DGXX 10-K & 10-Q changes, risk factors and insider trading
Digi Power X Inc. · Nasdaq · Finance Services · CIK 1854368 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Comparison not available: Not available: fewer than two 10-K filings on EDGAR to compare (only one so far)..
What changed in the latest 10-Q
Risk Factors
New heading “We expect to require additional financing, including project-level debt financing, to complete the buildout of our AI data center campus, and such financing may not be available on acceptable terms or at all.”
New heading “We depend on a limited number of suppliers, including NVIDIA, for critical computing equipment and components, and any disruption in supply could materially harm our business.”
New heading “Our data center projects may be subject to new or rapidly evolving regulatory frameworks, and we may face increased public scrutiny or negative publicity as a result of our data center strategy.”
Removed heading “Our future contracts with HPC data center customers could subject us to significant liability.”
Removed heading “Certain of our agreements with HPC data center customers may include restrictions on providing HPC data center services to certain third parties, which could have a material adverse effect on our business, financial condition, and/or results of operations.”
Largest changes
“We expect to require additional financing, including project-level debt financing, to complete the buildout of our AI data center campus, and such financing may not be available on acceptable terms or at all.”see in full comparison
“Data centers are increasingly scrutinized by federal, state, and local authorities and have been subject to environmental activists and negative public perception, due to concerns regarding energy consumption, land use, carbon emissions, water usage, environmental impacts, data-sovereignty considerations and national-security-related issues. Regulators may impose new permitting requirements, energy-efficiency standards, carbon-reduction mandates, sustainability reporting rules, or operational restrictions specific to data centers, AI infrastructure, or high-density compute environments. …”see in full comparison
“Additionally, a customer’s decision to lease space and power at our facilities typically involves a significant commitment of resources and due diligence on the part of our customers regarding the adequacy of our facilities. As a result, we may expend significant time and resources in pursuing a particular transaction that may not result in revenue. …”see in full comparison
“Certain of our agreements with HPC data center customers may include restrictions on providing HPC data center services to certain third parties, which could have a material adverse effect on our business, financial condition, and/or results of operations.”see in full comparison
“Our data center projects may be subject to new or rapidly evolving regulatory frameworks, and we may face increased public scrutiny or negative publicity as a result of our data center strategy.”see in full comparison
“We depend on a limited number of suppliers, including NVIDIA, for critical computing equipment and components, and any disruption in supply could materially harm our business.”see in full comparison
Full comparison: every changed paragraph (13)
In
addition to the other information set forth in this Quarterly Report, including the cautionary statement under the caption “Cautionary
Note Regarding Forward-Looking Statements,” Management’s Discussion and Analysis of Financial Condition and Results of
Operations, the condensed consolidated financial statements and related notes, and the following additional risk factors, you should
carefully consider the risks discussed in “Part I, Item 1A - Risk Factors” in the 2025 Annual Report.Report, as updated and supplemented
in “Part II, Item 1A – Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (the
“Q1 Quarterly Report”). There have been no
material changes with respect to the risk factors disclosed in our 2025 Annual
Report and our Q1 Quarterly Report. However, we note that the risks described in this
report andreport, in our 2025 Annual Report, and in our Q1
Quarterly Report are not the only risks facing the Corporation, and such additional risks and uncertainties that
we currently deem to
be immaterial or are unknown to us could negatively impact our business, operations and/or financial results.
We expect to require additional financing, including project-level debt financing, to complete the buildout of our AI data center campus, and such financing may not be available on acceptable terms or at all.
The full deployment of Phase 2 (40 MW) of our purpose-built AI data center campus is conditioned on our securing adequate financing, and we are pursuing project-level debt financing to fund our data center buildout while seeking to limit dilution to our shareholders. There can be no assurance that we will complete any such financing on the terms we currently contemplate, or at all. If we are unable to obtain sufficient financing on acceptable terms, we may be required to delay, curtail or abandon all or a portion of our development plans, including our ability to satisfy our obligations under our AI colocation agreement, which could have a material adverse effect on our business, financial condition and results of operations.
We depend on a limited number of suppliers, including NVIDIA, for critical computing equipment and components, and any disruption in supply could materially harm our business.
