Bit Digital, Inc.

Hello and welcome to the BitDigital second quarter 2026 earnings conference call. We'll begin shortly. During the call, all participant lines will be in listen-only mode. Following management's remarks, we will open the line for questions. If you'd like to ask a question at this time, please press star 1 on your telephone keypad. As a reminder, today's call is being recorded. I'll now turn the call over to your host, Daniel Kennedy, head of investor relations at BitDigital. Daniel, please go ahead.

Thank you and good morning. Joining me today are Sam Tabar, Chief Executive Officer, and Erke Huang, Chief Financial Officer. Before we begin, I'd like to remind everyone that today's discussion contains forward-looking statements. These statements reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. For discussion of these risks, please refer to our annual report on Form 10-K and our quarterly reports. We assume no obligation to update these statements. Certain matters discussed today, including potential capital allocation initiatives, remain subject to board and shareholder approval in accordance with Cayman Island law, where applicable. Throughout the call, we may also refer to non-GAAP financial measures. Reconciliations to the most directly comparable gap measures can be found in our earnings materials available on our website. Unless otherwise indicated, figures discussed during these remarks are rounded for readability. With that, I'll turn the call over to Sam.

Thank you, Daniel, and good morning. This quarter was about capital allocation. Every decision started with the same question. How do we create the most long-term value from the assets already on our balance sheet? BitDigital is positioned to secure the infrastructure for what we believe are the two most important sectors in economic history, digital assets, which will settle on Ethereum, and artificial intelligence, which is powered by data centers. Ethereum is our position in the first. and White Fiber is our position in the second. Two distinct assets connected by one capital allocation model. Few companies offer meaningful exposure to both sides of that build-out and fewer even still actively allocate capital between them. Our conviction on Ethereum has not changed. The price did. Ethereum spent most of the quarter below $2,000 and I'm not going to pretend that was comfortable. BitDigital is one of the largest public corporate holders of Ethereum. That does not make us a digital asset treasury, and it is not what we are trying to be. The goal has never been to hold the most ETH. It is to get the most out of ETH that we hold. Neither purely AI infrastructure nor a digital asset treasury, neither, and yet, both. What we are building towards is the convergence of the two. Assets positioned for where the economy is going rather than where it is today. Our Ethereum treasury is managed the way a company manages cash-like reserves. It earns while we hold it and it becomes capital that can be put to work when the right opportunity appears. Unlike a traditional reserve, It generates a protocol-native return and also serves as a source of liquidity. That is exactly what happened early in the quarter. White Fiber sought additional capital to bridge its investment in its flagship facility in North Carolina to permanent project financing and to support broader growth initiatives. Together, the companies evaluated a range of financing alternatives. They ultimately pursued a related party bridge facility. This provided White Fiber with efficient access to capital while preserving strategic flexibility and avoiding near-term dilution. Against a portion of our Ethereum, we raised $50 million of liquidity and then used our own balance sheet to originate a delayed draw term facility for White Fiber. Commitments of up to $150 million guaranteed The transaction preserved our Ethereum position, avoided issuing equity at either company, and allowed us to maintain our ownership interest in WhiteFiber. Independent committees at both companies reviewed it, and Needham and Seaport delivered fairness opinions to their respective boards. We chose to provide the facility because it offered an efficient way to support our investments in WhiteFiber, while generating an attractive return above the staking yield available on Ethereum. The principal risk in a structure like this is, of course, margin call. That was considered as well, so an additional buffer of Ethereum is held against it, size to withstand market moves well beyond what we consider reasonable. The facility was designed as a temporary bridge to permanent financing for the initial 40 megawatt build out in our flagship facility in North Carolina. That facility is anchored by Nscale and its investment-grade off-taker. Upon permanent financing, our collateral is released and the guarantee terminates. The facility is repaid with interest more than the staking income that we gave up and without giving up any upside. One decision and one quarter. but it contains the essence of the strategy. We approach our assets differently than a buy and hold treasury because every dollar, every ETH, and every share should be maximally productive. And that is what we mean by a strategic asset company. The assets themselves are not the differentiator. It is how we deploy them.