American Bitcoin Corp 10-Q for FY2026 Q1
American Bitcoin Corp. (ABTC)
About this 10-Q
American Bitcoin Corp filed this 10-Q on May 6, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $62.12M
- up 403.5% from $12.34M a year earlier
- Net loss
- $81.79M
- compared with a net loss of $100.62M a year earlier
- Diluted EPS
- -$0.08
- compared with -$0.11 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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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
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
(Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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.
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).
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.
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Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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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 4, 2026, the registrant had
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Table of Contents
Introductory Note
References to the "Company," "ABTC," "American Bitcoin," "we," "us," "our," and similar terms used throughout this Quarterly Report on Form 10-Q (this "Quarterly Report") refer to:
On March 31, 2025, Hut 8 Corp. ("Hut 8"), American Data Centers Inc. ("ADC"), and the stockholders of ADC entered into a Contribution and Stock Purchase Agreement, pursuant to which Hut 8 contributed to ADC substantially all of Hut 8's wholly-owned ASIC miners, in exchange for newly issued Class B Common Stock of ADC, representing 80% of the total and combined voting power and 80% of the issued and outstanding equity interests of ADC after giving effect to the issuance (the "Transactions"). In connection with the Transactions, ADC was renamed American Bitcoin Corp. ("Historical ABTC").
Prior to the effectiveness of the Transactions, we historically operated as the "ASIC Compute" sub-segment of Hut 8’s "Compute" segment and not as a standalone company; therefore, separate financial statements had not been prepared for us. Our Unaudited Condensed Consolidated and Combined Financial Statements, representing the historical assets, liabilities, operations and cash flows directly attributable to us prior to the effectiveness of the Transactions have been prepared on a carveout basis through the use of a management approach from Hut 8’s Consolidated Financial Statements and accounting records and are presented on a standalone basis as if our operations had been conducted independently from Hut 8.
On May 9, 2025, Gryphon Digital Mining, Inc. (along with its consolidated subsidiaries, "Gryphon"), GDM Merger Sub I Inc., a Delaware corporation and wholly owned direct subsidiary of Gryphon ("Merger Sub Inc."), GDM Merger Sub II LLC, a Delaware limited liability company and wholly owned direct subsidiary of Gryphon ("Merger Sub LLC"), and Historical ABTC, entered into an Agreement and Plan of Merger (the "Merger Agreement").
On September 3, 2025, in accordance with the terms of the Merger Agreement, among other things, (i) Merger Sub Inc. merged with and into Historical ABTC, with Historical ABTC surviving the merger (the "First Merger") as a wholly owned direct subsidiary of Gryphon (the corporation surviving the First Merger, the "First Merger Surviving Corporation") and (ii) immediately after the First Merger, the First Merger Surviving Corporation merged with and into Merger Sub LLC, with Merger Sub LLC surviving the merger (the "Second Merger" and, taken together with the First Merger, the "Mergers") as a wholly owned direct subsidiary of Gryphon. In connection with and immediately following the consummation of the Mergers, Gryphon changed its name to American Bitcoin Corp.
1
Cautionary Statement Regarding Forward-Looking Statements
This Quarterly Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, as well as assumptions, that, if proven incorrect or do not materialize, could cause our results to differ materially from those expressed or implied by these forward-looking statements. Forward-looking statements generally are identified by the words "intend," "plan," "may," "should," "will," "project," "estimate," "anticipate," "believe," "expect," "continue," "potential," "opportunity," and similar expressions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Such statements are based on management’s current expectations and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. There can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors, including those described in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the "Annual Report") and in Part II, Item 1A "Risk Factors" of this Quarterly Report. Except as required by law, we do not assume any obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
2
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
American Bitcoin Corp.
Condensed Consolidated and Combined Balance Sheets
(in USD thousands, except share and per share data)
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March 31, |
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December 31, |
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2026 |
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2025 |
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(Unaudited) |
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(Audited) |
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Assets |
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Current assets |
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Cash |
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$ |
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$ |
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Deposits and prepaid expenses |
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Accounts and other receivables |
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Digital assets receivable |
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Total current assets |
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Non-current assets |
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Digital assets – held in custody |
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Digital assets – pledged for miner purchase |
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Property and equipment, net |
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Operating lease right-of-use asset |
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Derivative asset |
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Indefinite-lived intangible asset |
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Goodwill |
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Total non-current assets |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders’ equity |
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Current liabilities |
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Accounts payable and accrued expenses |
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$ |
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$ |
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Due to Hut 8 |
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Income tax payable |
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Operating lease liability, current portion |
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Total current liabilities |
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Non-current liabilities |
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Miner purchase liability |
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Operating lease liability, less current portion |
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Warrant liability |
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Total non-current liabilities |
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Total liabilities |
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$ |
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$ |
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Stockholders’ equity |
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Preferred stock, $ |
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— |
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— |
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Class A common stock, $ |
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Class B common stock, $ |
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Class C common stock, $ |
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— |
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— |
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Additional paid-in capital |
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Accumulated deficit |
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( |
) |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See accompanying Notes to Unaudited Condensed Consolidated and Combined Financial Statements.
3
American Bitcoin Corp.
Condensed Consolidated and Combined Statements of Operations and Comprehensive (Loss) Income
(Unaudited, in USD thousands, except share and per share data)
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Three Months Ended |
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March 31, |
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2026 |
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2025 |
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Revenue |
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$ |
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$ |
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Cost of revenue (exclusive of depreciation and amortization shown below) |
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Operating expenses: |
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Depreciation and amortization |
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General and administrative expenses |
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Loss on sale of property and equipment |
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— |
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Loss on digital assets |
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Total operating expenses |
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Operating loss |
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( |
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( |
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Other income: |
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Gain on derivatives |
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Gain on warrant liability |
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— |
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Other income |
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Loss before income taxes |
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( |
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( |
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Income tax (provision) benefit |
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( |
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Net loss |
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Other comprehensive income: |
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Foreign currency translation adjustments |
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— |
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Total comprehensive loss |
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$ |
( |
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$ |
( |
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Net loss per share of common stock: |
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Basic and diluted |
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$ |
( |
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$ |
( |
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Weighted average number of shares of common stock outstanding: |
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Basic and diluted |
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See accompanying Notes to Unaudited Condensed Consolidated and Combined Financial Statements.
4
American Bitcoin Corp.
Condensed Consolidated and Combined Statements of Stockholders’ Equity
(Unaudited, in USD thousands, except share and per share data)
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Class A |
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Class B |
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Class C |
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Additional |
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Retained |
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Accumulated |
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Hut 8 |
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Total Stockholders' |
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Shares |
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Amount |
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Shares |
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Amount |
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Shares |
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Amount |
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Paid-in Capital |
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(Accumulated |
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Comprehensive |
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Net Investment |
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Equity |
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Balance, December 31, 2024 |
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— |
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$ |
— |
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— |
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$ |
— |
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— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
( |
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$ |
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$ |
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Net loss(1) |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Net transfers to Hut 8 |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Foreign currency translation adjustments |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Disposition of cumulative translation adjustment |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
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Issuance of shares resulting from the Transactions (Note 1) |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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Balance, March 31, 2025 |
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— |
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$ |
— |
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— |
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$ |
— |
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$ |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
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Class A |
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Class B |
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Class C |
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Additional |
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Retained |
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Accumulated |
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Hut 8 |
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Total Stockholders' |
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Shares |
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Amount |
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Shares |
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Amount |
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Shares |
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Amount |
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Paid-in Capital |
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(Accumulated |
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Comprehensive |
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Net Investment |
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Equity |
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Balance, December 31, 2025 |
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$ |
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$ |
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— |
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$ |
— |
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$ |
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$ |
( |
) |
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$ |
— |
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$ |
— |
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$ |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
) |
Issuance of common stock – at-the-market offering, net of issuance costs |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of common stock – warrant exercises |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance, March 31, 2026 |
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$ |
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$ |
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— |
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$ |
— |
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$ |
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$ |
( |
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$ |
— |
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$ |
— |
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$ |
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(1) Net loss of $
See accompanying Notes to Unaudited Condensed Consolidated and Combined Financial Statements.
5
American Bitcoin Corp.
Condensed Consolidated and Combined Statements of Cash Flows
(Unaudited, in USD thousands)
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Three Months Ended |
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March 31, |
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2026 |
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2025 |
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Operating activities |
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Net loss |
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$ |
( |
) |
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$ |
( |
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Adjustments to reconcile net loss to net cash: |
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Depreciation and amortization |
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Non-cash lease expense |
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— |
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Stock-based compensation |
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Bitcoin mining revenue |
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( |
) |
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( |
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Loss on digital assets |
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Deferred tax assets and liabilities |
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— |
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( |
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Gain on derivatives |
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( |
) |
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( |
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Gain on warrant liability |
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( |
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— |
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Loss on sale of property and equipment |
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— |
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Changes in assets and liabilities: |
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Deposits and prepaid expenses |
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( |
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— |
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Accounts and other receivable |
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— |
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Income taxes payable |
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( |
) |
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Accounts payable and accrued expenses |
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( |
) |
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( |
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Due to Hut 8 |
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( |
) |
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— |
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Net cash used in operating activities |
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( |
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( |
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Investing activities |
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Proceeds from sale of digital assets |
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— |
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Purchases of digital assets |
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( |
) |
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— |
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Deposit paid to purchase miners and mining equipment |
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( |
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— |
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Proceeds from sale of property and equipment |
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— |
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Net cash (used in) provided by investing activities |
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( |
) |
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Financing activities |
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Proceeds from the issuance of common stock – at-the-market offering, net of issuance costs |
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— |
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Net transfer from Hut 8 – non-cash |
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— |
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Net cash provided by financing activities |
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Net increase in cash |
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— |
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Cash, beginning of period |
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— |
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Cash, end of period |
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$ |
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$ |
— |
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Three Months Ended |
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March 31, |
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2026 |
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2025 |
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Supplemental cash flow information: |
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|
||
Non-cash transactions |
|
|
|
|
|
|
||
Right-of-use assets obtained in exchange for operating lease liabilities |
|
$ |
|
|
$ |
— |
|
|
Property and equipment acquired under accounts payable and accrued expenses |
|
$ |
|
|
$ |
— |
|
|
Property and equipment acquired under miner purchase liability |
|
$ |
|
|
$ |
— |
|
|
Bitcoin redemption and put options acquired under miner purchase liability |
|
$ |
|
|
$ |
— |
|
|
See accompanying Notes to Unaudited Condensed Consolidated and Combined Financial Statements.
6
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
Note 1. Description of business, the transactions and basis of presentation
Nature of operations and corporate information
American Bitcoin Corp. is a pure-play Bitcoin accumulation platform that integrates scaled Bitcoin mining operations with disciplined accumulation strategies. Its business is (i) the operation of application-specific integrated circuit ("ASIC") miners for the purpose of mining Bitcoin and (ii) the strategic accumulation of a Bitcoin reserve. References to the "Company" herein refer to:
The Transactions
Transaction with American Data Centers Inc.
On March 31, 2025, Hut 8 Corp. ("Hut 8"), American Data Centers Inc. ("ADC"), and the stockholders of ADC entered into a Contribution and Stock Purchase Agreement (the "Agreement"), pursuant to which Hut 8 contributed to ADC substantially all of Hut 8’s wholly-owned ASIC miners, representing the business of the Company, in exchange for newly issued Class B Common Stock of ADC, representing
In connection with the Transactions, Hut 8 and the Company entered into a Master Services Agreement and a Master Colocation Services Agreement providing for Hut 8 and its personnel to perform day-to-day commercial and operational management services and ASIC colocation services to the Company, respectively, in each case on an exclusive basis for so long as such agreements remain in effect. Hut 8 and the Company also entered into a Shared Services Agreement, pursuant to which Hut 8 and its personnel would provide back-office support services to the Company.