Our AI data center and GPU-as-a-Service operations depend on a limited number of suppliers, particularly NVIDIA, for GPUs and related computing equipment. On June 3, 2026, we committed to purchase approximately $35 million of NVIDIA’s next-generation Vera Rubin systems. This reliance on a single supplier for critical computing hardware exposes us to risks including supply shortages, price increases, delayed product releases, changes in product specifications, and potential changes in the supplier relationship. NVIDIA’s products are in high demand globally, and we may face competition from other purchasers for limited supply. If we are unable to obtain the necessary equipment on acceptable terms or within required timeframes, or if NVIDIA experiences production delays or quality issues, our ability to expand our NeoCloudz platform, fulfill our obligations under the Cerebras Agreement, and execute our business strategy could be materially and adversely affected.
Our data center projects may be subject to new or rapidly evolving regulatory frameworks, and we may face increased public scrutiny or negative publicity as a result of our data center strategy.
Data centers are increasingly scrutinized by federal, state, and local authorities and have been subject to environmental activists and negative public perception, due to concerns regarding energy consumption, land use, carbon emissions, water usage, environmental impacts, data-sovereignty considerations and national-security-related issues. Regulators may impose new permitting requirements, energy-efficiency standards, carbon-reduction mandates, sustainability reporting rules, or operational restrictions specific to data centers, AI infrastructure, or high-density compute environments. For example, on July 14, 2026, New York State Governor Kathy Hochul signed an executive order barring the construction of new hyperscale data centers using 50 megawatts or more of power for up to one year in the state of New York. Additionally, in Texas, Governor Greg Abbott published a letter to the Electric Reliability Council of Texas and the Public Utility Commission of Texas, directing the Commission to conduct a comprehensive verification and audit of all data centers advancing through the interconnection process within the state before they are approved to move forward. Such governmental actions and regulations, at the federal level or by state and local governments in the States of Alabama, New York, and North Carolina, where we are building, or plan to build, our properties, could increase our capital expenditures, delay development timelines, limit expansion opportunities, limit projects from moving forward through commercialization, or require costly modifications to existing infrastructure. Any restrictions or new policy initiatives targeting large-scale compute operations, including those supporting AI/HPC workloads, could limit our opportunities to acquire additional properties and restrict our ability to build out our data center operations on any of our existing or future properties, which may adversely affect our data center business or limit the economic viability of our strategic diversification initiatives. Given the evolving nature of digital asset and data-center regulation, and the difficulty of predicting the outcomes of ongoing or future governmental actions, we cannot assure you that future regulatory or legislative developments will not have a material adverse effect on our business, prospects, financial condition, or operations. Even in the absence of new regulations or legislation, increased public scrutiny or negative publicity regarding the development and environmental impact of HPC data centers could harm our reputation, which may adversely affect our business, financial condition and results of operations.
Our future contracts with HPC data center
customers could subject us to significant liability.
In the ordinary course of business, we have entered
into, and aim to continue to enter into, agreements with customers pursuant to which we provide data center space, power, environmental
controls, physical security, and connectivity products to our HPC hosting and colocation customers. These contracts typically contain
indemnification and liability provisions, in addition to service level commitments, which could potentially impose a significant cost
on us in the event of losses arising out of certain breaches of such agreements, services to be provided by us or our subcontractors,
or from third-party claims. HPC data center customers increasingly are looking to pass through their regulatory obligations and other
liabilities to their outsourced data center providers, and we may not be able to limit our liability or damages in an event of loss suffered
by such customers whether as a result of our breach of an agreement or otherwise. If such an event of loss occurred, we could be liable
for material monetary damages and could incur significant legal fees in defending against such an action, which could adversely affect
our financial condition and results of operations.
We may also develop space specifically for HPC
data center customers pursuant to agreements signed prior to beginning or early in the development process. In those cases, if we fail
to meet our development obligations under those agreements, these customers may be able to terminate their agreements, and we will be
required to find a new customer for this space. In addition, in certain circumstances, we may lease HPC data center facilities prior to
their completion. If we fail to complete the facilities in a timely manner, the customer may be entitled to terminate its agreement, seek
damages or penalties against us or pursue other remedies and we may be required to find a new customer for the space. If we are not able
to complete an HPC data center in a timely manner, if development costs are higher than we currently estimate, our financial condition,
results of operations and cash flow could be materially adversely affected.
