NFN8 Group: Bitcoin Miner Pursues DIP-Funded Sale

NFN8 Group, Inc. and its affiliates entered chapter 11 in the U.S. Bankruptcy Court for the Western District of Texas on February 2, 2026, as the debtors pursue a sale of substantially all assets through a court-supervised process. The filing covers NFN8 Group, Inc., NFN8 Capital, LLC, and NFN8 Holdings, LLC, which together operate mining facilities and a sale-leaseback program for industrial mining equipment. The cases are jointly administered in the Western District of Texas.

Bankruptcy filings cite margin compression after the April 2024 Bitcoin halving, hosting disruptions tied to the Core Scientific bankruptcy, litigation from sale-leaseback counterparties, and a late-2025 fire at the Crystal City facility that reduced capacity. The debtors are seeking a priming DIP loan of up to $2.75 million to fund operations while they pursue a sale process.

Debtor(s)	NFN8 Group, Inc.; NFN8 Capital, LLC; NFN8 Holdings, LLC (jointly administered)
Court	U.S. Bankruptcy Court, Western District of Texas
Case Number	26-10193 (lead case)
Petition Date	February 2, 2026
Business	Industrial-scale Bitcoin mining, hosting, and equipment sale-leaseback
Key Facilities	Crystal City, TX; Shelby, IA; Walnut, IA
DIP Facility	Proposed up to $2.75 million priming DIP term loan from Twelve Bridge Capital, LLC
Process	Court-supervised marketing and sale of substantially all assets

DIP Financing and Sale Process

Proposed DIP facility. The debtors seek a superpriority, priming DIP term loan of up to $2.75 million, structured as a multi-draw facility. The borrower is NFN8 Group, Inc., with NFN8 Capital and NFN8 Holdings as guarantors. The facility would accrue interest at 13.0% per annum, payable in kind monthly, with a 3.0% default rate premium. Maturity is set at the earliest of May 29, 2026, a sale of substantially all assets, a plan effective date, or dismissal or conversion.

The DIP proposes priming liens and superpriority status, along with milestones tied to the debtors' asset-marketing process.

Interim funding and budget controls. The interim order would allow a $1.0 million draw, with a net funded amount of $675,000 after fees. The proposed budget spans four weeks and includes a 15% cumulative variance limit, with weekly reporting and variance updates due each Wednesday.

Sale milestones. The proposed DIP documents include milestones, including a qualified bid deadline within 75 days of the petition date.

The DIP maturity triggers also include a plan effective date, and the petition notice lists June 2, 2026 as the plan and disclosure statement deadline.

Collateral package. The DIP lender is offered liens on cash, insurance proceeds, bank accounts, equipment, intellectual property, real and personal property, and proceeds, plus superpriority administrative expense status. The filings describe an asset base that includes thousands of miners, including more than 5,000 units described as unencumbered.

Sale-leaseback program dynamics. NFN8 operated a sale-leaseback program where NFN8 Capital sold mining equipment to counterparties, and NFN8 Holdings leased it back on fixed terms. Lease payments were funded from mining revenue. The filings indicate the program involved more than 250 counterparties, and that the debtors suspended or deferred lease payments multiple times as mining margins compressed. Litigation tied to the program began in October 2024, with a March 17, 2025 order compelling arbitration.

Public materials describe the program using a purchase agreement, a bill of sale, a lease agreement with fixed payments, and a repurchase clause. Clients purchased mining equipment, NFN8 operated it in company facilities, and clients received fixed monthly payments over a multi-year term before the equipment could be repurchased.

Cash management system. The debtors use Burling Bank as their primary depository, with a structure that routes Bitcoin sale proceeds through a Kraken wallet to operating accounts. One account is used for payments when physical checks are required, another for collecting Bitcoin sale proceeds, and the operating account funds payroll and vendor payables. A non-debtor affiliate, NFN8 Inc., reimburses payroll, utilities, rent, and electricity under service arrangements. Filings also describe Block Overstock, LLC funding electricity payments into one of the accounts.

The system is built around converting Bitcoin to U.S. dollars before funding operating expenses. The debtors' cash management structure separates collections from disbursements, with the Kraken wallet serving as a holding point for Bitcoin and the NFN8 Holdings account acting as the first landing spot for sale proceeds. The filings also note monthly bank fees of roughly $2,500 and small balances in trust and reserve accounts.

Insurance premium finance exposure. NFN8 Capital entered a premium finance agreement with IPFS Corporation to finance roughly $103,137 of insurance premiums for liability, property, and electronic data processing coverage. The agreement carries a 10.540% APR and monthly payments of $9,877.43. The lender has rights to cancel policies upon default, which is a standard but operationally sensitive risk for asset-heavy operators.

