12. DEBT

2030 Convertible notes 

In October 2025, we issued $150.0 million 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 $15.0 million 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 September 30, 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 thousand 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 thousand 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 loss in the consolidated statements of operations. The estimated fair value of the entire 2030 Notes was determined to be approximately $136.2 million as of September 30, 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 September 30, 2026.

2031 Convertible notes

On January 26, 2026, WhiteFiber issued $230.0 million 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 $20.0 million principal amount of the 2031 Notes. The 2031 Notes bear interest at a rate of 4.500% per year, payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2026 and has an effective interest rate of 5.37%. 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. WhiteFiber used approximately $120 million of the proceeds of the 2031 Notes offering to enter into a zero-strike call option transaction, as discussed below.

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 thousand principal amount of the 2031 Notes (equivalent to an initial conversion price of approximately $25.91 per ordinary share), which represents an approximately 27.5% 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.

Holders may require the WhiteFiber to repurchase the 2031 Notes for cash on February 6, 2029 or upon the occurrence of certain fundamental changes, in each case subject to the terms of the governing indenture, at 100% of principal plus accrued and unpaid interest. WhiteFiber may redeem the 2031 Notes on or after February 6, 2029, subject to specified share-price conditions and other restrictions, and may redeem the notes upon certain tax-related events.

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.

In August 2026, WhiteFiber purchased $198.15 million aggregate principal amount of the 2031 Notes for cash and shares in privately negotiated transactions, as discussed below. Following settlement, $31.85 million principal amount remained outstanding. The estimated fair value of the remaining 2031 Notes was determined to be approximately $34.5 million as of September 30, 2026 based on quoted prices in markets that are not active, which is considered a Level 2 valuation input.

WhiteFiber accounts for the remaining 2031 Notes as a single liability instrument at amortized cost, net of unamortized debt issuance costs. As of September 30, 2026, WhiteFiber classified the 2031 Notes as a long-term liability. Although the 2031 Notes are currently convertible, WhiteFiber has the intent and the ability to settle any conversion in its ordinary shares and therefore does not expect that settlement of the 2031 Notes will require the use of current assets or the creation of other current liabilities. Holders may require repurchase of the 2031 Notes for cash on February 6, 2029, which is more than twelve months after September 30, 2026.

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.

2032 Convertible Senior Notes

On August 21, 2026, WhiteFiber completed a private offering of $310.0 million aggregate principal amount of 5.00% convertible senior notes due September 1, 2032 (the “2032 Notes”), consisting of an initial $270.0 million issuance and an additional $40.0 million issued upon exercise in full of the initial purchasers’ over-allotment option. The 2032 Notes are senior unsecured obligations and bear interest at 5.00% per annum, with an effective interest rate of 5.81%, payable semiannually in arrears on March 1 and September 1, commencing March 1, 2027. The estimated fair value of the 2032 Notes was determined to be approximately $297.7 million as of September 30, 2026 based on quoted prices in markets that are not active, which is considered a Level 2 valuation input.

The initial conversion rate is 29.5530 ordinary shares per $1,000 principal amount of the 2032 Notes, equivalent to an initial conversion price of approximately $33.84 per share, subject to adjustment. Holders may convert their 2032 Notes at their option prior to the close of business on the second scheduled trading day immediately preceding the maturity date, in accordance with the terms and conditions of the indenture. Upon conversion, WhiteFiber may settle its obligations in cash, ordinary shares or a combination thereof at its election. Under certain circumstances, including specified corporate events or redemption notices, the conversion rate may be increased. WhiteFiber may redeem the 2032 Notes at its option on or after September 6, 2030, subject to specified stock-price conditions and other restrictions, and upon certain tax-related events. Holders may require WhiteFiber to repurchase the 2032 Notes for cash on September 6, 2030 or upon certain fundamental changes, in each case subject to the indenture, at 100% of principal plus accrued and unpaid interest.

WhiteFiber accounts for the 2032 Notes as a single instrument. As of September 30, 2026, WhiteFiber has classified the 2032 Notes as a long-term liability. Although the 2032 Notes are currently convertible, WhiteFiber has the intent and the ability to settle any conversion in its ordinary shares, and therefore does not expect that settlement of the 2032 Notes will require the use of current assets or the creation of other current liabilities. Holders may require repurchase of the 2032 Notes for cash on September 6, 2030, which is more than twelve months after September 30, 2026.

Partial Repurchase of 2031 Notes

On August 18, 2026, WhiteFiber entered into binding, privately negotiated transactions with certain holders of its 2031 Notes to repurchase an aggregate principal amount of $198.15 million of 2031 Notes. The transactions settled on August 21, 2026. WhiteFiber transferred approximately $118.5 million of cash, including approximately $0.5 million of accrued interest, and issued 6,271,534 ordinary shares with an aggregate fair value of approximately $169.8 million.