Additionally, a customer’s decision to lease
space and power at our facilities typically involves a significant commitment of resources and due diligence on the part of our customers
regarding the adequacy of our facilities. As a result, we may expend significant time and resources in pursuing a particular transaction
that may not result in revenue. Economic conditions, including market downturns and the implementation of new tariffs and more restrictive
trade regulations, may impact customers’ ability to plan future business activities, which could cause customers to slow spending
or delay decision making. Our inability to adequately manage the risks associated with these developments may adversely affect our business,
financial condition and results of operations.
Certain
of our agreements with HPC data center customers may include restrictions on providing HPC data center services to certain third parties,
which could have a material adverse effect on our business, financial condition, and/or results of operations.
Certain
of the customer agreements that we may enter into may prohibit us from providing HPC data center services to certain third parties, including
competitors of existing HPC data center customers. The existence of such restrictions could hinder our ability to enter into agreements
with additional HPC data center customers, which could have a material, adverse effect on our business, financial condition and/or results
of operations.
Management's Discussion & Analysis (MD&A)
New heading “For the six months ended June 30, 2026, compared to the six months ended June 30, 2025:”
New heading “Cost of Revenue”
New heading “Operating Expenses”
New heading “Other income (expenses)”
Largest changes
“On May 4, the Corporation entered into a Data Center Colocation and Master Services Agreement (the “Cerebras Agreement”) with Cerebras Systems Inc. (“Cerebras”) to deploy at total of approximately 40 megawatts (“MW”) for AI computing at the Corporation’s AI data center campus in Columbiana, Alabama (the “Facility”). Pursuant to the Cerebras Agreement, Cerebras will hold an exclusive license to access the data center for the duration of the Cerebras Agreement. …”see in full comparison
“For the six months ended June 30, 2026, compared to the six months ended June 30, 2025:”see in full comparison
“Management applies judgment in assessing whether indicators of impairment exist for property, plant and equipment, including assets under construction. The Corporation reviews its property and equipment and intangible assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Impairment exists when the carrying value of the company’s asset exceeds the related estimated undiscounted future cash flows expected to be derived from the asset. If impairment exists, the carrying value of that asset is adjusted to its fair value. …”see in full comparison
Full comparison: every changed paragraph (75)
The
following discussion
and analysis should be read together with our audited financial statements and the related notes included elsewhere
in this Quarterly
Report and with our interim financial statements incorporated by reference. This MD&A is intended to provide investors
with an understanding
of our results of operations, financial condition, liquidity and capital resources, and critical accounting estimates
through the eyes
of management. It includes “forward-looking statements” within the means of the U.S. Private Securities
Litigation Reform
Act of 1995, as amended, and “forward-looking information” within the meaning of U.S. and Canadian securities
laws laws,(collectively orreferred collectively,
to herein as “forward-looking statements, that involve risks and uncertainties.statements”). Actual results could differ materially from those
anticipated in these
forward-looking statements due to a number of factors, including those discussed under the headers “Cautionary
Note Regarding Forward-Looking
Statements” and “Risk Factors” and elsewhere in this Quarterly Report. The numbers below
are presented in thousands
except for percentages as well aspercentages, share and per share amounts.
The
consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States
of America (“U.S. GAAP”) and include the results of the Corporation and its wholly-owned subsidiaries. Any reference in these
notes to
applicable guidance is meant to refer to the authoritative guidance found in the Accounting Standards Codification (“ASC”)
and Accounting Standards Update (“ASU”). The Corporation’s consolidated financial statements filed with this Quarterly
Report and this discussion and analysis are reported in thousands of US dollars and US dollars, respectively, except where otherwise
noted. The Corporation’s management team is responsible for the preparation and integrity of the financial statements, including
the maintenance of appropriate information systems, procedures and internal controls. Management is also responsible for ensuring that
information disclosed externally, including the financial statements and this related discussion and analysis, is complete and reliable.
The Corporation also receives revenue from its Bitcoin mining operations, which is described in greater detail in “Mining and Staking Operations” below.
The
Corporation uses a mining pool that pays Bitcoin rewards utilizing a “Full-Pay-Per-Share” payout of Bitcoin based on a contractual
formula, which calculates payout primarily based on the hash rate provided by us to the mining pool as a percentage of total network
hash rate, along with other inputs. We are entitled to consideration even if a block is not successfully placed by the mining pool operator.
