Energy Contract

The Company’s current energy services contract with a third party expires in October 2026. Under the terms of the agreement, the Company is committed to pay a minimum of $200,000 monthly for energy used in the previous month. Usage in excess of $200,000 is invoiced to the Company in arrears on a monthly basis. The Company may terminate this agreement prior to its expiration date for an early termination fee of $400,000. The energy services contract does not qualify as a lease under ASC 842 and therefore follows ASC 340-40 “take or pay” type contract. As of June 30, 2026, the Company had no liability recorded related to any early termination provisions.

On May 27, 2026, the Company’s wholly owned subsidiary, One Blockchain, entered into an amended long-term electric service agreement that is scheduled to become effective October 1, 2026 and replace the current arrangement. The amended agreement includes a minimum monthly demand charge of $400,000, of which $200,000 is payable currently and $200,000 is deferred until the Trigger Date described below.

Under the new electric service agreement, the deferred portion of the monthly minimum demand charge accrues without interest until the earlier of (i) the date in which the Company’s wholly owned subsidiary, One Blockchain’s contracted power demand first reaches 40,000 kVA or (ii) December 31, 2027 (the “Trigger Date”). Following the Trigger Date, the full minimum monthly demand charge becomes payable in cash in accordance with the billing provisions of the agreement.

The agreement also requires, the Company’s wholly owned subsidiary, One Blockchain to provide credit support in an amount generally approximating two months of estimated maximum billings. Such credit support may be provided through a cash deposit, surety bond, letter of credit or other form of collateral acceptable to the utility provider and is subject to adjustment based on operating experience and expected usage.

In addition, if the Company’s wholly owned subsidiary, One Blockchain, fails to commence receipt of electric service or the agreement is otherwise terminated prior to expiration of the original term, the Company’s wholly owned subsidiary, One Blockchain may be required to pay an infrastructure early termination fee of $250,000. As security for this obligation, the Company’s wholly owned subsidiary, One Blockchain is required to make a $250,000 prepayment, which will be applied against future electric service billings upon commencement of service. As of June 30, 2026, no liability had been recognized related to this agreement.

Letter of Credit

During 2022, a related party of the Company entered into a stand-by letter of credit (“LOC”) arrangement with its financial institution on behalf of the Company to provide $3,000,000 in funding for the benefit of the third party that the Company has its energy services contract with. In 2025, the LOC was reduced to $2,060,000. The LOC is automatically renewed annually and is secured by a certificate of deposit (“CD”), which also supports the Company’s surety bond obligations. As of the issuance date of these condensed consolidated financial statements, the LOC remains in effect.

A portion of the collateral supporting the letter of credit relates to funds previously advanced by the Company and recorded as a loan receivable from VCV Digital Infrastructure Holdings LLC, as discussed in Note 11 - Related Party Transactions. The loan receivable was used to fund certificate of deposit balances and related credit support arrangements that secure the letter of credit and surety bond obligations. Management believes the existence of this collateral structure provides additional evidence supporting the collectability of the related-party loan receivable balance.

Securities Class Actions

Signing Day Sports, Inc. (“SGN”), a subsidiary of the Company, has been named as one of numerous issuer defendants in three putative securities class actions filed in the Supreme Court of the State of New York, New York County: Patrick Shane Johnson, et al. v. SYLA Technologies Co., Ltd., et al., Index No. 153671/2026, filed on March 24, 2026 (the “Johnson Action”); Leyber Gabriel Briones, et al. v. SYLA Technologies Co., Ltd., et al., Index No. 154747/2026, filed on April 13, 2026 (the “Briones Action”); and Damond Morales, et al. v. SYLA Technologies Co., Ltd., et al., Index No. 159271/2026, filed on July 23, 2026 (the “Morales Action” and, collectively with the Johnson Action and Briones Action, the “Actions”).

The Actions were brought on behalf of putative classes of investors who invested in, or made investments traceable to, the initial public offerings of numerous issuers, including SGN. The complaints generally allege that the issuer defendants and their underwriters violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 by failing to disclose an alleged coordinated pattern of market manipulation involving numerous nano-cap and micro-cap companies. The complaints do not contain specific factual allegations of wrongdoing by SGN. Plaintiffs seek unspecified compensatory damages, rescission or rescissory damages, costs and expenses, and equitable or injunctive relief.

As of the date of this report, SGN has not been served in the Johnson Action or the Briones Action. Plaintiffs in the Morales Action have purportedly served SGN with a summons and complaint, and SGN intends to seek dismissal of the Morales Action as against it. If served in the Johnson Action or Briones Action, SGN intends to vigorously defend against the claims. At this stage, the Company is unable to predict the outcome of the Actions or reasonably estimate the amount or range of potential loss, if any.

Other litigations

The Company is involved, from time to time, in litigation, other legal claims, and proceedings involving matters associated with or incidental to its business, including, among other things, matters involving credit card fraud, trademarks and other intellectual property, licensing, taxation, and employee relations. The Company believes at present that the resolution of currently pending matters will not, individually or in aggregate, have a material adverse effect on its condensed consolidated financial statements. However, the Company’s assessment of any current litigation or other legal claims could potentially change in light of the discovery of facts not presently known or determinations by judges, juries, or other finders of fact that are not in accord with management’s evaluation of the possible liability or outcome of such litigation or claims.

In the normal course of business, the Company may enter into certain guarantees or other agreements that provide general indemnifications. The Company has not made any significant indemnification payments under such agreements in the past and does not currently anticipate incurring any material indemnification payments.