7
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
The following table presents a reconciliation of the Unaudited Condensed Consolidated and Combined Balance Sheets of the Company as of March 31, 2025, prior to the effectiveness of the Transactions, and the Unaudited Condensed Consolidated and Combined Balance Sheets of the Company as of March 31, 2025, following the effectiveness of the Transactions:
|
|
Combined |
|
|
Adjustments Post |
|
|
Balance |
|
|||
|
|
March 31, 2025 |
|
|
Carveout |
|
|
March 31, 2025 |
|
|||
Assets |
|
|
|
|
|
|
|
|
|
|||
Current assets |
|
|
|
|
|
|
|
|
|
|||
Deposits and prepaid expenses |
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
|
Derivative assets |
|
|
|
|
|
( |
) |
|
|
— |
|
|
Digital assets – pledged for miner purchase |
|
|
|
|
|
( |
) |
|
|
— |
|
|
Total current assets |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Non-current assets |
|
|
|
|
|
|
|
|
|
|||
Digital assets – held in custody |
|
|
|
|
|
( |
) |
|
|
— |
|
|
Digital assets – pledged as collateral |
|
|
|
|
|
( |
) |
|
|
— |
|
|
Property and equipment, net |
|
|
|
|
|
( |
) |
|
|
|
||
Goodwill |
|
|
|
|
|
( |
) |
|
|
— |
|
|
Total non-current assets |
|
|
|
|
|
( |
) |
|
|
|
||
Total assets |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|||
Liabilities and equity |
|
|
|
|
|
|
|
|
|
|||
Current liabilities |
|
|
|
|
|
|
|
|
|
|||
Accounts payable and accrued expenses |
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
|
Derivative liability |
|
|
|
|
|
( |
) |
|
|
— |
|
|
Income tax payable |
|
|
|
|
|
( |
) |
|
|
— |
|
|
Total current liabilities |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Non-current liabilities |
|
|
|
|
|
|
|
|
|
|||
Deferred tax liability |
|
|
|
|
|
( |
) |
|
|
|
||
Total liabilities |
|
|
|
|
|
( |
) |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|||
Stockholders’ equity |
|
|
|
|
|
|
|
|
|
|||
Net Hut 8 investment |
|
|
|
|
|
( |
) |
|
|
— |
|
|
Common Stock |
|
|
— |
|
|
|
|
|
|
|
||
Additional paid-in capital |
|
|
— |
|
|
|
|
|
|
|
||
Accumulated other comprehensive income |
|
|
( |
) |
|
|
|
|
|
— |
|
|
Total stockholders’ equity |
|
|
|
|
|
( |
) |
|
|
|
||
Total liabilities and stockholders’ equity |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Mergers with Gryphon Digital Mining, Inc.
On May 9, 2025, Gryphon Digital Mining, Inc., a Delaware corporation (together with its consolidated subsidiaries and predecessors "Gryphon"), GDM Merger Sub I Inc., a Delaware corporation and wholly owned direct subsidiary of Gryphon ("Merger Sub Inc."), GDM Merger Sub II LLC, a Delaware limited liability company and wholly owned direct subsidiary of Gryphon ("Merger Sub LLC"), and Historical ABTC, entered into an Agreement and Plan of Merger (the "Merger Agreement").
On September 3, 2025, in accordance with the terms of the Merger Agreement, among other things, (i) Merger Sub Inc. merged with and into Historical ABTC, with Historical ABTC surviving the merger (the "First Merger") as a wholly owned direct subsidiary of Gryphon (the corporation surviving the First Merger, the "First Merger Surviving Corporation") and (ii) immediately after the First Merger, the First Merger Surviving Corporation merged with and into Merger Sub LLC, with Merger Sub LLC surviving the merger (the "Second Merger" and, taken together with the First Merger, the "Mergers") as a wholly owned direct subsidiary of Gryphon. Gryphon was renamed to American Bitcoin Corp. after the completion of the Mergers (the "Closing"). This transaction was accounted for under the acquisition method as a reverse acquisition with Historical ABTC identified as the accounting acquirer for financial statement reporting purposes. The transaction resulted in the recognition of $
8
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
Note 2. Significant accounting policies and recent accounting pronouncements
Basis of presentation
Until the effectiveness of the Transactions on March 31, 2025, the Company’s operations historically operated as the "Bitcoin mining" sub-segment of Hut 8’s "Compute" segment and not as a standalone company; therefore, separate financial statements had not historically been prepared for the Company prior to April 1, 2025. The Company's Unaudited Condensed Consolidated and Combined Financial Statements represent the historical assets, liabilities, operations, and cash flows directly attributable to the Company starting April 1, 2025; the prior periods have been prepared on a carveout basis through the use of a management approach from Hut 8’s consolidated financial statements and accounting records and are presented on a standalone basis as if the operations had been conducted independently from Hut 8.
Following the effectiveness of the Transactions on March 31, 2025, the Company began operating as a standalone entity with its own accounting and financial records; therefore, starting April 1, 2025, the Company’s results of operations are the results directly attributed to its standalone operations rather than the Bitcoin mining operations of Hut 8. The Company’s Unaudited Condensed Consolidated and Combined Balance Sheets as of March 31, 2026, reflects the assets and liabilities that the Company directly owns or is legally obligated to satisfy post-Transactions.
Prior to the effectiveness of the Transactions on March 31, 2025, all revenues and costs, as well as assets and liabilities directly associated with Hut 8’s Bitcoin mining sub-segment activities were included in the Company’s Unaudited Condensed Consolidated and Combined Financial Statements, including Hut 8’s strategic Bitcoin reserve (which remained with Hut 8 following the effectiveness of the Transactions). Additional costs allocated to the Company include corporate general and administrative expenses which consisted of various categories, including but not limited to: employee compensation and benefits, professional services, facilities and corporate office expenses, information technology, interest expenses, and stock-based compensation. The corporate and general administrative expenses allocated were primarily based on a percentage of revenue basis that was considered to be a reasonable reflection of the utilization of the services provided or benefit received during the periods presented, depending on the nature of the service received. Management believes the assumptions underlying the Company’s Unaudited Condensed Consolidated and Combined Financial Statements, including the expense methodology and resulting allocation, are reasonable for all periods presented. However, the allocations may not include all of the actual expenses that would have been incurred by the Company had it operated as a standalone entity during such periods and may not reflect its results of operations, financial position and cash flows had it been a standalone company during the periods presented. Actual costs that might have been incurred had the Company been a standalone company would depend on a number of factors, including the Company’s organizational structure, what corporate functions the Company might have performed directly or outsourced, and strategic decisions the Company might have made in areas such as executive management, legal, and other professional services, and certain corporate overhead functions. These costs also may not be indicative of the expenses that the Company may incur in the future or would have incurred if the Company had obtained these services from a third party.
Prior to the effectiveness of the Transactions on March 31, 2025, the Company’s equity balance in its Unaudited Condensed Consolidated and Combined Financial Statements represented the excess of total liabilities over assets. Net Hut 8 investment is primarily impacted by contributions from Hut 8 that are the result of net funding provided by or distributed to Hut 8.
Prior to the effectiveness of the Transactions on March 31, 2025, cash was managed through bank accounts controlled and maintained by Hut 8. The Company did not have legal ownership of any bank accounts containing cash balances prior to March 31, 2025. As such, cash held in commingled accounts with Hut 8 is presented within net Hut 8 investment on the Company’s Unaudited Condensed Consolidated and Combined Balance Sheets. Subsequent to March 31, 2025, the Company has set up its own legally separate bank accounts to directly settle its liabilities and to manage its own cash.
Prior to the effectiveness of the Transactions on March 31, 2025, the Company was not a co-obligor on Hut 8’s third-party, long-term debt obligations nor was the Company expected to pay any portion of Hut 8’s third-party, long-term debt. However, proceeds from Hut 8’s third-party debts were used to finance the Company’s purchase of ASICs or directly used for the Company’s Bitcoin mining-related activities and were therefore included in the Company’s Unaudited Condensed Consolidated and Combined Financial Statements. While the Company is not a legal obligor, as of March 31, 2026, certain Bitcoin mining assets of the Company were pledged as collateral as disclosed in Note 4. Digital Assets. Following the effectiveness of the Transactions on March 31, 2025, the Company is no longer connected to any of Hut 8’s third-party debt obligations.
9
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
The Company’s Unaudited Condensed Consolidated and Combined Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial reporting. While these statements reflect all normal recurring adjustments which are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all the information and footnotes required by GAAP for complete financial statements. As such, the information included in these Unaudited Condensed Consolidated and Combined Financial Statements should be read in conjunction with the Company's Combined Financial Statements for the year ended December 31, 2025 and related notes included therewith.
Interim results are not necessarily indicative of results for a full year.
The U.S. Dollar is the functional and presentation currency of the Company.
Significant accounting policies followed by the Company in the preparation of the accompanying Unaudited Condensed Consolidated and Combined Financial Statements are summarized below.
Principles of consolidation
The Company's Unaudited Condensed Consolidated and Combined Financial Statements include the accounts of the Company and its controlled subsidiaries. Consolidated subsidiaries’ results are included from the date the subsidiary was formed or acquired. Intercompany balances and transactions have been eliminated in consolidation.
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 Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its Unaudited Condensed Consolidated and Combined Financial Statements and ensures that there are proper controls in place to ascertain that the Company’s Unaudited Condensed Consolidated and Combined Financial Statements properly reflect the change.
In December 2025, the Financial Accounting Standards Board ("FASB") issued Update 2025-12, Codification Improvements, ("ASU 2025-12"). ASU 2025-12 clarifies dilutive earnings per share treatment for certain contracts that may be settled in stock or cash when a company has a loss from continuing operations. This update is effective for interim and annual reporting periods beginning after December 31, 2026, with early adoption permitted. The Company is currently assessing the impact of adopting this standard. Adoption of ASU 2025-12 requires retrospective application to each prior reporting period presented.
In September 2025, FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) ("ASU 2025-07"). With respect to Topic 815, ASU 2025-07 refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting. This update is effective for interim and annual reporting periods beginning after December 15, 2026, with early adoption permitted. The Company is currently assessing the impact of adopting this standard. ASU 2025-07 may be applied using a prospective or modified retrospective transition approach.
In September 2025, FASB issued Update ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06"). ASU 2025-06 modernizes the accounting for internal-use software to current development practices, clarifies when to begin capitalizing costs and enhances disclosure requirements. This update is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently assessing the impact of adopting the standard.
In January 2025, the FASB issued Update ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01"). ASU 2025-01 was issued to clarify the effective date for Update ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"). ASU 2024-03 requires public business entities to provide additional disclosures in the notes to financial statements, disaggregating specific expense categories within relevant income statement captions. The prescribed categories include purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation, depletion, and amortization related to oil-and-gas producing activities. ASU 2024-03 is effective for the first annual reporting period beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently assessing the impact of adopting the standard.
10
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
Use of estimates
Cash
Cash includes cash on hand and demand deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal or use. The Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. As of March 31, 2026, the Company had
Fair value measurement
The Company’s financial assets and liabilities are accounted for in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820") which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs when measuring fair value and classifies those inputs into three levels:
Level 1— Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2— Observable, market-based inputs, other than quoted prices included in Level 1, for the assets or liabilities either directly or indirectly.
Level 3—Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or a liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management judgment.
11
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
Assets and liabilities measured at fair value on a recurring basis
The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of March 31, 2026 and December 31, 2025:
|
|
Fair value measured at March 31, 2026 |
|
|||||||||||||
(in USD thousands) |
|
Total carrying value at March 31, 2026 |
|
|
Quoted prices in |
|
|
Significant other |
|
|
Significant |
|
||||
Digital assets |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
Warrant liability |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Bitcoin redemption and put options |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Fair value measured at December 31, 2025 |
|
|||||||||||||
(in USD thousands) |
|
Total carrying value at December 31, 2025 |
|
|
Quoted prices in |
|
|
Significant other |
|
|
Significant |
|
||||
Digital assets |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
Warrant liability |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Bitcoin redemption and put options |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
In determining the fair value of its digital assets, the Company is able to cite quoted prices as determined by the Company’s principal market, which is the Coinbase exchange. As such, the Company’s Digital assets were determined to be Level 1 assets. See Digital assets below for a description of the Company’s digital asset accounting policy.
