affiliate of Brookfield Corporation, consisting of the operations of 10 data centers located in the United States and Canada that provide retail colocation services (the “2025 Portfolio” and collectively the “2025 Portfolio Acquisition”). The acquisition provides the Company with a strong diversity of existing and prospective colocation customers, expanded data center locations, and an experienced management team critical to ongoing operations. The Company paid a total preliminary purchase price of $202.5 million, consisting of $195.1 million in cash and $16.2 million placed in escrow, reduced by $2.4 million related to the settlement of a pre-existing lease between a wholly owned subsidiary of the Company and a subsidiary of the 2025 Portfolio. The preliminary purchase price was further reduced by $6.4 million, attributable to a net working capital adjustment, which has been recorded as a receivable as of December 31, 2025. The Company subsequently cash settled the receivable in the second quarter of 2026. To fund the acquisition, the Company drew $220.0 million on the 2024 Revolving Credit Facility, as defined in Note 9 - Debt.

Pursuant to the Purchase Agreement, the Company funded $16.2 million into escrow related to the resolution of requests submitted bytwo subsidiaries of the 2025 Portfolio for a change in fiscal period with the Canada Revenue Agency and Revenue Quebec. The escrow amount of $16.2 million was included in the preliminary purchase price. Given the contingency related to an uncertain tax position, the Company recorded income tax liabilities and a related indemnification asset of $16.2 million. Subsequent to the 2025 Portfolio Acquisition, the Canada Revenue Agency and Revenue Quebec denied the application to change the fiscal period-end. As a result, the $16.2 million held in escrow was released and returned to the Company during the second quarter of 2026 and was subsequently used to satisfy the related income tax obligations.

The table below sets forth the preliminary purchase price, the preliminary fair value of the assets acquired and liabilities assumed, and the preliminary goodwill recognized for the acquisition (in thousands):

The Company recognized customer relationships as an intangible asset with a fair value of $63.7 million, which is being amortized over a weighted average useful life of 12.4 years. The fair values of the customer relationships were estimated using the with-and-without method. The preliminary goodwill of $134.3 million arising from the transaction is primarily related to new customer contracts associated with expected capacity expansions after the acquisition and the workforce of the acquired businesses. The goodwill recognized is not deductible for tax purposes. The results of the 2025 Portfolio Acquisition have been included in the Company’s unaudited consolidated statements of operations since the acquisition date. During the six months ended June 30, 2026, the Company recorded measurement period adjustment of $0.6 million related to working capital associated with the 2025 Portfolio Acquisition.

Goodwill and Intangible Assets, Net

Changes in goodwill as of June 30, 2026, as compared to December 31, 2025 consisted of the following (in thousands):

During the six months ended June 30, 2026, the Company recorded measurement period adjustments related to working capital associated with the 2025 Portfolio Acquisition.

Intangible assets, net consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands):

The Company recorded amortization expense on intangible assets of $16.1 million and $13.8 million for thethree months ended June 30, 2026 and 2025, respectively, and $30.0 million and $27.5 million for thesix months ended June 30, 2026 and 2025, respectively which was included in depreciation and amortization expense on the unaudited condensed consolidated statements of operations. The Company did not record any impairment charges related to intangible assets for the three months ended June 30, 2026 and 2025.

As of June 30, 2026, expected future amortization expense for the years indicated was as follows (in thousands):

Leases

Lessee Accounting

The Company enters into lease arrangements primarily for data center spaces, office spaces and for certain equipment. The Company determines if an arrangement is or contains a lease at inception. The Company recognizes a right-of-use asset and lease liability on the unaudited condensed consolidated balance sheets for all leases with a term longer than 12 months. Many of the Company’s lease agreements include options to extend the lease, which are not included in the minimum lease payments unless they are reasonably certain to be exercised at lease commencement. Rental expense related to operating leases is recognized on a straight-line basis over the lease term. Operating lease right-of-use assets are presented as right-of-use assets on the unaudited condensed consolidated balance sheets, while finance lease right-of-use assets are included within property and equipment, net.

