Digi Power X首季淨虧損擴大至465萬美元 收入跌27%

UNITED
STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM
10-Q

 

 

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For
the quarterly period ended March 31, 2026

 

OR

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For
the transition period from _____ to _____

 

Commission
file number 001-41236

 

 

 

Digi
Power X Inc.

(Exact
Name of Registrant as Specified in its Charter)

 

 

 

 British
Columbia, Canada
   Not Applicable
 (State or other jurisdiction of   (I.R.S. Employer
 incorporation or organization)   Identification No.)
      
 110 Yonge Street, Suite 1601    
 Toronto, Ontario   M5C 1T4
 (Address of Principal Executive Offices)   (Zip Code)
 

 

(818)
280-9758

Registrant’s telephone number, including area code

 

Securities
registered pursuant to Section 12(b) of the Act:

 

 Title
of each class
   Trading Symbol(s)   Name of each exchange on which registered
 Subordinate Voting Shares   DGXX   Nasdaq Capital Market
 

 

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

 

Yes
☒ No ☐

 

Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405
of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files).

 

Yes
☒ No ☐

 

Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 Large accelerated filer ☐ Accelerated filer ☐
 Non-accelerated filer ☒ Smaller reporting company ☒
 Emerging growth company ☒    
 

 

If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

 

Yes
☐ No ☒

 

As of May 15, 2026, the registrant had 90,420,824 subordinate voting
shares issued and outstanding and 3,333 proportionate voting shares issued and outstanding.

 

 

 

 
 

 
 

 

 

Table
of Contents

 

 
  
 Page

 
 Part I - Financial Information
 1

 
 Unaudited Condensed Interim Consolidated Balance Sheets
 2

 
 Unaudited Condensed Interim Consolidated Statements of Operations and Comprehensive Loss
 3

 
 Unaudited Condensed Interim Consolidated Statements of Cash Flows
 4

 
 Unaudited Condensed Interim Consolidated States of Changes in Shareholder’s Equity
 5

 
 Notes to Unaudited Condensed Consolidated Financial Statements
 6

 
 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
 24

 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 36

 
 Item 4. Controls and Procedures
 36

 
  
  

 
 Part II - Other Information
 36

 
 Item 1. Legal Proceedings
 36

 
 Item 1A. Risk Factors
 36

 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 37

 
 Item 3. Defaults Upon Senior Securities
 37

 
 Item 4. Mine Safety Disclosures
 37

 
 Item 5. Other Information
 38

 
 Item 6. Exhibits
 38

 
  
 

 
 SIGNATURES
 39

 

 

 
i

 
 

 

 

CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Certain statements contained in this Quarterly Report on Form 10-Q
(the “Quarterly Report”) that reflect Digi Power X Inc.’s (“we,” “us,” “our,” the
“Corporation,” or “Digi Power”) current views with respect to future events and financial performance, business
strategies, expectations for our business and any other statements of a future or forward-looking nature, constitute “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, and “forward-looking information”
within the meaning of applicable Canadian securities laws, or collectively, forward-looking statements. We intend such forward-looking
statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of
1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and forward-looking information within the meaning of Canadian securities laws. All statements other than statements of historical
facts contained in this Quarterly Report may be forward-looking statements. These forward-looking statements include statements about
our financial condition, results of operations, earnings outlook, prospects, and the treatment of the Corporation under government regulatory
and taxation regimes. Forward-looking statements appear in a number of places in this Quarterly Report including, without limitation,
in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

 

In
addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including
any underlying assumptions, are forward-looking statements. Forward-looking statements can often be identified by forward-looking words,
such as “anticipate,” “believe,” “expect,” “plan,” “intend,” “estimate,”
“may,” “potential” and “will,” or similar words suggesting future outcomes or other expectations,
beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. The forward-looking statements
contained in this Quarterly Report are based on our current expectations and beliefs concerning future developments and their potential
effects on us. You should not place undue reliance on these forward-looking statements. We cannot assure you that future developments
affecting the Corporation will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties
(some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from
those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should
any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.
Some factors that could cause actual results to differ include, but are not limited to, the following:

 

●The Corporation’s development
of a Tier III data center and other infrastructure projects involves significant risks, many of which are beyond the Corporation’s
control;

   

 

●The loss of our
existing customer and/or our inability to gain new customers may have an adverse effect on the Corporation’s business, financial
condition and results of operations;

   

 

●The Corporation’s business
may be adversely impacted if the Corporation is unable to fulfill its obligations pursuant to the Cerebras Agreement (as defined below).
For more information regarding the Cerebras Agreement, see Note 20 to the Corporation’s Condensed Interim Consolidated Financial
Statements for the three months ended March 31, 2026 and 2025 – “Subsequent Events”; 

   

 

●The Corporation’s inability
to execute on our evolving business model and strategy, including our ability to diversify and expand into the market for high-performance
computing (“HPC”) and artificial intelligence (“AI”) solutions and data centers; 

 

 
ii

 
 

 

 

●The Corporation’s inability
to respond to anticipated demand for large data centers may have an adverse impact on the Corporation’s business; 

   

 

●Regulatory changes or actions
related to data centers and/or cryptocurrencies may alter the nature of an investment in the Corporation in a manner that adversely affects
the Corporation’s operations;

   

 

●The Corporation is subject to
risks associated with the Corporation’s need for significant electrical power. The Corporation’s data center and mining operations
require electrical power to be available at commercially feasible rates. Government regulators may potentially restrict the ability of
electricity suppliers to provide electricity to mining operations;