The Corporation transitioned completely to this type of mining pool in 2022 and utilized it for the periodperiods ended MarchJune 31,30, 2026.2025 and 2026,
respectively.
As
of MarchJune 31,30, 2026, the Corporation held a total of approximately
166 217 Bitcoins with an inventory value of $11,430,207$12,705,648 based on the Bitcoin
price as of that date per the Gemini exchange.Exchange. For the three-month
period ended MarchJune 31,30, 2026, Digi Power didmined nota minetotal anyof approximately
3 Bitcoins as compared to a total of approximately 914 Bitcoins for the three-month
period ended MarchJune 31,30, 2025, representing a decrease
of 79%. For the six-month period ended June 30, 2026, Digi Power mined a total of approximately 3 Bitcoins as compared to a total of
approximately 23 Bitcoins for the six-month period ended June 30, 2025, representing a decrease of 100%.87%.
As
of MarchJune 31,30, 2026, the Corporation held a total of 1,0131,017 Ethereum with an inventory value of $2,131,189$1,597,613 based on the Ethereum price as
of that date per the Gemini exchange, as compared to a value of $0 as of MarchJune 31,30, 2025, as the Corporation diversified its cryptocurrency
holdings with the acquisition of Ethereum during the second half of fiscal year 2025.
On
February 7, 2025, the Corporation closed a private placement for gross proceeds of $6,609,500 and consisted of the sale of 2,503,601
subordinate voting shares of the Corporation and 1,251,801 warrants at a price of $2.64. Each warrant is exercisable at a price of $3.66
and expires three years from the issuance date.
The
Corporation incorporated US Data Centers Inc. as a subsidiary on September 20, 2024. In Q1 2025, the Corporation dissolved this subsidiary
and incorporated an entity of the same name. Funds of approximately $1,000,000 were distributed back to the original shareholders upon
dissolution.
On February 7, 2025, Digi Power formed US Data Centers, Inc. (“US
Data Centers” or “USDC”), a wholly owned subsidiary of the Corporation, which will be dedicated to the development of
high-performance computing (“HPC”) and artificial intelligence (“AI”)-focused data centers. The new US Data Centers
website can be found at www.usdatacenters.ai.
With
the launch of US Data Centers, Digi Power is creating a dedicated platform focused entirely on delivering AI and HPC solutions, ensuring
purpose-built infrastructure for the next generation of computing. As its first major initiative, US Data Centers plans to lead the transformation
of the Corporation’s existing site in Columbiana, Alabama into a state-of-the-art Tier 3 data center designed to support next-generation
AI and HPC workloads.
The
Corporation commenced assembly of its first ARMS 200 Tier III AI data center pod during the fourth quarter of 2025, with full activation
expectedcompleted in the second quarter of 2026. This milestone,milestone when achieved, will representrepresents Digi Power X’s first modular AI infrastructure
deployment under
its ARMS (AI-Ready Modular Solution) platform.
In
partnership with Super Micro Computers, Inc. (“SMCI”), the Corporation remains on schedule to havedeployed its firstfirst, fully operational NVIDIA B200
GPU cluster fully operational byin the second quarter of 2026, which will marksignaling a major milestone in its AI infrastructure roadmap.
In
March 2026, the Corporation introduced the formation of US Data Centers Inc. (“USDC as an independent subsidiary.”). USDC will commercialize the ARMS
modular data
center system, a turnkey modular AI data center system that can convert a powered site into an operational AI data
center in a fraction
of the time required by conventional construction. USDC will manufacture and sell the ARMS system, while its
customers will own and operate
their own sites. As of MarchJune 31,30, 2026, Digi Power X currently holds an approximately 51% majority48% equity stake
in USDC.
On
April 18, 2026, the Corporation entered into a bare metal GPU rental agreement with SubQ AI, a next generation AI Corporation. The 24-month
contract carries an expected total contract value of approximately $19.6 million and becomesbecame effective May 15, 2026. Under the term of
the Agreement, Digi Power X will deliverdelivers exclusive, dedicated access to a fleet of the latest generation of NVIDIA Blackwell GPUs. These
systems will beare operated on a bare metal basis through NeoCloudz, Digi Power X’s GPU-as-a-Service platform, at the Corporation’s
AI data
center. The deployment follows NVIDIA reference architecture, and the facility is engineered to Rated 3 standards, with redundant
utility utility
feeds, N+1 UPS, and a CDU and chiller based two loop cooling architecture. The Corporation began recognizing revenues from this
agreement during the second quarter of 2026.
