NOTE 6 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

On the Closing Date, the Company acquired approximately 9,800 cryptocurrency mining machines from BSG Series CM LLC in the asset exchange described in Note 4. The mining equipment was recorded at the Transferor’s carrying amount as of the date of transfer, determined in accordance with U.S. GAAP, which represents its cost basis for purposes of subsequent depreciation. Depreciation commences when the assets are placed in service and is computed on a straight-line basis over the estimated useful lives of the assets, which the Company has determined to be two years for mining equipment.

The determination of the useful life of computing equipment requires assumptions about a range of computing industry market and economic factors, including required hashrates, technological changes, the availability of hardware and other inputs, and production costs. The Company reassesses the estimated useful lives of its mining equipment when indicators suggest that the productive life of the assets is longer or shorter than previously estimated.

For the three and six months ended June 30, 2026, depreciation expense was $1,157,509, which is included in cost of revenue in the condensed consolidated statements of operations. The Company held no property and equipment as of December 31, 2025.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment exists when the carrying value of an asset exceeds the related estimated undiscounted future cash flows expected to be derived from the asset, in which case the carrying value is adjusted to fair value. During the three months ended June 30, 2026, the Company identified a triggering event with respect to its mining equipment asset group, resulting from the temporary curtailment of mining operations in response to unfavorable cryptocurrency market conditions. In accordance with ASC 360-10-35, the Company first performed a recoverability test comparing the carrying value of the asset group to the sum of estimated future undiscounted cash flows. The Company then measured the fair value of the asset group using secondary market pricing data for comparable mining equipment. Because the estimated fair value exceeded the carrying value, no impairment loss was recognized for the period