{"url_path":"/sec/bgde/10-q/2026/item-3","section_key":"item-3","section_title":"Item 3 Defaults Upon Senior Securities","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-14","source_url":"https://www.sec.gov/Archives/edgar/data/1218683/0001213900-26-056680-index.html","accession_number":"0001213900-26-056680","cik":"0001218683","ticker":"BGDE","issuer_name":"Big Digital Energy, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1218683/0001213900-26-056680-index.html","primary_entity_key":"0001218683","primary_entity_name":"Big Digital Energy, Inc."},"word_count":673,"has_tables":true,"body_markdown":"Item 3. Defaults Upon Senior Securities\n\n \n\nCelsius Mining LLC loaned $20.0 million to Luna\nSquares through the Celsius Promissory Note, which had a maturity date of August 23, 2023, and a total outstanding balance as of March\n31, 2026 of $11.1 million. Luna Squares has not repaid the loan as required on the maturity date and is claimed by Celsius to be in default.\nCelsius Mining LLC transferred the benefit of the Celsius Promissory Note to Celsius Network Ltd. Celsius Network Ltd has notified Luna\nSquares that default interest is payable. On November 23, 2023, Celsius filed an arbitration proceeding against Mawson, its subsidiaries\nLuna Squares and Cosmos, asserting various claims related to the alleged breach of the Celsius Colocation Agreement. The Company is pursuing\ncounter claims against Celsius. See Note 8 – Commitments and Contingencies, Celsius Promissory Note and Digital Colocation Agreement\nto the unaudited consolidated condensed financial statements included in Item 1. “Financial Statements” of this Quarterly\nReport.\n\n \n\nThe Marshall Loan matured in February 2024 and\nthe total outstanding balance is $13.5 million as of March 31, 2026. MIG No. 1, an Australian entity, has not made a payment on principal\nand interest since May 2023, despite such payments falling due, and is therefore alleged by Marshall to be in default under the Marshall\nLoan. MIG No. 1 is also in default of a number of other covenants under the terms of the loan. On March 19, 2024, MIG No.1 was placed\ninto an Australian court appointed liquidation and wind-up process and was deconsolidated for the group from this date.\n\n \n\nOn March 19, 2024, Marshall appointed receivers\nand managers in Australia under the terms of their security relating to the Marshall Loan. The direct assets that secure this loan include\n5,372 miners and 8 MDCs. These assets are held by MIG No.1 and therefore were included in the deconsolidation. The receiver’s statutory\nduty includes the obligation to sell the secured assets at market value or, if market value is not known, at the best price reasonably\nobtainable to maximize the prospects of there being sufficient proceeds available to satisfy the balance of the outstanding secured debt.\nIt is therefore expected that this loan balance will be offset in the future by the amount received from the sale of these miners and\nMDCs. On June 25, 2024, Marshall inspected and inventoried the miners and MDCs located at the Company’s Midland facilities. The\nCompany is currently not utilizing these miners or MDCs for its operations and has asked Marshall to take these assets out of the Company’s\nstorage. Marshall has not responded to the Company’s request for these miners and MDCs to be removed from the Company’s storage.\nThe Company also reserves and retains all rights against Marshall.\n\n \n\nThe Company is the guarantor of the W Capital\nLoan. As of March 31, 2026, AUD $2.6 million (USD $1.8 million) has been drawn down from this facility. The W Capital Loan expired in\nMarch 2023 and the Company did not extend the maturity date and has not repaid the loan amount. The Company is therefore considered by\nW Capital to be in default. This W Capital Loan was originally with Mawson SPL, an Australian entity which was placed into voluntary administration\nunder Australian law on October 30, 2023, and on November 3, 2023, W Capital Advisors appointed receivers and managers in Australia under\nthe terms of their security relating to their working capital facility.\n\n \n\nThe Company has a Secured Convertible Promissory\nNote (the “Convertible Note”) with W Capital Advisors Pty Ltd with an outstanding balance of $0.2 million as of March 31,\n2026. The Convertible Note matured in July 2023. W Capital Advisors did not convert the note, and the Company has repaid the principal\nbalance of the Convertible Note.\n\n \n\nFor more information on the above matters, refer\nto Note 8 - Commitments and Contingencies to the unaudited consolidated condensed financial statements included in Item 1. “Financial\nStatements” of this Quarterly Report. The disclosure set forth in Note 8 is incorporated herein by reference."}