Digital Assets Held for Operational Purposes

The Company holds certain digital assets (primarily USDT) exclusively as a medium of exchange to facilitate inventory procurement from international vendors. Digital assets held for operational purposes are classified as current assets on the Consolidated Balance Sheets based on the Company’s intent and ability to utilize these assets within its normal operating cycle. The Company measures digital assets at fair value with changes recognized in other income (expense) in the Consolidated Statement of Operations. The Company tracks its cost basis of digital assets by-wallet in accordance with the first-in-first-out (“FIFO”) method of accounting.