10. INVESTMENT SECURITIES

Investment securities were comprised of the following:

(a) Investment in Digital Future Alliance Limited (“DFA”)

DFA is a privately held company, over which the Company has neither control nor significant influence through investment in ordinary shares. The Company accounted for the investment in DFA using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer.

For the three and nine months ended September 30, 2026 and 2025, the Company did not record upward adjustments or downward adjustments on the investment. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security. As of September 30, 2026 and December 31, 2025, the Company did not recognize impairment against the investment security.

(b) Investment in Nine Blocks Offshore Feeder Fund (“Nine Blocks”)

On August 1, 2022, the Company entered into a subscription agreement with Nine Blocks for investment of $2.0 million. The investment includes a direct investment into the Nine Blocks Master Fund, a digital assets market neutral fund using basis trading, relative value, and special situations strategies.

As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the fund. For the three months ended September 30, 2026 and 2025, the Company recorded cumulative downward adjustments of $12 thousand and upward adjustments of $102 thousand, respectively, on the investment. For the nine months ended September 30, 2026 and 2025, the Company recorded cumulative downward adjustments of $32 thousand and $nil, respectively, on the investment.

(c) Investment in Auros Global Limited (“Auros”)

On February 24, 2023, the Company closed an investment of $1,999,987 in Auros, which is a leading crypto-native algorithmic trading and market making firm that delivers best-in-class liquidity for exchanges and token projects. The Company has neither control nor significant influence through investment in ordinary shares. The Company accounted for the investment in Auros using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer.

For the three and nine months ended September 30, 2026 and 2025, the Company did not record upward adjustments or downward adjustments on the investment. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security. As of September 30, 2026 and December 31, 2025, the Company did not recognize impairment against the investment security.

(d) Investment in Ingonyama Ltd. (“Ingonyama”)

In September 2023, the Company closed an investment of $100,000 in Ingonyama, a semiconductor company focusing on Zero Knowledge Proof hardware acceleration. The Company has neither control nor significant influence through investment in preferred shares. The Company accounted for the investment in Ingonyama using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer.

For the three and nine months ended September 30, 2026 and 2025, the Company did not record upward adjustments or downward adjustments on the investment. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security. As of September 30, 2026 and December 31, 2025, the Company did not recognize impairment against the investment security.

(e) Investment in Cysic Inc (“Cysic”) 

On April 2, 2024, the Company closed an investment of $100,000 in Cysic, a ZK hardware acceleration company and ZK prover network to provide ZK Compute-as-a-Service. The Company has neither control nor significant influence through investment in preferred shares. The Company accounted for the investment in Cysic using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer.

For the three and nine months ended September 30, 2026 and 2025, the Company did not record upward adjustments or downward adjustments on the investment. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security. As of September 30, 2026 and December 31, 2025, the Company did not recognize impairment against the investment security.   

(f) Investment in a SAFE

On May 30, 2024 (the “Effective Date”), and subsequently amended June 30,2024, the Company entered into a simple agreement for future equity (“SAFE”) agreement for an initial investment amount of $1 million in exchange for a right to participate in a future equity financing of preferred stock to be issued by Canopy Wave Inc. (“Canopy”). Alternatively, upon a liquidity event such as a change in control, a direct listing or an initial public offering, the Company is entitled to receive the greater of (i) the SAFE investment amount plus 15% annual accrued interest (the “cash-out amount”) or (ii) the SAFE investment amount divided by a discount to the price per share of Canopy’s ordinary shares. In a dissolution event, such as a bankruptcy, the Company is entitled to receive the cash-out amount. If the SAFE is outstanding on the three-year anniversary of the Effective Date, then the SAFE will expire and the Company will be entitled to receive the cash-out amount. In the event of a qualifying equity financing, the number of shares of preferred stock received by the Company would be determined by dividing the SAFE investment amount by a discounted price per share of the preferred stock issued in the respective equity financing. The Company recorded an investment of $1 million as an investment in the SAFE on the condensed consolidated balance sheets. Additionally, per the terms of the SAFE arrangement, the Company may be obligated to invest up to an additional $2 million into the SAFE arrangement if Canopy satisfies certain milestones prior to the expiration of the SAFE, or if an equity financing event occurs.

The Company accounted for this investment under ASC 320, Investments - Debt Securities and elected the fair value option for the SAFE investment pursuant to ASC 825, Financial Instruments, which requires financial instruments to be remeasured to fair value each reporting period, with changes in fair value recorded in the condensed consolidated statements of operations. The fair value estimate includes significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The decision to elect the fair value option is determined on an instrument-by-instrument basis on the date the instrument is initially recognized, is applied to the entire instrument, and is irrevocable once elected. For instruments measured at fair value, embedded conversion or other features are not required to be separated from the host instrument. Issuance costs related to convertible securities carried at fair value are not deferred and are recognized as incurred on the condensed consolidated statements of operations.