   

 

●The Corporation faces competition
from other data center and cryptocurrency companies;

   

 

●The Corporation’s data
centers and/or cryptocurrency inventory may be exposed to cybersecurity threats and hacks; 

   

 

●The value of cryptocurrencies may be subject
to momentum pricing risk; 

   

 

●Cryptocurrency exchanges and other trading venues
are relatively new and, in most cases, largely unregulated and may therefore be more exposed to fraud and failure; 

   

 

●Acceptance and/or widespread use of cryptocurrency
is uncertain; 

   

 

●If the Corporation is unable
to insure the remainder of its mined digital currency, its business and/or its financial condition may be adversely affected;

   

 

●The Corporation may be required
to sell its cryptocurrency portfolio to pay its expenses; 

   

 

●Technological obsolescence and
difficulty obtaining hardware may adversely impact the Corporation’s operating results and financial condition; 

   

 

●The Corporation does not currently
pay cash dividends, and, therefore, the Corporation’s shareholders will not be able to receive a return on their subordinate voting
shares (“SV Shares”) unless they sell them;

   

 

●The SV Shares are subject to
volatility risk, and there is no guarantee that an active or liquid market will be sustained for the SV Shares;

   

 

●The Corporation has a limited history of operations
and is in the early stage of development;

   

 

●Ineffective management of growth could result
in a failure to sustain the Corporation’s progress;

   

 

●There are significant legal, accounting, and
financial costs of being a publicly traded company, which may reduce the resources available for the Corporation to develop its data centers
and/or deploy on its cryptocurrency mining operations;

 

 
iii

 
 

 

 

   

 

●The Corporation may be unable to obtain additional
financing on acceptable terms or at all;

   

 

●The Corporation may be subject to tax consequences
that could reduce the Corporation’s profitability; 

 

●The Corporation may be exposed to risks from
exchanging currencies, including currency exchange fees.

   

 

●The Corporation may be subject to litigation;

   

 

●Uninsured or uninsurable risks could result in significant financial liabilities;

   

 

●Exposure to environmental liabilities and hazards may result in the imposition
of fines, penalties and restrictions;

   

 

●The Corporation’s success is largely dependent on the performance of
the Corporation’s management and executive officers;

   

 

●The Corporation may be unable to attract, develop and retain its key personnel
and establish adequate succession planning;

   

 

●Certain directors and officers may have a conflict
of interest between their duties owed to the Corporation and their interest in other personal or business ventures;

   

 

●Recent changes in U.S. political leadership and
economic policies, as well as any future policy changes, may create uncertainty that materially affects the Corporation’s business
and financial performance; and 

   

 
 ●Current or future geopolitical events may have an adverse impact on
the Corporation’s business.

 

 

The foregoing list of factors and other risks detailed from time to
time in our reports filed with the U.S. Securities and Exchange Commission (the “SEC”) is not exhaustive. See “Part
II, Item 1A – Risk Factors.” Those factors and the other risk factors described therein are not necessarily all of the important
factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements.
Other unknown or unpredictable factors also could harm our results. Consequently, our actual results could be materially different from
the results described or anticipated by our forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections
and may be better or worse than anticipated. Given these uncertainties, you should not place undue reliance on the above forward-looking
statements. Forward-looking statements represent our estimates and assumptions only as of the date that they were made. We expressly disclaim
any duty to provide updates to forward-looking statements, and the estimates and assumptions associated with them, after the date of this
report, in order to reflect changes in circumstances or expectations or the occurrence of unanticipated events except to the extent required
by applicable securities laws.

 

 
iv

 
 

 

 

Part
I - Financial Information

 

 

 

 

 

DIGI
POWER X INC.

 

CONDENSED
INTERIM CONSOLIDATED FINANCIAL STATEMENTS

 

FOR
THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

 

(EXPRESSED
IN UNITED STATES DOLLARS)

 

(UNAUDITED)

 

 

 

 

 

 
1

 
 

 

 

 
 Digi Power X Inc.

 
 Condensed Interim Consolidated Balance Sheets

 
 (Expressed in United States Dollars, except number of shares)

 

 

 
   
 As at 
 March 31,

 2026 
  
 As at

 December 31, 

2025 

 
   
 (Unaudited)  
   

 
 ASSETS 
    
   

 
 Current assets 
    
   

 
 Cash and cash equivalents 
 $57,813,811  
 $78,478,759 

 
 Digital currencies 
  13,561,396  
  14,814,180 

 
 Current portion of amounts receivable and other assets 
  1,592,557  
  1,576,272 

 
 Other receivable 
  44,000  
  44,000 

 
 Total current assets 
  73,011,764  
  94,913,211 

 
   
     
    

 
 Property, plant and equipment, net 
  26,211,575  
  23,005,900 

 
 Intangible asset 
  894,032  
  926,339 

 
 Amounts receivable and other assets, net of current portion 
  24,273,884  
  13,724,798 

 
 Investments 
  2,543,331  
  1,543,331 

 
 Total assets 
 $126,934,586  
 $134,113,579 

 
   
     
    

 
 LIABILITIES AND SHAREHOLDERS’ EQUITY 
     
    

 
   
     
    

 
 Current liabilities 
     
    

 
 Accounts payable and accrued liabilities 
 $3,716,253  
 $6,350,923 

 
 Warrant liabilities 
  2,076,760  
  2,297,930 

 
 Total current liabilities 
  5,793,013  
  8,648,853 

 
   
     
    