The Company estimates the fair value of its Bitcoin redemption and put options using the Black model, which includes several inputs and assumptions, including the forward price of the underlying asset (Bitcoin), the underlying asset’s implied volatility, the risk-free interest rate, and the expected term of the redemption and put options.
See the Derivatives section below for a description of the Company’s derivative instrument accounting policy.
The Company estimated the fair value of its warrant liability, which it assumed in connection with the Mergers, using the Black-Scholes pricing model, which includes significant unobservable inputs, including the expected term of the warrants, and as a result, the Company determined that the warrant liability is a Level 3 liability. For quantitative disclosure on the inputs used to estimate the fair value of the Company’s warrant liability, see Note 7. Derivatives. See Warrant liability section below for a description of the Company’s warrant liability accounting policy.
Assets and liabilities measured at fair value on a non-recurring basis
In addition to assets and liabilities that are measured at fair value on a recurring basis, the Company also measures certain assets and liabilities at fair value on a non-recurring basis. The Company’s non-financial assets, including goodwill and property and equipment, are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at estimated fair value only when an impairment charge is recognized. The Company had
The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts payable and accrued expenses, approximate fair value due to the short-term nature of these instruments. The carrying value of long-term liabilities, such as lease liabilities, approximate fair value as the related interest rates approximate rates currently available to the Company.
12
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
Digital assets
Bitcoin, representing the Company’s digital assets, are measured at fair value as of each reporting period. The fair value of digital assets is measured using the period-end closing price from the Company’s principal market, which is Coinbase Prime, in accordance with ASC 820. Since the digital assets are traded on a 24-hour period, the Company utilizes the price as of midnight UTC time, which aligns with the Company’s Bitcoin mining revenue recognition cut-off. Changes in fair value are recognized in Losses on digital assets, in Operating expenses on the Company’s Unaudited Condensed Consolidated and Combined Statement of Operations and Comprehensive (Loss) Income. When the Company sells digital assets, gains or losses from such transactions are measured as the difference between the cash proceeds and the carrying basis of the digital assets as determined on a First In-First Out basis and are also recorded within the same line item Loss on digital assets.
Digital assets received by the Company through its revenue activities are accounted for in connection with the Company’s revenue recognition policy disclosed below.
Leases
The Company accounts for its leases under ASC Topic 842, Leases ("ASC 842"). Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the Unaudited Condensed Consolidated and Combined Balance Sheets as both a right-of-use ("ROU") asset and a lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the ROU asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the ROU asset result in straight-line rent expense over the lease term.
Upon adoption of ASC 842, for purposes of calculating the ROU asset and lease liability, the Company elected to combine lease and related non-lease components as permitted under ASC 842. The Company also elected the short-term lease exception for leases having an initial term of 12 months or less. Consequently, such leases are not recorded in the Company’s Unaudited Condensed Consolidated and Combined Balance Sheets. The Company recognizes rent expense from its operating leases on a straight-line basis over the lease term.
Property and equipment
Property and equipment, net are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Cost includes expenditures that are directly attributable to the acquisition of the asset, including those attributable to bringing the asset to its intended working condition. Construction in progress is not depreciated until the assets are placed in service.
Based on the currently available information and data, management has determined that the straight-line method of depreciation best reflects the current expected useful life of the Company's miners and mining equipment. Management reviews estimates at each reporting date and will revise such estimates as and when data become available. Management reviews the appropriateness of its assumptions related to residual value at each reporting date.
The estimated useful life of the Company's property and equipment is generally as follows:
|
|
Useful life (in years) |
Miners and mining equipment |
|
Impairment of long-lived assets
The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its long-lived assets, including property and equipment, may not be recoverable. When such events or changes in circumstances occur, the Company assesses recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows from it. If the expected future undiscounted cash flows from the assets are less than the carrying amount of these assets, the Company recognizes an impairment loss based on any excess of the carrying amount over the fair value of the assets.
When recognized, impairment losses related to long-lived assets to be held and used in operations are recorded as cost and expenses in the Company’s Unaudited Condensed Consolidated and Combined Statements of Operations and Comprehensive Income (Loss).
13
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
Goodwill
Goodwill represents the cost of a business acquisition in excess of the fair value of the net assets acquired. The Company reviews goodwill for impairment at the reporting unit level on an annual basis during the fourth quarter of each fiscal year and in between annual tests whenever events or changes in circumstances indicate that it is more likely than not that the carrying value of a reporting unit exceeds its fair value. In performing the goodwill impairment test, the Company first performs a qualitative assessment, which requires the Company to consider events or circumstances, including significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business, significant underperformance relative to expected historical or projected development milestones, significant negative regulatory or economic trends, and significant technological changes that could render the asset (or asset group) obsolete. If, after assessing the totality of events or circumstances, the Company determines that it is more likely than not that the fair value of its reporting unit is greater than the carrying amounts, then the quantitative goodwill impairment test is not performed.
If the qualitative assessment indicates that the quantitative analysis should be performed, the Company next evaluates goodwill for impairment by comparing the fair value of its reporting unit to its carrying value, including the associated goodwill. To determine the fair value, the Company uses the equal weighting of the market approach based on comparable publicly traded companies in similar lines of businesses and the income approach based on estimated discounted future cash flows. Cash flow assumptions consider historical and forecasted revenue, operating costs and other relevant factors.
The Company has
Derivatives
The Company accounts for the derivative contracts it enters into as follows:
Bitcoin redemption and put options
The Company has entered into agreements to purchase property and equipment that includes a pledge of Bitcoin and a right to redeem the pledged Bitcoin for a certain period after the redemption period starts. The redemption period starts when the purchased property and equipment is shipped. The amount of Bitcoin that can be redeemed is pro-rata of the percentage of property and equipment shipped. These Bitcoin redemption and put options do not qualify as an accounting hedge under FASB ASC Topic 815, Derivatives and Hedging ("ASC 815"). Accordingly, the Company carries the Bitcoin redemption and put options at fair value and any gains or losses are recognized in profit or loss, respectively.
Covered call options
From time to time, Hut 8 sold call options on Bitcoin that it owned (the "covered call options") to generate cash flows on a portion of its Bitcoin held. These options do not qualify as accounting hedges under ASC 815. Accordingly, the Company carries the covered call options at fair value and any gains or losses are recognized in profit or loss, respectively.
As of March 31, 2026, the Company had not entered into a covered call options transaction.
Warrant liability
The Company assumed certain warrants in the Mergers (as defined below) that meet the definition of a derivative under ASC 815, and due to the terms, the warrants are required to be classified as a liability. The warrant liability is carried at fair value and any gains or losses are recorded in profit or loss.
Segment reporting
Operating segments are defined as components of an enterprise for which separate financial information is available and regularly reviewed by the Chief Operating Decision Maker ("CODM") to make strategic decisions, allocate resources, and assess financial performance. The Company's serves as the CODM, responsible for strategic decisions regarding operations and financial management. The Company operates with
14
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
Because the Company has a reportable segment, all required financial segment information can be found directly in our Unaudited Condensed Consolidated and Combined Financial Statements. The measure of segment assets is reported on the Unaudited Condensed Consolidated and Combined Balance Sheets as total assets. Significant segment expenses are consistent with those presented on the Unaudited Condensed Consolidated and Combined Statements of Operations and Comprehensive (Loss) Income. Depreciation and amortization expense is reported on the Unaudited Condensed Consolidated and Combined Statements of Cash Flows.
Revenue recognition
The Company recognizes revenue under ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"). The core principle of this standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:
In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a "distinct" good or service (or bundle of goods or services) if both of the following criteria are met: (1) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and (2) the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).
If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.
The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:
Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.
15
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
The Company earns revenue from Bitcoin mining. The Company has entered into arrangements, as amended from time to time, with mining pool operators to perform hash computations for the mining pools, which is an output of the Company’s ordinary activities. The Company has the right to decide the point in time and duration for which it will provide hash computation services to the mining pools. As a result, the Company’s enforceable right to compensation only begins when, and continues so long as, the Company provides hash computation services to the mining pools. The contracts are terminable at any time by either party without substantive compensation to the other party for such termination. Therefore, the Company has determined that the duration of the contract is less than 24 hours and that the contract continuously renews throughout the day. Upon termination, the mining pool operator (i.e., the customer) is required to pay the Company any amount due related to previously satisfied performance obligations. The Company has determined that the mining pool operator’s (i.e., the customer’s) renewal right is not a material right as the terms, conditions, and compensation amounts are at then market rates. There is no significant financing component in these transactions.
In exchange for providing hash computation services, which represents the Company’s only performance obligation, the Company is entitled to noncash consideration in the form of Bitcoin, calculated under payout models determined by the mining pool operators. The payout model used by the mining pools in which the Company participated is the Full Pay Per Share ("FPPS") model, which contains three components: (1) a fractional share of the fixed Bitcoin award from the mining pool operator (referred to as a "block reward"), (2) transaction fees generated from (paid by) blockchain users to execute transactions and distributed (paid out) to individual miners by the mining pool operator, and (3) mining pool operating fees retained by the mining pool operator for operating the mining pool. The Company’s total compensation is calculated using the following formula: the sum of the Company’s share of (a) block rewards and (b)
transaction fees, less (c) mining pool operating fees. The following is a detailed description of each of the components of the FPPS model under which the Company receives payment from the mining pools in which it participates:
Cost of revenues (exclusive of depreciation and amortization)
The Company’s cost of revenue consists primarily of direct costs of generating revenue, including electric power costs, hosting costs, repairs and maintenance, occupancy, materials and supply costs, and labor.
Stock-based compensation
The Company grants stock-based compensation, primarily to employees, consultants, and non-employee directors of the Company and its affiliates. Restricted stock units ("RSUs") granted to employees generally either vest in quarterly or annual installments over three years and RSUs granted to non-employee directors generally vest on the date of the Company’s annual general meeting of stockholders.
16
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
Compensation expense for awards is predominantly recognized using the straight-line method over the requisite service period for the entire award and forfeitures are recognized as they occur. The cumulative amount of compensation cost recognized at any point in time equals at least the portion of the grant-date fair value of the award that is vested at that date. The fair value of RSUs is calculated at the market value of the Class A common stock on the measurement date.
Foreign currency
The U.S. Dollar is the functional and presentation currency of the Company. Hut 8 has consolidated subsidiaries that have a non-U.S. Dollar functional currency. Each of Hut 8's subsidiaries determines its own functional currency and items of each subsidiary included in the Unaudited Condensed Consolidated and Consolidated Financial Statements are measured using that functional currency. Assets and liabilities of foreign operations having a functional currency other than the U.S. Dollar are translated at the rate of exchange prevailing at the reporting date and revenues and expenses at average rates during the period. Foreign currency translation adjustments are reflected within accumulated other comprehensive income (loss) in stockholders’ equity. Gains and losses from foreign currency transactions are included in profit or loss for the period. Foreign currency-denominated monetary assets and liabilities of Hut 8 are translated using the rate of exchange prevailing at the reporting date, and non-monetary assets and liabilities measured at fair value are translated at the rate of exchange prevailing at the date when the fair value was determined. Resulting gains and losses arising from the translation of these assets and liabilities are recorded as a cumulative translation adjustment, a component of other comprehensive (loss) income in stockholders’ equity. Revenues and expenses are measured at average rates during the period. Gains or losses on translation of these items are included in earnings. Foreign currency denominated non-monetary assets and liabilities, measured at historic cost, are translated at the rate of exchange at the transaction date. Certain foreign operations have been carved out and allocated to the Company. Therefore, the Company allocated a portion of these foreign currency impacts to the Unaudited Condensed Consolidated and Combined Financial Statements.
