Note 8. Debt and Other Financing Arrangements

Brown Family Enterprises

On May 13, 2024, the Company entered into a $1.5 million secured loan (“Secured Note”) with Brown Family Enterprises LLC (“Brown Family”) which pays ten percent (10%) interest per annum, simple interest on a monthly basis until the Secured Note is paid in full. The note's maturity date was initially May 14, 2025. The Company granted to the holders of the Secured Note a secured interest in substantially all of the Company's assets and interests.

On March 27, 2025, we entered into a first amendment to secured promissory note with Brown Family to increase the interest rate to eleven percent (11%) interest per annum, simple interest, payable on the maturity date. In addition, we agreed with Brown Family to extend the maturity date of the Brown Secured Note until March 31, 2026. On March 27, 2026, we entered into a second amendment to secured promissory note with Brown Family to extend the maturity date of the Brown Secured Note until June 30, 2026.

SE & AJ Liebel Limited Partnership

On August 6, 2024, the Company entered into a $5.0 million senior secured term loan agreement (“Original Loan Agreement”) with SE & AJ Liebel Limited Partnership (“SE&AJ”). The Senior Note is secured by Bitcoin which is held as collateral in a specified custody account. The Company has also granted SE&AJ a first perfected security interest in substantially all the assets of the Company.

Further, in connection with the Original Loan Agreement, the Company entered into an Intercreditor Agreement, dated August 6, 2024 (the “Intercreditor Agreement”), with Brown Family, pursuant to which the First Lien Obligations and the Second Lien Obligations (as each are defined in the Intercreditor Agreement) are subject to customary intercreditor arrangements. The loan bears interest at a rate of 12.0% per annum and will mature on August 6, 2026 (the “Maturity Date”). The Company will make monthly interest payments in the amount of approximately $50,000 each month until the Maturity Date, and on such date the entire principal balance, together with accrued and unpaid interest, shall become payable.

On September 15, 2025, the Company entered into an amendment of the Original Loan Agreement (the “Loan Agreement Amendment”) by and among the Company, each of LM Funding, LLC and US Digital, as guarantors (jointly and severally, the “Guarantors”), and SE&AJ, as lender (the “Lender”). Pursuant to the Loan Agreement Amendment, the Company obtained an additional loan of up to $2.0 million from the Lender (the “Additional Loan”), which is in addition to the $5.0 million loan that was made to the Company by the Lender under the Original Loan Agreement (the “Initial Loan”).

The Additional Loan bears interest at a rate of 12.0% per annum and will mature on September 15, 2027. As provided in the Loan Agreement Amendment and the Promissory Note issued by the Company thereunder (the “Promissory Note”), an amount equal to $1.3 million of the Additional Loan was funded on the date of the Loan Agreement Amendment, and the balance of the additional loan in an amount of up to $700,000 was funded on October 21, 2025. The Additional Loan is secured by the same collateral, security agreement, and pledge agreement, and is subject to the same guarantees, as the Initial Loan, provided that the minimum Bitcoin collateral value that is pledged to secure the loan has been increased to 110% of the outstanding principal amount of Initial Loan and Additional Loan. As of December 31, 2025 and 2024 Bitcoin valued at $7.7 million and $5.0 million, respectively, was held as collateral for the Initial Loan and Additional Loan.

Galaxy Loan Facility

On October 29, 2025, the Company entered into a Master Digital Currency Loan Agreement (the “Loan Agreement”) with Galaxy Digital LLC (“Lender”). The Loan Agreement establishes the terms and conditions pursuant to which the Company may, from time to time, borrow U.S. Dollars and/or specified digital currencies (each, a “Loan”), including Bitcoin, Ether, and other mutually agreed digital assets, from Lender (the “Loan Facility”). Loans under the Loan Facility may be structured as open loans, term loans, or collar loans, with the specific type, amount borrowed, specified fees, collateral pledged, maturity and other provisions for each Loan to be set forth in a written term sheet executed by the Company and Lender at the time of such Loan. Each Loan will be secured by cash or digital currency collateral, whereby the Company has granted Lender a first‑priority security interest in such collateral to secure the Company’s obligations underlying such Loan.

The Loan Agreement has an initial term of one year and will automatically renew for successive one‑year terms unless terminated in accordance with its terms. In addition to events of default, the Loan Agreement includes termination events such as loss or non-renewal of required licenses or regulatory authorizations, specified governmental or criminal proceedings against the Company or its key personnel, significant declines in net asset value or net worth beyond agreed thresholds, failures to deliver required financial statements or other reporting, and key person events where required management is not replaced with acceptable personnel.

On October 30, 2025, the Company made a draw under the Loan facility and borrowed a principal sum of $11 million and granted to Lender a security interest in 145 Bitcoin owned by the Company as collateral. Refer to Note 4.

The settlement amount of the loan is adjusted based on the Bitcoin price relative to a contractual floor and ceiling market price of Bitcoin (“Collar Feature”), and is cash settled. The Collar Feature is an embedded derivative requiring bifurcation under ASC 815-15.

The fair value of the Collar Feature was calculated using a Black Scholes calculation using Level 3 inputs as of the loan inception date. Significant inputs include the volatility of Bitcoin observed for a similar term as the remaining term of the loan of 35.6% and short term treasury interest rates of 3.5%. The derivative, with a fair value of $237 thousand, was classified as a debt discount and amortized over the life of the contract. As of December 31, 2025 a gain on the change in the fair value of the derivative of $285 thousand was classified within “Unrealized gain on Galaxy loan derivative”. The derivative asset of $48 thousand and nil was classified as “Galaxy loan derivative” on the consolidated balance sheets as of December 31, 2025 and 2024.