On
May 4, the Corporation entered
into a Data Center Colocation and Master Services Agreement (the “Cerebras Agreement”) with
Cerebras Systems Inc. (“Cerebras”)
to deploy at total of approximately 40 megawatts (“MW”) for AI computing at
the Corporation’s AI data center campus
in Columbiana, Alabama (the “Facility”). Pursuant to the Cerebras Agreement,
Cerebras will holdholds an exclusive license to access
the data center for the duration of the Cerebras Agreement. The Cerebras Agreement has
an initial term of ten (10) years (the “Initial
Term”) from the later of the two phase commencement dates (as described below).
Additionally, the Cerebras Agreement grants Cerebras
the right to extend the Initial Term for one or more additional periods of one (1),
three (3), five (5), or seven (7) years (each, an
“Extension”). Pursuant to the Cerebras Agreement, the total contract value
to the Corporation is approximately $1.1 billion
in the initial term of the contract, with a total potential contract value to the Corporation
of approximately $2.5 billion, assuming
one seven (7)-year Extension, in each case subject to the Corporation meeting its obligations
under the agreement. The Cerebras Agreement
provides for certain one-time payments by Cerebras in connection with Phase 1 and Phase 2
construction, as well as a monthly colocation
fee to paid by Cerebras for Phase 1 and Phase 2 (a portion of which is to be prepaid),
based upon the number of kilowatts delivered.
The Cerebras Agreement requires the Corporation to construct, equip, and commission two
phases of the colocation space at the Facility,
with Phase 1 (15 MW) ready-for-service date targeted at December 15, 2026 and with full
deployment in Phase 2 (40 MW) targeted by the
end of the first fiscal quarter of 2027. The additional 25 MW of load capacity in Phase
2 is conditioned on the Corporation securing
adequate financing for Phase 2 operations. The Cerebras Agreement also contains various
other customary terms and conditions, including
representations and warranties, service and service credit, penalty, termination, indemnification,
confidentiality, and limitation of
liability provisions. For more information, see the Corporation’s Current Report on Form 8-K,
filed with the SEC on May 8, 2026.
On June 3, 2026, the Corporation announced a commitment of approximately $35 million to purchase NVIDIA’s next-generation Vera Rubin platform to expand its NeoCloudz GPU-as-a-Service business, with initial deployment targeted for the first quarter of 2027, subject to NVIDIA’s production and delivery schedule. The Corporation intends to fund the purchase from cash on hand and to offer the resulting capacity through NeoCloudz. Consistent with its objective of funding expansion through non-dilutive debt where possible, the Corporation is also arranging project-level financing to support its data center buildout, with further details expected upon execution of definitive documentation.
The dedicated on-site substation serving Phase 1 of the Columbiana Facility has been completed, grid interconnection has been finalized, and a power delivery agreement with the local utility is in place. The Corporation’s NeoCloudz GPU-as-a-Service platform has processed AI workloads on its deployed fleet of NVIDIA B200 and B300 GPUs continuously since May 15, 2026 and recognized its first AI-related revenues in May 2026. US Data Centers Inc.’s ARMS 200 modular unit has operated at Tier 3 standards at the Alabama facility since May 15, 2026 and has generated AI-related revenues, and the Corporation holds an approximately 48% interest in US Data Centers Inc. To support the growth of the NeoCloudz platform, the Corporation is building out an engineering and operations team, led by its Chief Technology Officer, Jagan Jeyapaul, at a new Silicon Valley office.
The
Corporation has a digital custody account with Gemini Trust Corporation, LLC (“Gemini”). Gemini is a digital currency exchange
and custodian that allows customers to buy, sell, and store its digital assets. Gemini holds 100% of the Corporation’s cryptocurrency
assets in hot storage. Gemini is not a related party of the Corporation. The Corporation is not aware of anything with regards to Gemini’s
operations that would adversely affect the Corporation’s ability to obtain an unqualified audit opinion on its audited financial
statements.