The agreement covers multiple Accelerant Specialty Insurance policies and creates a short-term financing obligation that must be serviced during the case. For an operator with large physical infrastructure and equipment, maintaining property and data processing coverage is critical to preserving asset value during a sale process.

Business Overview and Operating Footprint

Core mining operations. NFN8 operates an industrial-scale Bitcoin mining platform with thousands of mining units and revenue tied primarily to block rewards and transaction fees. The business also derives revenue from equipment sale-leaseback programs, hosting arrangements, and related services. On its public site, NFN8 describes operating at enterprise scale with proprietary software that manages what to mine and when to sell.

Filings describe a diversified revenue model tied to mining rewards and transaction fees, supplemented by equipment transactions, hosting fees, joint ventures, and related service arrangements. This structure ties cash flow to both Bitcoin price movements and the availability of power and hosting capacity. It also creates a mix of operating and contractual obligations, particularly where mining revenue is needed to fund fixed payments under the sale-leaseback program.

NFN8 also describes a software-driven operating layer that determines what to mine, when to hold, and when to sell mined Bitcoin. The company positions this system as a core part of its operating model, which helps define how quickly mined Bitcoin is converted to dollars to fund operating expenses and contractual payments.

Texas facility in public disclosures. In a February 2025 press release, NFN8 described a leased Texas property spanning 450,000 square feet on a 22-acre site, with 70,000 square feet dedicated to mining operations and equipment repairs. The company said the buildout increased capacity from 6 megawatts to 10 megawatts and added 24-hour on-site security. An NFN8 website post describing a Texas facility similarly references the 450,000 square foot property and a 10 megawatt initial electrical setup.

The release also states that 70,000 square feet of the Texas property is dedicated to mining operations and equipment repairs.

Texas facility in filings. Bankruptcy filings identify a Crystal City location at 2205 Old Uvalde Hwy., Crystal City, Texas, leased from Midnight Enterprises, LLC, with roughly 78,377 square feet of space. The filings cite this facility as the location of the late-2025 fire that reduced mining capacity. The filings and public releases point to the same geographic footprint but describe different size metrics.

Iowa footprint. In Iowa, the filings list two leased facilities: one in Shelby, Iowa and another in Walnut, Iowa. Both leases are scheduled to expire on January 31, 2029. In the February 2025 press release, NFN8 said its Iowa facility operated at about 10 megawatts with plans to add another 8.5 megawatts of capacity.

The Texas facility is described in public materials as using a push-pull airflow system that draws cooler air from inside the building to reduce exposure to hot outside air.

Cooling and efficiency strategy. NFN8 has publicly described a shift from air cooling to immersion cooling. In a May 2025 announcement, the company outlined plans to submerge mining machines in non-conductive fluids to stabilize thermal performance and reduce reliance on onboard fans.

Energy partnership narrative. NFN8 announced an electricity agreement with TESS Energy Solutions and described a 1 MW thermal battery system generating 3 to 6 MWh per cycle.

Equipment purchase and buyback program. The company has promoted an equipment purchase and buyback program in which clients purchase mining equipment, NFN8 operates it in company facilities, and clients receive fixed monthly payments over a 2 to 4 year term with a repurchase provision. A December 2024 press release described the structure using a purchase agreement, a bill of sale, a lease agreement with fixed payments, and a repurchase clause. The same program is described in public materials as a sale-leaseback model and is the basis for many of the counterparties now implicated in the bankruptcy.

The company has also described funding mining equipment through strategic futures contracts, noting in January 2025 that it had executed over $25 million in equipment-related futures contracts in 2021 and 2022.

Prepetition balance-sheet messaging. In January 2025, NFN8 said it repaid more than $11 million to its equipment lender, NYDIG, and finished 2024 debt-free apart from its sale-leaseback commitments. The same release said the company intended to expand its mining fleet and data center capacity.

Company background and footprint. NFN8 states that it started in 2017 and grew from a small founding team. A profile page describes the company as a self-funded mining operation formed by three founders in Pflugerville, Texas, with a business model centered on company-owned data centers and a sale-and-buyback program for accredited clients. The company lists its mailing address as 13809 Research Blvd., Suite 785, Austin, Texas 78729. Public-facing materials also identify leadership roles, including Josh Moore as CEO and partner of NFN8 Inc., and list operational leadership for mining and facilities management.

