Note 8. Commitments and Contingencies

Bitcoin Production Equipment and Operations

On March 16, 2023, the Company entered into a partnership agreement (the “Partnership Agreement”) and a property lease agreement (the “Lease Agreement”, and together with the Partnership Agreement, collectively, the “Agreement”) with another cryptocurrency mining company (“Tenant”). Pursuant to the Lease Agreement, the Company agreed to lease to Tenant portions of the Company’s six acre mining facility in Lafayette, GA in increments of up to 10 spaces that are 40 feet in length and eight feet in height each (“Spaces”), together with related utilities access including electricity of up to one megawatt (“MW”) per Space, for deploying mining equipment, in exchange for rental payments of $5 per Space per month (provided the Spaces are powered) and payment of the electricity costs and deposit requirements arising from the Spaces. In connection with the Lease Agreement, Tenant agreed to make an initial deposit of $229 for the initial electricity deployment for five MW.

In connection with the Partnership Agreement, the Company agreed to issue Tenant 500,000 shares of its common stock per month for each rented Space (the “Monthly Issuances”) and to issue an additional annual share issuance equal to 100% of the aggregate Monthly Issuances for that year (the “Annual Issuances,” and together, the “Issuances”). The Agreements had a term of 24 months commencing on April 1, 2023.

The Company determined the transaction should be accounted for on a net basis, and the fair value of the equity should be recorded as a direct deduction from rental revenue. The Company determined that the share issuances would be treated as lease incentives and ASC 842-10-30-5 requires lease incentives to be recorded as a reduction of fixed payments when determining lease payments. The Company concluded that the equity portion of the agreement should be recorded at fair value on the grant date. Upon recording the equity at fair value at the time of issuance and taking into consideration that revenue should be reduced by the fair value of equity, the Company determined that the fair value of the equity exceeds the total cash to be received based on the fair value of the contract at the date of issuance, resulting in a contract loss at inception.

The Company applied the guidance under ASU 2021-05 and determined that it would be appropriate to account for the entire loss at commencement and recognize that loss as a future equity commitment. The loss is based on the difference between the amount of cash to be received under the contract and the fair value of the stock to be issued under the contract. As the lease commenced on April 1, 2023, the Company began accounting for the lease on that date. At lease inception, the Company recorded a lease incentive loss of $184 and recorded an operating lease liability in the corresponding amount. The lease liability was reduced over the lease term period in conjunction with the issuance of the shares.

During the three and six months ended June 30, 2025, the Company received $0 and $113, reduced the lease liability by $0 and $20, issued 0 shares of common stock, and recorded 0 and 56,000,000 shares of common stock to be issued. At June 30, 2026, the Company has a recorded liability of $360 for 88,000,000 shares of common stock potentially issuable under the Agreements. These shares have yet to be issued pending administrative close-out of the contract and mutually agreeable releases.

Legal proceedings

The Company is not a party to any material legal proceedings, and to management’s knowledge, no such proceedings have been threatened. From time to time, the Company may be involved in routine litigation or claims that arise in the ordinary course of business; however, management does not believe that any such matters will have a material effect on the Company’s financial position, results of operations, or cash flows.