1

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2025

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

For the transition period from __________ to __________

Commission file number: 001-42780

WHITEFIBER, INC.

(Exact name of registrant as specified in its charter)

Cayman Islands		61-2222606
(State or other jurisdiction of Company or organization)		(I.R.S. Employer Identification No.)

31 Hudson Yards, Floor 11, Suite 30, New York, NY		10001
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number: (646) 801-0779

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

Title of each class		Trading Symbol		Name of each exchange on which registered
Ordinary Shares, par value $0.01 per share		WYFI		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒ The registrant became a reporting Company on August 6, 2025.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

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

If an emerging growth company, indicate by checkmark 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 Exchange Act). Yes ☐ No ☒

As of September 8, 2025, the registrant had outstanding 37,825,000 Ordinary Shares, $0.01 par value per share.

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		ii

PART I

Item 1.	Financial Statements.	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	28

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	47

Item 4.	Controls and Procedures.	47

PART II

Item 1.	Legal Proceedings.	48

Item 1A.	Risk Factors.	48

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	48

Item 3.	Defaults Upon Senior Securities.	48

Item 4.	Mine Safety Disclosures.	48

Item 5.	Other Information.	48

Item 6.	Exhibits.	49

SIGNATURES		51

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements regarding us and our business strategies, market potential, future financial performance and other matters that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this report, including statements regarding our strategy, future financial condition, future operations, plans, objectives of management, and expected market growth, are forward-looking statements. The words “believe,” “expect,” “estimate,” “could,” “should,” “intend,” “may,” “might,” “will,” “target,” “potential,” “goal,” “objective,” “plan,” “seek,” “anticipate,” “project” and similar expressions, among others, generally identify “forward-looking statements,” which speak only as of the date the statements were made. The matters discussed in these forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those projected, anticipated or implied in the forward-looking statements. In particular, information included under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and other sections of this report contain forward-looking statements. Where, in any forward-looking statement, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of WhiteFiber’s (as defined below) management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. Whether any such forward-looking statements are in fact achieved will depend on future events, some of which are beyond WhiteFiber’s control.

You should realize that if underlying assumptions prove inaccurate, or known or unknown risks or uncertainties materialize, our actual results and financial condition could vary materially from expectations and projections expressed or implied in our forward-looking statements. Risks and uncertainties include, but are not limited to: our ability to integrate the operations of Enovum (as defined below) and any hereafter acquired companies into our HPC Business (as defined below) segment; our ability to purchase GPUs (as defined below) on a timely basis to service our cloud service customers; supply chain disruptions may have a material adverse effect on the Company’s performance; our failure to effectively manage our growth, strategic investments, combination, joint-ventures, acquisitions or alliances, which could disrupt our business; the loss of any member of our executive management team, capital markets and interest rate risks; significant customer concentration; our failure to innovate and provide cloud services to our customers and partners; the demand for data centers substantially decreases; volatility in the supply and price of power in the open markets, WhiteFiber has a limited history of operating as an independent public company; export restitution and tariffs, particularly with Canada concerning our supplies and operations; issues in the development and use of AI (as defined below); regulations that target AI, and governmental regulations and other legal obligations related to data privacy, data protection and information security.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this report primarily on our current expectations, estimates, forecasts and projections about future events and trends that we believe may affect our business, results of operations, financial condition and prospects. Although we believe that we have a reasonable basis for each forward-looking statement contained in this report, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur at all. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those matters discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report as well as other factors which may be identified from time to time in our other filings with the U.S. Securities and Exchange Commission, or in the documents where such forward-looking statements appear, include factors, risks, trends and uncertainties that could cause actual results or events to differ materially from those anticipated. Additional risks and uncertainties of which we are unaware, or that we currently deem immaterial, also may become important factors that affect us. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this report. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

All forward-looking statements made in this report are qualified by these cautionary statements. These forward-looking statements are made only as of the date of this report, and WhiteFiber does not undertake any obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, and changes in future operating results over time or otherwise. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

Comparisons of results for current and any prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed as historical data.

Item 1. Financial Statements and Supplementary Data

THE WHITEFIBER BUSINESS OF BIT DIGITAL, INC.