Net (loss) income per share attributable to common stockholders
The Company does not have participating securities other than common stock. Basic net (loss) income per share of common stock from continuing operations attributable to the Company and basic net loss per share of common stock from discontinued operations attributable to the Company are computed by dividing net (loss) income from continuing operations attributable to the Company and net loss from discontinued operations attributable to the Company, respectively, by the weighted-average number of shares of common stock outstanding during the period. Diluted net (loss) income per share of common stock from continuing operations attributable to the Company is computed by giving effect to all potentially dilutive shares of common stock, including (if any) warrants to purchase common stock to the extent dilutive under the treasury-stock method, and the numerator adjustment from the impact of the warrant liability assumed from the Mergers to the extent dilutive. In computing potentially dilutive shares of common stock, each class of shares is applied to basic net (loss) income per share of common stock from continuing operations attributable to the Company on a most to least dilutive basis until a particular class no longer produces further dilution, if applicable. Diluted net loss per share of common stock from discontinued operations attributable to the Company is computed by using the same denominator used to calculate diluted net (loss) income per share of common stock from continuing operations attributable to the Company, as previously noted. For comparative purposes, periods prior to the Mergers have been retroactively recast to reflect the effects of the changes in equity structure resulting from the Mergers and assumes the same basic weighted average shares.
The Company has two classes of common stock outstanding: Class A common stock and Class B common stock. Holders of Class A common stock generally have the same rights, including rights to dividends, as holders of Class B common stock, except that holders of Class A common stock have vote per share while holders of Class B common stock have
Income taxes
The Company complies with the accounting and reporting requirements of ASC Topic 740, Income Taxes which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.
A valuation allowance is recorded if it is more-likely-than-not that some portion, or all, of a deferred tax asset will not be realized. In evaluating whether a valuation allowance is needed, the Company considers all relevant evidence, including past performance, recent cumulative losses, projections of future taxable income, and the viability of tax planning strategies. If the Company subsequently determines that there is sufficient evidence to indicate a deferred tax asset will be realized, the associated valuation allowance is reversed.
17
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
The Company will recognize positions taken or expected to be taken in a tax return in the Unaudited Condensed Consolidated and Combined Financial Statements when it is more-likely-than-not that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit with greater than 50% likelihood of being realized upon ultimate settlement. The Company will recognize any interest and penalties related to unrecognized tax benefits in income tax expense. There were
Note 3. Segment information
The Company reports results in a reportable segment, which reflects how our CODM allocates resources and evaluates the Company's financial results. Because the Company has a single reportable segment, all required financial segment information can be found directly in our Unaudited Condensed Consolidated and Combined Financial Statements.
The following table presents summarized information for revenue by geographic area:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
(in USD thousands) |
|
2026 |
|
|
2025 |
|
||
Revenue |
|
|
|
|
|
|
||
United States |
|
$ |
|
|
$ |
|
||
Canada |
|
|
— |
|
|
|
|
|
Total revenue |
|
$ |
|
|
$ |
|
||
The following table presents summarized information for long-lived assets by geographic area:
|
|
March 31, |
|
|
December 31, |
|
||
(in USD thousands) |
|
2026 |
|
|
2025 |
|
||
United States |
|
$ |
|
|
$ |
|
||
Total long-lived assets |
|
$ |
|
|
$ |
|
||
18
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
Note 4. Digital assets
The following table presents the changes in carrying amount of the Company's digital assets as of March 31, 2026 and March 31, 2025:
(in USD thousands) |
|
Amount |
|
|
Balance as of December 31, 2024 |
|
$ |
|
|
Revenue recognized from Bitcoin mined |
|
|
|
|
Carrying value of Bitcoin sold |
|
|
( |
) |
Change in fair value of Bitcoin |
|
|
( |
) |
Adjustments post carveout of mining operations to ABTC |
|
|
( |
) |
Foreign currency translation adjustments |
|
|
|
|
Balance as of March 31, 2025 |
|
$ |
|
|
|
|
|
|
|
Number of Bitcoin held as of March 31, 2025 |
|
|
— |
|
Number of Bitcoin pledged to Bitmain as of March 31, 2025 |
|
|
— |
|
Cost basis of Bitcoin held as of March 31, 2025 |
|
$ |
— |
|
Realized gains on the sale of Bitcoin for the three months ended March 31, 2025 |
|
$ |
|
|
|
|
|
|
|
Balance as of December 31, 2025 |
|
$ |
|
|
Revenue recognized from Bitcoin mined |
|
|
|
|
Bitcoin purchased |
|
|
|
|
Mining revenue earned in prior period received in current period |
|
|
|
|
Bitcoin mining revenue not received |
|
|
( |
) |
Change in fair value of Bitcoin |
|
|
( |
) |
Balance as of March 31, 2026 |
|
$ |
|
|
|
|
|
|
|
Number of Bitcoin held as of March 31, 2026 |
|
|
|
|
Number of Bitcoin pledged to Bitmain as of March 31, 2026 |
|
|
|
|
Cost basis of Bitcoin held as of March 31, 2026 |
|
$ |
|
|
Realized gains on the sale of Bitcoin for the three months ended March 31, 2026 |
|
$ |
— |
|
The Company’s digital assets have been or currently are held in segregated custody accounts for the benefit of the Company, held in segregated custody accounts under the Company’s ownership, or held by Bitmain Technologies Delaware Limited (together with its affiliates, "Bitmain") for the Bitcoin pledged in connection with the 2025 Bitmain Purchase Agreement (as defined below) and the 2026 Bitmain Purchase Agreement (as defined below) for miner purchases from them. As discussed in Note 1, Hut 8 contributed only ASIC miners as part of the Transactions. As a result, the Company's entire strategic Bitcoin reserve as of March 31, 2025, included in the carveout financial statements, remained with Hut 8 following the effectiveness of the Transactions. Starting April 1, 2025, the Company began to build its own strategic Bitcoin reserve through Bitcoin mining and at-market Bitcoin purchases. The Company accumulated
19
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
|
|
Amount |
|
|
Number of Digital Assets |
|
||||||||||
(in USD thousands) |
|
March 31, 2026 |
|
|
December 31, 2025 |
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||||
Current |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bitcoin held in custody |
|
$ |
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
— |
|
Total digital assets – held in custody |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bitcoin pledged for miner purchase |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total current digital assets pledged for miner purchase |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-current |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bitcoin held in custody |
|
$ |
|
|
$ |
|
|
|
|
|
|
|
||||
Total non-current digital assets – held in custody |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bitcoin pledged for miner purchase |
|
$ |
|
|
$ |
|
|
|
|
|
|
|
||||
Total Bitcoin pledged for miner purchase |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bitcoin pledged as collateral |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total non-current digital assets – pledged as collateral |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total digital assets |
|
$ |
|
|
$ |
|
|
|
|
|
|
|
||||
Bitmain Purchase Agreements
In November 2024, Hut 8 entered into a purchase agreement with Bitmain Technologies Delaware Limited (together with its affiliates, "Bitmain") to purchase approximately
As of March 31, 2025, Hut 8 pledged
On August 5, 2025, Hut 8 assigned its option to purchase up to approximately
20
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
Concurrently with the execution of the 2025 Bitmain Purchase Agreement, the Company purchased
In February 2026, the Company entered into a Future Sales and Purchase Agreement (the "2026 Bitmain Purchase Agreement") with Bitmain to purchase approximately
As of March 31, 2026, the Company pledged
In accordance with FASB ASC Topic 610-20, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets, the Company assessed the transfer of Bitcoin as a nonfinancial asset under ASC 606. Specifically, the Company noted that the Bitcoin pledged to Bitmain under the 2025 Bitmain Purchase Agreement and the 2026 Bitmain Purchase Agreement constitute repurchase agreements under ASC 606. As a result, Bitcoin was not derecognized upon these transfers as both Hut 8 and the Company retain repurchase options.
Due to the Company’s redemption rights under the 2025 Bitmain Purchase Agreement and 2026 Bitmain Purchase Agreement, and its continued economic exposure to Bitcoin, the pledged Bitcoin under these agreements is separately classified as Digital assets – pledged for miner purchase on the Company’s Condensed Consolidated and Combined Balance Sheets, which represents restricted Bitcoin.
Strategic Bitcoin reserve
Starting April 1, 2025, following the effectiveness of the Transactions, the Company began to accumulate its own strategic Bitcoin reserve through Bitcoin mining and at-market purchases, totaling
Note 5. Property and equipment, net
The components of property and equipment were as follows:
(in USD thousands) |
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
Miners and mining equipment |
|
$ |
|
|
$ |
|
||
Less: Accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Total property and equipment, net |
|
$ |
|
|
$ |
|
||
Depreciation and amortization expense related to property and equipment was $
21
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
Impairment of long-lived assets
There is considerable management judgment necessary to determine the estimated future cash flows and fair values of the Company’s long-lived assets, and, accordingly, actual results could vary significantly from such estimates, which fall under Level 3 within the fair value measurement hierarchy (see discussion of fair value measurements in Note 2. Significant accounting policies and recent accounting pronouncements).
Note 6. Stock-based compensation
In connection with the closing of the Mergers on September 3, 2025, the Company adopted the Amended and Restated American Bitcoin Corp. 2025 Omnibus Incentive Plan (the "ABTC 2025 Plan"), which amended and restated the predecessor Gryphon Digital Mining, Inc. 2024 Omnibus Incentive Plan.
In February 2026, the Company granted
(in USD thousands, except share and per share amounts) |
|
Number of Units |
|
|
Weighted Average Grant-Date Fair Value |
|
|
Aggregate Intrinsic Value |
|
|||
Unvested as of December 31, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|||
Granted |
|
|
|
|
|
|
|
|
|
|||
Unvested as of March 31, 2026 |
|
|
|
|
$ |
|
|
$ |
|
|||
The Company recognized stock-based compensation expense of $
Note 7. Derivatives
The following table presents the Company’s Unaudited Condensed Consolidated and Combined Balance Sheets classification of derivatives carried at fair value:
(in USD thousands) |
|
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||||||||||
Derivative |
|
Balance Sheet Line |
|
Asset |
|
|
Liability |
|
|
Asset |
|
|
Liability |
|
||||
Derivatives not designated as hedging instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bitcoin redemption and put options |
|
Derivative asset |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
Warrant liability |
|
Warrant liability |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total derivatives |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following table presents the effect of derivatives on the Company’s Unaudited Condensed Consolidated and Combined Statements of Operations and Comprehensive Income (Loss):
|
|
|
|
Three Months Ended |
|
|||||
(in USD thousands) |
|
Statement of |
|
March 31, |
|
|||||
Derivative |
|
Operations Line |
|
2026 |
|
|
2025 |
|
||
Derivatives not designated as hedging instruments: |
|
|
|
|
|
|
|
|
||
Bitcoin redemption and put options |
|
Gain on derivatives |
|
$ |
|
|
$ |
|
||
Covered call options |
|
Gain on derivatives |
|
|
— |
|
|
|
|
|
Warrant liability |
|
Gain on warrant liability |
|
|
|
|
|
— |
|
|
Total derivatives |
|
|
|
$ |
|
|
$ |
|
||
22
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
Bitcoin redemption and put options
During December 2024, pursuant to the Hut 8 Bitmain Purchase Agreement, Hut 8 pledged approximately 968 Bitcoin attributed to the Company at the time to Bitmain in connection with a purchase of approximately
As part of the 2025 Bitmain Purchase Agreement, in August, September, and October 2025, the Company pledged Bitcoin with Bitmain in connection with a purchase of the 17,280 U3S21EXPH ASIC miners. The total amount of Bitcoin pledged was approximately
In February 2026, in connection with the 2026 Bitmain Purchase Agreement, the Company pledged approximately
Covered call options
During October 2024, Hut 8 sold covered call options on
During the three months ended March 31, 2025, covered call options on
Warrant liability
In connection with the Mergers, the Company assumed
23
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
As of March 31, 2026, there were
These warrants meet the definition of a derivative under ASC 815, and due to the terms of the warrants, are required to be liability classified. The warrant liabilities are carried at fair value, and are Level 3 liabilities as noted in Note 2. Significant accounting policies and recent accounting pronouncements.
