Rumble Inc

ITEM 1A. RISK FACTORS.

There haBecause the ND Business Combination has now been consummated and Northern Datas business is expected to constitute a significant portion of our business, additional significant risks may apply to the combined business as detailed in the Risk Factors section of our Registration Statement on Form S-4 (File No. 333-295008) filed in connection with the ND Business Combination, which was initially filed with the SEC on April 13, 2026 and subsequently declared effective been no on April 14, 2026, including the risks relating to Northern Datas business contained therein, which Risk Factors section is incorporated by reference herein. Except as set forth therein and below, there have been no material changes to the risk factors described under the caption Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025. Such risk factors could materially adversely affect our business, financial condition, results of operations, and prospects. You should carefully consider the risks, uncertainties and cautionary statements described therein, together with the other disclosures in this Quarterly Report on Form 10-Q and in our other public filings with the SEC. Any such risks and uncertainties, as well as risks and uncertainties not currently known to us or that we currently deem to be immaterial, may materially adversely affect our business, financial condition and operating results.

Risks Related to Our Business

Our development and construction of new data center facilities involves significant risks, including increasing public and community opposition to data center development and exposure to a highly-evolving regulatory landscape, which could delay, increase the cost of, or prevent the completion of our planned projects and subject us to potential legal liabilities.

Our strategy contemplates the development and construction of one or more new data center facilities, and we expect to continue to evaluate additional development opportunities in the future. Data center development is a complex, capital-intensive, multi-year undertaking that exposes us to numerous risks, many of which are outside of our control, including: construction delays and budget overruns; increased prices for, or limited availability of, raw materials, building supplies, and long-lead-time equipment such as generators, switchgear, transformers, and cooling infrastructure; the availability and cost of skilled construction labor, and labor disputes or work stoppages involving our contractors and subcontractors; the availability of construction and permanent financing on acceptable terms, or at all; unanticipated environmental, geological, or other site-specific conditions; delays in, or the failure to obtain, necessary entitlements, permits, and approvals, including zoning, siting, land use, building, environmental, water, and utility permits and interconnection or other approvals from public agencies and utility companies; and the availability of sufficient electrical power and related transmission and distribution infrastructure on commercially reasonable terms and within our anticipated timelines.

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In addition, data center development has become the subject of increasing public attention and, in a growing number of communities, organized local opposition. Residents, advocacy organizations, and other stakeholders in communities where data centers are proposed or under development have raised concerns regarding, among other things, electricity consumption and the potential impact of large-load customers on local utility rates and grid reliability; water usage, particularly in water-stressed regions; noise, traffic, light, and other quality-of-life impacts; effects on property values and community character; environmental and land use impacts; and the perceived imbalance between the scale of data center investment and the number of permanent local jobs created. This opposition has become increasingly organized and well-publicized across the industry, and has contributed to the delay, modification, and cancellation of data center projects proposed by other developers, as well as to the adoption or consideration by state and local governments of moratoria, restrictive zoning ordinances, enhanced permitting and disclosure requirements, water- and energy-use restrictions, limitations on the use of back-up power sources, and other measures that could hinder our ability to develop, upgrade, expand or rebuild existing data centers or construct new data centers. Specifically, drought conditions in certain markets have resulted in water usage restrictions and proposals to further restrict water usage, and our data center facilities could face restrictions on water usage, water efficiency mandates, or higher water prices. In addition, local officials who support data center projects have, in some instances, faced significant political pressure, and land use decisions favorable to data center developers have been, and may in the future be, challenged through litigation, referenda, and other legal and political processes.