The Corporation has chosen to hold its full inventory of the Corporation’s cryptocurrency assets with Gemini due to its track record in the industry. Gemini is a New York trust company regulated by the New York State Department of Financial Services and is the foreign equivalent of a Canadian financial institution (as that term is defined in National Instrument 45-106 – Prospectus Exemption). Gemini is a qualified custodian under New York Banking Law and is licensed by the State of New York to custody digital assets. Gemini has not appointed a sub-custodian to hold any of the Corporation’s cryptocurrencies. Gemini has US$125M split between US$25M of commercial crime insurance for digital assets held in online hot wallet and US$100M for offline, cold storage insurance coverage. Although the Corporation has historically utilized both cold and hot storage for its digital crypto assets with Gemini, the Corporation currently holds all its cryptocurrencies custodied with Gemini in hot storage.
On
occasion, to mitigate third-party risk, the Corporation will hold a portion of its digital currencies in cold storage solutions that
are not connected to the internet. The Corporation’s digital assets that are held in cold storage are stored in safety deposit
boxes at a bank branch. The wallets in which the Corporation stores its cryptocurrency assets are not multi-signature wallets; however,
the Corporation secures the 24-word seed phrase, which facilitates recovery of the wallets should the wallets become lost, stolen or
damaged, by partitioning the seed phrase in multiple parts and securing each part in a separate location. Each part of the seed phrase
is stored in either a safe or safety deposit box. The Corporation replicates this security protocol by taking the same 24-word seed phrase,
partitioning this into several parts and storing each part in a secure location in a separate safe or safety deposit box than was used
for the first copy of the seed-phrase. This duplication ensures that the digital currencies held via cold storage solutions will be recoverable
by the Corporation should the Corporation’s cold-wallets become lost, stolen or damaged. During the period-endedperiod Marchended 31,June 30, 2026,
and as of the date of this MD&A, all of the Corporation’s cryptocurrency assets were and are currently held in its Gemini wallets.
For
the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025:
For
the three months ended MarchJune 31,30, 2026, the Corporation’s
Company’s net loss was $4,652,345$14,360,509 compared to a net incomeloss of $1,633,261$9,704,563 for the
three months ended MarchJune 31,30, 2025. Highlights of the quarter include:
The
Corporation recognized revenue from colocation service agreementsservices of $3,026,908$3,426,308 for the quarter ended MarchJune 31,30, 2026 (as compared to $4,487,129
$5,082,795 as of MarchJune 31,30, 2025). The decline in colocation revenue in Q1Q2 2026 versus Q1Q2 2025 is attributed to the Corporation’s transition
transition to building out AI-driven infrastructure during the quarter in one of its previous hosting locations.
Exemplifying this transition, during the quarter ended June 30, 2026, the Corporation recognized its first revenues related to its GPU rental agreement with SubQAI for a total of $1,082,592 (as compared to $0 as of June 30, 2025).
The
Corporation also recognized revenue from the sale of energy of $3,716,711$1,958,285 for the three month period ended June 30, 2026, compared to
$2,229,582 for the three-month period ended MarchJune 31, 2026, compared to
$3,424,916 for the three-month period ended March 31,30, 2025. Revenue from this acquisitionSale of aenergy businessrevenue is recognized each month through
the operations of
the plant through its available capacity that can be sold, and actual generation of power sold. The slight increase
decrease in revenue on a year-over-year
basis was due to a decrease in the plantplant’s sellingsale of its power to the grid during the current yearquarter instead of using the
plant power to
run its mining operations (higher power pricing drove the decision to curtail).operations.
Revenue
from Bitcoin mining was $47,727$161,422 for the
three months ended MarchJune 31,30, 2026, compared to $765,876$1,394,740 for the period ended MarchJune 31,30, 2025.
For
the three-month period ended MarchJune 31,30, 2026,
the Corporation didself-mined nota minetotal anyof approximately 3 Bitcoins at an average Bitcoin price
of US$71,648 (from Gemini) compared to the three-month period ended MarchJune 31,30, 2025, in which the CorporationCompany mined approximately
9 14 Bitcoins
at an average price of Bitcoin of US$93,391.US$98,697.
The
primary reason for the minimal amount in
the Corporation’s mining revenues in both years was the continued diversification of the Corporation’s
Company’s revenue streams by
entering into the AI and colocation agreements mentioned above in this MD&A. By entering into
these contracts, the Corporation was able
to utilize its existing infrastructure and power supply and receive consistent payment for
consumption.