As of March 31, 2026, the Company estimated the fair value of the warrant liability using the Black-Scholes pricing model with the following inputs:
|
|
March 31, 2026 |
|
|
Exercise price |
|
$ |
|
|
Expected price volatility |
|
|
% |
|
Risk-free interest rate |
|
|
% |
|
Expected term (in years) |
|
|
|
|
Dividend yield |
|
|
% |
|
The following table provides a summary of activity and change in fair value of the Company’s warrant liability (Level 3 derivative liability), and there was no activity during the three months ended March 31, 2026:
(in USD thousands) |
|
March 31, |
|
|
December 31, 2025 |
|
||
Balance, beginning of period |
|
$ |
|
|
$ |
|
||
Warrants assumed in Mergers |
|
|
— |
|
|
|
|
|
Exercise of warrants |
|
|
— |
|
|
|
( |
) |
Change in fair value |
|
|
( |
) |
|
|
( |
) |
Balance, end of period |
|
$ |
|
|
$ |
|
||
Note 8. Leases
As further discussed in Note 11. Related party transactions, on March 31, 2025, in connection with the Transactions, the Company entered into a Master Colocation Services Agreement and Master Managed Services Agreement with Hut 8. Under both agreements, Hut 8 provides the Company with colocation, hosting, management, oversight, strategy, compliance, operational and other services for its Bitcoin mining operations located at Hut 8’s facilities. Pursuant to an Exclusivity Agreement between the Company and Hut 8, all of the Company’s Bitcoin miners are located at Hut 8’s facilities. The Company has determined that it has embedded operating leases at three of the facilities governed by this arrangement and has elected to combine lease and non-lease components as permitted under ASC 842. One of the facilities governed by this arrangement includes payments that are variable pass-through fees and facility costs and are therefore expensed as incurred. The Company recorded right-of-use ("ROU") assets of $
The following table shows the ROU assets and lease liabilities as of March 31, 2026 and December 31, 2025:
(in USD thousands) |
|
March 31, |
|
|
December 31, |
|
||
ROU assets |
|
|
|
|
|
|
||
Operating leases |
|
$ |
|
|
$ |
|
||
Total ROU assets |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Lease liabilities |
|
|
|
|
|
|
||
Operating leases |
|
$ |
|
|
$ |
|
||
Total lease liabilities |
|
$ |
|
|
$ |
|
||
24
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
The Company’s lease costs are comprised of the following:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
(in USD thousands) |
|
2026 |
|
|
2025 |
|
||
Operating lease cost |
|
$ |
|
|
$ |
— |
|
|
Variable lease cost |
|
|
|
|
|
— |
|
|
Total lease expense |
|
$ |
|
|
$ |
— |
|
|
The following table presents supplemental lease information:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
(in USD thousands) |
|
2026 |
|
|
2025 |
|
||
Operating cash outflows – operating leases |
|
$ |
— |
|
|
$ |
— |
|
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Weighted-average remaining lease term – operating leases (in years) |
|
|
|
|
|
— |
|
|
Weighted-average discount rate(1) – operating leases |
|
|
% |
|
|
— |
% |
|
(1) The Company’s operating leases implicit interest rate cannot be determined, therefore the Company uses the incremental borrowing rate at the lease commencement date in determining the present value of lease payments. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis for similar assets over the term of the lease.
The following table presents the Company’s future minimum operating lease payments as of March 31, 2026:
|
|
Operating |
|
|
(in USD thousands) |
|
Leases |
|
|
Remainder of 2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total undiscounted lease payments |
|
|
|
|
Less: present value discount |
|
|
( |
) |
Present value of operating lease liabilities |
|
$ |
|
|
Note 9. Income taxes
For the three months ended March 31, 2026, the Company’s income tax expense and effective tax rate were $
The Company is subject to U.S. federal income taxes as well as income taxes in various state jurisdictions. The Company’s tax returns for tax years beginning 2025 remain subject to potential examination by the taxing authorities.
Note 10. Concentrations
The only digital asset mined by the Company during the three months ended March 31, 2026 and 2025 has been Bitcoin. Therefore,
25
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
Note 11. Related party transactions
Parties are considered related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. This includes equity method investment entities. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all known related party transactions. As of March 31, 2026, the Company owed Hut 8 $
Cost Allocations from Hut 8
Prior to the effectiveness of the Transactions on March 31, 2025, Hut 8 provided significant support functions to the Company, which did not operate as a standalone business. The Company's Unaudited Condensed Consolidated and Combined Financial Statements reflect an allocation of these costs. Allocated costs included in cost of revenue relate to support primarily consisting of electricity, facilities, repairs and maintenance, and labor, which are predominantly allocated based on revenue. Allocated costs included in general and administrative expenses primarily relate to finance, human resources, benefits administration, information technology, legal, corporate strategy, corporate governance, other professional services, and general commercial support functions and are predominantly allocated based on a percentage of revenue. See Note 1 for a discussion of these costs and the methodology used to allocate them.
Master Colocation Services Agreement
On March 31, 2025, in connection with the Transactions, the Company entered into a Master Colocation Services Agreement with Hut 8 (the "MCSA"). Under the MCSA and its service orders, Hut 8 provides the Company with colocation and hosting services at Hut 8 owned or leased facilities for the Company’s Bitcoin miners, on specific terms set forth in service orders to the MCSA.
Under the terms of the MCSA, the Company pays Hut 8 fees generally consisting of a monthly recurring charge, as set forth in each service order, plus
Master Management Services Agreement
On March 31, 2025, in connection with the Transactions, the Company entered into a Master Management Services Agreement with Hut 8 (the "MMSA"). Under the MMSA and its service orders, Hut 8 provides the Company with management, oversight, strategy, compliance, operational, and other services for its Bitcoin mining operations hosted at Hut 8’s facilities.
Under the terms of the MMSA, the Company pays to Hut 8 service fees generally consisting of a fixed fee, payable monthly, for general management, operational, compliance, and other services, plus a monthly fee equal to a combination of payroll related allocations and
Shared Services Agreement
On March 31, 2025, in connection with the Transactions, the Company entered into a Services Agreement with Hut 8 (the "Shared Services Agreement"), pursuant to which Hut 8 agreed to provide back-office support services to the Company, including accounting and financial reporting, HR support, payroll, benefits, IT support and management, legal and compliance, and vendor management services. Under the terms of the Shared Services Agreement, the Company pays to Hut 8 a monthly fee equal to a combination of payroll related allocations and costs charged on a "pass through" basis, to Hut 8 for providing services under the Shared Services Agreement to the Company. For the three months ended March 31, 2026 and 2025, fees and expenses billed by Hut 8 to the Company under the Shared Services Agreement were $
26
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
Note 12. Stockholders’ equity
Net Hut 8 Investment
The net transfers to and from Hut 8, as discussed above in Note 1, were as follows:
|
|
Three Months Ended |
|
|
(in USD thousands) |
|
March 31, 2025 |
|
|
Cash pooling and general financing activities |
|
$ |
|
|
Corporate allocations |
|
|
|
|
Adjustments post carveout of mining operations to the Company |
|
|
( |
) |
Contributions from Hut 8 |
|
|
|
|
Net transfers from Hut 8 per Condensed Consolidated and Combined Statements of Cash Flows |
|
|
( |
) |
Stock based compensation funded by Hut 8 |
|
|
( |
) |
Net transfers to Hut 8 per Condensed Consolidated and Combined Statements of Stockholders’ Equity |
|
$ |
( |
) |
Authorized shares
As of March 31, 2026, the Company had the following capital authorized:
Each share of the Company's Class B common stock is entitled to
At-the-Market Offering
On September 3, 2025, the Company entered into a Controlled Equity Offering Sales Agreement to establish an at-the-market equity program, allowing the Company to offer and sell up to $
Contribution from Hut 8
In connection with the Transactions on March 31, 2025, the Company received $
27
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
Akerna warrants
In connection with the Mergers on September 3, 2025, warrants to purchase shares of Gryphon common stock originally issued by and assumed from Akerna Corp. (the "Akerna Common Warrants") and warrants issued to underwriters to purchase shares of Gryphon common stock originally issued by and assumed from Akerna Corp. (the "Akerna Underwriter Warrants" and, collectively with the Akerna Common Warrants, the "Akerna Warrants") outstanding immediately before the Mergers were assumed by the Company. Post-Mergers, the warrant holders are entitled to receive, upon exercise, in lieu of Gryphon common stock, the Company's Class A Shares at an exchange ratio of
The Akerna Common Warrants and Akerna Underwriter Warrants assumed in the Mergers expire on July 5, 2027, and June 29, 2027, respectively.
Transactions involving the Company's equity-classified warrants are summarized as follows:
(in USD thousands) |
|
Number of shares |
|
|
Weighted average exercise price (per share) |
|
|
Weighted average remaining contractual life (in years) |
|
|||
Akerna Common Warrants assumed through the Mergers |
|
|
|
|
|
|
|
|
|
|||
Akerna Underwriter Warrants assumed through the Mergers |
|
|
|
|
|
|
|
|
|
|||
Outstanding as of March 31, 2026 |
|
|
|
|
$ |
|
|
|
|
|||
Note 13. Earnings per share
Basic and diluted net income (loss) per share attributable to common stockholders is computed in accordance with Note 2. Significant accounting policies and recent accounting pronouncements – Net income (loss) per share attributable to common stockholders.
The following table presents potentially dilutive securities that were not included in the computation of diluted net (loss) income per share of common stock as their inclusion would have been anti-dilutive and or their issuance upon satisfying a contingency, if applicable, was not satisfied or deemed satisfied as of period end:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Akerna Common Warrants |
|
|
|
|
|
— |
|
|
Akerna Underwriter Warrants |
|
|
|
|
|
— |
|
|
Restricted stock units |
|
|
|
|
|
— |
|
|
Gryphon Warrants |
|
|
|
|
|
— |
|
|
Total |
|
|
|
|
|
— |
|
|
28
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
The following is a reconciliation of the denominator of the basic and diluted net income (loss) per share of common stock computations for the periods presented:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
(in USD thousands, except share and per share amounts) |
|
2026 |
|
|
2025 |
|
||
Numerator: |
|
|
|
|
|
|
||
Net loss – basic and diluted |
|
$ |
( |
) |
|
$ |
( |
) |
Denominator: |
|
|
|
|
|
|
||
Weighted average shares of Class A common stock |
|
|
|
|
|
|
||
Weighted average shares of Class B common stock |
|
|
|
|
|
|
||
Total weighted average shares of common stock outstanding – basic and diluted |
|
|
|
|
|
|
||
Net loss per share of common stock: |
|
|
|
|
|
|
||
Basic and diluted |
|
$ |
( |
) |
|
$ |
( |
) |
Note 14. Commitments and contingencies
Bitmain Purchase Agreements
In August 2025 and February 2026, the Company entered into the 2025 Bitmain Purchase Agreement and 2026 Bitmain Purchase Agreement, respective, each of which includes the following financial commitments: a Bitcoin redemption option, recognized as a derivative asset under ASC 815, measured at fair value at each reporting period, a Miner purchase liability representing a commitment to settle the obligation in cash if the redemption right is exercised before expiration, and a derecognition of Digital assets – pledged for miner purchase if the redemption right is not exercised. See Note 4. Digital Assets, for further information on the 2025 Bitmain Purchase Agreement and 2026 Bitmain Purchase Agreement.
