NOTE 3 — BUSINESS COMBINATIONS

Acquisition of BTC Inc

On February 16, 2026, we entered into an Agreement and Plan of Merger (the “BTC Merger Agreement”) with BTC Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of ours (“BTC Merger Sub”), BTC Inc, and the stockholder representative party thereto.

On February 20, 2026 (the “Closing Date”), we completed the transaction contemplated by the BTC Merger Agreement (the “Closing”), pursuant to which BTC Merger Sub merged with and into BTC Inc, with BTC Inc surviving the merger as a wholly owned subsidiary of ours (the “BTC Merger”). In connection with the Closing, we acquired all of the issued and outstanding securities of BTC Inc.

Concurrently with the BTC Merger, on February 20, 2026, we also completed the acquisition of UTXO (the “UTXO Acquisition”) through the exercise of a call option on UTXO equity interests that was held by BTC Inc and acquired as part of the BTC Merger. See below for further information regarding the UTXO Acquisition.

Upon consummation of the BTC Merger on the terms and conditions set forth in the BTC Merger Agreement, the holders of BTC Inc common and preferred stock received the right to receive 6,497,156 shares of our common stock (“Common Stock”), par value $0.001 per share (“BTC Merger Shares”) and we reserved 1,960,675 shares of Common Stock for issuance in connection with fully-vested BTC Inc stock options assumed by us (“BTC Stock Options” together with the BTC Merger Shares, the “BTC Consideration”).

Pursuant to the BTC Merger Agreement, 620,885 shares of our Common Stock were withheld from the BTC Consideration and will be available to offset any post-closing adjustments to the BTC Consideration and to support indemnification obligations (the “BTC Holdback Shares”). Certain stockholders of BTC Inc will receive their pro rata portions of the BTC Holdback Shares subject to the conditions in accordance with the BTC Merger Agreement. All of the remaining 5,876,270 shares of our Common Stock to be issued are dependent upon us receiving a letter of transmittal from previous BTC Inc stockholders (“Letter of Transmittal Shares”). As of June 30, 2026, we have received letters of transmittal representing 5,459,304 shares of Common Stock and have issued shares of Common Stock to those former BTC Inc shareholders. As of June 30, 2026, 416,966 Letter of Transmittal Shares remain subject to receipt and subsequent issuance of Common Stock.

Accounting for the BTC Merger

Prior to the Closing Date, we held a call option on the equity interests of BTC Inc, which was accounted for as a derivative instrument measured at fair value with changes in fair value recognized in earnings. On the Closing Date, the call option was remeasured to its acquisition date fair value and applied as consideration in the BTC Merger in accordance with ASC 805.

The components of consideration used to measure goodwill are as follows (in thousands):

 SCHEDULE OF GOODWILL

Previously Held Call Option

Prior to the Closing Date, we held a call option on the equity interests of BTC Inc, which was accounted for as a derivative instrument in accordance with ASC 815, Derivatives and Hedging, and measured at fair value with changes in fair value recognized in change in fair value of call option – related party in the condensed consolidated statements of comprehensive loss. On December 31, 2025, the fair value of the call option was $199.1 million. During the period from January 1, 2026, through the Closing Date, we recognized a loss of $107.7 million in change in fair value of the call option, reducing the fair value to $91.3 million immediately prior to the Closing Date.

On the Closing Date, the call option was remeasured to its acquisition date fair value and applied as consideration in the BTC Merger and, concurrently through the acquisition of BTC Inc’s call option on UTXO, the UTXO Acquisition. The $91.3 million acquisition date fair value of the call option has been allocated between the two transactions based on the relative fair value of the underlying BTC Inc and UTXO equity interests. Of the total, $45.1 million has been included in the consideration used to measure goodwill in the BTC Merger and $46.2 million has been allocated to the UTXO Acquisition.

The acquisition date fair value of the call option was measured based on the intrinsic value of the option at exercise. The acquisition date fair value of BTC’s equity interests of $128.6 million and the acquisition date fair value of UTXO’s interest of $52.8 million were determined by an independent third-party valuation specialist. As the call option was exercised on the Closing Date with no remaining time value, the intrinsic value approach is consistent with the fair value of the call option under ASC 820. The underlying equity valuations reflect significant unobservable (Level 3) inputs as defined in ASC 820.

Preliminary Purchase Price Allocation – BTC Inc

Our preliminary allocation of the acquisition price is based on our preliminary estimate of fair value for each of the acquired assets and liabilities. Such amounts are subject to revision as additional information about fair values of assets and liabilities becomes available. During the three months ended June 30, 2026, we refined the preliminary estimated fair value of certain net assets acquired primarily including an increase in deferred tax liabilities of $16.5 million, an increase in accounts payable and accrued expenses of $2.1 million, a decrease in intangible assets of $2.0 million and an increase in contract liabilities current of $0.2 million. The offset to these measurement period adjustments was to goodwill, which increased by $20.8 million. We recognized the effect of these measurement period adjustments in the current period and did not revise amounts reported in prior periods. The effect of the adjustment on amortization expense applicable to prior periods was not material. The following table summarizes the preliminary allocation of the fair value of consideration to the assets acquired and liabilities assumed as of the Closing Date (in thousands):

 SCHEDULE OF ESTIMATED FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES

The preliminary fair values and weighted-average useful lives of identifiable intangible assets acquired are as follows (in thousands):

 SCHEDULE OF PRELIMINARY FAIR VALUES INTANGIBLE ASSETS ACQUIRED

The fair value measurements of intangible assets reflect significant unobservable (Level 3) inputs as defined in ASC 820. No residual value has been assigned to these intangible assets and they do not contain material renewal or extension provisions.