The Corporation’s cost of revenues including depreciation and amortization was $12,152,671 for the three-month period ended June 30, 2026, compared to $8,203,532 for the three-month period ended June 30, 2025.
Cost of revenue increased by $1,454,096 year over year as the Corporation’s plant related expenses associated with carbon compliance increased due to price of credits along with ancillary expenses for its mining operations.
Depreciation and amortization expense increased by $2,495,043 year over year as the Corporation placed into service approximately $50 million of assets related to its Tier III AI Data Center.
The Corporation’s cost of revenues was $7,592,982 for the three-month
period ended March 31, 2026, compared to $10,795,101 for the three-month period ended March 31, 2025.
Cost of revenue decreased by $2,479,432 year over year as the Corporation
scaled back its mining operations and associated power costs as it continues to build out its AI dedicated infrastructure.
Depreciation and amortization expense decreased by $722,687 year over
year as the expense associated with the $3.2 million of assets related to the Corporation’s infrastructure and mining equipment
that were put into use during the first half of 2024 was offset by the reduction of expense associated with fully depreciated assets.
The
Corporation’s operating expenses were $5,136,320$4,646,826 for the
three-month period ended MarchJune 31,30, 2026, compared to $2,887,143$6,631,301 in the
same period of 2025.
The
primary drivers in the current period versus the quarterthree months ended MarchJune 31,30, 2025, were due to:
Other
income/expense items of note in the current year include the revaluation of the warrant liabilities which resulted in a gainloss of $784,833$5,035,605
(as compared to a gainloss of approximately $2.76 million$2,960,791 for the three-monthsthree months ended MarchJune 31,30, 2025) and net financial interest income of $845,986 (as compared
to expense of $20,390 for the three months ended June 30, 2025).
For the six months ended June 30, 2026, compared to the six months ended June 30, 2025:
For the six months ended June 30, 2026, the Corporation’s net loss was $19,012,854 compared to net income of $11,337,824 for the six months ended June 30, 2025. Highlights of the six months ended June 30, 2026 include:
Revenue
The Corporation recognized revenue from colocation services of $6,453,216 for the six months ended June 30, 2026 (as compared to $9,569,924 as of June 30, 2025). The decline in colocation revenue in the six months ended June 30, 2026 versus the six months ended June 30, 2025 is attributed to the Corporation’s transition to building out AI-driven infrastructure during the quarter in one of its previous hosting locations.
Exemplifying this transition, during the quarter ended June 30, 2026, the Corporation recognized its first revenues related to its GPU rental agreement with SubQAI for a total of $1,082,592 (as compared to $0 for the six months ended June 30, 2025).
The Corporation also recognized revenue from the sale of energy of $6,850,863 for the six-month period ended June 30, 2026, compared to $5,657,498 for the six-month period ended June 30, 2025. Sale of energy revenue is recognized each month through the operations of the plant through its available capacity that can be sold and actual generation of power sold. The increase in revenue on a year-over-year basis was due to an increase in the plant’s sale of power to the grid during the current year instead of using the plant power to run its mining operations.
Revenue from Bitcoin mining was $209,149 for the six months ended June 30, 2026, compared to $2,160,616 for the six months ended June 30, 2025.
For the six-month period ended June 30, 2026, the Corporation self-mined a total of approximately 3 Bitcoins at an average Bitcoin price of $74,062 (from Gemini) compared to the six-month period ended June 30, 2025, in which the Corporation mined approximately 23 Bitcoins at an average price of Bitcoin of $96,059.
The primary reason for the minimal amount in the Corporation’s mining revenues in both periods was the continued diversification of the Corporation’s revenue streams by entering into the AI and colocation agreements mentioned above in this MD&A. By entering into these contracts, the Corporation was able to utilize its existing infrastructure and power supply and receive consistent payment for consumption.
Cost of Revenue
The Corporation’s cost of revenues including depreciation and amortization was $20,921,520 for the six-month period ended June 30, 2026, compared to $19,016,633 for the six-month period ended June 30, 2025.
Cost of revenue increased by $150,531 year over year, remaining relatively flat as the Corporation scaled back its mining operations and associated power costs as it continues to build out its AI dedicated infrastructure.
Depreciation and amortization expense increased by $1,772,356 year over year as the Corporation placed into service approximately $50 million of assets related to its Tier III AI Data Center.