 
 Deposits payable 
  2,203,526  
  2,203,526 

 
 Total liabilities 
  7,996,539  
  10,852,379 

 
 Shareholders’ equity 
     
    

 
 Subordinate voting shares, no par value, unlimited shares authorized; 69,807,452 shares and 69,427,788 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

 
  -
  
  -
 

 
 Proportionate voting shares, no par value, unlimited shares authorized; 3,333 shares and 3,333 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

 
  -
  
  -
 

 
 Additional paid-in capital 
  218,733,180  
  216,409,130 

 
 Accumulated deficit 
  (93,522,952) 
  (88,870,607)

 
 Accumulated other comprehensive income (loss), net 
  (7,206,106) 
  (4,277,323)

 
 Total shareholders’ equity attributable to shareholders 
  118,004,122  
  123,261,200 

 
 Non-controlling interest 
  933,925  
  -
 

 
 Total shareholders’ equity 
  118,938,047  
  123,261,200 

 
 Total liabilities and shareholders’ equity 
 $126,934,586  
 $134,113,579 

 

 

The accompanying notes are an integral part of these unaudited condensed
interim consolidated financial statements 

 

 
2

 
 

 

 

 
 Digi Power X Inc.

 
 Condensed Interim Consolidated Statements of Operations and Comprehensive Loss

 
 (Expressed in United States Dollars) (Unaudited)

 

 

 
 Three Months Ended March 31, 
 2026  
 2025 

 
 Revenue 
    
   

 
 Digital currency mining and staking 
 $47,727  
 $765,876 

 
 Colocation services 
  3,026,908  
  5,082,795 

 
 Sale of energy 
  3,716,711  
  3,427,916 

 
 Total revenue 
  6,791,346  
  9,276,587 

 
   
     
    

 
 Cost of revenue 
     
    

 
 Cost of revenue 
  (6,142,878) 
  (8,622,310)

 
 Depreciation and amortization 
  (1,450,104) 
  (2,172,791)

 
 Gross loss 
  (801,636) 
  (1,518,514)

 
   
     
    

 
 Operating expenses 
     
    

 
 General and administrative expenses 
  (4,333,962) 
  (2,714,302)

 
 Foreign exchange gain (loss) 
  2,959,327  
  (62,875)

 
 Gain on sale of digital currencies 
  2,418  
  337,009 

 
 Loss on revaluation of digital currencies 
  (3,764,103) 
  (446,975)

 
 Total operating expenses 
  (5,136,320) 
  (2,887,143)

 
   
     
    

 
 Other income (expenses) 
     
    

 
 Other income 
  -
  
  750 

 
 Net financial income 
  500,778  
  6,923 

 
 Gain from change in fair value of warrant liability 
  784,833  
  2,764,723 

 
 Total other income 
  1,285,611  
  2,772,396 

 
   
     
    

 
 Net loss for the period attributable to common shareholders 
  (4,652,345) 
  (1,633,261)

 
 Foreign currency translation adjustment 
  (2,928,783) 
  27,294 

 
 Comprehensive loss for the period attributable to common shareholders 
 $(7,581,128) 
 $(1,605,967)

 
   
     
    

 
 Net loss for the period attributable to: 
     
    

 
 Common shareholders of the Corporation 
  (4,652,345) 
  (1,633,261)

 
 Non-controlling interests 
  -
  
  -
 

 
   
     
    

 
 Comprehensive loss for the period attributable to: 
     
    

 
 Common shareholders of the Corporation 
  (7,581,128) 
  (1,605,967)

 
 Non-controlling interests 
  -
  
  -
 

 
   
     
    

 
 Net loss per common share: 
     
    

 
 Basic and diluted 
 $(0.07) 
 $(0.05)

 
   
     
    

 
 Weighted average number of common shares outstanding: 
     
    

 
 Basic and diluted 
  69,636,328  
  34,966,831 

 

 

The accompanying notes are an integral part of these unaudited condensed
interim consolidated financial statements 

 

 
3

 
 

 

 

 
 Digi Power X Inc.

 
 Condensed Interim Consolidated Statements of Cash Flows

 
 (Expressed in United States Dollars) (Unaudited)

 

 

 
 Three Months Ended March 31, 
 2026  
 2025 

 
 Operating activities 
    
   

 
 Net loss for the period 
 $(4,652,345) 
 $(1,633,261)

 
 Adjustments for: 
     
    

 
 Digital currencies items 
  1,252,784  
  (4,469,226)

 
 Depreciation of right-of-use assets 
  -
  
  25,549 

 
 Depreciation and amortization 
  1,450,104  
  2,159,800 

 
 Interest on lease liabilities 
  -
  
  2,648 

 
 Share based compensation 
  1,352,975  
  828,763 

 
 Gain (loss) from change in fair value of warrant liability 
  (784,833) 
  (2,764,723)

 
 Accretion on liability 
  -
  
  566 

 
 Foreign exchange loss (gain) 
  (2,964,157) 
  21,168 

 
 Working capital items 
  (2,051,916) 
  (4,276,284)

 
 Net cash used in operating activities 
  (6,397,388) 
  (10,105,000)

 
   
     
    

 
 Investing activities 
     
    

 
 Purchases and deposits on property, plant and equipment 
  (15,172,560) 
  (782,106)

 
 Acquisition of investment 
  (1,000,000) 
  -
 

 
 Digital currencies traded for cash 
  -
  
  4,598,203 

 
 Net cash (used in) provided by investing activities 
  (16,172,560) 
  3,816,097 

 
   
     
    

