12. DEBT

2030 Convertible notes 

In October 2025, we issued $150,000,000 aggregate principal amount of 4.00% convertible senior notes due 2030 (the “2030 Notes”), including the exercise in full by the initial purchasers of the 2030 Notes of their option to purchase up to an additional $15,000,000 principal amount of the 2030 Notes.

The Notes were issued pursuant to, and are governed by, an indenture (the “Base Indenture”), dated as of October 2, 2025, between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), as supplemented by a first supplemental indenture (the “Supplemental Indenture,” and the Base Indenture, as supplemented by the Supplemental Indenture, the “Indenture”), dated as of October 2, 2025, between the Company and the Trustee. The net proceeds from the 2030 Notes offering, after deducting underwriting discounts and commissions and estimated offering expenses, were approximately $143.7 million, including the proceeds from the Underwriters’ exercise of their over-allotment option in full.

The 2030 Notes are senior and unsecured obligations and bear interest at a coupon rate of 4.00% per annum, with interest payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2026. The 2030 Notes will mature on October 1, 2030, unless earlier converted, redeemed or repurchased in accordance with their terms. The unamortized debt issuance costs as of December 31, 2025 was $6.3 million and were reported as a direct deduction from the face amount of the 2030 Notes. While the 2030 Notes bear a 4.00% stated interest rate, the effective interest rate for the notes as of March 31, 2026 was 11.7%, primarily reflecting the accretion of debt issuance costs.

Noteholders may convert their 2030 Notes at their option prior to the close of business on the second scheduled trading day immediately preceding the maturity date. The conversion rate is initially 240.3846 ordinary shares per $1,000 principal amount of the 2030 Notes (equivalent to an initial conversion price of $4.16 per ordinary share), which represents an approximately 30% conversion premium over the last reported sale price of $3.20 per ordinary share on the Nasdaq Capital Market on September 29, 2025. The conversion rate is subject to customary adjustments upon the occurrence of certain events, such as the interest make-whole conversion rate adjustment, or conversion upon a make-whole fundamental change, as described in the Indenture.

Holders of the 2030 Notes have a one-time noncontingent right to require the Company to repurchase for cash all or any portion of their respective notes at a repurchase price equal to 100% of the principal amount of such notes to be repurchased, plus any accrued and unpaid interest to, but excluding the repurchase date on October 1, 2028.

Under the interest make-whole conversion rate adjustment, the holders of the 2030 Notes are able to convert at any time during the period from, and including, the date that is six months after the last date of original issuance of the notes until the close of business on the business day immediately preceding September 15, 2028 (other than a conversion in connection with a make-whole fundamental change), the Company will increase the conversion rate per US$1,000 principal amount of the 2030 Notes to be converted by a number of ordinary shares.

We may not redeem the 2030 Notes prior to October 6, 2028. We may redeem for cash all or any portion of the 2030 Notes, at our option, on or after October 6, 2028 and prior to the 31^st scheduled trading day immediately preceding the maturity date, if the last reported sale price of our ordinary shares has been at least 130% of the conversion price for the 2030 Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of optional redemption at a redemption price equal to 100% of the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

If a “Fundamental Change” (as defined in the Indenture) occurs, then, subject to certain conditions and except as set forth in the Indenture, noteholders may require the Company to repurchase their 2030 Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition in the Indenture of a Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the ordinary shares.

The Indenture contains customary terms and covenants, including that upon certain events of default either the Trustee or the holders of at least 25% in aggregate principal amount of the outstanding 2030 Notes may declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the 2030 Notes to be due and payable.

The conversion features embedded in the 2030 Notes met the criteria to be bifurcated from the debt host contract under ASC 815 and recognized separately at fair value. The total proceeds received were first allocated to the fair value of the derivative liability, and the remaining proceeds allocated to the host. The host is subsequently measured using the effective interest method, and the derivative liability is measured at fair value, with changes in fair value recorded as derivative gain in the consolidated statements of operations. The estimated fair value of the entire 2030 Notes was determined to be approximately $115.14 million as of March 31, 2026 based on quoted prices in markets that are not active, which is considered a Level 2 valuation input. The 2030 Notes are classified as non-current liabilities as of March 31, 2026.