The Company subleases certain office space that it does not intend to occupy. The sublease arrangement expires during the year 2030 and provides for escalations of lease payments in the normal course of business.

The components of lease expenses and income for thethree and six months ended June 30, 2026 and 2025 are as follows (in thousands):

In the Company’s unaudited condensed consolidated statements of operations, amortization of right-of-use assets under finance leases and interest on finance lease liabilities are included in depreciation and amortization and interest expense, respectively. Operating lease costs for data centers are included in cost of revenues, and operating lease costs for office leases are included in selling, marketing, general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations.

For the three and six months ended June 30, 2026 and 2025, the Company didnot record any impairment charges related to right-of-use assets.

On May 20, 2026, the Company entered into a Surrender Agreement with the landlord of its Hawthorne, California facility. The Company did not exercise any renewal options under the lease and surrendered the leased premises on May 31, 2026. In accordance with ASC 842, the Company derecognized the remaining lease liability and right-of-use asset associated with the lease upon termination. As a result, the Company recognized a net gain of $40.0 million during thesix months ended June 30, 2026, which is included in gain on lease modification in the Company’s unaudited condensed consolidated statements of operations.

Supplemental unaudited condensed consolidated cash flow and other information related to leases is as follows (in thousands):

As of June 30, 2026, maturities of lease liabilities were as follows (in thousands):

Lessor Accounting

Our leases generally have non-cancelable initial lease terms ranging from five toten years andmay include options to extend or renew the lease for additional periods. Lease payments typically consist of fixed payments, including contractual rent escalation provisions, and, for certain leases, variable lease payments. Variable lease payments are primarily based on usage or other factors specified in the lease agreements and are billed in arrears based on actual consumption. The lease arrangements do not contain purchase options.

A summary of minimum lease payments due from our customers under operating leases of colocation space within data center environments, as well as other facilities leased under triple net arrangements are shown below. These amounts do not reflect future rental revenues from renewal or replacement of existing leases unless we are reasonably certain we will exercise the option or the lessee has the sole ability to exercise the option. Reimbursements of operating expenses and variable rent increases are excluded from the table below.

The components of operating lease income for thethree and six months ended June 30, 2026 and 2025 are as follows (in thousands):

Future minimum lease receipts for operating leases under Topic 842 as of June 30, 2026 are as follows (in thousands):

Property and equipment, net underlying operating lease income consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands):

Depreciation on property and equipment underlying operating lease income was $12.4 million and $3.8 million, for thethree months ended June 30, 2026 and 2025, respectively, and $24.5 million and $7.6 million, for thesix months ended June 30, 2026 and 2025, respectively, and was included in depreciation and amortization expense on the unaudited condensed consolidated statements of operations.

Other Current Assets and Accrued Expenses

The components of certain unaudited condensed consolidated balance sheets accounts are as follows (in thousands):

Derivatives

The Company is party to various interest rate swap agreements designated and qualifying as cash flow hedges of the Company's forecasted variable interest cash flows. The swaps were designed to hedge exposure to floating interest rates on the 2024 Term Loan Facility (as defined in Note 8 - Debt) for the six months ended June 30, 2025 and on the 2024 Revolving Credit Facility (as defined in Note 8 - Debt) for the six months ended June 30, 2026. For the three and six months ended June 30, 2026 the Company recorded loss from derivative instruments in interest expense of $0.2 million and $0.3 million from swaps terminated in the year ended December 31, 2025. During the three and six months ended June 30, 2025, the Company partially terminated one outstanding swap agreement for Asset-Backed Secured Note 2 and recorded gain from derivative instruments in interest expense of $0.2 million and $0.2 million. The Company expects $0.7 million loss to be reclassified from accumulated other comprehensive income to earnings during the twelve months subsequent to June 30, 2026.