 
 Financing activities 
     
    

 
 Proceeds of shares issued for cash, net of issuance costs 
  -
  
  6,482,509 

 
 Return of proceeds to non-controlling interest 
  -
  
  (1,000,000)

 
 Contributions from non-controlling interest 
  1,905,000  
  -
 

 
 Repayment of loans payable 
  -
  
  (78,130)

 
 Lease payments 
  -
  
  (15,000)

 
 Net cash provided by financing activities 
  1,905,000  
  5,389,379 

 
   
     
    

 
 Net change in cash 
  (20,664,948) 
  (899,524)

 
 Cash and cash equivalents, beginning of period 
  78,478,759  
  1,703,896 

 
 Cash and cash equivalents, end of period 
 $57,813,811  
 $804,372 

 

 

The accompanying notes are an integral part of these unaudited condensed
interim consolidated financial statements 

 

 
4

 
 

 

 

 
 Digi Power X Inc.

 
 Condensed Interim Consolidated Statement of Changes in Shareholders’ Equity

 
 (Expressed in United States Dollars) (Unaudited)

 

 

 
   
 Number of shares (note 9)  
    
    
 Accumulated  
    
   

 
   
 Subordinate

 Voting Shares  
 Proportionate

 Voting Shares  
 Additional

 paid-in 

capital  
 Accumulated

 Deficit  
 Other

 Comprehensive

 Income  
 Non-Controlling

 Interest  
 Total 

 
 Balance as of December 31, 2024 
  33,011,600  
  3,333  
 $90,011,906  
 $(60,514,384) 
 $(7,487,193) 
 $279,430  
 $22,289,759 

 
 Restricted share units converted to common shares 
  792,669  
  -  
  -
  
  -
  
  -
  
  -
  
  -
 

 
 Shares issued for cash 
  2,503,601  
  -  
  4,123,056  
  -
  
  -
  
  -
  
  4,123,056 

 
 Cost of issue - cash 
  -  
  -  
  (126,998) 
  -
  
  -
  
  -
  
  (126,998)

 
 Share based compensation 
  -  
  -  
  828,763  
  -
  
  -
  
  -
  
  828,763 

 
 Dissolution of non-controlling interest 
  -  
  -  
  (721,270) 
  -
  
  -
  
  (279,430) 
  (1,000,700)

 
 Net loss for the period 
  -  
  -  
  -
  
  (1,633,261) 
  -
  
  -
  
  (1,633,261)

 
 Other comprehensive loss for the period 
  -  
  -  
  -
  
  -
  
  27,294  
  -
  
  27,294 

 
 Balance as of March 31, 2025 
  36,307,870  
  3,333  
 $94,115,457  
 $(62,147,645) 
 $(7,459,899) 
 $-
  
 $24,507,913 

 
   
     
     
     
     
     
     
    

 
 Balance as of December 31, 2025 
  69,427,788  
  3,333  
 $216,409,130  
 $(88,870,607) 
 $(4,277,323) 
 $-
  
 $123,261,200 

 
 Restricted share units converted to common shares 
  379,664  
  -  
  -
  
  -
  
  -
  
  -
  
  -
 

 
 Share based compensation 
  -  
  -  
  1,352,975  
  -
  
  -
  
  -
  
  1,352,975 

 
 Changes to ownership of subsidiary 
  -  
  -  
  971,075  
  -
  
  -
  
  933,925  
  1,905,000 

 
 Net loss for the period 
  -  
  -  
  -
  
  (4,652,345) 
  -
  
  -
  
  (4,652,345)

 
 Other comprehensive loss for the period 
  -  
  -  
  -
  
  -
  
  (2,928,783) 
  -
  
  (2,928,783)

 
 Balance as of March 31, 2026 
  69,807,452  
  3,333  
 $218,733,180  
 $(93,522,952) 
 $(7,206,106) 
 $933,925  
 $118,938,047 

 

 

The accompanying notes are an integral part of
these unaudited condensed interim consolidated financial statements

 

 
5

 
 

 

 

 
 Digi Power X Inc.

 
 Notes to Condensed Interim Consolidated Financial Statements

 
 Three Months Ended March 31, 2026

 
 (Expressed in United States Dollars) (Unaudited)

 

 

1.Nature
of operations

 

Digi
Power X Inc. (together with its subsidiaries, Digihost International, Inc., DGX Holding, LLC, World Generation X, LLC, and US Data Centers,
Inc., the “Corporation” or “Digi Power”) is an innovative energy infrastructure corporation that develops data
centers to drive the expansion of sustainable energy assets.

 

The Corporation was incorporated in British Columbia, Canada, on February
18, 2017 and operated under the name “Digihost Technology Inc.” until March 6, 2025. The Corporation’ subordinate voting
shares were listed on the TSX Venture Exchange, and the Corporation’s subordinate voting shares were uplisted to Cboe Canada on
February 27, 2026. The Corporation is listed on Cboe Canada and the NASDAQ trading under the trading symbols DGX and DGXX, respectively.
The head office of the Corporation is located at 218 NW 24th Street, 2nd Floor, Miami, Florida 33127.

 

These
unaudited condensed interim consolidated financial statements of the Corporation were reviewed, approved and authorized for issue by
the Board of Directors of the Corporation (the “Board”) on May 15, 2026.