Corporate Structure and Governance

Debtor entities. NFN8 Group, Inc. is the parent entity for NFN8 Capital, LLC and NFN8 Holdings, LLC. The filings describe NFN8 Capital as holding mining equipment and participating in the sale-leaseback program, while NFN8 Holdings is the lessee under those arrangements.

CRO and board oversight. The company appointed Erik White as chief restructuring officer on December 29, 2025. The filings also identify an independent director, Eric J. Taube, with exclusive authority for restructuring and sale decisions.

Conflict management. Filings note that Josh Moore, a principal affiliated with a potential purchaser, was removed from decision-making authority over restructuring matters.

Non-debtor affiliate. NFN8, Inc. is identified as a non-debtor affiliate with partial common ownership. The affiliate provides services to the debtors under agreements with NFN8 Capital, including payroll and operating support, and is reimbursed for certain operating costs.

Sources of Distress and Liquidity Pressure

Bitcoin halving and margin compression. The April 2024 Bitcoin halving reduced block rewards per mined block, and the filings describe resulting margin compression across the business.

Hosting disruption tied to Core Scientific. NFN8 previously relied on hosting arrangements with Core Scientific. The Core Scientific bankruptcy in December 2022 contributed to termination of hosting agreements in mid-2023, leaving miners without contracted hosting capacity and disrupting operating revenue. NFN8's public materials include the company's 2022 announcement that it installed ANTMINER S19 XP units at Core Scientific's Dalton, Georgia data center.

Sale-leaseback litigation and arbitration. The debtors' sale-leaseback program generated more than 250 counterparties. As payment suspensions began, counterparties filed litigation in October 2024. The state court later compelled arbitration on March 17, 2025.

Crystal City fire. A fire at the Crystal City facility between Christmas and New Year 2025 reduced mining capacity and revenue by up to 50%, according to the filings.

Payment suspensions and liquidity strain. The filings describe multiple payment suspensions to sale-leaseback counterparties, including periods in mid-2023, June 2024, and late 2025. The debtors state that liquidity pressure intensified and that they filed chapter 11 to pursue a sale process.

Industry and Power Market Context

Bitcoin mining energy mix. A 2025 Cambridge Centre for Alternative Finance report estimated that sustainable energy sources accounted for 52.4% of Bitcoin mining energy use, annual Bitcoin electricity consumption totaled 138 TWh, network-wide emissions were 39.8 MtCO2e, and the United States accounted for 75.4% of reported Bitcoin mining activity in the survey sample.

Texas power profile. In its 2024 Texas electricity profile, the U.S. Energy Information Administration reports net generation of 566,502,688 MWh, net summer capacity of 168,317 MW, and an average retail electricity price of 9.79 cents per kWh.

ERCOT curtailment programs. ERCOT created a voluntary curtailment program for large flexible customers in 2022, specifically naming bitcoin mining facilities as eligible participants.

Key Dates and Milestones

The timeline below summarizes selected events described in the filings and key docket dates.

Frequently Asked Questions

When did NFN8 Group file for chapter 11?

NFN8 Group, Inc., NFN8 Capital, LLC, and NFN8 Holdings, LLC filed for chapter 11 protection on February 2, 2026.

Where is the case pending and what is the case number?

The case is pending in the U.S. Bankruptcy Court for the Western District of Texas under case number 26-10193.

What does NFN8 do?

NFN8 operates an industrial-scale Bitcoin mining business, with revenue tied to block rewards and transaction fees, and it also runs equipment sale-leaseback and hosting arrangements. The company describes its core operations and software-driven mining decisions on its public site.

What is the proposed DIP financing package?

The debtors seek a priming DIP term loan of up to $2.75 million from Twelve Bridge Capital, LLC, with a 13.0% PIK interest rate, a 3.0% default rate premium, and maturity tied to a sale, plan effective date, or dismissal or conversion.

Why did the company enter bankruptcy?

Filings cite margin compression after the April 2024 Bitcoin halving, hosting disruptions following the Core Scientific bankruptcy, litigation tied to the sale-leaseback program, and a late-2025 fire that reduced mining capacity.

What assets are expected to be marketed for sale?

The debtors intend to market substantially all assets, including their mining fleet, related equipment and infrastructure, and operating sites and leases.

What are the next key dates in the case?

The first-day hearing was held on February 4, 2026. The 341 meeting of creditors is scheduled for March 12, 2026, and the petition notice lists June 2, 2026 as the plan and disclosure statement deadline.

Who is the claims agent for NFN8 Group?

The debtors applied to employ Epiq Corporate Restructuring, LLC as claims and noticing agent on February 6, 2026.

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