DEBT |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Debt Disclosure [Abstract] | |
| DEBT | NOTE 7 — DEBT
Our outstanding debt as of June 30, 2026, is $164.7 million and consists of a 60.0 million USDT note payable due to Payward Interactive, Inc. (“Kraken”) on December 4, 2026, and a 105.0 million USDT note payable due to Kraken on June 30, 2027.
On January 30, 2026, we entered into the First Amendment to the Master Loan Agreement (“MLA Amendment”), which amends the previous Master Loan Agreement, dated as of December 3, 2025 (the “Master Loan Agreement”) by and between Nakamoto Holdings and Kraken. The MLA Amendment amends the Master Loan Agreement (the “Amended Master Loan Agreement”) to permit the funding of a designated trading wallet maintained at Kraken (the “Trading Wallet”) and to clarify that the Trading Wallet shall serve as collateral for both the obligations under the Master Loan Agreement and obligations (if any) resulting from trading activity conducted through such wallet.
On February 5, 2026, we pledged an additional 688 Bitcoin as collateral under the Master Loan Agreement to satisfy collateral maintenance requirements (see Note 4 — Digital Assets).
On June 5, 2026, Nakamoto Holdings and Kraken executed a loan term sheet (the “Restructured Loan Term Sheet”) under that certain Master Loan Agreement. The Restructured Loan Term Sheet supersedes in its entirety the loan term sheet, dated as of December 9, 2025, by and between Nakamoto Holdings and Kraken (the “December Term Sheet”), and the loans issued under the December Term Sheet were deemed repaid and the outstanding principal balance thereunder was deemed to be transferred to Nakamoto Holdings, without the need for any notice or actual transfer of loaned digital currency. Pursuant to the Restructured Loan Term Sheet, Nakamoto Holdings borrowed a fixed-term loan in a principal amount of 210.0 million USDT (the “Restructured Loan”). The Restructured Loan was scheduled to mature in two tranches: 105.0 million USDT of the outstanding principal amount was to mature on December 4, 2026, and the remaining 105.0 million USDT was to mature on June 30, 2027.
On June 5, 2026, Nakamoto Holdings repaid 45.0 million USDT to reduce the outstanding principal amount of the Restructured Loan from 210.0 million USDT to 165.0 million USDT (the “Partial Repayment”).
To fund the Partial Repayment, Nakamoto Holdings sold approximately 600 Bitcoin for 35.6 million USDT and certain Bitcoin derivative contracts, generating approximately $48.0 million in net proceeds, and applied $45.0 million of those proceeds to the Partial Repayment.
Following the Partial Repayment, Nakamoto Holdings and Kraken entered into a subsequent loan term sheet on June 5, 2026 (the “June Term Sheet”), under the Master Loan Agreement. The June Term Sheet supersedes in its entirety the Restructured Loan Term Sheet, and the loans issued under the Restructured Loan Term Sheet are deemed repaid and the outstanding principal balance thereunder is deemed to be transferred to Nakamoto Holdings pursuant to the June Term Sheet, without the need for any notice or actual transfer of loaned digital currency. Pursuant to the June Term Sheet, Nakamoto Holdings borrowed a fixed-term loan in a principal amount of 165.0 million USDT (the “June Loan”), which reflects the reduced principal balance of the Restructured Loan following the Partial Repayment. The June Loan matures in two tranches: 60.0 million USDT of the outstanding principal amount matures on December 4, 2026, and the remaining 105.0 million USDT matures on June 30, 2027.
The June Loan bears a loan fee of (i) 7.75% per annum during any period in which Nakamoto Holdings holds at least 2,000 Bitcoin in a designated Bitcoin yield strategy collateral account (the “Trading Wallet”), and (ii) 8.00% per annum during any period in which Nakamoto Holdings holds less than 2,000 Bitcoin in the Trading Wallet. The June Loan is secured solely by Bitcoin pledged by Nakamoto Holdings to Kraken and the initial collateral required to secure the June Loan was 3,805 Bitcoin. Nakamoto Holdings has the right to paydown the June Loan, in whole or in part, upon 30 days’ prior written notice to Kraken, with no early return penalty.
We evaluated the June 5, 2026, transactions under ASC 470-50 and ASC 470-60 and concluded that they are considered a debt modification. We accounted for the 45.0 million USDT repayment as a partial extinguishment of the Restructured Loan, with no gain or loss recognized.
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