Our current and future development projects have been and will likely continue to be the subject of similar public scrutiny or opposition. Although we have invested significant time and resources into developing positive relationships with local communities, community opposition could result in the delay, suspension, redesign, downsizing, relocation, or abandonment of one or more of our planned projects; the denial, revocation, or conditioning of permits and approvals necessary for construction or operation; the imposition of costly mitigation measures, community benefit commitments, or operating restrictions as a condition to approval; protracted administrative proceedings or litigation; increased pre-development, construction, and operating costs; and reputational harm to our company and our brand, whether arising from our own projects or from negative public sentiment toward the data center industry generally. Opposition directed at our utility providers, our development partners, or the customers our facilities are intended to serve could have similar effects on our projects, even where our own facilities are not the direct subject of such opposition. Because we may commit substantial capital and contractual obligations, including land acquisition, equipment procurement, power supply arrangements, and customer commitments, in advance of receiving all required approvals, delays or failures in the development process could result in stranded or impaired assets, loss of deposits or prepayments, liability to customers or other counterparties for failure to deliver capacity on anticipated timelines, and loss of anticipated revenue. Any of the foregoing could materially and adversely affect our business, results of operations, financial condition, and prospects.

The regulatory landscape surrounding the high-performance computing (HPC) and AI industries is evolving rapidly. These developments may affect our business and operations in ways that are difficult to predict. Regulators are increasingly scrutinizing the development and operation of data centers regarding energy consumption, land use, carbon emissions, water usage, environmental impacts, data-sovereignty considerations, and national-security-related issues. New requirements, such as permitting requirements, energy standards, carbon-reduction mandates, sustainability reporting rules, or operational restrictions specific to data centers, AI infrastructure, or high-density compute environments, may be imposed. To the extent we have not complied with such laws, rules, and regulations, we could be subject to significant fines, revocation of licenses, limitations on our products and services, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect our business, operating results, financial condition, and prospects.

Further, AI data compute customers increasingly are looking to pass through their regulatory obligations and other liabilities to their outsourced data center providers, and we may not be able to limit our liability or damages in the event of loss suffered by such customers, whether as a result of our breach of an agreement or otherwise.

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Our substantial indebtedness following the ND Business Combination, and additional indebtedness we expect to incur in connection with our AI infrastructure and data center business, could adversely affect our financial condition and limit our operational flexibility.

In connection with the closing of the ND Business Combination, on June 18, 2026, Rumble Freedom First Holding Designated Activity Company (Irish HoldCo), as borrower, and Tether, as lender, entered into that certain secured Credit Agreement (the Credit Agreement) in connection with Tether transferring 50% of its receivable under an existing floating rate loan, dated as of November 2, 2023 (as amended, supplemented or modified from time to time) (the Existing ND Loan), by and between Tether and Northern Data. Irish Holdco is a newly formed Irish private limited company and indirect wholly-owned subsidiary of the Company and the borrower group under the Credit Agreement comprises Irish Holdco and its subsidiaries. The Credit Agreement provides for a secured five-year term facility with commitments of 317,533,401. This facility matures on the five-year anniversary of June 18, 2026 and bears interest at a margin of 3.00%, payable quarterly, plus EURIBOR.

In addition to the Credit Agreement described above, we also expect to incur substantial additional indebtedness to finance the development, construction, and operation of data centers and the acquisition of related equipment, including high-performance computing hardware. Our transition from operating without leverage to operating with substantial indebtedness presents risks that are new to our business.

The Credit Agreement could require us to dedicate a significant portion of our cash flow from operations to debt service, reducing funds available for working capital, capital expenditures, and other corporate purposes; limit our ability to obtain additional financing on favorable terms, or at all; increase our vulnerability to adverse economic and industry conditions, including changes in demand for AI computing capacity; expose us to interest rate risk to the extent our borrowings bear interest at variable rates; and place us at a competitive disadvantage relative to competitors with greater financial resources or lower cost of capital.

The Credit Agreement contains, and future financing arrangements that we may incur to facilitate and expand our AI infrastructure and data center business may contain, covenants that restrict our ability to incur additional indebtedness, create liens, dispose of assets, make investments, pay dividends, and require us to maintain specified financial ratios. Failure to comply could result in an event of default, which could lead to acceleration of the affected indebtedness and, through cross-default provisions, other indebtedness, including obligations we have guaranteed. In addition, given the capital-intensive nature of data center development, our financing needs could be substantial and recurring, and any construction delay, cost overrun, or an inability to refinance maturing obligations on acceptable terms could materially and adversely affect our business, financial condition, and results of operations. External factors such as inflation, monetary policy, or other market conditions could impact our cost of borrowing and could make it more difficult to obtain the financing that is required to construct the facilities and generation and transmission assets we develop to support future data center contracts on favorable terms, or at all. Any issuance of additional debt could negatively impact our credit ratings and overall cost of capital, which could in turn adversely affect our future results and liquidity.