COMBINED BALANCE SHEETS

(Unaudited; Expressed in US dollars, except for the number of shares)

	June 30,			December 31,
	2025			2024
ASSETS
Current assets
Cash and cash equivalents	$	16,397,894		$	11,671,984
Restricted cash		3,732,792			3,732,792
Accounts receivable		6,491,562			5,267,863
Net investment in lease - current		3,517,921			2,546,519
Other current assets		20,151,049			23,285,682
Total current assets		50,291,218			46,504,840

Non-current assets
Deposits for property, plant, and equipment		14,364,613			35,743,011
Property, plant, and equipment, net		229,956,425			89,203,483
Operating lease right-of-use assets		44,160,980			14,544,118
Net investment in lease - non-current		9,367,633			6,782,479
Investment securities		1,000,000			1,000,000
Deferred tax asset		108,358			104,642
Intangible assets		13,210,056			13,028,730
Goodwill		20,190,268			19,383,291
Other non-current assets		3,665,765			2,838,269
Total non-current assets		336,024,098			182,628,023

Total assets	$	386,315,316		$	229,132,863

LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	1,258,988		$	2,346,510
Current portion of deferred revenue		11,640,667			30,698,458
Current portion of operating lease liabilities		5,160,985			4,372,544
Income tax payable		759,481			985,191
Other payables and accrued liabilities		16,177,823			7,357,839
Total current liabilities		34,997,944			45,760,542

Non-current liabilities
Non-current portion of operating lease liabilities		37,946,832			9,010,577
Non-current portion of deferred revenue		28,046			73,494
Deferred tax liabilities		4,981,833			3,776,124
Other long-term liabilities		392,686			785,371
Total non-current liabilities		43,349,397			13,645,566

Total liabilities		78,347,341			59,406,108

Equity
Parent company net investment		313,871,593			171,148,420
(Accumulated deficit) retained earnings		(7,261,663	)		143,893
Accumulated other comprehensive income (loss)		1,358,045			(1,565,558	)
Total equity		307,967,975			169,726,755
Total liabilities and equity	$	386,315,316		$	229,132,863

The accompanying notes are an integral part of these combined financial statements.

THE WHITEFIBER BUSINESS OF BIT DIGITAL, INC.

COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited; Expressed in US dollars, except for the number of shares)

	For the three months ended June 30						For the six months ended June 30,
	2025			2024			2025			2024
Revenue	$	18,662,249		$	12,589,701		$	35,423,511		$	20,759,033
Operating costs and expenses
Cost of revenue (exclusive of depreciation shown below)		(7,201,168	)		(4,595,301	)		(13,818,011	)		(7,752,628	)
Depreciation and amortization expenses		(5,140,713	)		(4,322,291	)		(8,970,357	)		(7,203,818	)
General and administrative expenses		(15,476,832	)		(1,261,489	)		(19,754,485	)		(2,458,408	)
Total operating expenses		(27,818,713	)		(10,179,081	)		(42,542,853	)		(17,414,854	)
(Loss) income from operations		(9,156,464	)		2,410,620			(7,119,342	)		3,344,179
Total other income, net		769,003			86,679			754,320			169,971
(Loss) Income before provision for income taxes		(8,387,461	)		2,497,299			(6,365,022	)		3,514,150
Income tax expenses		(445,931	)		(552,234	)		(1,040,534	)		(742,575	)
Net (loss) income	$	(8,833,392	)	$	1,945,065		$	(7,405,556	)	$	2,771,575
Other comprehensive income
Foreign currency translation adjustment		3,428,209			-			2,923,603			-
Total comprehensive (loss) income		(5,405,183	)		1,945,065			(4,481,953	)		2,771,575

The accompanying notes are an integral part of these combined financial statements.

THE WHITEFIBER BUSINESS OF BIT DIGITAL, INC.

