Foreign Currency Translation and Transactions

Assets and liabilities of international subsidiaries whose functional currency is the local currency are translated at the rate

of exchange in effect on the consolidated balance sheet date; income and expenses are translated at the average exchange

rates prevailing during the period. The effects of these translation adjustments are presented in the consolidated statements

of shareholders’ equity and in the consolidated statements of operations and comprehensive (loss) income. Fluctuations in

the Company’s functional currency from our net investment in the Company’s subsidiaries expose us to foreign currency

translation risk, where changes in foreign currency exchange rates may adversely affect our results of operations upon

translation into U.S. Dollars.

Segment Reporting

Operating segments are defined as components of an entity for which separate financial information is available and that is

regularly reviewed by the Chief Executive Officer, also known as the Chief Operating Decision Maker (the “CODM”) in

deciding how to allocate resources to an individual segment and in assessing performance. The CODM reviews financial

information presented on a consolidated basis for purposes of making operating decisions, allocating resources and

evaluating financial performance. As such, the Company has determined that it operates as one operating segment and one

reportable segment. Segment expenses are provided to the CODM on the same basis as disclosed in the consolidated

statements of operations and comprehensive (loss) income which are used to evaluate company performance. The CODM

does not evaluate performance or allocate resources based on segment assets, and therefore such information is not

presented in the notes to the financial statements.

Revenue Recognition

The Company applies the provisions of Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts

with Customers (“ASC 606”), to determine the measurement of revenue and the timing of when it is recognized. Under

ASC 606, revenue is measured as the amount of consideration we expect to be entitled to, in exchange for transferring

products or providing services to our customers and is recognized when performance obligations under the terms of

contracts with our customers are satisfied. ASC 606 prescribes a five-step model for recognizing revenue from contracts

with customers: (1) identify contract(s) with the customer; (2) identify the separate performance obligations in the contract;

(3) determine the transaction price; (4) allocate the transaction price to the separate performance obligations in the contract;

and (5) recognize revenue when (or as) each performance obligation is satisfied. Our primary customers are Application

Programming Interface Providers ("API Providers") who pay for access to the Exodus Platform.

Exchange Aggregation, Fiat Onboarding, and Staking Revenue Earned Through an API Provider

The Company recognizes various amounts charged to API Providers which are based on user interactions conducted

through APIs as revenue. Currently, the Company has API agreements with providers of digital asset-to-digital asset

exchanges, fiat-to-digital asset conversions, and digital asset staking. Under the terms and conditions of the agreements, the

Company and the providers have integrated the APIs into the Exodus Platform. In consideration for the integration by the

Company of the APIs into the Exodus Platform software, API Providers pay us an API fee for certain user interactions with

the API Provider. These interactions are typically transactions of services between provider and a user, effected through the

API.

Exchange Aggregation—There are two main types of contracts with API Providers, transaction-based contracts and tiered

subscription contracts based on volume. The performance obligations under both types of contracts are such that the

Company allows the API Providers to provide software services which permit a user of Exodus’ un-hosted self-custodial

digital asset software wallet to exchange one digital asset for another digital asset (the “Exchange Services”). The API

Providers supply an application program interface to permit the Exchange Services to be integrated into the un-hosted self-

custodial wallet software (the “Exchange API”). Under the terms and conditions of the agreements, the Company and the

Exchange API Providers have integrated the Exchange APIs into the Exodus wallet.

For transaction-based contracts, revenue is recognized when a transaction occurs between a user and the API Provider. The

Company receives from the API Provider a set percentage, per the contract, of the transaction value. As the majority of our

revenue is transaction based, our revenue can vary significantly based on the volume of user transactions that occur each

day. Because revenue is recognized based on our estimates of the user transaction value (using pricing information from an

independent pricing source), network fees, and spread captured by the API Provider, any or all of which may differ from

the actual amounts, there is variable consideration. The Company calculates an expected variable percentage to apply to the

transaction when and as revenue generating activity (in the form of user transactions with API Providers) occurs, which is

used to calculate the amount recognized. Because a transaction-based contract between the Company and the API Provider

represents a series of distinct services, which occur daily, the variable consideration allocation exception allows the

Company in each case to allocate the consideration related to each individual user transaction to the period in which it is

earned, since the pricing formula is consistent throughout the period. The variability in transaction price no longer exists

after receipt of consideration. The transaction price is based on a percentage of the fair value of assets exchanged and is

settled in Bitcoin.

