Financial Analysis

4. ACQUISITIONS On October 11, 2024, the Company acquired 100% of Enovum Data Centers Corp (the Acquiree or Enovum), an owner, operator, and developer of high-performance computing data centers, located in Montreal, Quebec, Canada. The acquisition of Enovum provides the Company with a strong diversity of existing and prospective colocation customers, delivers a strong pipeline of expansion site opportunities and an experienced management team to lead the development processes, and enables the Company to offer new service offerings. The acquisition creates the potential for significant synergies, as the Company may capture additional margin from HPC customers, versus hosting them with third party data centers. Additionally, Enovum enhances the Companys competitive positioning in the marketplace, enabling the Company to offer an integrated GPU cloud solution to customers. Finally, the Company will enjoy greater operating flexibility by collocating its owned GPU inventory in Enovum data centers, offering capacity to customers on a just-in-time basis. The acquisition-date fair value of the consideration transferred totaled $43,834,313. The total consideration consists of $38,993,603 of cash consideration and $4,840,710 in equity-classified exchangeable shares. The acquisition-date fair value of the exchangeable shares was determined based on the opening market price of Bit Digitals Ordinary Shares as of the acquisition date. The following table summarizes the preliminary allocati …

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15. COMMITMENTS AND CONTINGENCIES From time to time, the Company may be a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. Contingent Consideration Liabilities As part of the Unifi Transaction (See Note 4. Acquisition ), the Company may be required to make additional contingent payments to the seller based on the timing and availability of electric service to the property, as follows: A contingent payment of $8 million may become payable if, within two years of the acquisition date, the Company uses commercially reasonable efforts and obtains from the local energy provider an Electric Service Agreement for at least 99 megawatts (MW), or if the property otherwise receives 99 MW of power within that timeframe. If an Electric Service Agreement for at least 99 MW is provided, or the property receives 99 MW of power within three years, the Company may instead be required to make a contingent payment of $5 million. If an Electric Service Agreement is provided, or the property receives more than 99 MW of power within four years, the Company may be required to make an additional payment of $200,000 per MW in excess of 99 MW, up to a maximum of $5 million. Royal Bank of Canada Facility Agreement On June 18, 2025, the Company entered into a definitive c …

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10. SHARE-BASED COMPENSATION Certain employees of the Company have historically participated in Bit Digitals 2023 Omnibus Equity Incentive Plan (2023 Plan) and 2025 Omnibus Equity Incentive Plan (2025 Plan) which provide long-term incentive compensation to employees, consultants, officers and directors and consist of restricted stock units, restricted share awards and stock options. Until the IPO was completed, certain employees of the Company continued to participate in the share-based compensation plans authorized and managed by Bit Digital. All significant awards granted under these plans will settle in shares of Bit Digitals ordinary shares and are approved by Bit Digitals Compensation Committee of the Board of Directors. As such, all related equity account balances, other than allocations of compensation expense, remained at the Bit Digital level. Stock compensation allocated to the Company for its employees is based on the same methodology used for the allocation of other corporate expenses. The share-based compensation, including the allocated stock compensation to the Company, were $6.5 million and $0.2 million for the three months ended June 30, 2025 and 2024, respectively and $6.7 million and $0.3 million for the six months ended June 30, 2025 and 2024, respectively. On February 6, 2025, the Board of Directors of WhiteFiber adopted the 2025 Omnibus Equity Incentive Plan (the 2025 Plan). The 2025 Plan provides for the award of restricted share units, restricted share …