 

2.Basis
of Presentation and Summary of Significant Accounting Policies

 

(a)Statement
of compliance

 

The accompanying unaudited condensed interim consolidated financial
statements included herein have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”)
and under the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim reporting.
The accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments,
that are necessary to present fairly the Corporation’s financial position, results of operations, and cash flows. The condensed
consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information
and footnote disclosures of the Corporation normally included in the financial statements prepared in accordance with GAAP have been condensed
or omitted under the SEC’s rules and regulations. These unaudited condensed interim consolidated financial statements should be
read in conjunction with the audited financial statements and accompanying notes thereto for the year ended December 31, 2025, included
in the Corporation’s Annual Report on Form 10-K, as originally filed with the SEC on March 31, 2026 and as amended on April 27,
2026 (the “2025 Annual Report”).

 

Prior
to January 1, 2026, the Corporation was a foreign private issuer reporting its financial statements under IFRS Accounting Standards as
issued by the International Accounting Standards Boards. These unaudited condensed interim consolidated financial statements, for all
periods, are presented in accordance with U.S. GAAP. 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”).

 

These
unaudited condensed interim consolidated financial statements have been prepared on a going concern basis, meaning that the Corporation
will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course
of operations.

 

 
6

 
 

 

 

 
 Digi Power X Inc.

 
 Notes to Condensed Interim Consolidated Financial Statements

 
 Three Months Ended March 31, 2026

 
 (Expressed in United States Dollars) (Unaudited)

 

 

(b)Basis
of consolidation

 

These
unaudited condensed interim consolidated financial statements include the accounts of Digi Power, its wholly owned subsidiaries, Digihost
International, Inc., DGX Holdings, LLC, and World Generation X, and its partially owned subsidiary, US Data Centers, Inc., with the Corporation
owning 51% of such entity as of March 31, 2026. Subsidiaries are consolidated from the date of acquisition, being the date on which the
Corporation obtains control and continues to be consolidated until the date that such control ceases. Control is achieved when an investor
has power over an investee to direct its activities, exposure to variable returns from an investee, and the ability to use the power
to affect the investor’s returns. All intercompany transactions and balances have been eliminated upon consolidation. Foreign exchange
gains and losses on cross-currency intercompany loan balances that are not of a long-term investment nature are included in foreign exchange
gain (loss). Net earnings or loss and each component of other comprehensive income are attributed to the shareholders of the Corporation
and to the non-controlling interests. Total comprehensive income is attributed to the shareholders of the Corporation and to the non-controlling
interests even if this results in the non-controlling interests having a deficit balance on consolidation.

 

(c)Segment
reporting

 

The
reporting segments are identified on the basis of information that is reviewed by the chief executive officer of the Corporation (the
“CEO”) to make decisions about resources to be allocated and assess its performance. Accordingly, for management purposes,
the Corporation has four reporting segments namely, cryptocurrency mining, sales of energy, colocation services, and AI data centers.

 

Operating
segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the
chief operating decision maker (“CODM”), which is comprised of the Corporation’s President and the CEO. The CODM uses
segment gross profit (loss), working capital, and EBITDA to assess the performance of, manage the operations of, and allocate capital
and operational resources to the Corporation’s four reportable segments. EBITDA is defined as earnings before interest expense,
taxes, depreciation and amortization.

 

(d)Critical
accounting judgements, estimates and assumptions

 

The
preparation of these financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgements and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of
expenses during the reporting period. Actual outcomes could differ from these estimates. These financial statements include estimates
that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements and may require
accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the year in which the estimate
is revised and future years if the revision affects both current and future years. These estimates are based on historical experience,
current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable
under the circumstances.

 

 
7

 
 

 

 

 
 Digi Power X Inc.

 
 Notes to Condensed Interim Consolidated Financial Statements

 
 Three Months Ended March 31, 2026

 
 (Expressed in United States Dollars) (Unaudited)

 

 

Significant
assumptions about the future that management has made that could result in a material adjustment to the carrying amounts of assets and
liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

 

Significant
judgements

 

(i)Income
from digital currency mining

 

The
Corporation recognizes income from digital currency mining from the provision of transaction verification services within digital currency
networks, commonly termed “cryptocurrency mining”. As consideration for these services, the Corporation receives digital
currency from each specific network in which it participates (“coins”). Income from digital currency mining is measured based
on the fair value of the coins received. The fair value is determined using the average price of the coin on the date of contract inception.
The coins are recorded on the unaudited condensed interim consolidated balance sheets, as digital currencies, at their fair value less
costs to sell and re- measured at each reporting date. Revaluation gains or losses, as well as gains or losses on the sale of coins for
traditional (fiat) currencies are included in profit or loss in accordance with the Corporation’s treatment of its digital currencies
as a traded commodity.

 

(ii)Income,
value added, withholding and other taxes

 

The
Corporation is subject to income, value added, withholding and other taxes. Significant judgement is required in determining the Corporation’s
provisions for taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary
course of business. The Corporation recognizes liabilities for anticipated tax audit issues based on estimates of whether additional
taxes will be due. The determination of the Corporation’s income, value added, withholding and other tax liabilities requires interpretation
of complex laws and regulations. The Corporation’s interpretation of taxation law as applied to transactions and activities may
not coincide with the interpretation of the tax authorities. A deferred tax asset is recognized only to the extent that it is probable
that future taxable income will be available against which the asset can be utilized. All tax related filings are subject to government
audit and potential reassessment subsequent to the financial statement reporting period.