For tiered subscription contracts, revenue is recognized monthly when the API Provider is invoiced a U.S. dollar amount

based on the user transaction volume tier reached during the corresponding month. The invoice may be settled in an

amount of either Bitcoin or U.S. Dollar Coin ("USDC"), at the election of the API Provider, equivalent in value to the U.S.

dollar amount at time of payment. Because the contract is denominated in U.S. dollars and the amount invoiced to and due

from the API Provider is a U.S. dollar amount, even if settled in the form other than cash, the consideration is valued as of

the payment date and revenue is recognized based on the U.S. dollar amount. Because the transaction volume is not known

at the time of contract inception and remains uncertain until the contract period is complete, there is variable consideration.

The variable consideration is resolved each month given that the Company invoices its tiered subscription customers in

U.S. dollars based on actual volume tier reached.

The Company has concluded that the contracts do not contain any significant financing components, as either the period

between receipt of the funds and the satisfaction of performance obligations is largely within one year. Substantially all of

the contracts call for payment to be made in digital assets or USDC and have payment terms that are less than 30 days.

Fiat onboarding—Fiat on-ramps, powered by API Providers, such as Ramp network, facilitate an effortless exchange for

users to buy digital assets with fiat currency through bank transfer, credit or debit card and Apple Pay. Users can sell digital

assets for fiat currency and transfer to their bank account utilizing our off-ramp, which is currently powered by API

Providers such as MoonPay and Sardine. Exodus receives transaction-based fees from our third-party providers based on

volume of currency exchanged. As the majority of our revenue is transaction based, our revenue can vary significantly

based on the volume of user transactions that occur each day. Because revenue is recognized based on our estimates of the

user transaction value (using pricing information from an independent pricing source), network fees, and spread captured

by the API Provider, any or all of which may differ from the actual amounts, there is variable consideration. The Company

calculates an expected variable percentage to apply to the transaction when and as revenue generating activity (in the form

of user transactions with API Providers) occurs, which is used to calculate the amount recognized. Because a transaction-

based contract between the Company and the API Provider represents a series of distinct services, which occur daily, the

variable consideration allocation exception allows the Company in each case to allocate the consideration related to each

individual user transaction to the period in which it is earned, since the pricing formula is consistent throughout the period.

The variability in transaction price no longer exists after receipt of consideration. The transaction price is based on a

percentage of the fair value of assets exchanged and is settled primarily in USDC.

Staking revenue earned through an API Provider—By participating in blockchain validation through our third-party API

Provider, Everstake, users are able to earn rewards by staking supported digital assets held in their Exodus wallets.

According to the design of the underlying network staking protocols, the holder determines the amount of digital assets to

stake, retains full control and ownership of the digital assets and can unstake them at any time. Users of the Exodus

Platform are able to access the Staking app within the Exodus Platform and delegate certain digital assets to participate in

staking and receive the resulting rewards. Exodus receives a volume based tiered monthly subscription fee from Everstake.

Because the transaction volume is not known at the time of contract inception, the contract is based by epoch period or

daily period depending on the digital asset and their network validation rules. The Company has determined that the

variable consideration is resolved at the end of the period. Revenue is recognized on a monthly basis based on the

completion of the series of performance obligations during the period.

Consulting and Other Revenue Earned by Exodus or Through an API Provider

Consulting and other—The Company recognizes revenue from the provision of consulting and other services based on

contractual terms. Revenue from consulting and other primarily consists of transactions for non-fungible tokens. The

Company evaluates the transactions based on whether it controls the digital asset provided before it is transferred to the

users or whether it acts as an agent by arranging for other customers to provide the digital asset to the customer. The

Company does not control the digital asset being provided before it is transferred to the buyer, does not have inventory risk

related to the digital asset, and is not responsible for the fulfillment of the digital asset. The Company also does not set the

price for the digital asset. The Company’s API Provider agreements and user terms of service along with the self-custodial

nature of the product clarify that the responsibility for transactions flowing through the APIs are exclusively the

responsibility of the API Provider and the user. The Company has determined that for its transaction-based contracts it is

an agent solely for the purposes of ASC 606.

