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STOCKHOLDERS’ EQUITY
 12 Months Ended
Dec. 31, 2025
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 10—STOCKHOLDERS’ EQUITY

 

Preferred Stock

 

As of December 31, 2025 and 2024, the Company was authorized to issue 10,000,000 preferred shares. As of December 31, 2025 and 2024, the Company had no preferred shares issued and outstanding.

 

Common Stock

 

On May 20, 2025, the board of directors of the Company and a majority of the stockholders of the Company approved the Second Amended and Restated Articles of Incorporation (the “Amended Articles”), which became effective upon filing with the Utah Division of Corporations on August 11, 2025. The Amended Articles increase the authorized shares of Common Stock to 10,000,000,000, from 100,000,000, among other changes.

 

As of December 31, 2025 and 2024, the Company was authorized to issue 10,000,000,000 and 100,000,000 common shares, respectively. As of December 31, 2025, the Company had 439,950,632 and 437,946,327 shares of Common Stock issued and outstanding, respectively. As of December 31, 2024, the Company had 6,050,148 and 6,029,648 common shares issued and outstanding, respectively. At December 31, 2025, the Company had 71,704,975 pre-funded warrants to purchase shares of common stock remaining unexercised (see Note 3) and for a description of the terms of the Pre-Funded Warrants see the Warrants section below. The shares underlying the unexercised Pre-Funded Warrants are included in the computation of basic and diluted earnings per share due to their nominal exercise price and unconditional right to receive shares upon exercise.

 

During the years ended December 31, 2025 and 2024, the Company issued shares of common stock in connection with various transactions, including its merger with Nakamoto Holdings (see Note 3), PIPE Financings (see Note 3), the acquisition of intangible assets, the initial public offering (see below), and stock-based compensation agreements (see Note 11). See the Warrants and At-the-Market Offerings sections below for additional detail on shares issued in connection with warrant exercises and the ATM program.

 

Initial Public Offering

 

On May 31, 2024, the Company entered into an underwriting agreement with WallachBeth Capital, LLC, as representative (the “Representative”) of the underwriters in connection with the initial public offering for sale of an aggregate of 1,240,910 units at a price to the public of $5.50 per share. Each unit offered under the underwriting agreement consisted of one share of common stock, one tradeable warrant to purchase one share of common stock with an exercise price of $6.33 and a five-year exercise term; and one non-tradeable warrant to purchase one-half of one share of common stock with an exercise price of $6.33 and a five-year exercise term.

 

The underwriting agreement also provided for the issuance of 83,639 warrants to the Representative with an exercise price of $6.33 and a five-year exercise term.

 

In addition, the underwriters partially exercised its over-allotment option, resulting in the issuance of 76,538 tradeable warrants and 76,538 non-tradeable warrants.

 

 

On June 3, 2024, the IPO was completed, resulting in the issuance of 1,240,910 units. As a result of the IPO, the Company received gross proceeds of approximately $6.8 million before deducting underwriting discounts and offering expenses. After deducting these and other offering expenses, the Company received net proceeds of approximately $5.9 million.

 

On June 3, 2024, in accordance with the terms of the 10% OID promissory note agreements, the Company issued each note holder common stock equal to the principal amount of the notes at the IPO price of $5.50 per share, totalling 80,808 shares of restricted common stock, with a fair value of $214,949 or $2.66 per share. These shares are subject to a 90-day lock-up agreement from the date of issuance.

 

The common stock and tradeable warrants are trading on the Nasdaq Global Market, under the symbols “NAKA” and “NAKAW,” respectively.

 

At-The-Market Offering

 

On August 26, 2025, the Company entered into a Sales Agreement (the “Sales Agreement”) with TD Securities (USA) LLC; Cantor Fitzgerald & Co.; B. Riley Securities, Inc.; The Benchmark Company, LLC; Canaccord Genuity LLC; Cohen & Company Capital Markets (a division of Cohen & Company Securities, LLC); Craig-Hallum Capital Group LLC; Needham & Company, LLC; and Yorkville Securities, LLC (each, an “Agent” and collectively, the “Agents”).

 

Pursuant to the Sales Agreement, the Company may, at its option and from time to time, offer and sell shares of its Common Stock, through the Agents having an aggregate gross sales price of up to $5,000,000,000.

 

For the year ended December 31, 2025, the Company sold 1,362,340 shares of Common Stock at an average price of $4.15 per share, for aggregate cash proceeds of $5,659,975, net of issuance costs.

 

Treasury Stock

 

As of December 31, 2025, the Company held 2,004,305 shares in treasury at a total cost of $749,003 and as of December 31, 2024, held 20,500 shares in treasury at a total cost of $22,145.

 

Warrants

 

The Company has issued warrants to purchase shares of common stock in connection with its initial public offering (see above) and PIPE financing (see Note 3). All warrants are classified as equity.

 

As of December 31, 2025, the Company has 72,293,476 warrants outstanding with the following terms:

 

Warrant Type:  Number of Shares Indexed   Exercise Price (Strike Price)   Settlement Date / Expiration Date  Settlement Method
IPO Warrants:                
Public tradeable warrants   384,936   $6.33   June 3, 2029  Cash or cashless (at holder’s election)
Public non-tradeable warrants(1)   203,565   $6.33   June 3, 2029  Cash or cashless (at holder’s election)
PIPE Warrants:                
Pre-funded warrants – PIPE   71,704,975   $0.001   N/A  Cash or cashless
Total warrants outstanding   72,293,476   $0.05       

 

(1)Public non-tradeable warrants allow the holder to purchase one-half of one share of the Company’s common stock.

 

Shares Issued Upon Warrant Exercise During 2025

 

●62,095,798 shares upon the cashless exercise of PIPE pre-funded warrants with no cash proceeds.
●1,456,008 shares upon the cash exercise of IPO warrants for proceeds of $9,216,534.
●55,312 shares upon the cashless exercise of warrants with no cash proceeds.

 

Total cash proceeds from warrant exercises during 2025 were $9,216,534.

 

 

Settlement Terms

 

Warrant holders control all settlement methods. Warrants may be settled through:

 

1.IPO Public Tradeable Warrants: (i) Physical settlement by paying $6.33 per share in cash, (2) cashless exercise where shares issued are reduced based on the spread between market price and exercise price using VWAP, or (3) upon a fundamental transaction (merger, sale of substantially all assets, or change in control), holders may require the Company to purchase warrants for cash equal to Black-Scholes value.
2.IPO Public Non-Tradeable Warrants: (i) Physical settlement by paying $6.33 per one-half share in cash, (2) cashless exercise where shares issued are reduced based on the spread between market price and exercise price using VWAP, or (3) upon a fundamental transaction (merger, sale of substantially all assets, or change in control), holders may require the Company to purchase warrants for cash equal to Black-Scholes value.
3.Pre-funded warrants: (i) Physical settlement by paying $0.001 per share in cash or (2) cashless exercise (mandatory if registration statement is unavailable). In a fundamental transaction, holders receive the same consideration as common stockholders (no cash buyout option).

 

The maximum shares that could be issued upon exercise of all outstanding warrants is 72,191,693 shares. Fewer shares may be issued if cashless exercise is elected.