As of December 31, 2025 there wereno outstanding designated interest rate swaps with third parties. As of June 30, 2026, the Company had $659.0 million of notional amount in outstanding designated interest rate swaps with third parties. All interest rate swaps are highly effective.

The following table presents a roll-forward of interest rate swaps recognized in accumulated other comprehensive income ("AOCI") (in thousands):

Debt

The Company’s total debt obligations are as follows (in thousands):

(1) For the asset-backed secured notes, the maturity is the anticipated repayment date.

(2) Includes amortization of debt premiums (discounts) and debt issuance costs and the impact of interest rate swap instruments.

(3)The 2024 Revolving Credit Facility has a maturity of December 2026, with provision for two successive terms ofone year each, subject to certain conditions. The Company intends to extend the maturity for at leastone year.

As of June 30, 2026, the future principal payments for the Company’s debt were as follows (in thousands):

For thethree and six months ended June 30, 2026 and 2025, total interest expense for the Company’s debt obligations was as follows (in thousands):

(1)Includes interest rate swap settlements in the amount of $0.1 million and $1.0 million as a reduction of stated interest expense for thethree months ended June 30, 2026 and June 30, 2025, respectively, and $0.3 million and $2.8 million as a reduction of stated interest expense for thesix months ended June 30, 2026 and June 30, 2025, respectively.

2021 Fund Revolving Credit Facility

Under a revolving credit agreement entered into by investment funds affiliated with Brookfield Corporation, Csquare, Inc. is jointly and severally liable, as a named borrower, for obligations under the facility (the "2021 Fund Revolving Credit Facility"), which allows the Company to borrow, repay and re-borrow over its term. Typically, the Company rolls the drawn balance on a month-by-month basis.

The facility includes a letter of credit sub-limit equal to 50% of total commitments. Borrowings bear interest at SOFR plus 1.75% per annum (June 30, 2025: SOFR plus 1.75%) and are subject to a commitment fee on the average daily unused portion of the commitments equal to 0.25% per annum when unused commitments exceed 50% of total commitments and 0.20% per annum when unused commitments are 50% or less (June 30, 2025:0.25%). Letters of credit bear a fee equal to the applicable margin of 1.75% per annum on the daily undrawn amount, plus a customary fronting fee.

On June 20, 2025, investment funds affiliated with Brookfield Corporation entered into an amended revolving credit facility agreement, extending the maturity of the subscription credit facility for the 2021 Fund Revolving Credit Facility from June 20, 2025 to June 17, 2027. On October 31, 2025, investment funds affiliated with Brookfield Corporation entered into another amended revolving credit facility where borrowings under the amended facility bear interest at SOFR plus 1.75% per annum and increased the total commitments to up to $500.0 million during a temporary period, reducing to $400.0 million on January 9, 2026.

On June 30, 2026, investment funds affiliated with Brookfield Corporation entered into an amended revolving credit facility agreement, pursuant to which the Company was released from its obligations as a Qualified Borrower under the 2021 Fund Revolving Credit Facility. In connection with the release, all outstanding borrowings and accrued interest attributable to the Company were repaid, and the lenders terminated their commitments and obligations to extend credit to the Company under the facility. No gain or loss was recognized in connection with the release.

As of June 30, 2026 and December 31, 2025, there wasno balance outstanding on the 2021 Fund Revolving Credit Facility.

2024 Term Loan Facility

On January 12, 2024, certain subsidiaries of the Company, entered into a Loan Agreement (the “2024 Term Loan Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”) and TD Securities (USA) LLC (“TD”) (the “2024 Term Loan”). Pursuant to the 2024 Term Loan Agreement, the Company received atwo-year term loan in an aggregate principal amount equal to $1,965.9 million. The 2024 Term Loan Facility bears interest at a rate based on the SOFR plus 3.75% with 25.0 basis point step up at month 13 and every 6 months thereafter until maturity of the original principal amount per annum.