Concentration of Revenue

Revenue from API Providers exceeding 10% of total revenues for the years ended December 31, 2025 and 2024 were as

follows:


(in thousands)	2025	2024
Company A	$14,820	$20,837
Company B	$18,357	$20,206
Company C	$19,434	$19,931
Company D (1)	$—	$16,196
Company E	$18,261	$12,807
Company F (2)	$13,161	$—

(1) Company did not have over 10% of revenue during the fiscal year 2025.

(2) Company did not have over 10% of revenue during the fiscal year 2024.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, money market mutual funds and treasury bills with an original maturity of

three months or less.

U.S. Dollar Coin

USDC is a stablecoin digital asset that is backed by U.S. dollars or other liquid assets and accounted for as a financial

instrument. USDC can be redeemed for one U.S. Dollar.

Concentration of Credit Risk

The Company maintains its cash and cash equivalents in checking accounts, various investment grade institutional money

market accounts, bank term deposits and licensed digital asset exchanges. Deposited funds held with financial institutions

may exceed the $250,000 limit insured by the Federal Deposit Insurance Corporation (“FDIC”). Generally, these deposits

may be redeemed upon demand and are maintained with financial institutions with reputable credit. The Company has not

experienced any losses on funds deposited to these accounts and, therefore, does not believe it is exposed to any significant

credit risk with respect to these accounts. The Company also holds cash at digital asset trading venues and performs a

regular assessment of these trading venues as part of its risk management process.

Accounts Receivable

The Company records accounts receivable at the invoiced amount. Accounts receivable are contractual rights to receive

payment in the form of digital assets, stable coin, or cash, and are recognized as an asset on the consolidated balance

sheets. Accounts receivable consists of earned but not yet received revenue accounted for in accordance ASC 606.

Accounts receivable that result in obtaining the right to receive a fixed amount of digital assets in the future are hybrid

instruments, consisting of a receivable host contract that is initially measured at the fair value of the underlying digital

assets and is subsequently carried at amortized cost, and an embedded forward feature based on the changes in the fair

value of the underlying digital asset. The embedded forward is bifurcated from the host contract and is subsequently

measured at fair value.

The Company applies ASC 326-20, Financial Instruments – Credit Losses, to record an allowance for doubtful accounts for

receivables based on expected credit losses. In determining expected credit losses, the Company considers historical loss

experience, the aging of its receivable balance, and the term between invoicing and when payment is due. Any accounts

receivable balance shall be charged off in the period in which trade receivables are deemed uncollectible. Recoveries of

trade receivables previously charged off shall be recorded when received. There have been no receivables charged off for

the periods presented.

Loans Receivable, Net

Loans receivable, net are recognized when the Company has a legally enforceable right to receive cash or other financial

assets under the terms of a written loan or promissory note. Loans receivable are initially recorded at the principal amount

advanced and are subsequently carried at amortized cost, net of any allowance for credit losses. The Company evaluates

loans receivable for expected credit losses in accordance with ASC 326, Financial Instruments—Credit Losses, and records

an allowance for credit losses when necessary based on management’s assessment of expected collectability.

Interest income is recognized using the effective interest method. Loan origination fees received, net of certain direct loan

origination costs, are deferred as an adjustment to the carrying value of the related loans and amortized into interest income

over the estimated life of the loans. Contractual exit fees associated with loans receivable are accounted for as adjustments

to yield and amortized into interest income using the effective interest method over the expected term of the loans. For

loans that provide for the capitalization of interest, accrued interest is added to the carrying value of the loan receivable in

accordance with the contractual terms and is not separately presented as accrued interest receivable.

Fair Value Measurements

Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with

the highest priority given to Level 1, as these are the most transparent or reliable:

•Level 1 – Quoted prices for identical instruments in active markets.

•Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar

instruments in markets that are not active; and model-derived valuations in which all significant inputs are

observable in active markets.

