This article first appeared in The Energy Mag. The original article can be read here. The Energy Mag (formerly The Miner Mag) publishes news, data, and analysis focusing on the intersection of energy, computing, and markets.
The expansion includes a commitment to purchase $31.5 million worth of miners, as well as two acquisitions totaling $13.9 million related to electricity contracts, land plots, buildings, and mining equipment. Collectively, these deals are intended to transform Fortitude from a mining company partially reliant on third-party infrastructure into a more vertically integrated operator with company-controlled power and data center capacity.
Fortitude stated that its controlled data center capacity will grow to over 60 megawatts by 2026. The expansion comes ahead of a planned merger with Nasdaq-listed HeartSciences Inc., which will allow the Digital Currency Group (DCG)-owned mining company to go public.
The most recent infrastructure deal occurred on July 7, when Fortitude acquired electricity contracts, a land plot, a building, and other mining equipment in Juniata, Nebraska, for $6.25 million, according to the latest proxy statement concerning the merger. Approximately $985,000 of the total deal amount was covered by previously made deposits, $466,000 came from the sale of mining equipment, and the remainder was paid in cash.
This deal followed an October 2025 asset acquisition in Aurora, Nebraska, worth $7.65 million. Fortitude allocated $4.5 million of the deal amount to an electricity contract, $2.7 million to mining and computer equipment, $567,000 to a building, and $134,000 to land, excluding transaction costs.
Fortitude said the Aurora asset acquisition was primarily aimed at securing its own and controlled power supply as part of its vertical integration strategy. Electricity and hosting are among the highest direct costs in cryptocurrency mining, so access to reliable power at competitive prices is crucial for business profitability.
Fortitude is combining these acquisitions with significant investments in new mining equipment. On May 21, the company entered into agreements to purchase equipment totaling $31.5 million. By the time of the financial report publication, $12.6 million had been paid, with the remaining $18.9 million due throughout the rest of 2026.
The company plans to fund the remaining purchases using existing cash, operating cash flow, and borrowings from DCG. On June 1, Fortitude entered into a $26 million term credit agreement with its parent company. Amounts drawn generally accrue interest at an annual rate of 11%, with maturity in June 2028.
While Fortitude did not specify the type of mining equipment involved in the deal, this purchase occurred against the backdrop of the company's pivot from Bitcoin to Zcash. According to the proxy statement, in Q1 2026, Zcash accounted for 61% of Fortitude's mining revenue, compared to 11% a year earlier. Bitcoin's share shrank from 79% to 36%, while other cryptocurrencies accounted for 3%.
In dollar terms, Zcash revenue in Q1 grew nearly fivefold to $11.8 million. Bitcoin revenue fell 60% to $6.9 million as Fortitude powered down older, unprofitable Bitcoin machines and reduced its dedicated Bitcoin mining capacity.
Fortitude has not ceased Bitcoin mining, but management stated it no longer prioritizes growing its Bitcoin hash rate at the same pace as the overall network growth. The average number of Bitcoin machines connected to the network decreased by 45% to 14,370 in Q1, and Bitcoin production fell 52% to 89 coins.
Zcash only recently overtook Bitcoin to become Fortitude's primary revenue source. In 2025, Bitcoin accounted for $58.1 million, or 65%, of the company's total mining revenue of $89.5 million. Zcash brought in $25.2 million, or 28%, with the remaining 7% coming from other digital assets.
This transition also explains why Fortitude is investing in new equipment and energy infrastructure. Zcash production declined even as the company deployed additional capacity.
In Q1, Fortitude mined 39,062 $ZEC, 36% less than a year earlier, despite increasing the average number of connected Zcash machines by 23% to 9,581. The company's average deployed Zcash hash rate grew by 6%, but the growth in the network's total computational power and mining difficulty outpaced Fortitude's expansion. In Q2, the company mined 33,634 $ZEC.
Rising Zcash prices offset the decline in production volume. Fortitude reported an average selling price of $272 per $ZEC in Q1 compared to $40 a year earlier, allowing Zcash revenue to surge sharply despite fewer coins being mined.
For the full year 2025, Fortitude mined 230,124 $ZEC, a 40% decrease from 380,723 in 2024. The company primarily attributed this decline to the Zcash halving in November 2024, which cut the block reward in half, as well as increased network difficulty.
Fortitude's direct costs associated with revenue in Q1 decreased by 39% to $10.4 million, while revenue fell 12% to $19.2 million. Revenue minus direct costs, before accounting for depreciation and other expenses, grew from $4.8 million to $8.8 million.
The company reported a net loss for Q1 of $4.6 million, an improvement from a $6.8 million loss a year earlier. Depreciation amounted to $5.9 million, and general and administrative expenses more than tripled to $5.4 million.
In 2025, the company incurred a loss of $12.7 million on revenue of $89.5 million, compared to a loss of $14.4 million in 2024. Direct costs on revenue increased 11% to $60.5 million, slightly outpacing revenue growth, and depreciation was $32.6 million.
As of the end of March, Fortitude had $8.9 million in cash, $1.9 million in digital assets, and total assets of $67 million. The $18.9 million equipment liability balance exceeded the cash balance, increasing the importance of operating cash flow and the DCG credit line.
This article first appeared in The Energy Mag. The original article can be read here. The Energy Mag (formerly The Miner Mag) publishes news, data, and analysis focusing on the intersection of energy, computing, and markets.
end-content