On March 1, 2024, the Company amended its 2024 Term Loan Agreement to increase the principal amount of loan by $33.0 million.

On March 11, 2025, the Company prepaid outstanding principal of $646.7 million under the 2024 Term Loan Facility. In conjunction with the debt repayment the Company recognized a debt extinguishment charge of $5.3 million.

On August 21, 2025, in conjunction with the asset-backed borrowings, the Company prepaid outstanding principal of $431.3 million under the 2024 Term Loan Facility.

On December 4, 2025, in conjunction with the asset-backed borrowings, the Company prepaid outstanding principal of $165.6 million under the 2024 Term Loan Facility. As a result, the Company has fully paid down the 2024 Term Loan Facility.

2024 Revolving Credit Facility

On January 12, 2024, certain subsidiaries of the Company entered into a Revolving Credit Facility (the “2024 Revolving Credit Facility”) with Wells Fargo Securities, LLC and TD. The 2024 Revolving Credit Facility provided for revolving loans in an aggregate principal amount of up to $200.0 million over athree-year term. As a part of the 2024 Revolving Credit Facility there is a sub-limit restriction for the issuance of letters of credit of up to $50.0 million at any one time. Borrowings under the 2024 Revolving Credit Facility bear interest of SOFR plus a margin of 4.25% and the Company is required to pay 0.75% per annum on the average daily unused portion of the 2024 Revolving Credit Facility. The Company is required to pay a 4.50% per annum letter of credit fee.

On February 28, 2025, the Company amended the 2024 Revolving Credit Facility to increase total commitments from $200.0 million to $300.0 million and to reduce the applicable interest rate margin from SOFR plus 4.25% to SOFR plus 3.00%.

On December 22, 2025, the Company closed a $500.0 million upsize to the 2024 Revolving Credit Facility with a maturity of December 2026, with provision for two successive terms ofone year each, subject to certain conditions. The Company intends to extend the maturity for at leastone year. The upsize also included an amendment to the Company’s financial covenants.

As of June 30, 2026 and December 31, 2025, the outstanding balance on the 2024 Revolving Credit Facility was $771.0 million and $659.0 million, respectively.

As of June 30, 2026 and December 31, 2025, the Company was in compliance with all financial covenants and requirements related to the 2024 Revolving Credit Facility.

Asset-Backed Notes

On October 17, 2024, certain subsidiaries of the Company completed an asset-backed securitization transaction totaling $885.0 million. The Company issuedtwo series of fixed-rate notes—Series 2024-1 and Series 2024-2 (together, the “Series 2024-1/2 Notes”) pursuant to an indenture (the “2024 Indenture”).

On March 20, 2025, certain subsidiaries of the Company completed an asset-backed securitization transaction totaling $940.0 million. The Company issuedtwo series of fixed-rate notes—Series 2025-1 and Series 2025-2 (together, the “Series 2025-1/2 Notes”) pursuant to a series supplement to the 2024 Indenture.

On August 21, 2025, certain subsidiaries of the Company completed an asset-backed securitization transaction totaling $815.0 million. The Company issuedtwo series of fixed-rate notes—Series 2025-3 and Series 2025-4 (together, the “Series 2025-3/4 Notes”) pursuant to a series supplement to the 2024 Indenture.

On October 1, 2025, as a result of the 2025 Portfolio Acquisition, the Company acquired three series of fixed-rate notes—Series 2020-1/2 Notes, Series 2021-1 Notes, and Series 2022-1 Notes for a total of $743.0 million. The Series 2020-1/2 Notes, Series 2021-1 Notes, and Series 2022-1 Notes are governed by an indenture (the “2020 Indenture”).