Operating Expenses
The Corporation’s operating expenses were $9,783,146 for the six-month period ended June 30, 2026, compared to $9,518,444 in the same period of 2025.
The primary drivers in the current period versus the six months ended June 30, 2025 were due to:
Other income (expenses)
Other income/expense items of note in the current year include the revaluation of the warrant liabilities which resulted in a loss of $4,250,772 (as compared to a loss of approximately $196,068 for the six months ended June 30, 2025) and net financial interest income of $1,346,764 (as compared to expense of $13,467 for the same period in 2025).
As
of MarchJune 31,30, 2026, the Corporation had a positive working capital balance of $67,218,751,$131,781,707, including digital currencies of $13,561,396.$14,303,261.
The Corporation commenced earning revenue from digital currency mining in mid-February 2020 and revenue from artificial intelligence
during the second quarter of 2026; however, it has limited operating history,
and there can be no assurance that the Corporation’s
historical performance will be indicative of its future performance.
In
order to achieve its future business objectives, the Corporation may need to liquidate or borrow against Bitcoin that has been accumulated
as of the date hereof as well as Bitcoin generated from ongoing operations, which may or may not be possible on commercially attractive
terms or at all. The Corporation presently anticipates that additional financing maywill be required to fund its initiative of developing
high-performance computing and artificial intelligence focused data centers. Specifically, the build-out of the Corporation’s data
center facility in Columbiana, Alabama requires specific funding in connection with the Cerebras Agreement. Accordingly, the Corporation
is currently seeking out project-level financing for the Columbiana, Alabama data center facility. The Corporation also anticipates that
additional financing
could be required as part of its ongoing transition from cryptocurrency mining to AI-driven infrastructure.
On May 30, 2025, the CorporationCompany entered into
an at-the-market
sales agreement with A.G.P./Alliance Global Partners as agent (the “Agent”), pursuant to which the Corporation
Company established an
at-the-market equity program (the “ATM Program”). From the commencement of the ATM Program through MarchJune 31,
30, 2026, the Corporation Company
issued 24,078,45052,028,450 subordinate voting shares in exchange for gross proceeds of $91,549,033,$254,758,203 at an average share price
of $3.80,$4.90 and received
net proceeds of $88,808,661$248,572,681 after paying commissions of $2,740,372$6,185,522 to the Agent and incurring $100,000 of other
transaction fees.
Cash
used by operating activities for the quarter year ended MarchJune 31,30, 2026,2026 was $6,397,388$10,607,198 as compared to cash used of $10,105,100$18,304,222 for the
quarter ended MarchJune 31,30, 2025. The difference is primarily attributed to the change in digital currency items ($1,252,784$510,919 versus -$4,469,226,-$10,762,446,
respectively), change in warrantforeign liabilityexchange (-$784,833$10,730,233 versus -$2,764,723,$3,528,235, respectively) and the increase in amounts owed for working
capital items in the current quarter (-$2,051,916$1,750,578 versus -$4,276,284,-$6,707,063, respectively).
Cash
used in investing activities for the quarter year ended MarchJune 31,30, 2026, was $16,172,560$101,258,574 as compared to cash provided in investing
activities activities
of $3,816,097$9,414,651 for the quarter ended MarchJune 31,30, 2025. In the current period, cash of $15,172,560$96,308,574 was used for the purchase
of equipment, $3,600,000 related to the deconsolidation of equipment
a subsidiary and $1,000,000$1,350,000 was used for an investment opportunity. In the prior year, cash of $782,106$1,557,363 was used for the purchase
of equipment, $3,600,000 related to the deconsolidation of equipmenta subsidiary and
digital currencies traded for cash of $4,598,203.$10,972,014.
DGXX insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 2 Form 4 filings (2 insiders, 2 trade dates, 30,000 shares, about $110.6K) and open-market sales in 1 filing (1 insider, 1 trade date, 27,500 shares, about $97.9K; 1 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: 2,500 (purchases minus sales); net value about $12.7K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-20 | Amar Alec |
Open-market purchase | 10,000 | $3.86 | $38.6K |
| 2026-08-19 | Amar Michel |
Open-market purchase | 20,000 | $3.60 | $72.0K |
| 2026-05-01 | Amar Alec |
Open-market sale |
27,500 | $3.56 | $97.9K |
Well-known investors holding DGXX (13F)
None of the 59 investors we track reported a position in their latest 13F.