•Level 3 – Valuations derived from valuation techniques in which one or more significant inputs are not

observable.

Prices may fall within Level 1, 2 or 3 depending upon the methodology and inputs used to estimate fair value for each

specific security. In general, securities are priced using third-party pricing services. Securities not priced by pricing

services are submitted to independent brokers for valuation and, if those are not available, internally developed pricing

models are used to value assets using a methodology and inputs that market participants presumably would use to value the

assets. Prices obtained from third-party pricing services or brokers are not adjusted. Subsequent to the adoption of

Accounting Standards Update ("ASU") 2023-08, the fair value of each digital asset is based on quoted (unadjusted) prices

in the principal market for each digital asset. Such prices are based on Level 1 inputs in accordance with ASC 820 - Fair

Value Measurement.

Investments

The Company determines the classification of investments at the time of purchase and evaluates such classification at each

balance sheet date. Investments over which the Company exercises significant influence, but does not control, are

accounted for using the equity method of accounting. Investments over which the Company does not exercise significant

influence are accounted for in accordance with ASC 321, Investments—Equity Securities ("ASC 321").

As of December 31, 2025, the Company held (i) investments in Simple Agreements for Future Equity (“SAFEs”) and (ii)

one investment in an equity security. The SAFEs represent contractual rights to acquire equity interests upon the

occurrence of specified future events and do not provide the Company with voting rights, governance rights, or the ability

to exercise significant influence over the issuers. Accordingly, the SAFEs are accounted for as cost method investments

and are included within other long-term assets on the consolidated balance sheets. The Company’s investment in an equity

security is accounted for in accordance with ASC 321 which is measured at fair value. Changes in the equity security fair

value is recognized in other losses, net on the consolidated statement of operations and comprehensive (loss) income and

the equity security is included within other long-term assets on the consolidated balance sheets. The Company evaluates its

investments for impairment at each balance sheet date. An impairment loss is recognized when the carrying amount

exceeds estimated fair value and the decline in value is determined to be other than temporary.

Convertible Note Receivable

In November 2025, the Company entered into a $0.1 million convertible loan agreement with an unrelated third party. The

convertible note is accounted for as a note receivable within other long-term assets, in accordance with ASC 310 -

Receivables, on the Company's balance sheet and is recorded at amortized cost which approximates its fair value. The note

accrues interest at a rate of 0.50% per annum above the 12-month EURIBOR, with interest beginning to accrue on January

1, 2027. The convertible note has a contractual maturity date of October 31, 2027, unless earlier converted in accordance

with the terms of the agreement.

The convertible note includes conversion features that permit the outstanding principal and accrued interest to be converted

into equity, of the unrelated third party, upon the occurrence of specified events, including (i) a qualifying equity financing,

(ii) an exit event, or (iii) at the election of the Company, if no qualifying financing has occurred, upon maturity. The

conversion price component varies by each trigger event: in the event of a new financing round, it is the lowest fully-

diluted price per share multiplied by a 80.0% discount multiple subject to a contractual valuation cap of €15.0 million; for

an exit event, it is the lower of the cap-based fully-diluted ("FD") price or the actual FD price in the exit; and for

conversion on request, it is the cap-based FD price. As of December 31, 2025, the carrying amount of the convertible note

receivable was $0.1 million, and no allowance for credit losses was recorded.

Variable Interest Entity

The Company evaluates its involvement with legal entities to determine whether the entity is a variable interest entity

("VIE") and whether consolidation is required under applicable accounting guidance. An entity is considered a VIE when,

among other factors, (i) the equity investment at risk is not sufficient to permit the entity to finance its activities without

additional subordinated financial support or (ii) the equity holders at risk lack the characteristics of a controlling financial

interest. If the Company has a variable interest in a VIE, it assesses whether it is the primary beneficiary. The primary

beneficiary is the party that has both (i) the power to direct the activities that most significantly impact the VIE's economic

performance and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to

the VIE. In assessing whether it has the power to direct the activities that most significantly impact a VIE's economic

performance, the Company evaluates the substance of its contractual arrangements, governance rights, and decision-

making authority. Rights that are designed solely to protect the Company's interests, without providing substantive

decision-making ability, are not considered indicators of power. If the Company determines that it is not the primary

beneficiary of a VIE, the entity is not consolidated and the Company accounts for its involvement in accordance with other

applicable accounting guidance.