On December 4, 2025, certain subsidiaries of the Company completed an asset-backed securitization transaction totaling $1,100.0 million. The Company issued three series of fixed-rate notes—Series 2025-5, Series 2025-6 and Series 2025-7 (together, the “Series 2025-5/6/7 Notes”) pursuant to a series supplement to the 2024 Indenture.

On December 4, 2025, in conjunction with the Series 2025-5/6/7 Notes, the Company paid off $220.0 million of Series 2020-1/2 Notes. Therefore for the Series 2020-1/2 Notes, only the Series 2020-2 Notes is outstanding as of June 30, 2026 and December 31, 2025.

The Series 2020-2 Notes, Series 2021-1 Notes and Series 2022-1 Notes are secured by a collateral pool consisting of multi-tenant enterprise data centers, held in fee simple.

The Series 2024-1/2 Notes, Series 2025-1/2 Notes, Series 2025-3/4 Notes and Series 2025-5/6/7 Notes are secured by a separate and distinct collateral pool consisting of multi-tenant enterprise data centers, held in both fee simple and leasehold interests.

The Series 2020-2 Notes, Series 2021-1 Notes, Series 2022-1 Notes, Series 2024-1/2 Notes, Series 2025-1/2 Notes, Series 2025-3/4 Notes, and Series 2025-5/6/7 Notes are collectively referred to as the “Asset-Backed Secured Notes.”

The Asset-Backed Secured Notes were issued in the following tranches (dollars in thousands):

The Asset-Backed Secured Notes are classified as long-term debt, net of deferred financing costs in the unaudited condensed consolidated balance sheets.

Interest expense on the Asset-Backed Secured Notes is recognized using the effective interest method. Direct costs incurred in connection with the issuance of the Asset-Backed Secured Notes are capitalized as deferred financing costs and amortized over the expected life of the related debt using the effective interest method.

The unamortized deferred financing costs are presented as a direct deduction from the carrying amount of each note in the unaudited condensed consolidated balance sheets. As of June 30, 2026 and December 31, 2025, the Company had unamortized deferred financing costs for the Asset-Backed Secured Notes as follows (dollars in thousands):

As of June 30, 2026 and December 31, 2025, the Company was in compliance with all financial covenants and requirements related to its Asset-Backed Secured Notes.

Variable Funding Note

The 2024 Indenture provided for $100.0 million of asset-backed, floating rate Series 2024-1 Secured Data Center Revenue Variable Funding Note (the “Series 2024-1 VFN” or "Variable Funding Note") over afive-year term. On August 21, 2025, the Company entered into an amendment whereby the Company increased the sub-limit restriction for the issuance of letters of credit of up to $25.0 million at any one time from $15.0 million at any one time. The applicable interest rate is equal to the SOFR plus 2.45%. The Company is required to pay 0.50% per annum on the average daily unused portion of the Variable Funding Note. The Company is required to pay a 2.00% per annum letter of credit fee.

The Series 2024-1 VFN has a revolving note structure and is intended to be used primarily for general corporate purposes, including working capital needs for the multi-tenant data centers securing the Series 2024-1/2 Notes, Series 2025-1/2 Notes, Series 2025-3/4 Notes, and Series 2025-5/6/7 Notes.

As of June 30, 2026 and December 31, 2025, the outstanding balance on the Series 2024-1 VFN was $75.0 million and $75.0 million, respectively.

As of June 30, 2026 and December 31, 2025, the Company was in compliance with all of its financial covenants related to the Series 2024-1 VFN.

Employee Benefits

The Company assumed a qualified defined benefit plan (the “Pension Plan”) covering a portion of the U.S. Company's employees. Benefits accrue to eligible employees based on years of service and compensation. The Company also assumed a post-employment benefit plan other than pensions (the “OPEB”) for the associated employees. The plan is provided to certain domestic employees who meet specific age, participation and length of service requirements at the time of retirement.

