15. Fair Value Measurements and Financial Risk Management

The Company’s financial instruments include cash, accounts receivable, equity, and debt securities, investments, warrant assets, a warrant derivative liability, accounts payable and accrued liabilities, short-term debt, including convertible debt measured under the fair value option, and the license contract liability. The Company recognizes and measures these instruments under the applicable U.S. GAAP guidance and evaluates its exposure to credit, liquidity, market-price and valuation, interest-rate, foreign-currency and concentration risks. Digital assets are not financial instruments under U.S. GAAP, however, the Company’s investment in the 21Shares Dogecoin ETF (“TDOG”) creates indirect exposure to Dogecoin market prices.

Fair value measurements

Fair value measurements are classified within a three-level hierarchy. Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 inputs are observable inputs other than Level 1 quoted prices; and Level 3 inputs are significant unobservable inputs. Classification is based on the lowest-level input that is significant to the measurement in its entirety. The Company recognizes transfers between levels of the fair value hierarchy at the beginning of the reporting period in which the transfer occurs. There were no transfers between levels during the three months ended June 30, 2026.

The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2026 and March 31, 2026. Instruments carried under the measurement alternative; the equity method or amortized cost are excluded. Detailed Level 3 reconciliations, valuation techniques, significant unobservable inputs and sensitivity information are presented in Note 7 - Investments, Note 9 - Yorkville Warrant, Note 10 - Short-Term Debt and Note 11 - Capital Stock. See Note 8 - Intangible Assets and License Contract Liability for the measurement and contractual terms of the license contract liability.

As of June 30, 2026

As of March 31, 2026

Quoted market prices were used to measure the TDOG and CleanCore common shares at June 30, 2026 and the DataCentrex and CleanCore common shares at March 31, 2026. The Company sold its entire DataCentrex position during the three months ended June 30, 2026. See Note 7 - Investments for the related realized loss and the accounting for each investment.

Level 3 measurements and related disclosures

The following table presents changes in the McQueen convertible debentures, the Company’s recurring Level 3 investment assets for the three months ended June 30, 2026. Detailed instrument-level valuation techniques, significant unobservable inputs and sensitivity information are presented in Note 7 - Investments. The corresponding disclosures for convertible debt measured under the fair value option are presented in Note10 - Short-Term Debt, and those for the Yorkville warrant derivative liability are presented in Note 09 - Yorkville Warrant.

During the three months ended June 30, 2026, the fair value of the McQueen convertible debentures decreased by $771, which was recognized in other comprehensive income. The Series F preferred shares received in connection with maturity extensions were accounted for separately from the debentures under the ASC 321 measurement alternative and therefore did not affect the debentures’ carrying amount or the recurring Level 3 roll-forward. CleanCore warrants are classified within Level 2 and are excluded from the Level 3 rollforward. See Note 7 - Investments.

Management selects valuation techniques that maximize the use of observable inputs, evaluates significant assumptions from the market participants perspective and reviews valuation changes from period to period.

Level 3 fair value measurements are sensitive to changes in significant unobservable inputs. Changes in discount rates, expected volatility, underlying equity values, expected conversion timing and scenario assumptions could materially affect the reported fair values and the amounts recognized in earnings or other comprehensive income. See Notes 7, 9, 10 and 11 for instrument-specific valuation methods, inputs, sensitivity information and Level 3 reconciliations. The Yorkville convertible note, senior secured convertible notes and Yorkville warrant derivative liability were first recognized on June 30, 2026 in connection with the merger, therefore, no post-recognition change in fair value was recognized through that date.

Financial liabilities measured under the fair value option

The Company elected the fair value option under ASC 825 for the Yorkville and senior secured convertible notes. The entire instruments are measured at fair value, with changes generally recognized in earnings and the portion attributable to instrument-specific credit risk recognized in other comprehensive income. See Note 10 - Short-Term Debt for the fair values and unpaid principal balances by instrument, the Level 3 roll- forward, valuation techniques, significant unobservable inputs, sensitivity information, contractual terms, collateral and maturities.

Nonrecurring measurements and instruments not measured at fair value

The Company’s LBK Triestina Holdings LLC equity-method investment is measured at fair value on a non-recurring basis when an impairment is recognized. See Note 7 - Investments for the investment roll- forward, impairment losses, fair value classification, valuation methodology, significant assumptions and related legal and restructuring considerations as of June 30, 2026 and March 31, 2026.

Stay Inc. and the McQueen Series F preferred shares are accounted for under the ASC 321 measurement alternative and are not included in the recurring fair value hierarchy. The carrying amounts of the McQueen Series F preferred shares were $265,679 and $235,024 at June 30, 2026 and March 31, 2026, respectively. See Note 7 - Investments for the carrying amounts, observable-price-change assessments and impairment evaluations of these investments.

The carrying amounts of cash, accounts receivable, accounts payable and accrued liabilities and conventional short-term debt approximate fair value because of their short maturities. Convertible debt for which the fair value option was elected is included in the recurring fair value tables above and is discussed in Note 10 - Short-Term Debt. The license contract liability is measured at amortized cost using the effective-interest method; and is not included in the recurring fair value tables. Its carrying amount was $6,397,911 at June 30, 2026 and $6,715,438 at March 31, 2026. If measured at fair value, the measurement would be categorized within Level 3 because the applicable discount rate is not observable. See Note 8 - Intangible Assets and License Contract Liability for the liability roll forward, contractual payment schedule, discount rate and presentation.

Financial risk management

The Company’s activities expose it to several financial risks. Management monitors these risks through cash-flow forecasting, counterparty and investment review, aging and collection procedures, periodic valuation processes and review of contractual obligations. The Company did not use foreign exchange, interest-rate or other hedging derivatives during the three months ended June 30, 2026 or the fiscal year ended March 31, 2026.

Credit risk

Credit risk is the risk of financial loss if a counterparty or issuer fails to meet its contractual obligations. The Company’s principal credit exposures arise from cash, accounts receivable, the McQueen convertible debentures and amounts held through brokerage arrangements. The Company maintains cash with commercial banks and third-party digital-asset service providers. Cash balances maintained with banks may exceed applicable deposit-insurance limits, while amounts maintained through digital-asset service providers are subject to additional counterparty, operational and access risks. The Company monitors the creditworthiness and financial condition of significant counterparties. At June 30, 2026 and March 31, 2026, cash was $662,499 and $2,836,291, respectively. The Company has not experienced losses on its cash deposits.

The Company manages receivable credit risk through customer credit review, contractual payment terms, aging analysis and collection monitoring. Accounts receivable were $64,657 at June 30, 2026 and $129,268 at March 31, 2026. Amounts due from 21Shares represented approximately 67.5% and 83.7% of those balances, respectively. No allowance for expected credit losses was recorded at either date. Available-for-sale debt securities are evaluated for credit losses when fair value is below amortized cost; no credit-loss allowance was recorded for the McQueen debentures at June 30, 2026 or March 31, 2026. The TDOG shares are held in a brokerage account and pledged as collateral for the margin loan, creating exposure to the broker and custodian in addition to market-price risk. See Notes 5, 7 and 10.

Market-price and valuation risk

Market-price and valuation risk is the risk that changes in quoted equity prices, Dogecoin prices, volatility, credit conditions, expected cash flows or other valuation assumptions will affect the Company’s financial results or the carrying amount of its investments and derivative liabilities. The objective of market risk management is to monitor and manage exposures within the Company’s risk tolerance while considering liquidity needs and strategic objectives.

Total investments were $24.8 million at June 30, 2026 and $10.6 million at March 31, 2026. CleanCore common shares and warrants represented approximately $20.6 million, or 82.8 %, of total investments at June 30, 2026, compared with approximately $7.1 million, or 67.3 %, at March 31, 2026. During the three months ended June 30, 2026, the Company recognized a net fair value gain on investments of $9,815,357 in earnings and an unrealized loss of $771 on the McQueen available-for-sale debentures in other comprehensive income. Level 3 measurements are sensitive to expected volatility, discount rates, equity values, scenario probabilities, conversion outcomes and discounts for lack of marketability. Changes in those inputs or in public-equity prices could materially affect earnings, other comprehensive income and liquidity. See Note 7.

Interest-rate and debt risk

Interest-rate risk is the risk that changes in market interest rates will affect future cash flows or fair values. The Company’s conventional short-term borrowings and license obligation are fixed-rate or short-term obligations, limiting direct cash-flow exposure to changes in market rates. Changes in market discount rates may nevertheless affect the fair values of the McQueen investments, CleanCore warrants, Yorkville warrant derivative liability, convertible debt measured under the fair value option and the license contract liability. The Company did not enter into interest-rate hedging contracts during the periods presented.

At June 30, 2026, short-term debt was $5,722,927, including $4,412,741 of convertible debt measured under the fair value option, and related-party debt $629, 802, compared with short-term debt of $9,324,031 and related-party debt of $55,456 at March 31, 2026. The license contract liability was $6,397,911 and $6,715,438 at those dates, respectively. The TDOG margin loan had a carrying amount of $680,384 at June 30, 2026 and was collateralized by TDOG shares with a fair value of $1,132,997. See Notes 7, 10 and 14.

Foreign-currency risk

Foreign-currency risk is the risk that the value of monetary assets and liabilities or future cash flows will fluctuate because of changes in exchange rates. The Company enters into certain transactions denominated in currencies other than its U.S. dollar functional currency, including European operating, investment and vendor transactions. Foreign-currency monetary balances were not significant at June 30, 2026 or March 31, 2026. The Company recognized a foreign-exchange loss of $4,693 during the three months ended June 30, 2026 and does not currently use foreign-exchange contracts to hedge this exposure.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty meeting obligations as they become due. At June 30, 2026, the Company had cash of $662,499, current assets of $3,518,356 and current liabilities of $19,872,010, resulting in a working-capital deficit of $16,353,654. At March 31, 2026, cash was $2,836,291 and the working-capital deficit was $7,279,076. Current liabilities at June 30, 2026 included accounts payable and accrued liabilities of $8,911,809, the current portion of the license contract liability of $2,400,000, the warrant derivative liability of $2,837,274, short-term debt of $5,093,125 and related-party debt of $629,802.

Management manages liquidity through rolling cash-flow forecasts, monitoring debt and contractual maturities, collecting receivables, managing discretionary expenditures, evaluating selective monetization of investments and seeking additional debt or equity financing. The Company’s ability to meet its obligations depends on available cash, the timing of collections, the liquidity and realizable value of investments, compliance with financing conditions and access to additional capital. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. See Note 3 - Going Concern and Notes 8 and 10 for the license and debt maturities, management plans and subsequent financing actions.

Digital-asset price risk

Digital assets are not financial instruments under U.S. GAAP; however, the Company is exposed to digital-asset price risk through its TDOG investment. TDOG’s objective is to track the performance of Dogecoin, net of the trust’s expenses and liabilities. At June 30, 2026, the TDOG investment had a fair value of $1,132,997 and was pledged as collateral for the $680,384 margin loan. Accordingly, Dogecoin price declines could reduce the investment’s fair value, increase collateral-related liquidity requirements and result in losses. The Company held no directly owned digital assets at June 30, 2026 or March 31, 2026. See Notes 2, 7 and 10.

Concentration risk

The Company’s revenue, receivables and investment portfolio are concentrated among a limited number of counterparties and issuers. Substantially all revenue for the three months ended June 30, 2026 was earned from 21Shares; approximately 67.5% of accounts receivable at June 30, 2026 was due from 21Shares; and approximately 82.8 % of total investments related to CleanCore. At March 31, 2026, approximately 83.7% of accounts receivable was due from 21Shares and approximately 67.3 % of total investments related to CleanCore.

The Company’s operations and commercial strategy are substantially focused on the Dogecoin ecosystem, including Dogecoin-related products, licensed intellectual property, strategic partnerships and other commercialization initiatives. As a result, the Company is exposed to concentration risk associated with changes in the adoption, market acceptance, liquidity, regulatory treatment and functionality of Dogecoin. Adverse developments affecting Dogecoin or the broader Dogecoin ecosystem could adversely affect the Company’s revenues, investments, commercialization activities and results of operations. The Company held no directly owned Dogecoin as of June 30, 2026.

The Company also utilizes a limited number of third-party digital-asset trading, custody and service providers, including Bitstamp and BitGo. Amounts maintained with, or services provided by, digital-asset trading and custody providers are subject to counterparty, custody, cybersecurity, operational, regulatory and access risks. A disruption, insolvency, regulatory restriction or other failure affecting a significant service provider could impair or delay the Company’s ability to access funds or digital assets or execute transactions and materially affect the Company’s financial position, results of operations and liquidity.

The Company manages these concentrations through monitoring of significant counterparties and service providers, access and authorization controls, periodic reconciliation of accounts and digital-asset holdings and, where practicable, diversification of service providers. These measures do not eliminate the risks associated with the Company’s concentration in the Dogecoin ecosystem or its reliance on significant counterparties and digital-asset service providers.