{"url_path":"/sec/cik-0001868516/10-q/2026/item-1a","section_key":"item-1a","section_title":"Item 1A RISK FACTORS","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1868516/0001104659-26-062309-index.html","accession_number":"0001104659-26-062309","cik":"0001868516","ticker":null,"issuer_name":"StratCap Digital Infrastructure REIT, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1868516/0001104659-26-062309-index.html","primary_entity_key":"0001868516","primary_entity_name":"StratCap Digital Infrastructure REIT, Inc."},"word_count":1939,"has_tables":true,"body_markdown":"ITEM 1A. RISK FACTORS\n\nThe following risk factors amend and supplement the risk factors set forth in our Annual Report for the year ended December 31, 2025:\n\nOur Public Offering, including DRP, has been suspended and is no longer a source of capital.\n\nIn connection with the Board’s determination in April 2026 to review strategic alternatives, we terminated the public offering of our shares (the “Public Offering”) and our distribution reinvestment plan (“DRP”). As a result, the Public Offering and DRP will no longer be sources of capital. The termination of the Public Offering and DRP eliminates a key source of equity capital that we have historically used, or expected to use, to fund investment opportunities, capital expenditures, operating shortfalls and share repurchases. If the review of strategic alternatives does not result in a transaction or event, and we continue with our existing business model and are unable to replace this capital with other sources on favorable terms or at all, our ability to execute our business strategy and to respond to changing market conditions may be adversely affected, which could negatively impact our financial condition, results of operations, liquidity and the value of your investment.\n\nOur Repurchase Programs have been partially suspended and may be terminated in our Board’s sole discretion.\n\nIn connection with the Board’s determination in April 2026 to review strategic alternatives, we partially suspended our share and unit repurchase programs (the “Repurchase Programs”) to permit repurchases only for holders eligible under the death and qualifying disability provisions, and then only subject to the limitations of the Repurchase Programs, including funding and volume limits. As a result, other stockholders are currently unable to have their shares or units repurchased, and we may in the future further limit, suspend or terminate the Repurchase Programs in our Board’s sole discretion.\n\nThere can be no assurance as to when, or if, the partial suspension will be lifted, particularly if the review of strategic alternatives does not result in a transaction or event that provides liquidity to stockholders. Because there is no public trading market for our shares and the Repurchase Programs are currently available only on a limited basis, stockholders should not expect to be able to sell their shares promptly or at a desired price.\n\nThe outcome of the review of strategic alternatives is uncertain and may not result in a transaction or event that provides liquidity or enhances stockholder value.\n\nIn April 2026, our Board decided to begin a review of strategic alternatives, which may include, among other things, a sale of the Company, a sale of substantially all of our assets, a merger or other business combination, or a continued stand-alone strategy. There is no assurance as to how long this review will take or what its outcome will be, including whether any transaction or event will occur or, if it does occur, whether it will be at a price or on terms that are attractive to stockholders.\n\nThe outcome of any potential transaction or event will depend on a number of factors, many of which are outside of our control, including market conditions, the performance and perceived value of our assets, the availability and cost of capital, the appetite of potential counterparties and regulatory considerations. The process of reviewing strategic alternatives may be time-consuming, distracting and disruptive to our business operations, and may divert the attention of our Advisor and its affiliates from day-to-day operations and long-term planning.\n\n38\n\n[Table of Contents](#TOC)\n\nIn addition, because the review of strategic alternatives may result in a sale, merger or other strategic transaction, any perceived uncertainty regarding our future operations may limit the ability of our Advisor and its affiliates to retain or hire qualified personnel, and may impact our ability to attract or retain tenants at our assets on favorable terms. Our Board may ultimately conclude that it is in the best interests of the Company and our stockholders to continue with our existing business plan and not pursue a transaction or event that would provide stockholders with liquidity. Any of these outcomes could adversely affect our operations, financial condition, results of operations and the value of your investment.\n\nWe have very limited access to capital, which may adversely affect our ability to execute our strategy and preserve liquidity.\n\nWe currently have no further borrowing capacity under the Sunflower Secured Credit Facility. As a result, our ability to access additional capital under this facility is fully constrained. Depending on the outcome of our ongoing review of strategic alternatives and our future capital needs, we may seek to obtain additional sources of financing for various purposes, including funding working capital, maintaining or improving our properties and other investments, refinancing existing indebtedness, satisfying repurchase requests, and funding potential asset sales or acquisitions.\n\nPotential future sources of capital may include secured or unsecured financings from banks or other lenders, establishing additional lines of credit, proceeds from the sale of properties and other assets, and undistributed cash flow. However, we have not identified any additional sources of financing at this time, and there is no assurance that such sources of financing will be available to us on favorable terms or at all. Our ability to obtain additional financing is subject to a number of factors, many of which are beyond our control, including conditions in the credit and real estate capital markets, the performance and appraised values of our investments, our leverage levels, our operating results, the interest rate environment, the progress and outcome of our strategic review, and lender and investor perceptions of our creditworthiness and prospects.