WhiteFiber concluded that the repurchase transactions qualified for induced conversion accounting under ASC 470-20, including the amendments in ASU 2024-04. WhiteFiber measured the inducement expense as the excess of the fair value of the consideration transferred over the fair value of consideration issuable under the original conversion privileges, measured as of August 18, 2026, the date of binding acceptance. WhiteFiber recognized induced conversion expense of approximately $80.8 million for the three and nine months ended September 30, 2026 in Induced conversion expense in the condensed consolidated statements of operations.

Upon settlement on August 21, 2026, WhiteFiber derecognized the carrying amount of the settled 2031 Notes, including related unamortized issuance costs, and recorded the applicable amounts in additional paid-in capital. in accordance with its induced conversion accounting conclusion.

The following table summarizes the balances of the convertible notes:

For the three and nine months ended September 30, 2026, interest expense related to the convertible notes totaled $6.9 million and $18.0 million, respectively, consisting of contractual interest expense of $4.9 million and $12.3 million, respectively, and amortization of debt issuance costs and discounts of $2.0 million and $5.7 million, respectively.

Accrued interest related to the convertible notes as of September 30, 2026 was $4.9 million. We record accrued interest in other payables and accrued liabilities in our consolidated balance sheet.

Included in the unamortized debt issuance costs and debt discount as of September 30, 2026 was approximately $28.5 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.

The following table summarizes the balances of the Company’s other short-term and long-term debts: 

Iceland Facility

On March 23, 2026, WhiteFiber Iceland ehf. (the “Borrower”), a subsidiary of the Company, 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”).

No separate guarantee liability is recognized in the consolidated financial statements as the guarantees provided by the Guarantors are intercompany arrangements that are eliminated upon consolidation under ASC 810-10-45-18. The guarantees are disclosed herein pursuant to the disclosure requirements of ASC 460-10-50-4.  

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. On April 24, 2026, the Company drew down $18 million. On September 11, 2026, the Borrower drew the remaining $2.0 million, bringing total borrowings under the Facility to $20.0 million.

In connection with the entry into the Facility, the Borrower paid an arrangement fee of $0.2 million (1.111% of the amount drawn), together with legal, documentation, and other third-party costs, for total debt issuance costs and debt discount of approximately $0.4 million, which were recorded as a direct deduction from the carrying amount of the Facility. The Facility also includes customary financial maintenance covenants, including leverage, equity, and loan to value ratios. As of September 30, 2026, the Company was in compliance with all financial covenants under the credit facility.

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.

As of September 30, 2026, the aggregate outstanding principal balance, net of unamortized debt discount and issuance costs, under the Facility was $17.8 million, and the Facility had a weighted average effective interest rate of 10.35%, which includes a weighted average stated interest rate of 7.94%.

Royal Bank of Canada Facility

On June 18, 2025, the Company entered into a non-recourse credit facility (“Credit Facility”) with the Royal Bank of Canada (“RBC”). The Credit Facility provides for an aggregate of up to approximately CAD 60 million (approximately $43.8 million) to finance its data centers business.

The agreement is non-recourse and comprised of three separate facilities:

The Company agreed to certain financial covenants including maintaining on a combined basis between MTL-1 and MTL-2: fixed charge coverage of not less than 1.20:1 and a ratio of Net Funded Debt to EBITDA of not greater than 4.25:1 and decreasing to 3.50:1 from December 31, 2027. The facilities had not been authorized for use by the lender, as certain conditions precedent had not yet been satisfied. Accordingly, no amounts were drawn, and no borrowings were available under this facility.

On April 27, 2026, the Company entered into an amended credit agreement (“Amended Credit Agreement”) with RBC. This agreement replaces the original Credit Agreement dated June 18, 2025, as subsequently amended on July 4, 2025. The Amended Credit Agreement provides for an authorized credit facility of CAD $28 million (approximately $20 million). On May 8, 2026, the Company drew CAD $24.7 million (approximately $17.3 million) to finance the acquisition of the MTL-3 facility and its related transaction costs.

Borrowings under the facility bore interest, at the Company’s option, at either (i) Daily Simple CORRA plus 2.75% per annum or (ii) Royal Bank Prime plus 1.00% per annum, with the prime-based rate serving as the default option. The facility had a six-month term from the date of drawdown and required interest-only payments during the term, with the outstanding principal due in full at maturity. The specific borrowing terms were established at the time of each drawdown pursuant to a borrowing request submitted by the Company and accepted by the lender.

Additionally, RBC provided a CAD $8 million (approximately $5.8 million) revolving facility in the form of Letters of Credit and Letters of Guarantee. The fees were determined on a transaction-by-transaction basis, and the facility was available for a 12-month term. As of September 30, 2026, the Company was in compliance with all financial covenants under the credit facility.