 

Developments
in an audit, litigation, or the relevant laws, regulations, administrative practices, principles, and interpretations could have a material
effect on our operating results or cash flows in the period or periods for which that development occurs, as well as for prior and subsequent
periods. We recognize the tax benefit from an uncertain tax position in accordance with ASC 740, Income Taxes, only if it is more likely
than not that the tax position will be sustained on examination by the applicable taxing authority, including resolution of the appeals
or litigation processes, based on the technical merits of the position. The tax benefits recognized in the unaudited condensed interim
consolidated financial statements from such a position are measured based on the largest benefit for each such position that has a greater
than fifty percent likelihood of being realized upon ultimate resolution. Many factors are considered when evaluating and estimating
the tax positions and tax benefits. Such estimates involve interpretations of regulations, rulings, case law, etc. and are inherently
complex. Our estimates may require periodic adjustments and may not accurately anticipate actual outcomes as resolution of income tax
treatments in individual jurisdictions typically would not be known for several years after completion of any fiscal year. We believe
the judgements and estimates discussed above are reasonable. However, if actual results are not consistent with our estimates or assumptions,
we may be exposed to losses or gains that could be material.

 

(iii)Impairment
of property, plant and equipment

 

Management
applies judgement 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 Corporation’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. This assessment requires consideration of internal and external factors such as changes
in the expected use of assets, operating performance, market conditions, and strategic plans. As at March 31, 2026, management concluded
that no impairment indicators existed for the Corporation’s property, plant and equipment.

 

 
8

 
 

 

 

 
 Digi Power X Inc.

 
 Notes to Condensed Interim Consolidated Financial Statements

 
 Three Months Ended March 31, 2026

 
 (Expressed in United States Dollars) (Unaudited)

 

 

Significant
estimates

 

(i)Useful
lives of property, plant and equipment

 

Depreciation
of data miners and equipment are an estimate of its expected life. In order to determine the useful life of computing equipment, assumptions
are required about a range of computing industry market and economic factors, including required hashrates, technological changes, availability
of hardware and other inputs, and production costs.

 

(ii)Warrant
liability

 

The Corporation uses Black Scholes method or the Monte Carlo simulation
technique to determine the fair value of the warrant liability. The Black Scholes method requires significant judgement in determining
the fair value such as volatility and risk-free rate. A change in these inputs could lead to significant change in the fair value of the
warrant liability.

 

(e)Recently
announced accounting pronouncements not yet adopted

 

The
Corporation continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new
accounting pronouncement may affect the Corporation’s financial reporting, the Corporation undertakes an analysis to determine
any required changes to its unaudited condensed interim consolidated financial statements and assures that there are proper controls
in place to ascertain that the Corporation’s unaudited condensed interim consolidated financial statements properly reflect the
change.

 

In November 2024, the FASB issued ASU No. 2024-03, Income Statement
- Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.
ASU 2024-03 requires additional disclosures of certain expenses in the notes of the financial statements, to provide enhanced transparency
into the expense captions presented on the unaudited condensed interim Consolidated Statements of Operations. Additionally, in January
2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40),
to clarify the effective date of ASU 2024-03. The new standard is effective for the Corporation for its annual periods beginning after
December 15, 2026 and for interim periods beginning after December 15, 2027, with early adoption permitted. The Corporation is currently
evaluating the impact of adopting the standard.

 

There
were no other significant updates to the recently issued accounting standards which may be applicable to the Corporation. Although there
are several other new accounting pronouncements issued or proposed by the FASB, the Corporation does not believe any of those accounting
pronouncements have had or will have a material impact on its financial position or operating results.

 

 
9

 
 

 

 

 
 Digi Power X Inc.

 
 Notes to Condensed Interim Consolidated Financial Statements

 
 Three Months Ended March 31, 2026

 
 (Expressed in United States Dollars) (Unaudited)

 

 

3.Digital
currencies

 

The
Corporation’s holdings of digital currencies consist of the following:

 

 
   
 As at 
 March 31,
 2026  
 As at
 December 31, 
 2025 

 
 Bitcoin 
 $11,430,207  
 $11,812,321 

 
 Ethereum 
  2,131,189  
  3,001,859 

 
   
 $13,561,396  
 $14,814,180 

 

 

The
continuity of digital currencies was as follows:

 

 
   
 Number of
 Ethereum  
 Amount  
 Number of
 Bitcoin  
 Amount  
 Total 

 
 Balance, December 31, 2024 
  -
  
 $-
  
  48  
 $4,525,416  
 $4,525,416 

 
 Digital currencies mined and staked 
  7  
  27,128  
  34  
  3,496,250  
  3,523,378 

 
 Digital currencies received from colocation services 
  -
  
  -
  
  156  
  15,649,009  
  15,649,009 

 
 Acquisition of digital currencies 
  1,002  
  4,245,883  
  16  
  1,911,631  
  6,157,514 

 
 Digital currencies traded for cash 
  -
  
  -
  
  (111) 
  (10,972,014) 
  (10,972,014)

 
 Digital currencies paid for services 
  -
  
  -
  
  (9) 
  (843,665) 
  (843,665)

 
 Digital currencies remitted as per Miner Agreement 
  -
  
  -
  
  (1) 
  (145,199) 
  (145,199)

 
 Gain on sale of digital currencies 
  -
  
  -
  
  -
  
  1,029,017  
  1,029,017 

 
 Revaluation adjustment 
  -
  
  (1,271,152) 
  -
  
  (2,838,124) 
  (4,109,276)

 
 Balance, March 31, 2025 
   
  
   
  
   
  
   
  
   
 

 
 Balance, December 31, 2025 
  1,009  
  3,001,859  
  133  
  11,812,321  
  14,814,180 

 
 Digital currencies mined and staked(1) 
  4  
  10,405  
  -
  
  37,322  
  47,727 

 
 Digital currencies received from colocation services 
  -
  
  -
  
  34  
  2,576,804  
  2,576,804 

 
 Digital currencies paid for services 
  -
  
  -
  
  (1) 
  (115,630) 
  (115,630)

 
 Gain on sale of digital currencies 
  -
  
  -
  
  -
  
  2,418  
  2,418 

 
 Revaluation adjustment 
  -  
  (881,075) 
  -  
  (2,883,028) 
  (3,764,103)

 
 Balance, March 31, 2026 
  1,013  
 $2,131,189  
  166  
 $11,430,207  
 $13,561,396 

 

 

(1)During
the three months ended March 31, 2026, the Corporation staked 4 Ethereum.