Fixed Assets, Net

Fixed assets are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of the respective

assets. Maintenance and repairs are charged to expense as incurred; major renewals and betterments are capitalized and

depreciated.

Digital Assets

Effective January 1, 2024, the company adopted ASU 2023-08, Improvements to Crypto Assets Disclosures. The Company

presents digital assets separately from other intangible assets, recorded as digital assets on the consolidated balance sheets.

The net activity from remeasurement of digital assets at fair value is reflected in the consolidated statements of operations

and comprehensive (loss) income within expense (income). Digital assets that are received as noncash consideration in our

revenue arrangements and sold for cash within seven days are presented as cash flows from operating activities in other

operating activities settled in digital assets and USDC, while other digital asset activity held longer than seven days is

reflected as cash flows from investing activities under disposal of digital assets held in the consolidated statements of cash

flows. The Company uses a mix of non-custodial and custodial services at multiple locations that are geographically

dispersed to store its digital assets. The Company has performed an analysis of the principal market. Refer to "Note 6 -

Intangible Assets", and "Note 13 - Fair Value Measurements", for additional information. The Company has ownership of

and control over its digital assets. The cost basis is calculated on a first-in first-out basis.

Software Development Cost

The Company applies ASC 985-20, Software-Costs of Software to Be Sold, Leased, or Marketed, in analyzing the

Company’s software development costs. ASC 985-20 requires the capitalization of certain software development costs

subsequent to the establishment of technological feasibility for a software product in development. Software development

costs associated with establishing technological feasibility are expensed as incurred. We apply ASC 350-40, Intangibles—

Goodwill and Other—Internal Use Software, in the review of certain system projects. These system projects generally

relate to software not hosted on our users’ systems (as defined in ASC 350-40), where the user has no access to source

code, and it is infeasible for the user to operate the software themselves without Exodus servers in place. In these reviews,

all costs incurred during the preliminary project planning stages are expensed as incurred. Amortization of capitalized

software development costs are included in technology, development and user support in the consolidated statements of

operations and comprehensive (loss) income. During the years ended December 31, 2025 and 2024, the Company recorded

$0.2 million and $0.3 million, respectively, in software development impairment which is presented as impairment on other

assets in the consolidated statements of operations and comprehensive (loss) income.

Indefinite-Lived Intangible Assets

The Company applies ASC 350-30, Intangibles-Goodwill and Other, General Intangibles Other Than Goodwill, in

analyzing the Company’s indefinite-lived assets. Indefinite-lived assets, primarily the Company’s domain name, are not

amortized but are evaluated annually for impairment and whenever events or changes in circumstances indicate that the

carrying amount of the asset may exceed its fair value. If the carrying value of an indefinite-lived asset exceeds its fair

value, an impairment charge is recognized in an amount equal to that excess.

Definite-Lived Intangible Assets

The Company applies ASC 350-30, Intangibles-Goodwill and Other, General Intangibles Other Than Goodwill, in

analyzing the Company’s definite-lived assets. The Company's intangible assets consist primarily of technology in

development, an assembled workforce, and trade names. These intangible assets were capitalized at fair market value and

are being amortized over their estimated useful lives.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets, currently consisting of indefinite-lived intangible assets and definite-lived

intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of the asset

may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of

an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an

asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying

amount of the asset exceeds the fair value of the asset. Significant management judgment is required to determine the fair

value of our long-lived assets and measure impairment, which includes projected cash flows. Fair value is determined by

using various valuation techniques, including discounted cash flow models, sales of comparable properties and third-party

independent appraisals. Changes in estimated fair value could result in an impairment of the asset. There were no material

impairment charges recorded for the periods reported. The Company performs its annual impairment test of long-lived

assets as of December 31 and determined that no impairment existed for the Company’s long-lived assets the years ended

December 31, 2025 and 2024.

