{"url_path":"/sec/dgxx/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/1854368/0001213900-26-057115-index.html","accession_number":"0001213900-26-057115","cik":"0001854368","ticker":"DGXX","issuer_name":"Digi Power X Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1854368/0001213900-26-057115-index.html","primary_entity_key":"0001854368","primary_entity_name":"Digi Power X Inc."},"word_count":716,"has_tables":true,"body_markdown":"Item\n1A. Risk Factors\n\n \n\nIn\naddition to the other information set forth in this Quarterly Report, including the cautionary statement under the caption “*Cautionary\nNote Regarding Forward-Looking Statements,*” Management’s Discussion and Analysis of Financial Condition and Results of\nOperations, the condensed consolidated financial statements and related notes, and the following additional risk factors, you should\ncarefully consider the risks discussed in “Part I, Item 1A - Risk Factors” in the 2025 Annual Report. There have been no\nmaterial changes with respect to the risk factors disclosed in our 2025 Annual Report. However, we note that the risks described in this\nreport and in our 2025 Annual Report are not the only risks facing the Corporation, and such additional risks and uncertainties that\nwe currently deem to be immaterial or are unknown to us could negatively impact our business, operations and/or financial results.\n\n \n\n36\n\n \n\n \n\n**Our future contracts with HPC data center\ncustomers could subject us to significant liability.**\n\n** **\n\nIn the ordinary course of business, we have entered\ninto, and aim to continue to enter into, agreements with customers pursuant to which we provide data center space, power, environmental\ncontrols, physical security, and connectivity products to our HPC hosting and colocation customers. These contracts typically contain\nindemnification and liability provisions, in addition to service level commitments, which could potentially impose a significant cost\non us in the event of losses arising out of certain breaches of such agreements, services to be provided by us or our subcontractors,\nor from third-party claims. HPC data center customers increasingly are looking to pass through their regulatory obligations and other\nliabilities to their outsourced data center providers, and we may not be able to limit our liability or damages in an event of loss suffered\nby such customers whether as a result of our breach of an agreement or otherwise. If such an event of loss occurred, we could be liable\nfor material monetary damages and could incur significant legal fees in defending against such an action, which could adversely affect\nour financial condition and results of operations.\n\n \n\nWe may also develop space specifically for HPC\ndata center customers pursuant to agreements signed prior to beginning or early in the development process. In those cases, if we fail\nto meet our development obligations under those agreements, these customers may be able to terminate their agreements, and we will be\nrequired to find a new customer for this space. In addition, in certain circumstances, we may lease HPC data center facilities prior to\ntheir completion. If we fail to complete the facilities in a timely manner, the customer may be entitled to terminate its agreement, seek\ndamages or penalties against us or pursue other remedies and we may be required to find a new customer for the space. If we are not able\nto complete an HPC data center in a timely manner, if development costs are higher than we currently estimate, our financial condition,\nresults of operations and cash flow could be materially adversely affected.\n\n \n\nAdditionally, a customer’s decision to lease\nspace and power at our facilities typically involves a significant commitment of resources and due diligence on the part of our customers\nregarding the adequacy of our facilities. As a result, we may expend significant time and resources in pursuing a particular transaction\nthat may not result in revenue. Economic conditions, including market downturns and the implementation of new tariffs and more restrictive\ntrade regulations, may impact customers’ ability to plan future business activities, which could cause customers to slow spending\nor delay decision making. Our inability to adequately manage the risks associated with these developments may adversely affect our business,\nfinancial condition and results of operations.\n\n \n\n**Certain\nof our agreements with HPC data center customers may include restrictions on providing HPC data center services to certain third parties,\nwhich could have a material adverse effect on our business, financial condition, and/or results of operations.**\n\n** **\n\nCertain\nof the customer agreements that we may enter into may prohibit us from providing HPC data center services to certain third parties, including\ncompetitors of existing HPC data center customers. The existence of such restrictions could hinder our ability to enter into agreements\nwith additional HPC data center customers, which could have a material, adverse effect on our business, financial condition and/or results\nof operations."}