COMBINED STATEMENTS OF CHANGES IN PARENT COMPANY NET INVESTMENT

(Unaudited; Expressed in US dollars, except for the number of shares)

	Parent Company Net Investment		(Accumulated Deficit)/ Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Total Equity
Balances as of December 31, 2023	$	50,876,188	$	(1,225,949	)	$	-		$	49,650,239
Net income		-		826,510			-			826,510
Parent contribution		9,289,559		-			-			9,289,559
Balances as of March 31, 2024	$	60,165,747	$	(399,439	)	$	-		$	59,766,308
Net income		-		1,945,065			-			1,945,065
Parent contribution		1,895,805		-			-			1,895,805
Balances as of June 30, 2024	$	62,061,552	$	1,545,626		$	-		$	63,607,178

Balances as of December 31, 2024	$	171,148,420	$	143,893		$	(1,565,558	)	$	169,726,755
Net income		-		1,427,836			-			1,427,836
Parent contribution		49,974,548		-			-			49,974,548
Other comprehensive loss		-		-			(504,606	)		(504,606	)
Balances as of March 31, 2025	$	221,122,968	$	1,571,729		$	(2,070,164	)	$	220,624,533
Net loss		-		(8,833,392	)		-			(8,833,392	)
Parent contribution		92,748,625		-			-			92,748,625
Other comprehensive income		-		-			3,428,209			3,428,209
Balances as of June 30, 2025	$	313,871,593	$	(7,261,663	)	$	1,358,045		$	307,967,975

The accompanying notes are an integral part of these combined financial statements.

THE WHITEFIBER BUSINESS OF BIT DIGITAL, INC.

COMBINED STATEMENTS OF CASH FLOWS

(Unaudited; Expressed in US dollars, except for the number of shares)

	For the six months ended June 30,
	2025			2024
Cash Flows from Operating Activities:
Net (loss) income	$	(7,405,556	)	$	2,771,575
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expenses		8,970,357			7,203,818
Changes in assets and liabilities:
Operating lease right-of-use assets		2,324,396			932,997
Accounts receivable		(1,186,845	)		(4,127,532	)
Net investment in lease		1,341,770			478,169
Other current assets		3,274,854			8,905,889
Other non-current assets		(766,249	)		195,942
Accounts payable		(1,101,089	)		1,656,272
Income tax payable		(225,710	)		345,995
Other payables and accrued liabilities		8,503,614			(4,417,465	)
Other long-term liabilities		(392,685	)		-
Deferred revenue		(19,039,677	)		(13,073,449	)
Lease liabilities		(2,172,820	)		(932,997	)
Deferred tax liabilities		1,043,002			396,580
Net Cash (Used in) Provided by Operating Activities		(6,832,638	)		335,794

Cash Flows from Investing Activity:
Purchases of and deposits made for property, plant, and equipment		(130,960,748	)		(3,395,151	)
Investment in SAFE		-			(1,000,000	)
Net Cash Used in Investing Activity		(130,960,748	)		(4,395,151	)

Cash Flows from Financing Activity:
Net transfers from parent		142,723,173			11,185,364
Net Cash Provided by Financing Activity		142,723,173			11,185,364

Net increase in cash, cash equivalents and restricted cash		4,929,787			7,126,007
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(203,877	)		-
Cash, cash equivalents and restricted cash, beginning of period		15,404,776			652,566
Cash, cash equivalents and restricted cash, end of period	$	20,130,686		$	7,778,573

Supplemental Cash Flow Information
Cash paid for income taxes, net of (refunds)	$	225,000		$	-
Non-cash Transactions of Investing and Financing Activities
Right of use assets exchanged for operating lease liabilities	$	30,863,437		$	-
Reclassification of deposits to property, plant and equipment	$	79,535,429		$	5,238,001

Reconciliation of cash, cash equivalents and restricted cash

	June 30, 2025		December 31, 2024
Cash and cash equivalents	$	16,397,894	$	11,671,984
Restricted cash		3,732,792		3,732,792
Total	$	20,130,686	$	15,404,776

The accompanying notes are an integral part of these combined financial statements.

THE WHITEFIBER BUSINESS OF BIT DIGITAL, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

The accompanying combined financial statements present, on a historical cost basis, the combined assets, liabilities, revenues and expenses of WhiteFiber AI Inc. (f/k/a Bit Digital AI Inc.) (“WhiteFiber AI”) and its subsidiaries and WhiteFiber, Inc. and its subsidiaries (“WhiteFiber” and collectively with WhiteFiber AI the “WhiteFiber Business” or the “Company”). WhiteFiber and WhiteFiber AI were wholly-owned subsidiaries of Bit Digital Inc. (“Bit Digital” or “Parent”) as of June 30, 2025.

