KEEL

Keel Infrastructure Corp. (KEEL) - Q1 2026 10-Q Summary

Business Context and Reporting Period

This Form 10-Q covers the three months ended March 31, 2026. Keel Infrastructure Corp. (formerly Bitfarms Ltd.) is a North American digital and energy infrastructure company transitioning from Bitcoin mining to High-Performance Computing (HPC) and AI data centers. Effective April 1, 2026, the company completed a U.S. Redomiciliation Transaction, becoming a Delaware corporation and the successor issuer to Bitfarms. The filing reflects operations prior to the closing of this transaction.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Decline: Revenue decreased 22% to $37.0 million, driven by a 21% drop in Bitcoin mined (388 BTC vs. 492 BTC) due to higher network difficulty and lower average Bitcoin prices ($75,840 vs. $92,138). This was partially offset by a $5.6 million increase in energy sales following the acquisition of Stronghold Digital Mining.
• Significant Losses: Net loss widened to $145.4 million. Key drivers included a $41.4 million unrealized loss on the fair value of digital assets, a $21.6 million loss on the extinguishment of the Macquarie Credit Facility, and $12.8 million in impairment charges related to discontinued operations in Paraguay.
• Debt Restructuring: The company fully repaid its $100 million Macquarie Credit Facility in February 2026, incurring a $21.6 million termination loss. Long-term debt remains primarily composed of $588 million in Convertible Senior Notes issued in October 2025.
• Discontinued Operations: Operations in Argentina (abandoned) and Paraguay (held for sale) are classified as discontinued. Paraguay operations incurred a $13.5 million net loss in Q1 2026, largely due to asset impairment.

Guidance, Outlook, and Risks

• Strategic Pivot: Management is actively transitioning from Bitcoin mining to HPC and AI data center development. The company has a 2.2 GW power capacity pipeline, with 648 MW of secured gross data center capacity as of March 31, 2026.
• Capital Intensity: The shift to HPC requires significant upfront capital. The company has committed approximately $121.4 million for HPC projects in 2026 and $48.9 million in 2027. Management believes existing cash and Bitcoin holdings are sufficient for the next 12 months but may require additional financing.
• Key Risks:
  • Bitcoin Volatility: Revenue and profitability remain tied to Bitcoin prices and network difficulty.
  • Counterparty Risk: A $4.2 million credit loss was recorded due to the bankruptcy of BlockFills (Reliz Ltd.), a counterparty for Bitcoin option contracts.
  • Regulatory/Tariffs: Potential U.S. tariffs on imported mining equipment and changing regulations regarding data center energy usage pose risks to cost structures.
  • Legal Proceedings: A putative class action lawsuit regarding alleged false statements about operations and internal controls is pending.

Investor Verification Checklist

• Debt Maturity Profile: Verify the terms and conversion triggers of the $588 million Convertible Senior Notes maturing in 2031.
• HPC Project Execution: Monitor progress on the Panther Creek and Scrubgrass sites and the ability to secure long-term HPC customers to offset declining mining revenue.
• Bitcoin Treasury Management: Review the "Bitcoin 2.1" program details and the impact of derivative contracts on net Bitcoin holdings and cash flow.
• Discontinued Operations Closure: Track the finalization of the sale of the Paso Pe data center (completed April 2026) and the Argentina subsidiary (expected Q2 2026) to confirm final proceeds and write-offs.
• Legal Exposure: Assess the potential financial impact of the pending securities class action lawsuit.