Goodwill

We recognized preliminary goodwill of $91.6 million as a result of the BTC Merger. None of the goodwill recognized is expected to be deductible for income tax purposes. All of the goodwill has been assigned to the Media & Information Services reporting unit.

Revenue and Earnings of BTC Inc Since the Closing Date

The amounts of revenue and pre-tax net loss of BTC Inc, included in our condensed consolidated statement of comprehensive loss from the Closing Date for the three and six months ended June 30, 2026, were as follows (in thousands):

 SCHEDULE OF CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS

Acquisition of UTXO Management GP, LLC

On February 20, 2026, concurrent with the Closing of the BTC Merger (see above), we completed the UTXO Acquisition. In connection with the Closing, we issued an aggregate of 662,047 shares of Common Stock (the “UTXO Consideration”), of which 66,204 shares were withheld from the UTXO Consideration to support indemnification obligations (the “UTXO Holdback Shares”). Certain equity holders of UTXO will receive their pro rata portion of the UTXO Holdback Shares subject to the conditions in and in accordance with the Agreement and Plan of Merger dated February 16, 2026, by and among Nakamoto, UTXO GP Merger Sub, LLC, a Tennessee limited liability company and a wholly-owned subsidiary of Nakamoto, UTXO, David Bailey, in his individual capacity, Tyler Evans, in his individual capacity, and the equityholder representative party thereto.

Accounting for the UTXO Acquisition

Prior to the Closing Date, we held a call option on the equity interests of BTC Inc, and BTC Inc held a call option on the equity interests of UTXO. Concurrent with the Closing of the BTC Merger, we (through BTC Inc) exercised BTC Inc’s call option on UTXO to complete the UTXO Acquisition. The portion of the acquisition date fair value of our previously held call option on BTC Inc equity interests allocated to the UTXO Acquisition, together with the UTXO Consideration, constitutes the consideration used to measure goodwill in the UTXO Acquisition.

The components of consideration used to measure goodwill are as follows (in thousands):

 SCHEDULE OF GOODWILL

Preliminary Purchase Price Allocation - UTXO

Our preliminary allocation of the acquisition price is based on our preliminary estimate of fair value for each of the acquired assets and liabilities. Such amounts are subject to revision as additional information about fair values of assets and liabilities becomes available. During the three months ended June 30, 2026, we refined the preliminary estimated fair value of certain net assets primarily including an increase of deferred tax liabilities of $7.4 million, an increase of intangible assets of $0.4 million, a decrease in other current assets of $0.2 million, a decrease in cash of $0.1 million, a decrease in accounts payable and other current liabilities of $0.1 million and a decrease in investments of $0.1 million. The offset to these measurement period adjustments was primarily to goodwill, which increased by $7.3 million. We recognized the effect of this measurement period adjustment in the current period and did not revise amounts reported in prior periods. The effect of the adjustment on amortization expense applicable to prior periods was not material. The following table summarizes the preliminary allocation of the fair value of consideration to the assets acquired and liabilities assumed as of the Closing Date (in thousands):

 SCHEDULE OF ESTIMATED FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES

The preliminary fair values and weighted-average useful lives of identifiable intangible assets acquired are as follows (in thousands):

 SCHEDULE OF PRELIMINARY FAIR VALUES INTANGIBLE ASSETS ACQUIRED

The fair value measurements of intangible assets reflect significant unobservable (Level 3) inputs as defined in ASC 820. No residual value has been assigned to these intangible assets and they do not contain material renewal or extension provisions.

Goodwill

We recognized preliminary goodwill of $30.0 million as a result of the UTXO Acquisition. None of the goodwill recognized is expected to be deductible for income tax purposes. All of the goodwill has been assigned to the Asset Management reporting unit.

Revenue and Earnings of UTXO Since the Closing Date

The amounts of revenue and pre-tax net loss of UTXO, included in our condensed consolidated statement of comprehensive loss from the Closing Date for the three and six months ended June 30, 2026, were as follows (in thousands):

 SCHEDULE OF CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS

Acquisition-Related Costs

We incurred acquisition-related costs of $0.0 million and $6.1 million during the three and six months ended June 30, 2026, respectively, related to both the BTC Merger and UTXO Acquisition. The acquisition-related costs consist primarily of advisory, legal, valuation, and due diligence fees, which are included in general and administrative expenses in the condensed consolidated statement of comprehensive loss.

Supplemental Pro Forma Information (Unaudited)

The following unaudited supplemental pro forma information presents our combined results of operations as though the BTC Merger and UTXO Acquisition had occurred on January 1, 2025. The pro forma results reflect adjustments directly attributable to the BTC Merger and UTXO Acquisition that are factually supportable, including additional amortization of acquired intangible assets, reversal of nonrecurring acquisition-related costs and reversal of the portion of the change in fair value of the call option allocated to the BTC Merger and UTXO Acquisition. The pro forma information is not necessarily indicative of results that would have been achieved had the BTC Merger and UTXO Acquisition been completed on January 1, 2025, nor is it indicative of future results (in thousands):

 SCHEDULE OF SUPPLEMENTAL PROFORMA INFORMATION

Pro forma net loss for the six months ended June 30, 2026, was adjusted to exclude (i) $6.1 million of acquisition-related costs incurred during the period, (ii) $107.7 million loss on change in fair value of the call option, and (iii) include intangible asset amortization expense prior to the BTC Inc and UTXO acquisitions of $1.4 million.

Pro forma net loss for the six months ended June 30, 2025, was adjusted to include $4.9 million of amortization expense associated with intangible assets acquired in the BTC Inc and UTXO acquisitions.