Company: BTBT
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110383
Chunk: 106

Company: Bit Digital, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 1
Chunk 106
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acks provided approximately 16.8 MW of capacity for our miners at their facility. On November 12, 2025,
we received communication regarding a change in the contracting entity under its existing hosting arrangements. Effective immediately,
Digital Energy Partners LLC (“DEP”) replaced KaboomRacks as the sole contracting counterparty. Under the updated terms, KaboomRacks
will return all deposits previously held by it, and we will remit a one-month deposit related to electricity costs to DEP. In connection
with the transition, DEP assumed the remaining portion of the $1.3 million loan, with an outstanding balance of approximately $1.1 million
as of November 13, 2025.

52

In
May 2022, our hosting partner Blockfusion advised us that the substation at its Niagara Falls, New York facility was damaged by an explosion
and fire, and power was cut off to approximately 2,515 of the Company’s bitcoin miners and approximately 710 ETH miners that had
been operating at the site immediately prior to the incident. The explosion and fire are believed to have been caused by faulty equipment
owned by the power utility. Blockfusion and the Company have entered into a common interest agreement to jointly pursue any claims evolving
from the explosion and fire. Prior to the incident, our facility with Blockfusion in Niagara Falls, provided approximately 9.4 MW to
power our miners. Power was restored to the facility in September 2022. However, we received a notice dated October 4, 2022 (the “Notice”),
from the City of Niagara Falls, which ordered the cease and desist from any cryptocurrency mining or related operations at the facility
until such time as Blockfusion complies with Section 1303.2.8 of the City of Niagara Falls Zoning Ordinance (the “Ordinance”),
in addition to all other City ordinances and codes. Blockfusion has advised us that the Ordinance came into effect on October 1, 2022,
following the expiration of a related moratorium on September 30, 2022. Blockfusion has further advised that it has submitted applications
for new permits based on the Ordinance’s new standards and that the permits may take several months to process. Pursuant to the
Mining Services Agreement between Bit Digital and Blockfusion dated August 25, 2021, Blockfusion represents, warrants and covenants that
it “possesses, and will maintain, all licenses, registrations, author