NOTE 5 – INTANGIBLE ASSETS - DIGITAL ASSETS

The Company records the initial cost basis of digital assets at their original purchase price or the then-current quoted market prices (e.g., if received in an exchange rather than through purchase) and presents all digital asset holdings as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other, except USD Coin. The Company performs an analysis to identify whether events or changes in circumstances, principally decreases in the quoted prices on active exchanges, indicate that it is more likely than not that our digital assets are impaired. In determining if an impairment has occurred, we consider the quoted price of the digital asset. If the then current carrying value of a digital asset exceeds the fair value so determined, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the prices determined.

The Company has revised its impairment loss assessment methodology for digital assets to record write-downs to the lowest market price of one unit of digital asset quoted on the active exchange since acquiring the digital asset (i.e., on a daily basis rather than quarterly). This revision is consistent with the requirements of ASC 350-30-35-19, which indicates impairment exists whenever carrying value exceeds fair value. It also indicates that after an impairment loss is recognized, the adjusted carrying amount of the intangible asset shall be its new accounting basis. Management assessed the potential difference in impairment loss that would have resulted in prior periods if this daily impairment methodology had been applied retroactively, noting the amounts were immaterial.

During the years ended December 31, 2025 and 2024, the Company received digital assets as consideration from investors for the purchases of unicoin rights, common stock and private placement unsecured notes issued by the Company. These digital assets included Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Litecoin (LTC), Tether (USDT) and Wrapped Ethereum (WETH). Unicoin rights are more fully discussed in Note 7. The Company utilized $419 thousand and $358 thousand of its digital asset holdings for vendor payments during the years ended December 31, 2025 and 2024, respectively.

During the years ended December 31, 2025 and 2024, the Company recorded $0 thousand and $15 thousand, respectively, of impairment losses on such digital assets. Impairment losses are included in operating expenses in the consolidated statements of operations and comprehensive loss. During the year ended December 31, 2025, there was $60 61,045 thousand of realized gain on disposal of digital assets.

The table below summarizes the carrying values and activity for the Company’s digital asset holdings as of and for the year ended December 31, 2025 and 2024:

The table above includes all balances presented within the Company’s intangible assets line item on the consolidated balance sheets, based on quoted prices on active exchanges. The table also includes a separate column reflecting transactions involving USD Coin (“USDC”), which is not presented as an intangible asset on the balance sheet. Because the Company routinely engages in transactions involving both digital assets accounted for as intangible assets and USDC, this column has been included to provide additional transparency. USDC is classified within prepaid expenses and other current assets, and the total balances of USDC as of December 31, 2025 and 2024 were $26 thousand and $44 thousand, respectively.