The Company contributions to the pension plan were $3.5 million and $0.1 million for thethree months ended June 30, 2026 and 2025, respectively, and $3.6 million and $1.2 million for thesix months ended June 30, 2026 and 2025, respectively. The total expense related to these plans were $0.7 million and $0.0 million in thethree months ended June 30, 2026 and 2025, respectively, and $0.7 million and $0.1 million in thesix months ended June 30, 2026 and 2025, respectively. Additionally, the net periodic pension and postretirement health benefit costs for the three months ended June 30, 2026 and 2025 were not material, both in aggregate and for each component individually, including service costs, interest costs, expected return on plan assets, gains and losses and amortization of prior service cost/credit.

The Company terminated the Pension Plan on April 29, 2026. In connection with the plan termination, the Company settled benefit obligations through distributions to plan participants totaling $7.0 million.

Stockholders'/Member's Equity

Pursuant to the BIF III US Aggregator (Delaware) LLC agreement (the "LLC Agreement"), the Company is authorized to issue a single class of member’s interest which are designated as common units. As of December 31, 2025, the Company has issued 103,887,373 units. The common units represent the only class of member’s equity interests authorized and outstanding. The Company does not have preferred equity or multiple classes of member’s interests.

Each common unit represents a unit of limited liability company interest and entitles the holder to one vote per unit, allocations of profits and losses, and distributions of available earnings, in proportion to ownership of common units, in accordance with the LLC Agreement and applicable law.

On June 15, 2026, BIF III US Aggregator (Delaware) LLC converted its legal structure from a Delaware limited liability company, to a Delaware corporation named Csquare, Inc., pursuant to the provisions of the Delaware Limited Liability Company Act and the General Corporation Law of the State of Delaware.

Pursuant to the Company's certificate of incorporation (the "Certificate of Incorporation"), the Company is authorized to issue 1,000,000,000 shares of capital stock, par value $0.01 per share. As of June 30, 2026, the Company has issued 103,887,373 shares of common stock.

Income Taxes

The Company accrues for income taxes during interim periods based on the estimated effective tax rate for the year. The effective tax rate is subject to change in the future due to various factors, such as the Company's operating performance and tax law changes. The Company's effective tax rate was (33.4)% and 13.6% for thethree months ended June 30, 2026 and 2025, respectively, and (0.4)% and 13.6% for thesix months ended June 30, 2026 and 2025, respectively. The June 30, 2026 and 2025 effective tax rates differ from the statutory rate due primarily to non-deductible expenses and changes in valuation allowances.

Commitments and Contingencies

Guarantees and Indemnifications

The Company maintains credit support arrangements with certain utility providers to support its contractual obligations. As of June 30, 2026 and December 31, 2025, the aggregate amount of such credit support arrangements was CAD 26.0 million, equivalent to approximately USD $18.3 million and USD $18.6 million, respectively.

Legal Contingencies

From time to time the Company may be involved in various legal proceedings arising from the normal course of business activities. We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, results of operations, cash flows or financial condition. As of June 30, 2026 and December 31, 2025, the Company has not accrued any material potential loss.

Related Party Transactions

Related Party Revenues and Expenses

An affiliate of the Parent pays certain expenses and interest obligations on behalf of the Company. Amounts advanced are recorded as due to related party in the unaudited condensed consolidated balance sheets. As of June 30, 2026, the outstanding balance due was approximately $3.0 million and there wasno outstanding balance as of December 31, 2025.

The Company recognized related party revenue with affiliates of the Parent of $0.8 million and $0.7 million during thethree months ended June 30, 2026 and 2025, respectively, and $1.6 million and $1.5 million during thesix months ended June 30, 2026 and 2025, respectively, which are included in revenues in the unaudited condensed consolidated statements of operations. As of June 30, 2026 and December 31, 2025, there wereno outstanding balances due to these related party revenues.