 

The
cost bases of the Corporation’s holdings of digital currencies consist of:

 

 
   
 As at 

March 31,

 2026  
 As at

 December 31, 

2025 

 
 Bitcoin 
 $14,313,234  
 $14,301,245 

 
 Ethereum 
  3,012,264  
  4,273,011 

 
   
 $17,325,498  
 $18,574,256 

 

 

 
10

 
 

 

 

 
 Digi Power X Inc.

 
 Notes to Condensed Interim Consolidated Financial Statements

 
 Three Months Ended March 31, 2026

 
 (Expressed in United States Dollars) (Unaudited)

 

 

4.Amounts
receivable and other assets

 

 
   
 As at 

March 31,

 2026  
 As at

 December 31, 

2025 

 
 Utility deposits 
 $3,370,975  
 $5,228,270 

 
 Equipment deposit 
  20,902,909  
  8,496,528 

 
 Prepaid expenses 
  63,451  
  56,585 

 
 Accounts receivable 
  -
  
  1,136,972 

 
 Other receivable 
  1,529,106  
  382,715 

 
   
  25,866,441  
  15,301,070 

 
 Long-term deposits and prepaid expenses 
  (24,337,335) 
  (13,724,798)

 
   
 $1,529,106  
 $1,576,272 

 

 

The
Corporation uses the single expected credit loss impairment model, which is based on changes in credit quality since initial application.

 

The
Corporation assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due. The Corporation
considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Corporation in full or
when the financial asset is more than 90 days past due.

 

The
carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of
recovery. This is generally the case when the Corporation determines that the debtor does not have assets or sources of income that could
generate sufficient cash flows to repay the amounts subject to the write-off.

 

5.Property,
plant and equipment

 

 
   
 Land and
 buildings(1)  
 Data miners  
 Equipment (1)  
 Leasehold
 improvement  
 Power plant
 in use(2)  
 Total 

 
 Cost 
    
    
    
    
    
   

 
 December 31, 2024 
 $7,094,339  
 $31,895,779  
 $24,592,207  
 $1,079,542  
 $5,234,577  
 $69,896,444 

 
 Additions 
  1,718,524  
  1,100,550  
  1,962,022  
  -
  
  1,405,657  
  6,186,753 

 
 Disposal 
  -
  
  (14,041,665) 
  -
  
  -
  
  -
  
  (14,041,665)

 
 December 31, 2025 
  8,812,863  
  18,954,664  
  26,554,229  
  1,079,542  
  6,640,234  
  62,041,532 

 
 Additions 
  1,429,804  
  -
  
  2,903,093  
  -
  
  290,577  
  4,623,474 

 
 March 31, 2026 
 $10,242,667  
 $18,954,664  
 $29,457,322  
 $1,079,542  
 $6,930,811  
 $66,665,006 

 
 Accumulated depreciation 
     
     
     
     
     
    

 
 December 31, 2024 
 $491,218  
 $31,496,438  
 $13,061,778  
 $506,900  
 $696,367  
 $46,252,701 

 
 Depreciation 
  403,233  
  399,341  
  5,469,650  
  105,318  
  447,054  
  6,824,596 

 
 Impairment 
  -
  
  (14,041,665) 
  -
  
  -
  
  -
  
  (14,041,665)

 
 December 31, 2025 
  894,451  
  17,854,114  
  18,531,428  
  612,218  
  1,143,421  
  39,035,632 

 
 Depreciation 
  123,957  
  91,713  
  1,048,935  
  26,330  
  126,864  
  1,417,799 

 
 March 31, 2026 
 $1,018,408  
 $17,945,827  
 $19,580,363  
 $638,548  
 $1,270,285  
 $40,453,431 

 
 Net carrying value 
     
     
     
     
     
    

 
 As at December 31, 2025 
 $7,918,412  
 $1,100,550  
 $8,022,801  
 $467,324  
 $5,496,813  
 $23,005,900 

 
 As at March 31, 2026 
 $9,224,259  
 $1,008,837  
 $9,876,959  
 $440,994  
 $5,660,526  
 $26,211,575 

 

 

(1)As
at March 31, 2026, the Corporation made capital investments related to the development of its Tier III AI data centers segment (see
Note 17 to the Condensed Interim Consolidated Financial Statements) and are included within property, plant and equipment. Depreciation
is not recognized on the AI data center assets that are not yet available for their intended use. The carrying amount of these assets
is $5,013,601.

 

 
11

 
 

 

 

 
 Digi Power X Inc.

 
 Notes to Condensed Interim Consolidated Financial Statements

 
 Three Months Ended March 31, 2026

 
 (Expressed in United States Dollars) (Unaudited)

 

 

6.Intangible
asset

 

Intangible asset relates to the right-of-use of an electric power facility
for a period of 156 months. As at March 31, 2026, there were 81 months remaining of the amortization period.