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11. GOODWILL AND INTANGIBLE ASSETS Goodwill The components of goodwill as of June 30, 2025 are as follows: As of June 30, 2025 Enovum Data Centers Corp. $ 20,190,268 Total goodwill $ 20,190,268 The Company recorded goodwill in the amount of $20.2 million in connection with its acquisition of Enovum on October 11, 2024. Refer to Note 4. Acquisitions for further information. Finite-lived intangible assets In addition to goodwill, in connection with the acquisition of Enovum, the Company recorded an identified intangible asset, customer relationships, with a definite useful life of 19 years in the amount of $13.5 million. Refer to Note 4. Acquisitions for further information. The following table presents the Companys finite-lived intangible assets as of June 30, 2025: As of June 30, 2025 Cost Accumulated amortization Net Customer relationships $ 13,721,607 $ (511,551 ) $ 13,210,056 Total $ 13,721,607 $ (511,551 ) $ 13,210,056 The following table presents the Companys finite-lived intangible assets as of December 31, 2024: As of December 31, 2024 Cost Accumulated amortization Net Customer relationships $ 13,486,184 $ (457,454 ) $ 13,028,730 Total $ 13,486,184 $ (457,454 ) $ 13,028,730 The following table presents the Companys estimated future amortization of finite-lived intangible assets as of June 30, 2025: 2025 $ 346,663 2026 693,325 2027 693,325 2028 693,325 2029 693,325 Thereafter 10,090,093 Total $ 13,210,056 The Company did not identify any impairment of its finite-lived i …

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12. INCOME TAXES The following table provides details of income taxes: For the Three Months Ended June 30, For the Six Months Ended June 30, 2025 2024 2025 2024 (Loss) Income before income taxes $ (8,387,461 ) $ 2,497,299 $ (6,365,022 ) $ 3,514,150 Provision for income taxes $ 445,931 $ 552,234 $ 1,040,534 $ 742,575 Effective tax rate (5.3 ) % 22.1 % (16.3 )% 21.1 % Our income tax provision was $0.4 million and $0.6 million for the three months ended June 30, 2025 and 2024, respectively. The income tax provision was lower during the three months ended June 30, 2025 compared to the three months ended June 30, 2024 primarily due to the operating loss incurred by Enovum in Canada. Our income tax provision was $1.0 million and $0.7 million for the six months ended June 30, 2025 and 2024, respectively. The income tax provision is higher during the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to the $0.5 million tax expense increase resulted from larger operating profit from White Fiber Iceland and partially offset by $0.2 million tax benefits resulted from Evonum's operating loss in Canada. With the enactment of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, the Company anticipates a reduction in our U.S. federal cash tax payments for the remainder of 2025 as the 100% bonus depreciation on qualified assets is permanently restored. There are several alternative ways of implementing the provisions of the OBBBA, which we are cur …

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6. LEASES Lease as Lessee During the period from October 19, 2023 to December 31, 2023, Bit Digital entered into a capacity lease agreement for its cloud services designed to support generative AI workstreams. The initial lease term is three years, with automatic renewals for successive 12-month periods. The lease expense incurred in December 2023 is capitalized as deferred cost since it is directly related to fulfilling its cloud services which commenced operations in January 2024. The capitalized lease payment was expensed in January 2024. On August 1, 2024, the Company entered into an additional capacity lease agreement for its cloud services. The initial lease term is three years with automatic renewals for successive 12-month periods. On October 11, 2024, the Company acquired 100% of Enovum Data Centers Corp, including a data center lease agreement in Montreal for its data center services. The remaining lease term on the date of acquisition was 12 years with two five-year renewal options. On February 11, 2025, the Company entered into an additional office lease agreement for its headquarters office in New York. The initial lease term is 27 months with automatic renewals on a month-to-month basis. On March 1, 2025, the Company entered into an additional capacity lease agreement for its cloud services. The initial lease term is three years with automatic renewals for successive 12-month periods. On April 11, 2025, the Company entered into a data center lease agreement in S …

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Recent accounting pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Companys financial reporting, the Company undertakes a study to determine the consequences of the change to its combined financial statements and assures that there are proper controls in place to ascertain that the Companys combined financial statements properly reflect the change. In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 expands existing income tax disclosures for rate reconciliations by requiring disclosure of certain specific categories and additional reconciling items that meet quantitative thresholds and expands disclosures for income taxes paid by requiring disaggregation by certain jurisdictions. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact, if any, of the updated guidance on its disclosures for the year ending December 31, 2025. In November 2024, the FASB issued ASU 2024-03, I ncome StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40 ) (ASU 2024-03). ASU 2024-03 requires, in the notes to the financial statements, disclosures of specified information about certain costs and expenses specified in the updated guidance …