On July 15, 2026, the Amended Credit agreement was repaid in full and refinanced through the Syndicated RBC Credit Facility agreement described below. The revolving facility from the Amended credit agreement in the form of Letters of Credit and Letters of Guarantee remains in place.

Syndicated RBC Credit Facility Agreement

On July 6, 2026, WhiteFiber’s wholly-owned subsidiary, Enovum Data Center Corp. entered into a syndicated credit agreement (“Syndicated RBC Credit Facility Agreement”). The Syndicated RBC Credit Facility Agreement provides for an aggregate of up to approximately CAD $115 million (approximately $80.8 million) to refinance the Amended Credit Agreement and finance its data centers business. The agreement also includes an accordion feature that permits the Company to increase by up to an additional CAD $25 million (approximately $17.7 million) to refinance the Amended Credit Agreement, subject to the satisfaction of specified conditions. The Syndicated Credit Facility Agreement is a non-revolving facility, and amounts repaid or prepaid may not be reborrowed.

Borrowings under the Syndicated RBC Credit Facility Agreement bear interest, at the Company’s option, at either (i) the CORRA-based benchmark rate for such interest period, plus 2.45% per annum plus the credit spread adjustment for the applicable interest period (29.547 basis points for one month interest period, 32.138 basis points for a three month interest period and 0 for a daily interest period), or (ii) RBC Prime rate plus 1.00% per annum. The facility has a three-year term from the date of the initial drawdown and requires interest-only payments until the first full quarter after the date of the initial drawdown. The loan will be amortized through quarterly principal repayments based on a 15-year amortization schedule, with the outstanding principal due in full at maturity. The specific borrowing terms are established at the time of each drawdown pursuant to a borrowing request submitted by the Company and accepted by the lender.

The Syndicated RBC Credit Facility is secured by first-ranking security interests over substantially all present and future personal property and assets of the borrower and the guarantors, together with first-ranking mortgages on certain owned real estate, including the Company’s MTL-2 and MTL-3 properties and related improvements and equipment.

The Company has agreed to certain financial covenants, including a minimum debt service coverage ratio and a maximum Net funded debt to EBITDA ratio. As of September 30, 2026, the Company was in compliance with all financial covenants under the Syndicated RBC Credit Facility Agreement.

On July 15, 2026, the Company drew a CORRA loan amount of CAD $36.8 million (approximately $26.2 million) under the Syndicated RBC Credit Facility Agreement. As of September 30, 2026, the CORRA loan amount had an average all-in rate of 5.03%.

B. Riley Facility

On May 26, 2026, the Company assigned to B. Riley a $20 million note that was issued to Enovum NC-1 Venture, LLC, an indirect wholly-owned subsidiary of WhiteFiber under the Delayed Draw Term Loan Facility and Security Agreement.

On August 24, 2026, WhiteFiber repaid the $20 million draw down assigned to B.Riley in full at maturity, without extension, for a total cash payment of $21.5 million, consisting of $20.0 million of principal and $1.5 million of MOIC return. Following repayment, the Company has no further obligations to B. Riley under the facility.

Collateralized borrowing

On March 27, 2026, the Company entered into a collateralized borrowing arrangement with Galaxy Digital LLC (“Galaxy”). The Galaxy Loan Agreement provides for loans to the Company from time to time, with each loan amount, collateral and other terms determined and agreed upon by the Company and Galaxy pursuant to individual Loan Term Sheets. Collateral for each loan may consist of Dollars or Digital Currency, as agreed by the parties. The Loans may be either: an Open Loan, without a Maturity Date, where the Borrower may repay and Lender may recall the Borrowed Asset at any time, or a Term Loan with a predetermined Maturity Date, where the Lender has no right to demand a return of the Borrowed Asset before the Maturity Date. The Borrow Fee for each loan is as agreed upon in the relevant Loan Term Sheet.

On May 20, 2026 and July 30, 2026, the Company drew down $50.0 million and $10.0 million, respectively, under the facility, which bears interest at an annual rate of 5.5%. The borrowing is secured by the Company’s LsETH. Under the terms of the agreement, the Company may be required to provide additional collateral if the value of the pledged collateral falls below the required maintenance threshold specified in the applicable loan documentation.

The borrowing is an evergreen facility that may be recalled by the lender upon seven days’ notice in accordance with the terms of the loan agreement. As the Company does not have an unconditional right to defer settlement of the borrowing for at least one year after the balance sheet date, the related loan payable is classified as a current liability in the condensed consolidated balance sheets. The Galaxy Loan Agreement has an initial term of one year and automatically renews for successive one-year periods unless terminated in accordance with its terms.

Because the Company does not have an unconditional right to defer settlement of the borrowing for at least one year after the balance sheet date, the related loan payable has been classified as a current liability in the condensed consolidated balance sheets.

On September 29, 2026, the Company repaid $30.0 million of the outstanding principal to Galaxy, reducing the outstanding principal balance to $30.0 million as of September 30, 2026.