As of June 30, 2026 and December 31, 2025, the Company determined it had surplus Miners and Mining electrical equipment that met the criteria as "assets held for sale" under ASC 360-10-45 as of the respective balance sheet dates. These assets were measured at the lower of their carrying amount and fair value less costs to sell at the time of the classification. These surplus assets are not determined to be discontinued operations as their planned sale did not represent a strategic shift on the Company's operations and financial results.

The significant net increase in surplus Miners and Mining electrical components classified as held for sale as of June 30, 2026 compared to December 31, 2025 is primarily attributable to the Company's cessation of Bitcoin Mining operations at its United States sites. Following the shutdown of the Washington State site in April 2026 and the subsequent cessation of operations at Panther Creek, Scrubgrass, and Sharon in Pennsylvania effective June 2026, the associated Miners and electrical equipment were no longer required for ongoing Bitcoin Mining operations and were identified for sale.

The fair value of these assets was determined using the market approach, which is based on recent sales prices for similar Miners and equipment. Such fair value measurements are a non-recurring Level 3 measurement under the fair value hierarchy. The key assumption used by Management to determine fair value is the most recent amount contracted with a third party for a comparable Miner or equipment sold.

In addition to surplus Miners and equipment, the Company classified assets in Paraguay which met the criteria as "assets held for sale" during the year ended December 31, 2025, which have been classified as discontinued operations as detailed in this note. The Paraguay disposal group included the Paso Pe Bitcoin data center which met the "held for sale" criteria during the third quarter of 2025 and was sold during the three and six months ended June 30, 2026, as further described below.


	As of June 30,	As of December 31,
	2026	2025
Miners	13,013	166
Mining electrical components	2,901	3,198
Assets of disposal group classified as held for sale:
Other assets	—	1,404
Inventories - electronic and networking components	—	426
Property, plant and equipment	—	17,168
Long-term deposits and equipment prepayments	—	1,145
Refundable deposits - security deposits for energy	—	5,157
	15,914	28,664

In 2025, the Company began a significant transformation of its corporate strategy, exiting its Latin American Bitcoin Mining operations in Paraguay and Argentina to fully concentrate on the U.S. and Canadian HPC infrastructure markets. As a result of these strategic decisions, the Company classified certain of its Latin American asset groups as "held for sale" and its operations as discontinued operations. As discussed below, the Argentina asset group was abandoned, and therefore its assets were not classified as "held for sale". The Company sold Backbone Argentina during the three and six months ended June 30, 2026, as further described below and completed the sale and discontinuation of the Company's South American operations.


	Three months ended June 30,
	2026			2025

	Argentina	Paraguay	Total	Argentina	Paraguay	Total
Revenues*	—	1,296	1,296	3,657	12,217	15,874
Cost of revenues	—	(1,287)	(1,287)	(5,775)	(12,430)	(18,205)
Gross profit (loss)	—	9	9	(2,118)	(213)	(2,331)
Operating expenses
General and administrative expenses	(572)	(343)	(915)	(1,438)	(575)	(2,013)
Gain (loss) on disposition of property, plant and equipment and deposits	(287)	128	(159)	70	4	74
Impairment of long-lived assets	—	—	—	(14,872)	—	(14,872)
Operating loss	(859)	(206)	(1,065)	(18,358)	(784)	(19,142)
Interest expense	—	—	—	—	(29)	(29)
Other (expense) income	(9)	(23)	(32)	22	106	128
Total other (expense) income	(9)	(23)	(32)	22	77	99
Loss before income taxes	(868)	(229)	(1,097)	(18,336)	(707)	(19,043)
Income tax recovery (expense)	—	53	53	457	(111)	346
Loss from discontinued operations	(868)	(176)	(1,044)	(17,879)	(818)	(18,697)


	Six months ended June 30,
	2026			2025

	Argentina	Paraguay	Total	Argentina	Paraguay	Total
Revenues*	—	7,378	7,378	10,612	24,231	34,843
Cost of revenues	—	(7,149)	(7,149)	(13,828)	(24,084)	(37,912)
Gross profit (loss)	—	229	229	(3,216)	147	(3,069)
Operating expenses
General and administrative expenses	(4,420)	(1,302)	(5,722)	(3,001)	(1,454)	(4,455)
Gain (loss) on disposition of property, plant and equipment and deposits	37	123	160	(126)	4	(122)
Impairment of long-lived assets	(811)	(12,806)	(13,617)	(33,696)	—	(33,696)
Operating loss	(5,194)	(13,756)	(18,950)	(40,039)	(1,303)	(41,342)
Interest income	—	—	—	—	74	74
Interest expense	—	—	—	—	(62)	(62)
Other income	70	4	74	386	36	422
Total other income	70	4	74	386	48	434
Loss before income taxes	(5,124)	(13,752)	(18,876)	(39,653)	(1,255)	(40,908)
Income tax recovery (expense)	—	53	53	(1)	(193)	(194)
Loss from discontinued operations	(5,124)	(13,699)	(18,823)	(39,654)	(1,448)	(41,102)
Gain on disposition of Yguazu Bitcoin data center	—	—	—	—	5,225	5,225
(Loss) gain from discontinued operations	(5,124)	(13,699)	(18,823)	(39,654)	3,777	(35,877)