In connection with our initial public offering (the “IPO”), Bit Digital, the parent company of WhiteFiber and WhiteFiber AI, entered into a Contribution Agreement to transfer all the capital stock of WhiteFiber AI, and its subsidiaries and their respective assets and liabilities to WhiteFiber (hereinafter the “Reorganization”) prior to the effective date of the IPO. The transaction resulted in two separate, publicly traded companies: Bit Digital, Inc. and WhiteFiber, Inc. On October 11, 2024, WhiteFiber completed the acquisition of Enovum Data Centers Corp (“Enovum”), a Montreal-based owner, operator, and developer of HPC data centers. WhiteFiber had no assets, liabilities, operations, or commitments and contingencies prior to the acquisition.

WhiteFiber was incorporated on August 15, 2024 under the name Celer, Inc. We believe we are a leading provider of high-performance computing (“HPC”) data centers and cloud-based HPC graphics processing units (“GPU”) services, which we term cloud services, for customers such as artificial intelligence (“AI”) applications and machine learning (“ML”) developers. Our HPC Tier-3 data centers provide hosting and colocation services. Our cloud services support-generative AI workstreams, especially training and inference which are provided by our subsidiary, WhiteFiber AI, Inc., incorporated on October 19, 2023, and its subsidiaries. In connection with our IPO, the WhiteFiber Business was being carved out of Bit Digital, Inc. and operates as a separate public company. As of September 17, 2025, Bit Digital owns 71.5% of WhiteFiber and WhiteFiber AI is a wholly-owned subsidiary of WhiteFiber.

For the avoidance of doubt, when using the terms “we,” “us,” or “our” throughout this report, it is in reference to the WhiteFiber Business.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and principles of consolidation

Throughout the periods covered by the combined financial statements, the WhiteFiber Business has historically existed and functioned as part of the consolidated business of Bit Digital. Consequently, stand-alone financial statements have not historically been prepared for the WhiteFiber Business. The accompanying combined financial statements reflect the historical balance sheets, results of operations, cash flows, and changes in net parent investment of the WhiteFiber Business, for the periods presented, prepared on a “carve-out” basis and have been derived from the consolidated financial statements and accounting records of Bit Digital, using the historical results of operations and historical basis of assets and liabilities of the Company. Prior to the formation of WhiteFiber Inc., which was a newly formed subsidiary of Bit Digital, the combined financial statements reflect the result of operations and assets and liabilities of WhiteFiber AI, incorporated on October 19, 2023. The results of Enovum are reflected following its acquisition on October 11, 2024.

The Company’s accompanying combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The combined financial statements include the accounts of the Company and its wholly owned subsidiaries. All material transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. Transactions between the Company and Bit Digital are considered to be effectively settled when the transactions are recorded and included as a component of Parent company net investment in the combined balance sheet and non-cash parent contribution in the combined statement of cash flows. Parent company investment represents Bit Digital’s historical investment in the Company, including WhiteFiber and WhiteFiber AI, and the net effect of transactions with Bit Digital.

All revenues and costs as well as assets and liabilities directly associated with the business activity of the Company are included in the combined financial statements. The combined financial statements also include expense allocations for certain functions provided by Bit Digital, including, but not limited to, certain general corporate expenses related to finance, tax, investor relations, and marketing. These general corporate expenses are included in the combined statements of operations within general and administrative expenses. The amount allocated was $1.8 million and $0.7 million for the three months ended and $2.7 million and $1.2 million for the six months ended June 30, 2025 and 2024, respectively. Direct usage has been used to attribute expenses that are specifically identifiable to the Company, where practicable. In certain instances, these expenses have been allocated to the Company primarily based on the percentage of revenue or other allocation methodologies that are considered to be a reasonable reflection of the utilization of the services provided to the benefits received. The allocations may not, however, reflect the expense the Company would have incurred as a stand-alone company for the period presented. These costs also may not be indicative of the expenses that the Company will incur in the future or would have incurred if the Company had obtained these services from a third party. Refer to Note 14. Related Parties for further information.