Legal and regulatory matters
The Company is subject at times to various claims, lawsuits, and governmental proceedings relating to the Company’s business and transactions arising in the ordinary course of business. The Company cannot predict the final outcome of such proceedings. Where appropriate, the Company vigorously defends such claims, lawsuits, and proceedings. Some of these claims, lawsuits, and proceedings seek damages, including consequential, exemplary, or punitive damages, in amounts that could, if awarded, be significant. Certain of the claims, lawsuits, and proceedings arising in ordinary course of business are covered by the Company’s insurance program. The Company maintains property and various types of liability insurance in an effort to protect the Company from such claims. In terms of any matters where there is no insurance coverage available to the Company, or where coverage is available and the Company maintains a retention or deductible associated with such insurance or elects not to purchase such insurance, the Company may establish an accrual for such loss, retention, or deductible based on current available information. In accordance with accounting guidance, if it is probable that an asset has been impaired or a liability has been incurred as of the date of the financial statements and the amount of loss is reasonably estimable, then an accrual for the cost to resolve or settle these claims is recorded by the Company in the accompanying Unaudited Condensed Consolidated and Combined Balance Sheets. If it is reasonably possible that an asset may be impaired as of the date of the financial statement, then the Company discloses the range of possible loss. Expenses related to the defense of such claims are recorded by the Company as incurred and included in the accompanying Combined Statements of Operations and Comprehensive Income (Loss). Management, with the assistance of outside counsel, may from time to time adjust such accruals according to new developments in the matter, court rulings, or changes in the strategy affecting the Company’s defense of such matters. The Company has established an accrued liability for certain legal and regulatory proceedings. The possible loss or range of loss resulting from such litigation and regulatory proceedings, if any, in excess of the amounts accrued is inherently unpredictable and uncertain. Consequently, no reasonable estimate can be made of any possible loss or range of loss in excess of the accrual.
PPP Loan
On April 21, 2020, Gryphon obtained a loan in the principal aggregate amount of $
29
American Bitcoin Corp.
Notes to Unaudited Condensed Consolidated and Combined Financial Statements
On February 5, 2024, Gryphon received a letter, dated January 25, 2024, from the SBA, on behalf of Key Bank, in which the SBA indicated that, notwithstanding its prior notification of forgiveness, in full, of repayment of the PPP Loan, it was reviewing its prior determination of forgiveness for potential reversal. Specifically, the SBA indicated that based on its preliminary findings, the SBA is considering a full denial of the previously received forgiven amount based on the purported ineligibility of Gryphon to have received the PPP Loan under the SBA loan programs because Gryphon, operating as Akerna at the time of the PPP Loan, provided software support to the cannabis industry. Gryphon responded to the SBA on February 6, 2024, providing reasons as to why it believes it was eligible for the PPP Loan, but has not received any further correspondence from the SBA since that date and the SBA has not made any financial demands. The Company plans to continue to cooperate with any further inquiry from the SBA.
In January 2024, Gryphon received a civil investigative demand from the Department of Justice seeking information and documents about the PPP Loan. The Company is cooperating with the inquiry. At this time, there has been no formal demand for return of the PPP Loan proceeds, and no formal claim or lawsuit has been initiated against the Company.
Note 15. Subsequent events
The Company has completed an evaluation of all subsequent events after the balance sheet date up to the date that the Unaudited Condensed Consolidated and Combined Financial Statements were available to be issued. Except for the events that occurred after March 31, 2026 disclosed above, the Company has concluded no other subsequent events have occurred that require disclosure.
30
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with our Unaudited Condensed Consolidated and Combined Financial Statements and the related notes and the other financial information included elsewhere in this Quarterly Report and the Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual business, financial condition, and results of operations could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Quarterly Report and the Annual Report. See also "Cautionary Note Regarding Forward-Looking Statements" in this Quarterly Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.
Overview
Our business objective is Bitcoin accumulation, and we aim to pursue that goal through a multi-pronged strategy that combines efficient Bitcoin mining, disciplined Bitcoin reserve expansion, and focused ecosystem engagement. We believe Bitcoin represents an emerging institutional-grade asset class that lacks a clear category leader in the form of a scaled, publicly traded platform purpose-built around Bitcoin accumulation, network participation, and ecosystem development. We are building American Bitcoin with the objective of becoming that platform.
Q1 2026 Highlights
Basis of Presentation
On March 31, 2025, Hut 8, ADC, and the stockholders of ADC entered into a Contribution and Stock Purchase Agreement, pursuant to which Hut 8 contributed to ADC substantially all of Hut 8’s wholly-owned ASIC miners, in exchange for newly issued Class B Common Stock of ADC, representing 80% of the total and combined voting power and 80% of the issued and outstanding equity interests of ADC after giving effect to the issuance. In connection with the Transactions, ADC was renamed American Bitcoin Corp. and became a majority-owned subsidiary of Hut 8.
Until the effectiveness of the Transactions on March 31, 2025, we historically operated as the "ASIC Compute" sub-segment of Hut 8’s "Compute" segment and not as a standalone company; therefore, separate financial statements had not historically been prepared for us prior to April 1, 2025. Our Unaudited Condensed Consolidated and Combined Financial Statements represent the historical assets, liabilities, operations, and cash flows directly attributable to us starting April 1, 2025; the prior periods have been prepared on a carveout basis through the use of a management approach from Hut 8’s Consolidated Financial Statements and accounting records and are presented on a standalone basis as if the operations had been conducted independently from Hut 8.
Following the effectiveness of the Transactions on March 31, 2025, we began operating as a standalone entity with our own accounting and financial records; therefore, starting April 1, 2025, our results of operations are the results directly attributed to our standalone operations rather than the Bitcoin mining operations of Hut 8. Our Unaudited Condensed Consolidated and Combined Balance Sheets as of March 31, 2026 reflects the assets and liabilities that we directly own or are legally obligated to satisfy post-Transactions.
31
Prior to the effectiveness of the Transactions on March 31, 2025, all revenues and costs, as well as assets and liabilities directly associated with Hut 8’s Bitcoin mining sub-segment activities were included in our Unaudited Condensed Consolidated and Combined Financial Statements, including Hut 8’s strategic Bitcoin reserve (which remained with Hut 8 following the effectiveness of the Transactions). Additional costs allocated to us include corporate general and administrative expenses, which consisted of various categories, including but not limited to: employee compensation and benefits, professional services, facilities and corporate office expenses, information technology, interest expenses, and stock-based compensation. The corporate and general administrative expenses allocated were primarily based on a percentage of revenue basis that was considered to be a reasonable reflection of the utilization of the services provided or benefit received during the periods presented, depending on the nature of the service received. Management believes the assumptions underlying our Unaudited Condensed Consolidated and Combined Financial Statements, including the expense methodology and resulting allocation, are reasonable for all periods presented. However, the allocations may not include all of the actual expenses that would have been incurred by us had we operated as a standalone entity during such periods and may not reflect our results of operations, financial position, and cash flows had we been a standalone company during the periods presented. Actual costs that might have been incurred had we been a standalone company would depend on a number of factors, including our organizational structure, what corporate functions we might have performed directly or outsourced, and strategic decisions we might have made in areas such as executive management, legal, and other professional services, and certain corporate overhead functions. These costs also may not be indicative of the expenses that we may incur in the future or would have incurred if we had obtained these services from a third party.
All intracompany transactions within our operations prior to the effectiveness of the Transactions on March 31, 2025 have been eliminated. All intercompany transactions between us and Hut 8 on or before March 31, 2025 are considered to be effectively settled in our Unaudited Condensed Consolidated and Combined Financial Statements at the time the transactions are recorded. The total net effect of these intercompany transactions considered to be settled are reflected in our Unaudited Condensed Consolidated and Combined Statement of Cash Flows within financing activities and in our Unaudited Condensed Consolidated and Combined Balance Sheets as net Hut 8 investment. At March 31, 2025, as described in the description of the Transactions above, the total net Hut 8 investment has been settled.
Prior to the effectiveness of the Transactions on March 31, 2025, our equity balance in our Unaudited Condensed Consolidated and Combined Financial Statements represents the excess of total liabilities over assets. Net Hut 8 investment is primarily impacted by contributions from Hut 8 that are the result of net funding provided by or distributed to Hut 8.
Prior to the effectiveness of the Transactions on March 31, 2025, cash was managed through bank accounts controlled and maintained by Hut 8. We did not have legal ownership of any bank accounts containing cash balances prior to March 31, 2025. As such, cash held in commingled accounts with Hut 8 is presented within net Hut 8 investment on our Unaudited Condensed Consolidated and Combined Balance Sheets. Subsequent to March 31, 2025, we have set up our own legally separate bank accounts to appropriately directly settle our liabilities and to manage our own cash.
Prior to the effectiveness of the Transactions on March 31, 2025, we were not a co-obligor on Hut 8’s third-party, long-term debt obligations nor were we expected to pay any portion of Hut 8's third-party, long-term debt. However, proceeds from Hut 8’s third-party debts were used to finance our purchase of Bitcoin miners or directly used for our Bitcoin mining-related activities and were therefore included in our Unaudited Condensed Consolidated and Combined Financial Statements. While we are not a legal obligor, certain Bitcoin mining assets of ours were pledged as collateral as disclosed in Note 4. Digital Assets. Following the effectiveness of the Transactions on March 31, 2025, we are no longer connected to any of Hut 8's third-party debt obligations.
The Unaudited Condensed Consolidated and Combined Financial Statements included in this Quarterly Report have been prepared in accordance with generally accepted accounting principles, in the United States ("GAAP").
Bitcoin Mining
We generate revenue from Bitcoin rewards by providing computation services to third-party mining pool operators, which combine the computing power of Bitcoin miners to increase the chance of solving a block and getting paid by the network. We provide the service of performing computations of our Bitcoin miners to these mining pool operators and receive in return a payout of Bitcoin based on a contractual formula which primarily calculates the computing power provided to the mining pool as a percentage of the total computing power of the network, regardless of whether the mining pool actually receives the Bitcoin award from the network.
32
As of March 31, 2026, we operated our Bitcoin miners at five sites under the Master Colocation Services Agreement (the "MCSA") with Hut 8:
Medicine Hat (Medicine Hat, Alberta) and Salt Creek (Orla, Texas)
During February and March 2025, mining activity at our Medicine Hat and Salt Creek sites was reduced due to a planned fleet upgrade, which was completed on April 4, 2025. The upgrade resulted in the deployment of higher efficiency Bitcoin miners, improving the efficiency of our Bitcoin mining operations.
Vega (Amarillo, Texas)
In August 2025, we entered into service orders with Hut 8 pursuant to the MCSA and the Master Managed Services Agreement (the "MMSA") to host additional Bitcoin miners at Hut 8’s Vega site in Amarillo, Texas, most of which were delivered in August with the remainder delivered in September 2025. Prior to August 2025, we did not mine at Hut 8’s Vega site.
Drumheller (Drumheller, Alberta)
In March 2026, Hut 8 reenergized its site in Drumheller, Alberta in anticipation of the delivery and deployment of approximately 11,298 Bitcoin miners, representing 3.05 exahash per second (EH/s) at 13.5 joules per terahash (J/TH). The site, which had previously mined Bitcoin, had been non-operational since March 2024 due to elevated energy costs and underlying voltage issues impacting profitability. Deployment was completed in April 2026, enabling the addition of 3.05 EH/s of Bitcoin mining capacity and increasing our operating fleet capacity from 21.9 to 25.0 EH/s, while maintaining a consistent efficiency of 14.1 J/TH. As a result, our total fleet capacity increased from 25.0 to 28.1 EH/s, with overall portfolio efficiency improving to 16.0 J/TH.
Key Factors Affecting ABTC’s Performance
Price of Bitcoin
Our business is heavily dependent on the price of Bitcoin, which is traded globally and has historically experienced significant volatility. We generate revenue from Bitcoin rewards we earn through third-party mining pool operators and Bitcoin we acquire through at-market purchases and strategic transactions to further build our strategic reserve. Under ASU 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets ("ASU 2023-08"), Bitcoin is revalued at its fair value at the end of each reporting period, with changes to fair value recognized in net (loss) income. As a result, fluctuations in Bitcoin prices may impact our financial performance, including mark-to-market adjustments on Bitcoin, but does not reflect changes in our core operating performance.
