Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. The unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s most recent Annual Report on Form 10-K for the fiscal year ended September 30, 2025, filed with the SEC on November 25, 2025 (the “Form 10-K”).

In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented in this Quarterly Report on Form 10-Q have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full fiscal year.

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company, and the Company’s wholly owned subsidiaries. All intercompany transactions have been eliminated upon consolidation of these entities. The Company has a sole reportable segment which is the bitcoin mining segment.

There were no changes to the Company’s most significant estimates and assumptions, significant accounting policies, or recent accounting pronouncements that were disclosed in Note 2 - Summary of Significant Accounting Policies included in the Form 10-K other than as discussed below.

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Improvements to Income Tax Disclosures, which enhances existing income tax disclosure requirements, including requiring greater disaggregation of information in the effective tax rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of ASU 2023-09 on its Condensed Consolidated Financial Statements and expects to adopt the guidance in its annual report for the current fiscal year ending September 30, 2026.

Segment reporting

The Company operates as a single operating and reportable segment focused on bitcoin mining. The Company’s Chief Executive Officer serves as the chief operating decision maker (“CODM”) and uses consolidated net (loss) income as the measure of segment (loss) income. The CODM uses consolidated net (loss) income, as presented on the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income, to evaluate the Company’s overall profitability and performance, to determine the volume and timing of bitcoin mining to be performed, to allocate and reallocate resources, including miner purchases and expansion projects, and to focus investment where long-term profitability appears most viable.

The CODM is regularly provided with information on certain significant segment expenses, including Cost of revenues (exclusive of depreciation and amortization), Professional fees, Payroll expenses, General and administrative expenses, Depreciation and amortization, and Loss (gain) on fair value of bitcoin, net. These significant segment expenses are consistent with those presented on the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income, and depreciation expense attributable to miners is disclosed in Note 7 - Property and Equipment. The measure of the Company’s segment assets is reported on the Condensed Consolidated Balance Sheets as total assets. Stock-based compensation is consistent with the amounts presented on the Condensed Consolidated Statements of Cash Flows. All of the Company’s long-lived assets are in the United States. Information about the Company’s revenue and vendor concentrations is included in Note 14 - Revenue and Vendor Concentrations.

Accrued liabilities

The Company records accruals for expenses that have been incurred but not yet invoiced or paid as of each balance sheet date. These accruals are included within current liabilities and represent estimates of obligations for which the timing or amount of payment is uncertain. Accrued liabilities primarily consist of indirect tax exposures, payroll and related benefits, operating expenses, and other miscellaneous accruals arising in the ordinary course of business.

(Loss) income per share

The Company reports (loss) income per share in accordance with FASB ASC 260-10, Earnings Per Share, which provides for calculation of “basic” and “diluted” earnings per share.

Basic earnings per share includes no dilution and is computed by dividing net (loss) income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share reflects the potential dilution of securities that could share in the earnings of an entity. The calculation of diluted net (loss) income per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive.

Common stock issuable upon the exercise of outstanding stock options, vesting of restricted stock, and warrants are computed using the treasury stock method. Potential shares of common stock issuable upon conversion of the convertible notes and Series A preferred stock are computed using the if-converted method.

Convertible senior notes are reflected in diluted earnings per share using the if-converted method when doing so is dilutive, meaning the additional shares and related interest add-back reduce earnings per share; otherwise, they are excluded as antidilutive. The un-weighted number of shares excluded from diluted earnings per share for the three and six months ended March 31, 2026 and 2025 are noted in the table below. Such shares were excluded as their assumed conversion would have been antidilutive or, for preferred stock, because the change-in-control conversion contingency was not satisfied.

Fair value measurement of financial instruments, derivative assets and contingent consideration

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable.

The carrying value of cash, accounts payable, accrued expenses and short-term portion of loan payable are Level 1 and approximate their fair values because of the short-term nature of the instruments. The carrying amount of the Company’s long-term interest-bearing portion of loan payable is also stated at fair value since the stated rate of interest approximates market rates available to the Company for a similar duration. The fair values of warrant liabilities were determined based on Black Scholes option-pricing model using Level 2 inputs. The fair value of the DAM (as defined below) derivative liabilities, as defined in Note 6 - Investments and Derivatives, were also determined based on Black Scholes option-pricing model but utilized historical volatility of bitcoin as an input which is deemed to be a Level 3 input.

There were no transfers between Level 1, 2 or 3 during the six months ended March 31, 2026.

The activities of the financial instruments that were measured and recorded at fair value on the Company’s Condensed Consolidated Balance Sheets on a recurring basis during the six months ended March 31, 2026 and year ended September 30, 2025 are described in Note 6 - Investments and Derivatives.