Share-based Compensation

Under the Company’s share-based compensation plans, certain team members, members of the Company’s Board, and its

consultants have received grants of restricted stock units (“RSUs”) for Exodus Movement Class A common stock.

The Company accounts for RSUs as equity classified awards. For RSUs, the expense is measured based on the grant-date

fair value and is recognized over the requisite service period for each vesting tranche of awards expected to vest, with

forfeitures estimated based on historical experience and future expectations. Share-based compensation is included in

expenses (income) on the consolidated statements of operations and comprehensive (loss) income.

Warrant Valuations

During fiscal year 2025, in connection with certain agreements, the company issued warrants to purchase shares of its

common stock. The company measures the fair value of the warrants using the Black-Scholes option pricing model as of

the issuance date. Exercisable warrants are equity based and recorded as a reduction in additional paid-in capital.

The material factors incorporated in the Black-Scholes model in estimating the fair value of the options and warrants

granted for the periods presented were as follows:

•Expected dividend yield - The expected dividend is assumed to be zero as we have never paid dividends and have

no current plans to pay any dividends on our common stock.

•Expected stock-price volatility - The expected volatility is derived from the historical volatility of the Company's

stock as there are no other publicly traded companies within our industry that we consider to be comparable over a

period approximately equal to the expected term.

•Risk-free interest rate - The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant

for zero coupon U.S. Treasury notes with maturities approximately equal to the expected term.

•Expected term - The expected term represents the period that the awards are expected to be outstanding. Our

historical warrant exercise experience does not provide a reasonable basis upon which to estimate an expected

term because of a lack of sufficient data. Therefore, we estimate the expected term by using the simplified method

provided by the SEC. The simplified method calculates the expected term as the average of the time-to-vesting

and the contractual life of the options.

•Fair value per share - The fair value per share is the fair price or theoretical value for a call or a put option based

on six variables such as volatility, type of option, underlying stock price, time, strike price and risk-free rate.

(Loss) Earnings Per Share

The Company computes net (loss) income per share using the two-class method required for participating securities. The

two-class method requires income available to common shareholders for the period to be allocated between common stock

and participating securities based upon their respective rights to receive dividends as if all income for the period had been

distributed. The Company’s Class A and Class B common stock were deemed participating securities. Basic net (loss)

income per share is computed using the weighted-average number of outstanding shares of common stock during the

period. Diluted net (loss) income per share is computed using the weighted-average number of outstanding shares of

common stock and, when dilutive, potential shares of common stock outstanding during the period. Potential shares of

common stock consist of incremental shares issuable upon the exercise of stock options, warrants, and vesting of RSUs.

Income Taxes

The Company applies the provisions of ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities are

determined based on differences between the financial statement carrying amounts and tax bases of assets and liabilities

and are measured using the enacted tax rates that are expected to apply to taxable income in the years in which those

temporary differences are expected to be recovered or settled. The effect of a change in tax rates is recognized in the

statements of operations and comprehensive (loss) income in the period that includes the enactment date. The Company

records valuation allowances to reduce its deferred tax assets to the amount that is more likely than not be realized.

In accordance with ASC 740, the Company recognizes, in its consolidated financial statements, the impact of the

Company's tax positions that are more likely than not to be sustained upon examination. The Company will determine

whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related

appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met

the more-likely-than-not recognition threshold, the Company presumes that the position will be examined by the

appropriate taxing authority with full knowledge of all relevant information. Upon determination that a tax position meets

the more-likely-than-not recognition threshold, it is measured to determine the amount of benefit to recognize in the

financial statements. The Company recognizes interest and penalties for uncertain tax positions in income tax expense.

On July 4, 2025, the “One Big Beautiful Bill Act” (P.L. 119‑21) was enacted into law. The legislation reinstates and extends

several provisions of the 2017 Tax Cuts and Jobs Act, including permanent 100% bonus depreciation, enhanced

Section 179 expensing, full research and development expense deduction for domestic expenditures and modification to the

international tax framework. We are currently assessing its impact on our consolidated financial statements. The primary

impact of the legislation is the acceleration of deductions related to research and development costs incurred in the U.S.,

which did not have a material impact on the Company’s effective tax rate for the year ended December 31, 2025.