Northern Data, together with its subsidiaries (the ND Group), is subject to certain pending tax audits and regulatory investigations which, if adversely determined, could result in additional tax assessments, penalties, interest charges, litigation, reputational damage, or increased compliance costs, any of which could have a material adverse effect on the ND Groups business, financial position and results of operations.

The ND Group is subject to tax laws and regulations in multiple jurisdictions and may from time to time be involved in audits, inquiries, or investigations by tax authorities or other regulatory bodies. Such proceedings may relate to the interpretation and application of complex tax rules, including cross-border transactions, transfer pricing, withholding taxes or indirect tax matters. The outcome of any such proceedings is inherently uncertain and may result in additional tax assessments, penalties, interest charges, or other financial obligations that differ materially from the ND Groups current expectations or provisions.

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A VAT audit was conducted by the STA in relation to two subsidiaries of Northern Data Decentric Europe B.V. (Decentric) and Hydro 66 Svenska AB (Hydro 66 Svenska) while an audit of another subsidiary is ongoing Hydro 66 Services). The STA has issued decisions to Decentric and Hydro 66 Svenska in which it asserts that certain activities performed at the ND Groups data center operations in Boden, Sweden, constituted cryptocurrency mining activities that it considers to be outside the scope of VAT, and therefore proposes to deny the deduction of input VAT previously claimed. The assessment amounts to approximately SEK 336 million (approximately USD 35 million) for Decentric and approximately SEK 209 million (approximately USD 21 million) for Hydro 66 Svenska, in each case including any potential penalties and interest. The ND Group has formally appealed both the decision regarding Decentric and the decision regarding Hydro 66 Svenska. Both entities applied for payment deferrals which the STA granted. The ND Groups position is that the relevant activities involved the provision of infrastructure and related services to third parties, which Northern Datas management board considers to constitute taxable supplies under Swedish VAT legislation. Northern Datas management board also considers that certain conclusions reflected in the decisions may have been drawn from incomplete operational data and assumptions that do not fully reflect the underlying commercial arrangements.

Separately, the European Public Prosecutors Office (EPPO) has initiated an investigation relating to VAT-related matters involving, among others, certain former employees and directors of Northern Data and its subsidiaries Decentric, Hydro66 Svenska and Hydro66 Services. Public documentation associated with the investigation refers to potential VAT exposure of up to approximately EUR 110 million (approximately USD 125 million), excluding any potential penalties, surcharges or interest. NDAG believes the EPPO investigation relates to the same or similar VAT matters under investigation by the STA. The proceedings of the STA in connection with all entities referenced in the EPPO investigation remain ongoing. It is at the appeal stage for Decentric and Hydro66 Svenska. The Group has not received any formal assessment or proposed decision from the Swedish Tax Agency in relation to Hydro66 Services AB The ultimate outcome of these matters remains uncertain and may depend on the outcome of further administrative discussions, appeals processes, or judicial proceedings. Due to payment deferrals that were granted and the ongoing proceedings, the ND Group cannot currently reliably estimate the amount of any potential obligation that may ultimately arise.

The outcome of the aforementioned proceedings could result in additional tax assessments, penalties, interest charges, litigation, reputational damage, or increased compliance costs, any of which could have a material adverse effect on the ND Groups business, financial position and results of operations. In addition, it cannot be excluded that tax or regulatory authorities in other jurisdictions may initiate further reviews or proceedings in connection with the ND Groups international activities. Any such developments could further increase the ND Groups exposure to financial and operational risks and could materially adversely affect the ND Groups business, financial position and results of operations.