| DIGITAL ASSETS |
4.
DIGITAL ASSETS
Digital
Assets
The
following table presents the Company’s digital assets held as of December 31, 2025 and 2024, which are measured at fair value in
accordance in ASC 350-60, Intangibles - Crypto Assets. Measurement is based on quoted prices in active markets (Level 1 input
under ASC 820, Fair Value Measurement).
SCHEDULE
OF DIGITAL ASSETS HELD
| | |
December 31, 2025 | | |
December 31, 2024 | |
| | |
Quantity | | |
Cost Basis | | |
Fair Value | | |
Quantity | | |
Cost Basis | | |
Fair Value | |
| AVAX tokens | |
| 12,409,212.272 | | |
$ | 160,039,924 | | |
$ | 152,509,109 | | |
| - | | |
$ | - | | |
$ | - | |
| Bitcoin | |
| 13.272 | | |
| 1,396,934 | | |
| 1,161,251 | | |
| 0.270 | | |
| 28,414 | | |
| 26,282 | |
| Total digital assets | |
| | | |
$ | 161,436,858 | | |
$ | 153,670,360 | | |
| | | |
$ | 28,414 | | |
$ | 26,282 | |
Activity
Rollforward
The
following table summarizes the activity in the Company’s digital assets for the years ended December 31, 2025 and 2024:
SCHEDULE
OF ACTIVITY IN DIGITAL ASSETS
| | |
Amounts | |
| December 31, 2023 - Fair Market Value | |
$ | - | |
| Investor contributions | |
| 49,432,541 | |
| Additions and purchases of digital assets | |
| 25,246 | |
| Rewards earned from blockchain infrastructure | |
| 2,340,279 | |
| Sale of digital assets | |
| (450,884 | ) |
| Transaction fees and other costs | |
| 2,133 | |
| Unrealized gain on market valuation | |
| 1,036 | |
| Unrealized loss on market valuation | |
| (7,679,769 | ) |
| December 31, 2024 - Fair Market Value | |
$ | 26,282 | |
| Investor contributions | |
| 49,432,541 | |
| Additions and purchases of digital assets | |
| 109,999,778 | |
| Rewards earned from blockchain infrastructure | |
| 2,340,279 | |
| Sale of digital assets | |
| (450,884 | ) |
| Transaction fees and other costs | |
| 2,133 | |
| Unrealized loss on market valuation | |
| (7,679,769 | ) |
| December 31, 2025 - Fair Market Value | |
$ | 153,670,360 | |
Investor
contributions in the table above are shown net of $24,233,587 of AVAX tokens in subscription receivable.
The
Company recognized realized gains of $86,728 and $0 on the disposition of digital assets during the years ended December 31, 2025 and
2024, respectively. There were no realized losses on dispositions of digital assets during the years ended December 31, 2025 and 2024.
Investor
Contributions - Subscription Receivable
In
connection with Offering, certain AVAX tokens received remain in investor wallets to which the Company did not have the private keys
as of December 31, 2025, because the tokens were subject to restrictions, such as lock-up agreements or pledges as collateral pursuant
to UCC-1 financing statements. As a result, management believes the Company does not have control of these digital assets and has presented
these AVAX tokens as subscription receivable within the consolidated statements of stockholders’ equity as contra-equity. After
each individual restriction lapses and the Company obtains control, the AVAX tokens will be reclassed to digital assets.
The
following table summarizes the total AVAX tokens subject to restriction as of December 31, 2025:
SCHEDULE
OF SUBJECT TO SUBSCRIPTION RECEIVABLES
| | |
December 31, 2025 | |
| | |
Quantity | | |
Cost Basis |
|
| Restricted tokens pledged as collateral | |
| 434,700.000 | | |
$ | 7,207,326 |
|
| Other restricted tokens | |
| 1,026,915.600 | | |
| 17,026,261 |
|
| Total subscription receivable - digital assets | |
| 1,461,615.600 | | |
$ | 24,233,587 |
|
The following table
summarizes the restrictions that apply to the AVAX tokens classified as digital assets and the AVAX tokens classified as
subscription receivables as of December 31, 2025:
SCHEDULE
OF SUBJECT TO RESTRICTION
| Restriction Period | |
AVAX Tokens | |
| Tokens unlock over 108 equal monthly increments beginning December 2026 and concluding November 2035 | |
| 7,220,217 | |
| Tokens unlock in equal weekly increments concluding July 2027 | |
| 1,346,044 | |
| Tokens unlock in equal quarterly increments beginning February 2026 and concluding July 2030 | |
| 661,500 | |
| Tokens unlock in equal weekly increments concluding September 2027 | |
| 462,238 | |
| Tokens unlock in equal weekly increments beginning in March 2026 and concluding February 2027 | |
| 447,428 | |
| Tokens unlock in equal weekly increments concluding May 2027 | |
| 243,024 | |
| Tokens unlock in equal weekly increments concluding July 2028 | |
| 235,095 | |
| Tokens unlock in equal weekly increments beginning September 2026 and concluding March 2027 | |
| 230,000 | |
| Tokens unlock at a rate of approximately 41% in March 2026 and approximately 59% April 2026 | |
| 85,000 | |
| Tokens unlock at a rate of approximately 42% per week through March 2026 and approximately 58% per week concluding March 2027 | |
| 51,084 | |
| Tokens unlock in equal weekly installments concluding March 2026 | |
| 19,589 | |
| Tokens | |
| 11,001,219 | |
In accordance with ASU 2022-03 (Topic 820), these restrictions
are not considered a part of the unit of account for the AVAX tokens and was not considered when measuring the AVAX tokens at fair
value.
|