On August 10, 2026, Canopy and SAIHEAT Limited (“SAIHEAT”) announced that they had entered into a definitive merger agreement pursuant to which Canopy would become a wholly owned subsidiary of SAIHEAT in a stock-for-stock transaction. In connection with the proposed merger, SAIHEAT is expected to be renamed Canopy Wave Holdings Inc.

In connection with the proposed merger, WhiteFiber and Canopy entered into a Surrender and Termination Agreement pursuant to which WhiteFiber’s existing SAFE investment will be surrendered and terminated, effective upon the closing of the merger, in exchange for a cash payment of $1.0 million, subject to the terms and conditions of the agreement. Pursuant to the agreement, WhiteFiber elected to reinvest the cash payment in Class A ordinary shares of SAIHEAT through the PIPE Investment, described below, with the purchase to be concurrent with the closing of the merger. WhiteFiber’s right to receive the cash payment is not conditioned on its participation in the PIPE Investment.

As of September 30, 2026, the proposed merger had not been completed, and the SAFE had not been surrendered or terminated. Accordingly, the Company continued to recognize its existing SAFE investment, with a carrying value of $1.0 million, in its condensed consolidated balance sheet as of September 30, 2026.

At September 30, 2026, the Company performed a qualitative assessment to identify if events or circumstances indicate that the investment is impaired or that an observable price change has occurred. We considered available information about Canopy’s operations and industry conditions. No events or circumstances were identified that would indicate the investment is impaired or that an observable price change occurred. The Company did not recognize any upward or downward adjustment to the value of the investment for the three or nine months ended September 30, 2026.

(g) Investment in AI Innovation Fund I (“AI fund”)

On July 15, 2024, the Company entered into a subscription agreement with Pleasanton Ventures Innovation Master Fund SPC Limited for investment of $15.9 million in its AI Innovation Fund I. The investment includes a direct investment into private equity and fund of fund opportunities within the AI industry. On May 20, 2025 and August 19, 2026, the Company made additional investments of $2.0 million and $15.8 million, respectively, into the fund.

As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the fund. For the three and nine months ended September 30, 2026, the Company recorded cumulative downward adjustments of $101 thousand and $251 thousand, respectively, in the investment.

(h) Investment in Innovation Fund I (“Innovation fund”)

After the Company disposed its BVI entities for its previous fund operation, the Company no longer consolidates the investment in the fund. As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the fund.

In March 2025, the Company invested an additional 3,400 ETH into the fund, equivalent to approximately $7.0 million based on the ETH-to-USD exchange rate at the time of investment.

In August 2025, the Company invested an additional 9,000 ETH into the fund, equivalent to approximately $40.6 million based on the ETH-to-USD exchange rate at the time of investment.

For the three months ended September 30, 2026 and 2025, the Company recorded cumulative upward adjustments of $17.1 million and $7.1 million, respectively, in the investment.

For the nine months ended September 30, 2026 and 2025, the Company recorded cumulative downward adjustments of $4.0 million and cumulative upward adjustments of $6.5 million, respectively, in the investment.

(i) Investment in Odiot Holding (“Odiot Holding”)

In connection with the acquisition of Bit Digital Europe Holding (“BDEH”) on November 28, 2025, the Company acquired an indirect minority equity interest in Odiot Holding, a publicly traded company in France. The Company does not have control or significant influence over Odiot Holding.

Accordingly, the investment is accounted for as an equity security under ASC 321, Investments — Equity Securities, The investment was initially recorded at fair value on the acquisition date and is subsequently measured at fair value using quoted market prices in an active market (Level 1 inputs), with changes in fair value recognized in earnings.

For the three and nine months ended September 30, 2026, the Company recorded cumulative upward adjustments of $55 thousand and $43 thousand, respectively, in the investment.

(j) PIPE Investment

On August 10, 2026, WhiteFiber entered into the PIPE Share Purchase Agreement with SAIHEAT Limited, an exempted company incorporated under the laws of the Cayman Islands (“SAIHEAT”).  Pursuant to the PIPE Share Purchase Agreement, WhiteFiber purchased from SAIHEAT, an aggregate of 55,105 SAIHEAT’s Class A Ordinary Shares (the “PIPE Shares”) for an aggregate purchase price of approximately $1.0 million at a per-share purchase price of $18.15 per share.

The PIPE investment was entered into in connection with the proposed merger between SAIHEAT and Canopy, pursuant to which Canopy would become a wholly owned subsidiary of SAIHEAT. The consummation of the PIPE investment is contingent upon the completion of the proposed merger and the satisfaction of certain closing conditions.

As of September 30, 2026, the proposed merger had not been completed, and the PIPE Shares had not been issued to the Company. Accordingly, the Company had not recognized an investment in the PIPE Shares in its condensed consolidated balance sheet as of September 30, 2026. Upon completion of the transaction, the Company expects to account for the PIPE Shares in accordance with the applicable U.S. GAAP guidance for equity securities.

WhiteFiber expects to have neither control nor significant influence through investment in PIPE Shares. Four members of the management, including the Company’s Chief Financial Officer, participated in the PIPE transaction in their personal capacity as investors and invested $0.5 million each in SAIHEAT.