American Bitcoin Corp. Leases Disclosure
Note 9. Leases
As further discussed in Note 12. Related party transactions, on March 31, 2025, in connection with the Transactions, the Company entered into a Master Colocation Services Agreement and Master Managed Services Agreement with Hut 8. Under both agreements, Hut 8 provides the Company with colocation, hosting, management, oversight, strategy, compliance, operational and other services for its Bitcoin mining operations located at Hut 8’s facilities. Pursuant to an Exclusivity Agreement between the Company and Hut 8, all of the Company’s Bitcoin miners are located at Hut 8’s facilities. The Company has determined that it has embedded operating leases at three of the facilities governed by this arrangement and has elected to combine lease and non-lease components as permitted under ASC 842. A fourth facility governed by this arrangement includes payments that are variable pass-through fees and facility costs and are therefore expensed as incurred. The Company recorded right-of-use ("ROU") assets of $182.7 million in exchange for operating lease obligations during the year ended December 31, 2025.
The following table shows the ROU assets and lease liabilities as of December 31, 2025 and 2024:
|
|
December 31, |
|
|||||
(in USD thousands) |
|
2025 |
|
|
2024 |
|
||
ROU assets |
|
|
|
|
|
|
||
Operating leases |
|
$ |
166,684 |
|
|
$ |
— |
|
Total ROU assets |
|
$ |
166,684 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
||
Lease liabilities |
|
|
|
|
|
|
||
Operating leases |
|
$ |
188,395 |
|
|
$ |
— |
|
Total lease liabilities |
|
$ |
188,395 |
|
|
$ |
— |
|
The Company’s lease costs are comprised of the following:
|
|
Years Ended |
|
|||||||||
|
|
December 31, |
|
|||||||||
(in USD thousands) |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Operating lease cost |
|
$ |
21,851 |
|
|
$ |
— |
|
|
$ |
— |
|
Variable lease cost |
|
|
58,499 |
|
|
|
— |
|
|
|
— |
|
Total lease expense |
|
$ |
80,350 |
|
|
$ |
— |
|
|
$ |
— |
|
The following table presents supplemental lease information:
|
|
Years Ended |
|
|||||||||
|
|
December 31, |
|
|||||||||
(in USD thousands) |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Operating cash outflows – operating leases |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
Years Ended |
|
|||||||||
|
|
December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Weighted-average remaining lease term – operating leases (in years) |
|
|
4.36 |
|
|
|
— |
|
|
|
— |
|
Weighted-average discount rate(1) – operating leases |
|
|
6.42 |
% |
|
|
— |
% |
|
|
— |
% |
(1) The Company’s operating leases implicit interest rate cannot be determined, therefore the Company uses the incremental borrowing rate at the lease commencement date in determining the present value of lease payments. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis for similar assets over the term of the lease.
The following table presents the Company’s future minimum operating lease payments as of December 31, 2025:
|
|
Operating |
|
|
(in USD thousands) |
|
Leases |
|
|
2026 |
|
$ |
61,492 |
|
2027 |
|
|
42,492 |
|
2028 |
|
|
43,620 |
|
2029 |
|
|
44,783 |
|
2030 |
|
|
22,472 |
|
Total undiscounted lease payments |
|
|
214,859 |
|
Less: present value discount |
|
|
(26,464 |
) |
Present value of operating lease liabilities |
|
$ |
188,395 |
|
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.