Bitcoin network difficulty and hashrate
Our business is not only impacted by the volatility in Bitcoin prices, but also by increases in the competition for Bitcoin production, specifically for Bitcoin mining. This increased competition is described as the network hashrate resulting from the growth in the overall quantity and quality of miners working to solve blocks on the Bitcoin blockchain, and the difficulty index associated with the secure hashing algorithm employed in solving the blocks. Increased difficulty reduces the mining proceeds of the equipment proportionally and eventually requires Bitcoin miners, like us, to upgrade our equipment to remain profitable and compete effectively with other miners. Conversely, a decline in network hashrate results in a decrease in difficulty, increasing mining proceeds and profitability.
33
Block reward and halving
The current Bitcoin reward for solving a block is 3.125 Bitcoin. The Bitcoin network is programmed such that the Bitcoin block reward is halved every 210,000 blocks mined, or approximately every four years. This reduction in reward spreads out the release of Bitcoin over a long period of time as fewer Bitcoin are mined with each halving event. Bitcoin halving events impact the number of Bitcoin we mine which, in turn, may have a potential impact on our results of operations. The last halving event occurred in April 2024, and the next halving event is expected to occur in 2028.
Power costs
Power costs are a significant component of our cost to mine a Bitcoin. Power costs can be highly volatile and sensitive to various factors outside of our control. We are subject to variable power prices and market rate fluctuations through our MCSA with Hut 8, through which power costs are incurred as a pass-through expense. Increased power costs impact the profitability of our Bitcoin mining operations.
Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP, we rely on Adjusted EBITDA to evaluate our business, measure our performance, and make strategic decisions. Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as net loss, adjusted for impacts of income tax benefit, depreciation and amortization, loss on sale of property and equipment, gain on derivatives, gain on warrant liability, the removal of non-recurring transactions, and stock-based compensation expense in the period presented. You are encouraged to evaluate each of these adjustments and the reasons that our Board and management team consider them appropriate for supplemental analysis.
Our Board and management team use Adjusted EBITDA to assess our financial performance because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense and income), asset base (such as depreciation and amortization), and other items (such as non-recurring transactions) that impact the comparability of financial results from period to period.
Net loss is the GAAP measure most directly comparable to Adjusted EBITDA. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in such presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that its future results will be unaffected by unusual or non-recurring items. There can be no assurance that we will not modify the presentation of Adjusted EBITDA in the future, and any such modification may be material. Adjusted EBITDA has important limitations as an analytical tool and you should not consider Adjusted EBITDA in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA may be defined differently by other companies in our industry, its definition of this non-GAAP financial measure may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.
For a reconciliation to our most directly comparable financial measure calculated and presented in accordance with GAAP, please see "—Results of Operations" below.
34
Results of Operations
Three Months Ended March 31, 2026 and 2025
|
|
Three Months Ended |
|
|
|
|
||||||
|
|
March 31, |
|
|
Increase |
|
||||||
(in USD thousands) |
|
2026 |
|
|
2025 |
|
|
(Decrease) |
|
|||
Revenue: |
|
$ |
62,118 |
|
|
$ |
12,338 |
|
|
$ |
49,780 |
|
|
|
|
|
|
|
|
|
|
|
|||
Cost of revenue (exclusive of depreciation and amortization shown below): |
|
|
29,598 |
|
|
|
11,651 |
|
|
|
17,947 |
|
|
|
|
|
|
|
|
|
|
|
|||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization |
|
|
26,620 |
|
|
|
6,424 |
|
|
|
20,196 |
|
General and administrative expenses |
|
|
6,908 |
|
|
|
14,368 |
|
|
|
(7,460 |
) |
Loss on sale of property and equipment |
|
|
— |
|
|
|
2,454 |
|
|
|
(2,454 |
) |
Loss on digital assets |
|
|
117,188 |
|
|
|
112,394 |
|
|
|
4,794 |
|
Total operating expenses |
|
|
150,716 |
|
|
|
135,640 |
|
|
|
15,076 |
|
Operating loss |
|
|
(118,196 |
) |
|
|
(134,953 |
) |
|
|
16,757 |
|
|
|
|
|
|
|
|
|
|
|
|||
Other income: |
|
|
|
|
|
|
|
|
|
|||
Gain on derivatives |
|
|
37,292 |
|
|
|
20,862 |
|
|
|
16,430 |
|
Gain on warrant liability |
|
|
69 |
|
|
|
— |
|
|
|
69 |
|
Total other income |
|
|
37,361 |
|
|
|
20,862 |
|
|
|
16,499 |
|
|
|
|
|
|
|
|
|
|
|
|||
Loss before income taxes |
|
|
(80,835 |
) |
|
|
(114,091 |
) |
|
|
33,256 |
|
|
|
|
|
|
|
|
|
|
|
|||
Income tax (provision) benefit |
|
|
(957 |
) |
|
|
13,468 |
|
|
|
(14,425 |
) |
|
|
|
|
|
|
|
|
|
|
|||
Net loss |
|
$ |
(81,792 |
) |
|
$ |
(100,623 |
) |
|
$ |
18,831 |
|
|
|
|
|
|
|
|
|
|
|
|||
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustments |
|
|
— |
|
|
|
4,467 |
|
|
|
(4,467 |
) |
Total comprehensive loss |
|
$ |
(81,792 |
) |
|
$ |
(96,156 |
) |
|
$ |
14,364 |
|
Adjusted EBITDA reconciliation:
|
|
Three Months Ended |
|
|
|
|
||||||
|
|
March 31, |
|
|
Increase |
|
||||||
(in USD thousands) |
|
2026 |
|
|
2025 |
|
|
(Decrease) |
|
|||
Net loss |
|
$ |
(81,792 |
) |
|
$ |
(100,623 |
) |
|
$ |
18,831 |
|
Income tax provision (benefit) |
|
|
957 |
|
|
|
(13,468 |
) |
|
|
14,425 |
|
Depreciation and amortization |
|
|
26,620 |
|
|
|
6,424 |
|
|
|
20,196 |
|
Loss on sale of property and equipment |
|
|
— |
|
|
|
2,454 |
|
|
|
(2,454 |
) |
Gain on derivatives |
|
|
(37,292 |
) |
|
|
(20,862 |
) |
|
|
(16,430 |
) |
Gain on warrant liability |
|
|
(69 |
) |
|
|
— |
|
|
|
(69 |
) |
Non-recurring transactions (1) |
|
|
— |
|
|
|
1,312 |
|
|
|
(1,312 |
) |
Stock-based compensation expense |
|
|
296 |
|
|
|
2,145 |
|
|
|
(1,849 |
) |
Adjusted EBITDA |
|
$ |
(91,280 |
) |
|
$ |
(122,618 |
) |
|
$ |
31,338 |
|
(1) There were no non-recurring transactions for the three months ended March 31, 2026. Non-recurring transactions for the three months ended March 31, 2025 represent approximately $1.3 million of transaction costs related to the Contributions.
35
Revenue
Revenue was $62.1 million and $12.3 million for the three months ended March 31, 2026 and 2025, respectively. This $49.8 million increase was primarily due to improved mining efficiencies at the Medicine Hat and Salt Creek sites following our fleet upgrade. The upgrade included the installation of higher-efficiency machines and targeted infrastructure enhancements at Hut 8's sites to support higher rack-level power density. In addition, deployment of Bitcoin miners at the Vega site in August and September 2025 added approximately 14.86 EH/s to our mining fleet. As a result, Bitcoin production increased to 817 Bitcoin mined during the three months ended March 31, 2026, compared to 135 Bitcoin mined during the three months ended March 31, 2025. This increase was partially offset by a decrease in the average revenue per Bitcoin mined to approximately $76,077 from approximately $91,500 for the three months ended March 31, 2026 and 2025, respectively.
Cost of revenue
Cost of revenue was $29.6 million and $11.7 million for the three months ended March 31, 2026 and 2025, respectively. This $17.9 million increase was primarily due to higher uptime resulting from the fleet upgrade that was completed in April 2025 at the Medicine Hat and Salt Creek sites. It was also driven by our deployment of the Bitcoin miners at the Vega site in August and September 2025, which added approximately 14.86 EH/s to our mining fleet.
Depreciation and amortization
Depreciation and amortization expense was $26.6 million and $6.4 million for the three months ended March 31, 2026 and 2025, respectively. The $20.2 million increase was primarily attributable to higher depreciation expense resulting from the fleet upgrade and the deployment of the Bitcoin miners at the Vega site in August and September 2025, which increased our depreciable asset base.
General and administrative expenses
General and administrative ("G&A") expenses were $6.9 million and $14.4 million for the three months ended March 31, 2026 and 2025, respectively, representing a decrease of $7.5 million. The decrease was primarily driven by (i) a $2.7 million decrease in general, marketing, and other administrative expenses due to streamlined back-office operations, (ii) a $2.3 million decrease in salaries and benefits due to reduced headcount, (iii) a $1.8 million decrease in stock-based compensation expense, and (iv) a $1.3 million decrease in transaction costs, partially offset by a $0.8 million increase in insurance expense due to higher coverage requirements as a standalone public company.
Loss on digital assets
Loss on digital assets were $117.2 million and $112.4 million for the three months ended March 31, 2026 and 2025, respectively. In connection with the Transactions on March 31, 2025, Hut 8's Bitcoin remained with Hut 8. As a result, immediately following the effectuation of the Transactions, we held no Bitcoin on our balance sheet. Starting April 1, 2025, we began to build our own strategic Bitcoin reserve. In the three months ended March 31, 2026, Bitcoin price declined from approximately $87,498 to approximately $68,222. In the three months ended March 31, 2025, Bitcoin price declined from approximately $93,354 to approximately $82,534.
Other income
Other income was $37.4 million and $20.9 million for the three months ended March 31, 2026 and 2025, respectively. The $16.5 million increase was primarily driven by a $16.4 million increase in gain on derivatives related to the Bitcoin redemption and put options with Bitmain.
Income tax (provision) benefit
Income tax provision was $0.9 million or the three months ended March 31, 2026, compared to an income tax benefit of $13.5 million for the three months ended March 31, 2025. This $14.4 million decrease in income tax benefit was primarily due to the loss on digital assets for the three months ended March 31, 2026, which was driven by Hut 8 retaining a portion of its Bitcoin on its standalone balance sheet and a decrease in the market price of Bitcoin during the period. This loss reduced pre-tax income and, in turn, increased the income tax benefit recognized for the period.
36
Liquidity and Capital Resources
Prior to the Transactions on March 31, 2025, we operated as the "Bitcoin mining" sub-segment of Hut 8's "Compute" segment and not as a standalone company; therefore, our primary sources of liquidity included cash from Hut 8, proceeds from sales of Bitcoin, Hut 8’s strategic Bitcoin reserve, and capital raised from investors.
Subsequent to the effectuation of the Transactions, our primary sources of liquidity included capital raised from investors, including equity sales and our strategic Bitcoin reserve, which we started to accumulate following the effectiveness of the Transactions on April 1, 2025. Our primary cash needs are for Bitcoin purchases to pursue our Bitcoin accumulation strategy, working capital to support our operations and growth, and equipment financing, including the purchase of additional Bitcoin miners.
On September 3, 2025, we entered into a Controlled Equity Offering Sales Agreement to establish the 2025 ATM (the "2025 ATM"), allowing us to offer and sell up to $2.1 billion of our Class A common stock from time to time. From inception to March 31, 2026, we issued and sold 149,553,691 shares of Class A common stock under our 2025 ATM for gross proceeds of $351.5 million.
