10. PROPERTY, PLANT, AND EQUIPMENT, NET

Property, plant and equipment, net was comprised of the following:

For the three months ended June 30, 2026 and 2025, depreciation and amortization expenses for property, plant and equipment were $9.9 million and $8.2 million, respectively and for the six months ended June 30, 2026 and 2025, depreciation and amortization expenses were $19.8 million and $15.5 million, respectively. Construction in Progress represents assets received but not placed into service as of June 30, 2026 and December 31, 2025.

For the three and six months ended June 30, 2026 we had an impairment charge of $5.0 million (as described in the section below, Disposals of Property, Plant and Equipment). There were no impairment charges during the three and six months ended June 30, 2025.

During 2024 and 2025, the Company purchased data storage and network equipment that was subsequently derecognized from property, plant and equipment upon entering into sales-type lease arrangements, with the related assets recorded as net investments in leases, totaling approximately $10.6 million and $7.9 million, respectively. In the second quarter of 2026, upon termination of a customer agreement, the Company derecognized a net investment in lease of $1.4 million for the related assets and recognized the amount in property, plant, and equipment. The Company then entered into a new sales-type lease arrangement with a customer, and the carrying value of the associated assets were derecognized from property, plant and equipment at their carrying value of $0.3 million, with the related assets recorded as net investment in leases. Refer to Note 9. Leases for further details.

On May 8, 2026, the Company acquired the MTL-3 property following the exercise of the purchase option under the related data center lease agreement (refer to Note 9. Leases). The purchase price of CAD $24.2M (approximately $17.3 million), and the capitalized transactions costs of CAD $1.4M (approximately $1.0 million), was allocated between land and building based on their relative fair value.

Disposals of Property, Plant and Equipment

For the six months ended June 30, 2026, the Company sold 126 H200s GPU for a total consideration of approximately $26.1 million. On the date of the transaction, the carrying amount of these GPUs was $24.3 million. The Company recognized a gain of $1.8 million from the sale which was recorded within Net gain from disposal of property, plant and equipment. As of the date of this Form 10-Q, the Company has collected the full cash consideration of $26.1 million.  

During the six months ended June 30, 2026, the Company determined that it would discontinue further investment in, and use of, its internally-developed software platform. As a result of this decision, effective June 4, 2026, the Company recorded an impairment charge of the remaining book value of $5.0 million during the six months ended June 30, 2026. The impairment charge is presented as a separate line item within operating expenses in the accompanying consolidated statements of operations and is excluded from depreciation and amortization expense.