 

 
   
 As at 
 March 31,
 2026  
 As at
 December 31,
 2025 

 
 Cost 
 $1,680,000  
 $1,680,000 

 
 Accumulated amortization 
  (785,968) 
  (753,661)

 
 Intangible assets, net 
 $894,032  
 $926,339 

 

 

During
the three months ended March 31, 2026, the Corporation recognized amortization expense of $32,307 (as compared to $32,308 for the three
months ended March 31, 2025), related to intangible assets.

 

7.Investment

 

 
   
 As at 
 March 31,

 2026
  
 As at

 December 31, 

2025 

 
 Balance, beginning of period 
 $1,543,331  
 $900,844 

 
 Additional investment (ii) 
  1,000,000  
  -
 

 
 Change in fair value of investment 
  -
  
  642,487 

 
 Balance, end of period 
 $2,543,331  
 $1,543,331 

 

 

(i) In December 2021, the Corporation entered
into an agreement for a Secured Convertible Promissory Note (the “Note”) with principal of $800,000. The Note accrued interest
at a rate of 6% per annum, with 3% payable in cash every calendar quarter and 3% payable in notes. The Note was converted into Series
C Preferred Stock (the “Shares”) of the issuer effective October 1, 2023, with 8,000 warrants issued to the Corporation. The
Shares are secured by the assets of the issuer. As at March 31, 2026, the fair value of the Shares and warrants was estimated to be $1,543,331.

 

(ii) On February 11, 2026, the Corporation invested
$1,000,000 in Alpha Square Fund, LP, a Delaware limited partnership managed by Alpha Square Management, LLC, through the purchase of limited
partnership interests in the fund.

 

8.Warrant
liabilities

 

The Corporation has warrants classified as financial liabilities as
they are not considered to be indexed to the common shares of the Corporation, due to the exercise price of the warrants denominated in
a currency other than the Corporation’s functional currency. In addition, during the three months ended March 31, 2026, the Corporation
issued a warrant in respect of 269,231 SV Shares that do not meet the criteria for equity classification because they include provisions
that could require the Corporation to redeem the warrants for cash upon expiration if specified market conditions are not met, resulting
in a potential obligation to transfer cash that is outside the Corporation’s control. Therefore the Corporation records these warrants
as financial liabilities measured at fair value upon initial recognition. At each subsequent reporting date, the warrants are re-measured
at fair value and the change in fair value is recognized through profit or loss. Upon warrant exercise, the fair value previously recognized
in warrant liabilities is transferred from warrant liabilities to additional paid-in capital.

 

 
12

 
 

 

 

 
 Digi Power X Inc.

 
 Notes to Condensed Interim Consolidated Financial Statements

 
 Three Months Ended March 31, 2026

 
 (Expressed in United States Dollars) (Unaudited)

 

 

The following table summarizes the changes in the warrant liabilities
for the Corporation’s warrants for the periods ended March 31, 2026 and December 31, 2025:

 

 
   
 Number of
 warrants  
 Amount 

 
 Balance, December 31, 2024 
  3,636,363  
 $3,040,494 

 
 Warrants issued 
  1,492,190  
  3,215,255 

 
 Warrants exercised 
  (3,653,410) 
  (7,324,588)

 
 Revaluation of warrant liabilities 
  -
  
  3,110,015 

 
 Foreign currency translation 
  -
  
  256,754 

 
 Balance, March 31, 2025 
   
  
   
 

 
 Balance, December 31, 2025 
  1,475,143  
  2,297,930 

 
 Warrants issued 
  269,231  
  599,039 

 
 Revaluation of warrant liabilities 
  -
  
  (784,833)

 
 Foreign currency translation 
  -
  
  (35,376)

 
 Balance, March 31, 2026 
  1,744,374  
 $2,076,760 

 

 

The fair value of the Corporation’s warrants issued during the
three months ended March 31, 2026 were determined using the Monte Carlo simulation model with the following assumptions: expected life
of 5 years; risk-free rate of 3.65%; expected volatility of 120.57%; and dividend yield of 0%. As at March 31, 2026, the warrants were
remeasured with the following assumptions: expected life of 4.9 years; risk free rate of 3.92%; expected volatility of 113.16%; and dividend
yield of 0%. The Corporation determined the fair value of the warrant liability based on based on Geometric Brownian Motion, which reflected
our estimates regarding the probability and timing of events that could result in payments to the warrant holder or the exercise of the
warrants.

 

The
fair value of the Corporation’s warrants determined using the Black-Scholes pricing model was determined with the following weighted
average assumptions:

 

 
   
 As at
 March 31,
 2026  
 As at
 December 31,
 2025 

 
 Spot price (in CAD$) 
 $2.63  
 $3.50 

 
 Risk-free interest rate 
  2.86% 
  2.64%

 
 Expected annual volatility 
  122% 
  121%

 
 Expected life (years) 
  2.26  
  2.48 

 
 Dividend 
  nil  
  nil 

 

 

The
following table reflects the Corporation’s warrants classified as liabilities outstanding and exercisable as at March 31, 2026.

 

 Expiry
date
  SV Shares underlying
Warrants
 outstanding
 and
 exercisable   Exercise price 
 August 15, 2027   522,727   US$2.00 
 February 7, 2028   712,031   US$3.66 
 July 21, 2030   240,385   US$3.59 
 February 20, 2031   269,231   US$2.85 
     1,744,374