The combined financial statements do not necessarily reflect what the financial position, results of operations, and cash flows would have been had it operated as a standalone company during the periods presented. Management believes all adjustments necessary for a fair statement of balance sheet, results of operations, and cash flows have been made. Except as otherwise disclosed, all such adjustments are of a normal recurring nature.

Following the Reorganization and IPO, the Company may perform certain functions using its own resources or purchased services. For an interim period following the Reorganization and IPO, however, some of these functions will continue to be provided by Bit Digital, under the Transition Services Agreement entered into between WhiteFiber and Bit Digital on July 30, 2025 (the “Transition Services Agreement”).

Use of estimates

In preparing the combined financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the combined financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of current assets, useful lives of property, plant, and equipment, impairment of long-lived assets, intangible assets and goodwill, valuation of assets and liabilities acquired in business combinations, provision necessary for contingent liabilities and realization of deferred tax assets. Actual results could differ from those estimates.

We review the useful lives of equipment on an ongoing basis, and effective January 1, 2025, we changed our estimate of the useful lives for our cloud service equipment from three to five years. The change was made to better reflect the expected usage patterns and economic benefits of the assets. The effect of this change in estimate, related to cloud service equipment included in “Property, plant and equipment, net” as of December 31, 2024, was a reduction in depreciation and amortization expense of $5.0 million and a benefit to net income of $4.0 million for the six months ended June 30, 2025, and was a reduction in depreciation and amortization expense of $2.5 million and a benefit to net income of $2.0 million for the three months ended June 30, 2025.

Fair value of financial instruments

ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

●

Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

●

Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data.

●

Level 3 - inputs to the valuation methodology are unobservable.

Fair value of the Company’s financial instruments, including cash and cash equivalents, restricted cash, deposits, accounts receivable, other receivables, accounts payable, and other payables, approximate their fair values because of the short-term nature of these assets and liabilities. Non-financial assets, such as goodwill, intangible assets, operating lease right-of-use assets, and property, plant and equipment, are adjusted to 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 fair value only upon recognition of an impairment charge.

Cash and cash equivalents

Cash includes cash on hand and demand deposits in accounts maintained with commercial banks. The Company considers all highly liquid investment instruments with an original maturity of three months or less from the date of purchase to be cash equivalents.

Restricted cash

Restricted cash represents cash balances that support an outstanding letter of credit to third parties related to security deposits and are restricted from withdrawal.

Accounts Receivable

Accounts receivable consist of amounts due from our customers. Receivables are recorded at the invoiced amount less an allowance for any potentially uncollectable accounts under the current expected credit loss (“CECL”) impairment model and presents the net amount of the financial instrument expected to be collected. The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, that considers forecasts of future economic conditions in addition to information about past events and current conditions. In accordance with ASC 326, Measurement of Credit Losses on Financial Instruments (“ASC 326”), the Company evaluates the collectability of outstanding accounts receivable balances to determine an allowance for credit loss that reflects its best estimate of the lifetime expected credit losses. Uncollectible accounts are written off against the allowance when collection does not appear probable.

Due to the short-term nature of the Company’s accounts receivable, the estimate of expected credit loss is based on the aging of accounts using an aging schedule as of period ends. In determining the amount of the allowance for credit losses, the Company considers historical collection history based on past due status, the current aging of receivables, customer-specific credit risk factors, including their current financial condition, current market conditions, and probable future economic conditions which inform adjustments to historical loss patterns.

As of June 30, 2025, the allowance for credit loss has not been material to the combined financial statements.

Deposits for property, plant, and equipment

The deposits for property, plant and equipment represented advance payments for purchases of high performance computing equipment and other equipment used in our colocation services. The Company initially recognizes deposits for property, plant, and equipment when cash is advanced to our suppliers. Subsequently, the Company derecognizes and reclassifies deposits for property, plant, and equipment to property, plant, and equipment when control is transferred to and obtained by the Company.

Below is the roll forward of the balance of deposits for property, plant and equipment for the six months ended June 30, 2025 and for the year ended December 31, 2024, respectively.

	June 30, 2025			December 31, 2024
Opening balance	$	35,743,011		$	4,127,371
Reclassification to property, plant, and equipment		(86,284,660	)		(23,225,217	)
Addition of deposits for property, plant, and equipment		64,906,262			55,922,142

SEC Form 10-Q filed by WhiteFiber Inc.