Asset Acquisitions

When an acquisition does not meet the definition of a business combination because either: (i) substantially all of the fair

value of the gross assets acquired is concentrated in a single identifiable asset, or group of similar identified assets, or (ii)

the acquired entity does not have an input and a substantive process that together significantly contribute to the ability to

create outputs, we account for the acquisition as an asset acquisition. In an asset acquisition, goodwill is not recognized, but

rather, any excess purchase consideration over the fair value of the net assets acquired is allocated on a relative fair value

basis to the identifiable net assets as of the acquisition date and any direct acquisition-related transaction costs are

capitalized as part of the purchase consideration. Purchase consideration is allocated to the tangible and intangible assets

acquired and liabilities assumed based on the estimated fair values as of the acquisition date, which are measured in

accordance with fair value measurement accounting principles. The determination of fair value requires management to

make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly

subjective in nature. For information on the acquisition that we completed during the year ended December 31, 2025 that

we accounted for as asset acquisitions, see "Note 6 - Intangible Assets.”

On November 10, 2025, the Company acquired substantially all of the assets of Gratitud Interna Ltd., a Latin American

crypto payments platform. The aggregate purchase price was $2.7 million excluding transaction costs of $0.1 million, of

which $1.5 million was paid in cash and $1.2 million was delivered in newly issued Class A shares. The Company issued

55,825 shares of Class A common stock, based on the 60-day volume-weighted average price of the Company’s Class A

common stock as of that date. This asset purchase expanded our payments capabilities by adding technology in

development, an assembled workforce, and a trade name supporting crypto-based merchant transactions in the Latin

America market.

Recently Issued Accounting Pronouncements Pending Adoption

Targeted Improvements to the Accounting for Internal-Use Software

In September 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-06, “Intangibles — Goodwill

and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use

Software”. The amendments in ASU 2025-26 (i) remove all references to prescriptive software development “project

stages,” (ii) refocus the capitalization threshold such that an entity begins capitalizing when (a) management authorizes and

commits to funding the project and (b) it is probable that the project will be completed and used for its intended function

(subject to evaluation of significant development uncertainty). The amendments in ASU 2025-26 do not (i) amend the

accounting for external-use software under Subtopic 985-20, (ii) change the types of internal-use software costs eligible for

capitalization (e.g., data conversion, training, maintenance costs generally remain expensed), or (iii) modify when

capitalization ceases (i.e., when the software is substantially complete and ready for its intended use). The amendments in

ASU 2025-26 are effective for annual periods beginning after December 15, 2027, and for interim periods within those

annual periods. Early adoption is permitted, but only as of the beginning of an annual reporting period. Entities may elect a

prospective, retrospective, or modified retrospective transition approach. The Company is currently evaluating the impact

of adopting the standard on the consolidated financial statements.

Expense Disaggregation Disclosures

In November 2024, the FASB issued ASU 2024-03, "Expense Disaggregation Disclosures". ASU 2024-03 aims to enhance

disclosures regarding a public business entity’s expenses, specifically addressing investor requests for more detailed

information on the types of expenses included in commonly presented expense captions such as cost of sales, selling,

general and administrative expenses, and research and development. The amendments in ASU 2024-03 require additional

transparency on the breakdown of expenses, including purchases of inventory, team member compensation, depreciation,

amortization, and depletion. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after

December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The

amendments may be applied either prospectively to financial statements issued for reporting periods after the effective

date, or retrospectively to any or all prior periods presented in the financial statements. The Company is currently

evaluating the impact of ASU 2024-03 on its financial reporting and will adopt the standard in accordance with the

required effective date. Subsequent to December 31, 2024, in January 2025 the FASB issued ASU 2025-01 which clarifies

the disclosure requirements for public business entities adopting ASU 2024-03. ASU 2025-01 specifies that all public

business entities should initially adopt the disclosure requirements presented in ASU 2024-03 in the first annual reporting

period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after

December 15, 2027. The Company is currently evaluating the impact of adopting the standard on the consolidated financial

statements.

Recently Adopted Accounting Pronouncements

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax

Disclosures”, which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in

the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated