NOTE 4 – DIGITAL ASSETS

The Company’s digital assets are comprised solely of BTC. In accordance with ASC Topic 820, Fair Value Measurement, the Company measures the fair value of its BTC based on the quoted price at 4:00pm EST on the measurement date for a single BTC on an active trading platform, Coinbase. Management has determined that Coinbase, an active exchange market, represents the Company’s principal market for BTC and at 4:00pm EST, the price is both readily available and representative of fair value (Level 1 inputs). As of June 30, 2026, the Company held 1,091.69 BTC at Coinbase with a cost basis of $109,801,107, and a fair value of $63,922,870, of which 565 BTC with a fair value of $33,083,010 were pledged as collateral under the Company’s loan agreement with Coinbase and are presented as digital assets, pledged as collateral, on the condensed consolidated balance sheet. As of December 31, 2025, the Company held 1,074.21 BTC at Coinbase with a cost basis of $108,514,113, and a fair value of $93,995,256.

The following table presents the roll forward of activity related to the Company’s digital assets for the six months ended June 30, 2026:

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During the three months ended June 30, 2026, the Company did not purchase BTC. During the three months ended June 30, 2025, the Company purchased 244.36 BTC at an average cost of $103,949 per BTC, inclusive of fees and expenses, for an aggregate cost of $25,400,657. During the three months ended June 30, 2026 and 2025, 8.44 and 11.25 BTC have been earned from mining operations, at an average value of approximately $71,821 and $99,428 per BTC, respectively. During the three months ended June 30, 2026 and 2025, the Company recognized mining revenue of $605,982 and $1,118,569, respectively, and received BTC with an aggregate fair value of $8,373 and $320,526, respectively, from the lessors as compensation for machine downtime, which is used to offset lease costs.

During the six months ended June 30, 2026, the Company did not purchase BTC. During the six months ended June 30, 2025, the Company purchased 693.81 BTC at an average cost of $100,748 per BTC, inclusive of fees and expenses, for an aggregate cost of $69,900,009. During the six months ended June 30, 2026 and 2025, 17.23 and 14.22 BTC have been earned from mining operations, at an average value of approximately $73,594 and $96,225 per BTC, respectively. During the six months ended June 30, 2026 and 2025, the Company recognized mining revenue of $1,268,293 and $1,368,323, respectively, and received BTC with an aggregate fair value of $18,701 and $320,526 from the lessors as compensation for machine downtime, which is used to offset lease costs.

During the three months ended June 30, 2026, the Board of Directors approved management’s decision that the Company’s BTC holdings would be available to fund operations, and accordingly, all digital assets were reclassified into current assets as of June 30, 2026.

Loan Agreement

On March 27, 2026, the Company borrowed $5 million (the “Second Drawdown”) against its $20 million credit facility with Coinbase. The Second Drawdown bears a 7% loan fee, and the Company segregated 125 BTC as collateral against this loan.

On May 13, 2026, the Company borrowed an additional $15 million (the “Third Drawdown”) against the $20 million credit facility with Coinbase. The Third Drawdown bears a 7% loan fee rate per annum, paid monthly, with no scheduled maturity date. During the three months ended June 30, 2026, the Company segregated an additional 440 BTC as collateral, bringing the total BTC pledged as collateral under the credit facility to 565 BTC. The Second and Third Drawdown are subject to the terms and conditions of the Master Loan Agreement.

As of June 30, 2026, the full $20 million of principal was outstanding and the Company incurred interest expense in the amount of $228,219 and $233,013 for the three and six months ended June 30, 2026. See Note 13 – Subsequent Events for details related to subsequent repayment of the loan.