During the three and six months ended June 30, 2025, the Company recognized related party expenses with affiliates of the Parent of $1.1 million and $2.1 million, respectively, which are included in selling, marketing, general and administrative in the unaudited condensed consolidated statements of operations. The expenses primarily relate to rent expenses. No such expenses were recognized during thethree and six months ended June 30, 2026. As of June 30, 2026 and December 31, 2025, there wereno outstanding balances due to these related party expenses.

In 2024, the Company provided management services to an affiliate of the Parent. As of June 30, 2026 and December 31, 2025, the outstanding balance due from the affiliate for these services was approximately $1.2 million and $2.5 million, respectively.

Related Party Loans

On May 14, 2026, an affiliate of the Parent issued an unsecured promissory note to the Company with an aggregate principal amount of $75.0 million. The note bears interest at a rate of 3.54% per annum and matures on May 14, 2029. As of June 30, 2026, the outstanding balance under the note, including accrued interest, was $75.3 million. Interest incurred on the note is included in Interest expense in the unaudited condensed consolidated statements of operations.

In 2025, the Company paid certain bonuses to executives on behalf of an affiliate of the Parent in return for a loan receivable from the affiliate. As of December 31, 2025, the outstanding balance due from affiliates was approximately $8.3 million. During three months ended June 30, 2026, the respective loan was forgiven and the Company recognized $8.3 million employee loan extinguishment costs, which are included in selling, marketing, general and administrative in the unaudited condensed consolidated statements of operations.

Theloan earned interest at a market-based rate and interest income is included in Other income (loss), net in the unaudited condensed consolidated statements of operations.

In 2025, the Company paid debt on behalf of an affiliate of the Parent in return for a loan receivable from the affiliate. As of June 30, 2026 and December 31, 2025, the outstanding balance due from affiliates was approximately $6.4 million and $6.4 million, respectively.

On March 11, 2025, the Company received a $646.0 million loan from Parent, the proceeds of which were used to repay outstanding principal under the Company’s 2024 Term Loan Facility in advance of the Company’s Series 2025-1/2 Notes issuance. On March 20, 2025, the bridge loan from Parent was repaid utilizing the proceeds received from the Series 2025-1/2 Notes issuances.

Related Party Deposits

From time to time, the Company temporarily deposits cash with affiliates of Parent bearing interest at a market-based rate. The deposits are presented in due from related parties on the unaudited condensed consolidated balance sheets and interest income recognized in Other income (loss), net in the unaudited condensed consolidated statements of operations. As of December 31, 2025, the Company had a deposit with an affiliate of the Parent of $127.6 million that bore interest at 3.99% per annum. The deposit matured during the second quarter of 2026, and the Company hadno deposits with affiliates of the Parent as of June 30, 2026.

Segment Reporting

The Company's chief operating decision maker ("CODM") evaluates the performance of the Company’s segment based upon consolidated net loss and considers budget-to-actual or forecast-to-actual variances to assess performance and make decisions about allocating resources. The CODM is regularly provided disaggregated expense information at a level more detailed than that presented in financial statements herein.

The following tables present the significant revenue streams, significant segment expenses and other segment items regularly reviewed by our CODM, as well as consolidated net loss (in thousands):

(1)Other segment items are primarily comprised of cost of revenues related to data center security services, commissions paid to third-party business partners, and other professional services associated with site management.

The following table provides information about disaggregated revenue by primary geographic region (in thousands):

The following table provides information about long-lived assets by primary geographical region (in thousands):

Fair Value Measurement

The Company’s financial instruments include cash, cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities. Cash, cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date.

Ourfinancial assets measured at fair value on a recurring basis as of June 30, 2026 and as of December 31, 2025 were as follows (in thousands):

The 2021 Fund Revolving Credit Facility, 2024 Term Loan Facility, 2024 Revolving Credit Facility, and Series 2024-1 VFN (as defined in Note 8 - Debt) are considered Level 2 instruments and recorded at book value on the Company’s unaudited condensed consolidated balance sheets. As they reprice frequently due to variable interest rate terms and entail no significant changes in credit risk, the fair value approximates carrying value. Refer to Note 8 - Debt for additional information.