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14. RELATED PARTIES Related-party transactions WhiteFiber AIs subsidiary, WhiteFiber Iceland ehf, has appointed Daniel Jonsson as its part-time Chief Executive Officer starting November 7, 2023, for a six-month term with a three-month probation. His compensation includes a monthly salary of $8,334, a $6,440 signing bonus, and eligibility for performance-based RSUs. Concurrently, Daniel Jonsson is part of the management team at GreenBlocks ehf which not only provides bitcoin mining hosting services but also benefits from a facility loan agreement extended by Bit Digital USA Inc., an affiliate of WhiteFiber Iceland ehf. Additionally, WhiteFiber Iceland ehf has contracted GreenBlocks ehf for consulting services pertaining to our high performance computing services in Iceland. As of December 31, 2023, the Company owed $21,592 to Daniel Jonsson for salary and bonus, and $160,000 to GreenBlocks ehf for services rendered. By the end of the first quarter of 2024, we had settled these outstanding amounts with both Daniel Jonsson and GreenBlocks ehf. Bit Digital made a payment of $1 million on behalf of WhiteFiber Iceland ehf, when WhiteFiber Iceland ehf entered into a simple agreement for future equity (SAFE) agreement for an initial investment amount of $1 million in exchange for a right to participate in a future equity financing of preferred stock to be issued by Canopy Wave Inc. (Canopy). By the end of the third quarter of 2024, we had settled this outstanding amount with Bit Digi …

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3. REVENUE FROM CONTRACTS WITH CUSTOMERS The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606). To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The Company recognizes revenue when it transfers its services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company is currently engaged in high performance computing (HPC) business, including cloud services and colocation services through its operation of HPC data centers. Disaggregation of revenues Revenue disaggregated by reportable segment is presented in Note 13. Segment Reporting . Cloud services The Company provides cloud services to support customers generative AI workstreams. We have determined that cloud services are a single continuous service comprised of a series of distinct services that are substantially the same and have the same pattern of transfer (i.e., distinct days of service). These serv …

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13. SEGMENT REPORTING The Company has two reportable segments: cloud services and colocation services. The reportable segments are identified based on the types of service performed. Gross profit (loss) is the segment performance measure the chief operating decision maker (CODM) uses to assess the Companys reportable segments. The cloud services segment generates revenue from providing high performance computing services to support generative AI workstreams. Cost of revenue consists of direct production costs, including electricity costs, data center lease expense, GPU servers lease expense, and other relevant costs, but excluding depreciation and amortization. Colocation services generate revenue by providing customers with physical space, power and cooling within the data center facility. Cost of revenue consists of direct production costs related to our HPC data center services, including electricity costs, lease costs, data center employees wage expenses, and other relevant costs. The CODM analyzes the performance of the segments based on reportable segment revenue and reportable segment cost of revenue. No operating segments have been aggregated to form the reportable segments. Other than the $20.2 million of goodwill from the Enovum acquisition allocated to the Colocation Services segment, the Company does not allocate all assets to the reporting segments as these are managed on an entity-wide basis. Therefore, the Company does not separately disclose the total assets o …

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and principles of consolidation Throughout the periods covered by the combined financial statements, the WhiteFiber Business has historically existed and functioned as part of the consolidated business of Bit Digital. Consequently, stand-alone financial statements have not historically been prepared for the WhiteFiber Business. The accompanying combined financial statements reflect the historical balance sheets, results of operations, cash flows, and changes in net parent investment of the WhiteFiber Business, for the periods presented, prepared on a carve-out basis and have been derived from the consolidated financial statements and accounting records of Bit Digital, using the historical results of operations and historical basis of assets and liabilities of the Company. Prior to the formation of WhiteFiber Inc., which was a newly formed subsidiary of Bit Digital, the combined financial statements reflect the result of operations and assets and liabilities of WhiteFiber AI, incorporated on October 19, 2023. The results of Enovum are reflected following its acquisition on October 11, 2024. The Companys accompanying combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The combined financial statements include the accounts …

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16. SUBSEQUENT EVENTS The Company has evaluated subsequent events through September 17, 2025, the date the financial statements were issued. On August 8, 2025, the Company completed its IPO of ordinary shares. In connection with the Offering, the Company also completed a series of related transactions, including a contribution of the cloud services business from Bit Digital and the execution of a transition services agreement. On September 2, 2025, the underwriters exercised their over-allotment option in full in connection with the IPO. These transactions occurred after the balance sheet date and are more fully described in Note 14. Related Parties .

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