2031 Convertible notes

On January 26, 2026, WhiteFiber issued $230,000,000 aggregate principal amount of 4.50% convertible senior notes due 2031 (the “2031 Notes”), including the exercise in full by the initial purchasers of the 2031 Notes of their option to purchase up to an additional $20,000,000 principal amount of the 2031 Notes. The 2031 Notes bear interest at a rate of 4.500% per year, payable semiannually in arrears beginning on February 1 and August 1 of each year, beginning on August 1, 2026. The 2031 Notes will mature on February 1, 2031, unless earlier converted, redeemed or repurchased in accordance with their terms. The Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of January 26, 2026, between WhiteFiber and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).

The net proceeds from the 2031 Notes offering, after deducting initial purchasers’ discounts and offering expenses, were approximately $222.1 million, including the proceeds from the exercise in full of initial purchasers’ option to purchase an additional $20.0 million aggregate principal amount of 2031 Notes. The unamortized debt issuance costs as of March 31, 2026 were $7.7 million. WhiteFiber used approximately $120 million of the proceeds of the 2031 Notes offering to enter into a zero-strike call option transaction. The estimated fair value of the 2031 Notes was determined to be approximately $190.60 million as of March 31, 2026 based on quoted prices in markets that are not active, which is considered a Level 2 valuation input. While the 2031 Notes bear a 4.500% fixed interest rate, the effective interest rate for the notes as of March 31, 2026 was 5.37%, primarily reflecting the accretion of debt issuance costs.

Noteholders may convert their 2031 Notes at their option prior to the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, WhiteFiber will satisfy its conversion obligation by paying or delivering, as the case may be, cash, its ordinary shares, or a combination of cash and ordinary shares, at WhiteFiber’s election, in the manner and subject to the terms and conditions set forth in the Indenture. The conversion rate is initially 38.5981 ordinary shares per $1,000 principal amount of the 2031 Notes (equivalent to an initial conversion price of approximately $25.91 per ordinary share), which represents an approximately 27.50% conversion premium over the last reported sale price of $20.32 per ordinary share on the Nasdaq Capital Market on January 21, 2026. The conversion rate is subject to customary adjustments upon the occurrence of certain events, as described in the Indenture.

On February 6, 2029, and if WhiteFiber undergoes a “Fundamental Change” (as defined in the Indenture), then, subject to certain conditions and except as set forth in the Indenture, noteholders may require WhiteFiber to repurchase for cash all or any portion of their 2031 Notes at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the relevant repurchase date.

WhiteFiber may not redeem the 2031 Notes prior to February 6, 2029. WhiteFiber may redeem for cash all or any portion of the 2031 Notes, at our option, on or after February 6, 2029 and prior to the 41^st scheduled trading day immediately preceding the maturity date, if the last reported sale price of our ordinary shares has been at least 130% of the conversion price for the 2031 Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which WhiteFiber provides notice of optional redemption. However, WhiteFiber may not redeem less than all of the outstanding 2031 Notes at its option unless at least $75.0 million aggregate principal amount of 2031 Notes are outstanding and not called for optional redemption as of the time it sends the related notice of optional redemption (and after giving effect to the delivery of such notice of optional redemption). WhiteFiber may also redeem for cash, in whole but not in part, the 2031 Notes, subject to certain conditions, upon the occurrence of certain changes to the laws, rules or regulations of a relevant taxing jurisdiction (as defined in the Indenture). The redemption price is equal to 100% of the principal amount of the 2031 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

The Indenture contains customary terms and covenants, including certain bankruptcy and insolvency-related events of default, the occurrence of which will result in the outstanding 2031 Notes automatically becoming due and payable, and certain non-bankruptcy and insolvency-related events of default, upon the occurrence of which either the Trustee or the holders of at least 25% in aggregate principal amount of the outstanding 2031 Notes may declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the 2031 Notes to be due and payable.