The Series 2020-2 Notes, Series 2021-1 Notes, and Series 2022-1 Notes (as defined in Note 8 - Debt), which contain a fixed rate coupon, were assumed on October 1, 2025. These notes are considered Level 2 instruments. Due to the proximity of the date the Company acquired the Series 2020-2 Notes, Series 2021-1 Notes, and Series 2022-1 Notes to December 31, 2025, and the absence of significant changes in market interest rates or the Company’s credit risk since the acquisition date, the carrying amount of the Series 2020-2 Notes, Series 2021-1 Notes, and Series 2022-1 Notes approximates their fair value at December 31, 2025. Refer to Note 8 - Debt for additional information.

The fair value of fixed rate debt as of December 31, 2025, was as follows (in thousands):

The fair value of fixed rate debt as of June 30, 2026, was as follows (in thousands):

Subsequent Events

The Company’s registration statement on Form S-1 related to its initial public offering was declared effective on July 15, 2026, and the Company’s common stock began trading on the New York Stock Exchange on July 16, 2026. The Company's IPO Prospectus was filed with the SEC on July 16, 2026. On July 17, 2026, the Company completed its initial public offering of 50.0 million shares of common stock at a public offering price of $21.00 per share. The Company received net proceeds of approximately $1,010 million, after deducting underwriting discounts and commissions and before payment of offering expenses.

On July 27, 2026, the underwriters exercised their option to purchase an additional 7,499,000 shares of common stock at the initial public offering price of $21.00 per share, less underwriting discounts and commissions. As a result, the Company received additional net proceeds of approximately $149.6 million, increasing total net proceeds from the offering to approximately $1,159.6 million.

The Company used a portion of the net proceeds to repay in full the $773.9 million outstanding under its revolving credit facility, the $75.5 million outstanding under its promissory note, the $75.3 million outstanding under its Series 2024-1 Variable Funding Notes, and $219.8 million outstanding under its Series 2020-2 Class A-2 Notes, with each amount including accrued and unpaid interest through the repayment date. In connection with the repayment of the revolving credit facility, the Company also terminated its interest rate swap agreements.

Upon completion of the IPO and the underwriters' exercise of the over-allotment option, deferred offering costs of approximately $15.0 million, consisting primarily of legal, accounting, printing and other direct incremental costs related to the offering, were reclassified to additional paid-in capital as a reduction of the offering proceeds.

In connection with its initial public offering, the Company adopted the Csquare, Inc. 2026 Omnibus Incentive Plan (the "2026 Incentive Plan"), which became effective immediately prior to the effectiveness of the registration statement relating to the Company's initial public offering. The 2026 Incentive Plan provides for the grant of equity-based and cash-based incentive awards to employees, directors and other service providers. The Company will account for awards granted under the 2026 Incentive Plan in accordance with ASC 718, Compensation - Stock Compensation. Compensation expense associated with such awards will be recognized over the applicable requisite service periods based on the grant-date fair value of the awards, as applicable.

Concurrently with the adoption of the 2026 Incentive Plan and the completion of the Company's initial public offering, the Company approved the replacement of certain outstanding incentive units with vested and unvested restricted shares, unvested restricted stock units ("RSUs") and cash payments for eligible participants. The Company expects to recognize compensation expense associated with vested restricted shares and cash payments in the third quarter of 2026, while compensation expense associated with unvested restricted shares and RSUs will be recognized over the applicable remaining requisite service periods.

On July 15, 2026, in connection with the completion of its initial public offering, the Company filed its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware. The amended certificate, among other matters, established the Company's post-offering capital structure, authorizing 1,500,000,000 shares of capital stock, consisting of 1,490,000,000 shares of common stock, par value $0.01 per share, and 10,000,000 shares of preferred stock, par value $0.01 per share.