	Six months ended June 30,
	2026	2025
Net change in cash related to operating activities	(7,220)	(16,698)
Net change in cash related to investing activities	19,105	20,730
Net change in cash related to financing activities	(150)	(226)
Net change in cash generated by the discontinued operations	11,735	3,806

During the second quarter of 2025, the Company's energy supplier halted the supply of electricity to the Company's Rio Cuarto, Argentina Bitcoin data center. Following this event, on August 11, 2025, the Company determined that it would discontinue and abandon its operations in Rio Cuarto, Argentina. The Company negotiated to eliminate its asset retirement obligation and reduced the reserved power to a minimum. As of September 30, 2025, the Company's Argentina operations were abandoned and classified as a discontinued operation. As these operations represent an asset group that was abandoned, it is not classified as "held for sale" of a disposal group. Notwithstanding, commencing in the second quarter of 2025, the Company also identified certain electrical equipment and BVVE that could be sold separately and not abandoned.

During the first quarter of 2025, due to indicators of impairment that included the decline of the Company's market capitalization and Bitcoin price, the Company performed recoverability tests for operating Bitcoin data centers in Canada, United States, Paraguay and Argentina. The Company also experienced an increase in gas prices which affected the Company's cost of energy in Argentina.

In performing a recoverability test, the Company calculated the sum of the estimated undiscounted future cash flows from continued use and eventual disposition for the Argentina asset group, and determined it was lower than its carrying amount, therefore the Argentina asset group was not recoverable, and an impairment loss in the amount of $17,504 was recognized to write down the carrying amount of the asset group to its fair value.

To measure the impairment loss, fair value was determined using an income approach under ASC 820 based on a discounted cash flow model incorporating management’s estimates of future cash flows, expected Bitcoin prices, projected operating expenses, and a market-based discount rate. Due to the use of significant unobservable inputs, the fair value measurement was classified within Level 3 of the fair value hierarchy.

Management considered the suspension of the Bitcoin Mining activities in Argentina as an indicator of impairment and performed a recoverability test for its operating Bitcoin data center in Argentina. The sum of the estimated undiscounted future cash flows for the Argentina asset group was determined to be lower than its carrying amount, therefore the Argentina asset group is not recoverable and an impairment loss in the amount of $14,872 was recognized to write down the carrying amount of the asset group to its fair value less cost to sell. Fair value was determined using an income approach under ASC 820 based on a discounted cash flow model as previously described above.

On May 8, 2026, the Company entered into a definitive share purchase agreement for the sale of its wholly-owned Argentina subsidiary, Backbone Hosting Solutions SAU ("Backbone Argentina"). The agreement included the transfer of all assets and liabilities of Backbone Argentina, which previously operated the Company’s Bitcoin mining data center in Rio Cuarto, Argentina. The total cash consideration received on June 24, 2026 ("Closing Date") was $129.

As of the Closing Date, the Backbone Argentina asset group subject to the proposed sale agreement had a carrying value of $781 in total assets (excluding cash) and $452 in total liabilities recorded on the Company’s consolidated balance sheets, resulting in a loss of $200 during the three and six months ended June 30, 2026.

During the first quarter of 2025, the Company finalized the sale of its Yguazu Bitcoin data center in Paraguay. Subsequently, during the third quarter of 2025, the Company determined that the Paso Pe Bitcoin data center met the criteria to be classified as "held for sale", and that all operations in Paraguay should be classified as discontinued operations as the Company makes a strategic shift towards HPC data center projects in North America.

On March 17, 2025, the Company completed the sale of its 200 gross MW Bitcoin data center under development in Yguazu, Paraguay to HIVE Digital Technologies Ltd. ("HIVE") pursuant to a January 24, 2025 share purchase agreement. The transaction involved the sale of the Company's 100% ownership stake in the Yguazu Bitcoin data center and resulted in the derecognition of the subsidiary’s assets and liabilities. The transaction details are as follows:


						As of March 17,
						2025
Consideration
Advance received in January 2025 upon signing the LOI						20,000
Cash received upon closing						12,038
Receivable over 6 equal monthly payments following the closing date*						31,000
Other costs assumed by HIVE						222
Total consideration received						63,260
Net assets transferred
Current assets						2,590
Property, plant and equipment						34,006
Intangible asset						309
Long-term deposits and equipment prepayments						18,321
Security deposit for energy						2,809
Total net assets transferred						58,035
Gain on disposal of subsidiary						5,225

During the first quarter of 2026, the Company used the most recent agreed upon selling price to estimate the fair value less costs to sell of the Paso Pe Bitcoin data center and recognized a further impairment loss of $12,806. This impairment loss is presented within loss from discontinued operations in the consolidated statements of operations.

On April 21, 2026, the Company completed the sale of Paso Pe Bitcoin data center pursuant to a January 2026 definitive share purchase agreement. The transaction involved the sale of the Company's 100% ownership stake in the Company's subsidiary, D&N Ingeniería S.A. The total agreed purchase price was approximately $13,000, which was fully received as of April 21, 2026.


						As of April 21,
						2026
Consideration
Cash received upon closing						13,000
Total consideration received						13,000
Net assets transferred
Other assets						1,435
Inventories - electronic and networking components						426
Property, plant and equipment						4,503
Long-term deposits and equipment prepayments						1,414
Other non-current assets						5,157
Accounts payable and accrued expenses						(59)
Total net assets transferred						12,876
Gain on disposal of subsidiary						124