WhiteFiber accounts for the 2031 Notes as a single instrument. As of March 31, 2026, none of the conditions permitting the holders of the 2031 Notes to convert their notes early had been met, and to require WhiteFiber to repurchase the 2031 Notes for cash. Therefore, the 2031 Notes are classified as long-term.

Zero-Strike Call Option Transaction

In connection with the issuance of the 2031 Notes, WhiteFiber entered into a zero-strike call option transaction (“Zero-Strike Call Option”) with one of the initial purchasers or its affiliate (the “Option Counterparty”). Pursuant to the Call Option Transaction, WhiteFiber paid a premium equal to approximately $120.0 million for the right to receive, without further payment, 5,905,511 ordinary shares (subject to customary adjustment), with delivery thereof by the Option Counterparty at expiry, subject to early settlement of the Zero-Strike Call Option in whole or in part at the Option Counterparty’s discretion. The Zero-Strike Call Option expires on the 40th non-disrupted day (as defined in the Zero-Strike Call Option) following February 1, 2031, or earlier if the Option Counterparty requests early settlement. The settlement method of the Zero-Strike Call Option is physical settlement. WhiteFiber will receive the fixed number of ordinary shares determined at the commencement date of the transaction upon expiration or for the portion thereof being settled early, provided that the Zero-Strike Call Option is exercised. The Zero-Strike Call Option is recognized as permanent equity at its fair value at inception as a reduction to additional paid in capital in the condensed consolidated balance sheet.

The following table summarizes the balances of the convertible notes (in thousands):

Included in the unamortized debt discount as of March 31, 2026 was approximately $32 million related to the embedded conversion feature of the 2030 Convertible Notes, which was bifurcated and recognized as a derivative liability upon issuance. The derivative liability is subsequently remeasured at fair value at each reporting period, with changes in fair value recognized in earnings. See Note 13. Fair Value of Financial Instruments, for additional information regarding the fair value measurement of the derivative liability.

Iceland Facility Agreement

On March 25, 2026, WhiteFiber Iceland ehf. (the “Borrower”), a subsidiary of WhiteFiber, Inc., entered into a secured term loan facility agreement (the “Facility”) with Landsbankinn hf, which provides for borrowings of up to $20 million. The obligations under the Facility are guaranteed by WhiteFiber, Inc. and WhiteFiber AI, Inc. (collectively, the “Guarantors”).

Borrowings under the Facility bear interest at a floating rate per annum equal to the sum of (i) three month CME Term SOFR (or any successor benchmark), and (ii) an applicable margin of 4.25% per annum. The base interest rate is subject to a floor of 0%, such that it will not be less than zero.

The Facility has an initial maturity of two years from the date of the agreement, with the option to extend the maturity up to an additional two years, for a maximum term of four years, subject to the terms and conditions of the agreement.

Principal repayments are required to be made in quarterly installments commencing three months after the initial drawdown date, with all remaining outstanding amounts due at the maturity date.

The Facility is secured by first-ranking security over (i) 100% of the Company’s shareholding in WhiteFiber Iceland ehf., (ii) designated assets (including GPU servers, CPU servers, IB switches and equipment accessories) at the date of the agreement, and (iii) material assets acquired thereafter (to be secured within 60 days), in each case until all obligations are fully satisfied. The Facility also includes customary events of default, the occurrence of which could result in the acceleration of amounts outstanding.

The Facility may be drawn in multiple tranches during an availability period, with up to two drawdowns permitted and a minimum draw amount of $5 million per draw. Any undrawn commitments are canceled at the end of the availability period. As of March 31, 2026, the Company had not yet drawn on the Facility. Subsequently, on April 24, 2026, the Company drew down $18 million.

In connection with the entry into the Facility, the Borrower is required to pay an arrangement fee to the lender. The Facility also includes customary financial maintenance covenants, including leverage, equity, and loan to value ratios.

The Facility permits voluntary prepayments, subject in certain cases to prepayment fees, and includes mandatory prepayment provisions in connection with specified events, including certain asset disposals and insurance proceeds, all as set out in the facility agreement.