\n\nIf we are unable to obtain additional financing when needed and on acceptable terms, we may be required to further limit or delay our strategic initiatives, curtail or delay capital expenditures and investment activities, further reduce or suspend distributions, further limit share repurchases, or sell assets, potentially at times or prices that are unfavorable or that adversely impact our portfolio and long-term strategy. We may also be unable to refinance existing indebtedness at maturity, which could lead to defaults, foreclosure on our investments or other adverse consequences. In addition, there can be no assurance that our ongoing review of strategic alternatives will result in any transaction or other outcome that improves our liquidity position, enhances stockholder value or provides an exit opportunity for stockholders within a desired timeframe. Any of these events could adversely affect our liquidity, our ability to execute our strategy, our financial condition and results of operations, our ability to maintain our qualification as a REIT, and the value of your investment.\n\nOur recent liquidity preservation measures, including the termination of the Public Offering and limitations on distributions and repurchases, may adversely affect our business, our ability to raise capital in the future and the value of your investment.\n\nIn light of recent volatility in the digital infrastructure market and broader capital markets, as well as increased repurchase requests and a challenging fundraising environment in the retail investor channel, our Board took several actions intended to preserve liquidity while we assess strategic alternatives. These actions include discontinuing the Public Offering (including the DRP), determining not to authorize additional stockholder distributions beyond April 2026, partially suspending the Repurchase Programs to limit repurchases to death and qualifying disability requests, and reducing the frequency of our NAV determinations, as described in Note 14, “Subsequent Events,” to our consolidated financial statements.\n\nThese liquidity preservation measures may have a number of adverse consequences, including, among others:\n\n●making our shares less attractive to new or existing investors (if we recommence raising capital);\n\n●increasing the perceived illiquidity and risk of our shares;\n\n●reducing transparency into the value of our shares as a result of less frequent NAV determinations; and\n\n●negatively impacting investor confidence in our long-term strategy and prospects.\n\n39\n\n[Table of Contents](#TOC)\n\nThere can be no assurance that these measures will be sufficient to preserve our liquidity or that they will not need to be expanded or extended. The combination of our limited access to external capital, the termination of the Public Offering and DRP, the limitations on share repurchases and our decision not to authorize additional distributions beyond April 2026 may adversely affect our ability to raise capital in the future, manage our leverage, respond to market opportunities and maintain stockholder support, any of which could negatively impact our financial condition, results of operations and the value of your investment.\n\nThe agreement by our Advisor and its affiliates to defer fees is discretionary and may create future liquidity pressures and potential conflicts of interest.\n\nAs discussed in Note 14, “Subsequent Events,” to our consolidated financial statements, our Advisor agreed to defer all fees that accrue and would otherwise be payable by us to the Advisor and/or its affiliates beginning on April 30, 2026, until such time as determined by the Advisor, in its sole discretion. While this fee deferral arrangement supports our near-term liquidity, it is discretionary on the part of the Advisor and may be modified, terminated or reinstated at any time, subject to the terms of our agreements.\n\nThe accrual of deferred fees increases our future obligations and may create additional liquidity pressures at the time such fees become payable. In addition, the Advisor’s right to determine when deferred fees become payable, in its sole discretion, could give rise to potential conflicts of interest between the Advisor and our stockholders, including with respect to the timing and structure of any strategic transaction, the timing of asset sales, and decisions regarding distributions and capital allocation. If we are unable to satisfy these deferred obligations when they become due, our relationship with the Advisor could be adversely affected, which could negatively impact the management of our portfolio and our operations. Any of these consequences could adversely affect our liquidity, results of operations and the value of your investment.\n\nGrowing power constraints, environmental regulation and community opposition may limit our ability to develop or expand data centers and increase our costs.\n\nOur investments are concentrated in digital infrastructure and data center assets that require significant and reliable access to electrical power and other utilities. In many markets, data centers have come under increased scrutiny from regulators, utility providers and local communities due to their power usage, environmental footprint and perceived impact on local infrastructure and resources (including water usage and strain on electrical grids). In some jurisdictions, regulators, utilities or local authorities have delayed, restricted or imposed new conditions on data center development, expansion or power allocations, and similar actions could occur in the markets where our properties are located or where we may seek to invest in the future.\n\nIf power or other utility capacity is not available on a timely basis, on reasonable terms, or at the densities required by our existing or prospective tenants, we may be unable to lease or re-lease space, expand existing facilities, or develop new projects at anticipated returns. In addition, changes in laws, regulations or policies related to energy usage, greenhouse gas emissions, water use, noise, land use, building codes or environmental impact, as well as the imposition of new taxes, fees, penalties or reporting obligations, could require us to incur significant capital expenditures or operating costs to comply or to maintain the competitiveness of our properties. Community opposition, litigation or permitting delays could also slow or prevent developments, expansions, or upgrades.\n\nAny limitations on power availability, increased regulatory or community opposition, or additional compliance costs could adversely affect our ability to attract and retain tenants, reduce our rental rates or occupancy, delay or cancel projects, and negatively impact our cash flows, the value of our properties and the value of your investment.\n\n​\n\n40\n\n[Table of Contents](#TOC)"}