Business Context and Reporting Period
Company: Bit Digital, Inc. (BTBT)
Filing Type: Form 8-K (Current Report)
Date of Report: May 20, 2026 (Event Date); May 27, 2026 (Filing Date)
Context: The Company entered into a material definitive agreement to provide a bridge loan facility to an affiliate of White Fiber, Inc. for the development of a high-performance computing (HPC) data center. To fund this facility, Bit Digital secured a digital currency loan from Galaxy Digital LLC.
Key Financial Metrics and Transaction Terms
Bridge Facility (Lender: Bit Digital Capital, Inc.)
- Facility Size: Up to $100 million, expandable to $150 million upon mutual agreement.
- Interest Rate: 9.5% per annum, stepping down to 8% upon completion of Phase I buildout and 80% lease-up.
- Term: 9 months, extendable by 3 months.
- Origination Discount: 3% original issue discount (OID) on advances.
- Commitment Fee: 0.50% of undrawn facility size.
- Minimum Return (MOIC): Borrower must repay no less than 1.1x the principal amount (excluding OID) by maturity.
- Collateral: 100% of stock in Enovum NC-1 Topco, Inc.
Funding Facility (Borrower: Bit Digital, Inc.)
- Lender: Galaxy Digital LLC.
- Initial Draw: $50 million on May 20, 2026.
- Interest Rate: 5.45% per annum on the initial draw.
- Collateral: Dollars or Digital Currency.
- Term: One year with automatic annual renewal.
- Termination Triggers: Includes Net Asset Value declines of 25% (month-over-month), 35% (quarter-over-quarter), or 45% (year-over-year), or Net Worth falling below specific thresholds.
Assignment
- Assignee: B. Riley Securities, Inc.
- Amount: $20 million portion of an Advance.
- Term: 90 days.
Material Changes and Strategic Initiatives
The filing represents a significant shift in capital deployment strategy, moving from direct operations to providing bridge financing for third-party data center development. The Company is leveraging its balance sheet to fund the buildout of the NC-1 HPC data center in Madison, North Carolina. This transaction creates a direct financial obligation for Bit Digital via the Galaxy Digital loan to fund the inter-company term loan.
Guidance, Risks, and Contingencies
Management Commentary and Fairness
Independent committees of both Bit Digital and White Fiber approved the transaction. Fairness opinions were obtained from Needham and Company LLC and Seaport Global Securities, LLC, confirming the terms are fair from a financial point of view.
Key Risks and Contingencies
- Execution Risk: The "Rate Step Down Event" (reduction to 8% interest) is contingent on the Borrower substantially completing the 40 megawatt Phase I buildout and leasing 80% of capacity.
- Financing Risk: The bridge facility is intended to be replaced by permanent financing; failure to secure this could impact the release of collateral and guarantor obligations.
- Collateral Risk (Galaxy Loan): The Galaxy Digital loan agreement includes strict termination clauses based on declines in Bit Digital's Net Asset Value and Net Worth. The Company may face margin calls if collateral value falls.
- Market Risk: Exposure to digital currency volatility as collateral for the Galaxy loan.
Investor Verification Checklist
- Verify the current status of the NC-1 data center buildout and lease-up rates to assess the likelihood of the interest rate step-down.
- Review Bit Digital's latest Net Asset Value and Net Worth to ensure compliance with the Galaxy Digital loan termination triggers.
- Confirm the specific digital currency collateral posted to Galaxy Digital and its current market valuation relative to the $50 million draw.
- Monitor the timeline for the Borrower's acquisition of permanent financing to understand the duration of the bridge facility exposure.
- Assess the creditworthiness of White Fiber Operating Partnership LP as the Guarantor of the Term Loan.