Our ability to meet our anticipated cash requirements will depend on various factors including our ability to maintain our existing business, compete with existing and new competitors in existing and new markets and offerings, pursue strategic transactions, access public and private capital markets, and respond to global and domestic economic, political, social conditions, and their impact on demand for our offerings.
We believe that cash flows generated from capital raised from investors and the Bitcoin on our balance sheet will meet our anticipated cash requirements in the short-term and long-term.
Cash Flows
The following table summarizes our cash flows for the three months ended March 31, 2026 and 2025:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
(in USD thousands) |
|
2026 |
|
|
2025 |
|
||
Cash flows used in operating activities |
|
$ |
(42,510 |
) |
|
$ |
(44,653 |
) |
Cash flows (used in) provided by investing activities |
|
|
(61,761 |
) |
|
|
5,992 |
|
Cash flows provided by financing activities |
|
|
110,503 |
|
|
|
38,661 |
|
Operating Activities
Net cash used in operating activities was $42.5 million and $44.7 million for the three months ended March 31, 2026 and 2025, respectively. Net cash used in operating activities for three months ended March 31, 2026 resulted primarily from a net loss of $81.8 million, partially offset by non-cash adjustments of $55.4 million and unfavorable changes in working capital of $16.1 million. Net cash used in operating activities for the three months ended March 31, 2025 resulted primarily from net loss of $100.6 million, partially offset by deduction of non-cash adjustments of $70.3 million and unfavorable changes in working capital of $14.4 million.
Investing Activities
Net cash used in investing activities totaled $61.8 million for the three months ended March 31, 2026, primarily consisting of $61.3 million of Bitcoin purchases and $0.5 million in deposits paid to purchase Bitcoin miners and mining equipment. Net cash provided by investing activities totaled $6.0 million for the three months ended March 31, 2025, consisting of $3.4 million in proceeds from Bitcoin sales, and $2.6 million in proceeds from sales of property and equipment.
Financing Activities
Net cash provided by financing activities was $110.5 million for the three months ended March 31, 2026, which was primarily a result of $110.5 million from the issuance of our Class A common stock through the 2025 ATM, net of fees. Net cash provided by financing activities was $38.6 million for the three months ended March 31, 2025, primarily consisting of $38.6 million of net Hut 8 investment.
37
Critical Accounting Policies and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our Unaudited Condensed Consolidated and Combined Financial Statements, which have been prepared in accordance with GAAP. The preparation of these Unaudited Condensed Consolidated and Combined Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. We evaluate our estimates and assumptions on an ongoing basis and base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for the judgments we make about the carrying value of assets and liabilities that are not readily apparent from other sources. Because these estimates can vary depending on the situation, actual results may differ from these estimates. Making estimates and judgments about future events is inherently unpredictable and is subject to significant uncertainties, some of which are beyond our control. Should any of these estimates and assumptions change or prove to have been incorrect, it could have a material impact on our results of operations, financial position, and statement of cash flows.
While our significant accounting policies and estimates are described in more detail in Note 2. Significant Accounting Policies and Recent Accounting Pronouncements in our Unaudited Condensed Consolidated and Combined Financial Statements included elsewhere in this Quarterly Report, we believe the following accounting policies and estimates are most critical to understanding and evaluating this management discussion and analysis:
Digital Assets
Accounting for digital assets requires significant judgment, including classification, measurement, presentation, and the determination of fair value. Digital assets pledged as collateral, including under arrangements with Bitmain, require additional judgment in evaluating the appropriate accounting treatment, including whether such assets remain recognized on our Unaudited Condensed Consolidated and Combined Balance Sheets. Pledged digital assets remain recognized because we retain ownership and continue to be exposed to changes in market value.
Long-lived Assets
Property, plant, and equipment are recorded at cost, net of accumulated depreciation. Judgment is necessary in estimating the Bitcoin miners' useful lives. This includes evaluating our own usage experience with our currently owned miners, the rate of technological advancement, and market-related factors such as the price of Bitcoin and the Bitcoin network hashrate, which impact the value of the miners. Depreciation is computed using the straight-line method over the estimated useful lives of the miners. Changes in depreciation, generally accelerated depreciation, are determined and recorded when estimates of the remaining useful lives or residual values of long-term assets change.
We review our long-lived assets, including property, plant, and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset, or asset group, may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted cash flows expected to be generated by the asset. Significant judgment is used when estimating future cash flows, particularly the price of Bitcoin and the network hashrate. Any impairment loss recorded is measured as the amount by which the carrying value of the assets exceeds the fair value of the assets. Should our estimates of useful lives, undiscounted cash flows, or asset fair values change, additional and potentially material impairments may be required, which could have a material impact on our reported financial results.
38
Item 3: Quantitative and Qualitative Disclosures About Market Risk
Tariff Risk
Changes in government and economic policies, incentives, trade regulations, or tariffs may have a material impact on equipment that we import. There remains uncertainty regarding the potential imposition of new tariffs or changes to existing tariffs on goods imported from certain countries where we source our equipment. Such developments could adversely affect our ability to procure equipment on a timely basis or at cost-effective levels, which in turn may impact project timelines, capital expenditures, and operating margins. We continuously monitor developments in trade policy and may adjust our procurement strategies, sourcing arrangements, or deployment plans in response to such changes; however, there can be no assurance that such actions will fully mitigate the impact of adverse tariff or trade policy developments.
Market Price Risk of Bitcoin
We hold a significant amount of Bitcoin; therefore, we are exposed to the impact of market price changes in Bitcoin.
As of March 31, 2026, we held 7,021 Bitcoin, and the fair value of a single Bitcoin was approximately $68,222. Therefore, the fair value of our strategic Bitcoin reserve as of March 31, 2026, was approximately $479.0 million. Declines in the fair market value of Bitcoin will impact the cash value that would be realized if we were to sell its Bitcoin for cash, therefore having a negative impact on our liquidity.
Custodian Risk
Our Bitcoin is held with third-party custodians, including Anchorage and Bitgo, that we selected based on various factors, including their financial strength, security measures, insurance coverage, and industry reputation. Custodian risk refers to the potential loss, theft, or misappropriation of our Bitcoin assets due to operational failures, cybersecurity breaches, or financial difficulties experienced by these third parties. Although we periodically monitor the financial health, insurance coverage, and security measures of our custodians, reliance on such third parties inherently exposes us to risks that we cannot fully mitigate.
Credit Risk
Credit risk arises from our practice of pledging Bitcoin as collateral in transactions with counterparties. We mitigate this risk by engaging with counterparties that we believe possess strong creditworthiness based on their size, credit quality, and reputation, among other factors. During the three months ended March 31, 2026, we have not incurred any material loss from such transactions. However, there remains a risk that a counterparty could default on its obligations to us, which might result in a material loss. We continually assess the credit risk associated with our counterparties and, if necessary, recognize a loss provision or write-down. Credit risk also arises from us placing our cash and demand deposits in financial institutions. Although we strive to limit our exposure by placing cash and demand deposits with financial institutions with a high credit standing, there can be no assurances that we are able to mitigate our credit risk.
39
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Management recognizes that any system of disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance rather than absolute assurance of achieving its objectives. The design of a control system must reflect resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation can provide absolute assurance that all control issues or instances of fraud, if any, will be detected. These inherent limitations include the possibility of faulty judgments, errors or mistakes, and the potential for controls to be circumvented by individual acts, collusion among employees, or management override. Moreover, the design of any control system is based on certain assumptions regarding future events, and there is no guarantee that any design will succeed under all potential future conditions. Over time, controls may become inadequate due to changes in conditions or deterioration in compliance with policies or procedures. Consequently, misstatements due to error or fraud may occur and not be detected. Based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the three months ended March 31, 2026 that materially affected, or that are reasonably likely to materially affect our internal control over financial reporting.
40
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
For a description of material legal proceedings in which we are involved, see Note 14. Commitments and contingencies to our Unaudited Condensed Consolidated and Combined Financial statements included elsewhere in this Quarterly Report, which is incorporated herein by reference.
We are not presently a party to any other legal or regulatory proceedings that in the opinion of our management, if determined adversely to us, would individually or taken together have a material adverse effect on our business, financial condition, or results of operations. However, we are subject to regulatory oversight by numerous federal, state, provincial, local, and other regulators and we are, and we may become, subject to various legal proceedings, inquiries, investigations, and demand letters that arise in the course of our business. See “Risk Factors—Risks Related to Certain Regulations and Laws, Including Tax Laws—We are involved in legal proceedings from time to time, which could adversely affect us” in the Annual report.
Item 1A. Risk Factors
As of the date of this Quarterly Report, there have been no material changes from the risk factors set forth in Part I, Item IA of the Annual Report. We are subject to various risks and uncertainties that could materially adversely affect our business, financial condition, results of operations, and the trading price of our Class A common stock. You should carefully read and consider the risks and uncertainties included in the Annual Report, together with all of the other information in the Annual Report and this Quarterly Report, including "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and our combined financial statements and related notes, and other documents that we file with the SEC. The risks and uncertainties described in these reports may not be the only ones we face. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business, financial condition, or results of operations. The factors discussed in these reports, among others, could cause our actual results to differ materially from historical results and those expressed in forward-looking statements made by us or on our behalf in filings with the SEC, press releases, communications with investors, and oral statements.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
There were no unregistered sales of equity securities by the Company during the three months ended March 31, 2026.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
10b5-1 Trading Arrangements
During the quarter ended March 31, 2026,
41
Item 6. Exhibits
Exhibit |
|
|
|
Incorporated by Reference |
||||
Number |
|
Description |
|
Form |
|
Exhibit |
|
Filing Date |
2.1* |
|
|
8-K |
|
2.1 |
|
05.12.2025 |
|
3.1 |
|
|
8-K |
|
3.1 |
|
09.03.2025 |
|
3.2 |
|
|
8-K |
|
3.2 |
|
09.03.2025 |
|
3.3 |
|
|
8-K |
|
3.3 |
|
09.03.2025 |
|
3.4 |
|
Amended and Restated Bylaws of American Bitcoin Corp., dated September 3, 2025. |
|
8-K |
|
3.4 |
|
09.03.2025 |
31.1 |
|
|
|
|
|
|
|
|
31.2 |
|
|
|
|
|
|
|
|
32.1** |
|
|
|
|
|
|
|
|
101.INS |
|
Inline XBRL Instance Document–the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document |
|
|
|
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents |
|
|
|
|
|
|
104 |
|
Cover Page formatted as Inline XBRL and contained in Exhibit 101 |
|
|
|
|
|
|
* Pursuant to Item 601(b)(10), as applicable, of Regulation S-K, certain portions of this exhibit were redacted. The Company hereby agrees to furnish a copy of any redacted information to the SEC upon request.
** Furnished herewith and not deemed to be "filed" for purposes of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act (whether made before or after the date of the Quarterly Report), irrespective of any general incorporation language contained in such filing.
42
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: May 6, 2026 |
|
AMERICAN BITCOIN CORP. |
|
|
|
|
By: |
/s/ Matt Prusak |
|
|
Matt Prusak |
|
|
President and Interim Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
43
Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael Ho, certify that:
Date: May 6, 2026
By: |
/s/ Michael Ho |
|
Name: |
Michael Ho |
|
Title: |
Chief Executive Officer |
|
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Matt Prusak, certify that:
Date: May 6, 2026
By: |
/s/ Matt Prusak |
|
Name: |
Matt Prusak |
|
Title: |
Interim Chief Financial Officer |
|
Exhibit 32.1
CERTIFICATION OF CEO AND CFO PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of American Bitcoin Corp. (the “Company”) for the fiscal period ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Michael Ho, as Chief Executive Officer of the Company, and Matt Prusak, as Interim Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
Dated: May 6, 2026
By: |
/s/ Michael Ho |
Name: |
Michael Ho |
Title: |
Chief Executive Officer |
By: |
/s/ Matt Prusak |
Name: |
Matt Prusak |
Title: |
Interim Chief Financial Officer |