v3.26.1
Business Combinations
 6 Months Ended
Jun. 30, 2026
Business Combinations [Abstract]  
BUSINESS COMBINATIONS

4. BUSINESS COMBINATIONS

 

CS Digital Ventures, LLC

 

On May 26, 2026, the Company acquired 100% of the membership interests of CS Digital Ventures, LLC (“CS Digital”), a provider of digital infrastructure and cryptocurrency mining services, pursuant to a Membership Interest Purchase Agreement dated May 26, 2026 (“MIPA”), as amended on June 16, 2026. The acquisition has been accounted for as a business combination under ASC 805, Business Combinations. The acquisition established the Company’s Crypto Mining reportable segment.

 

The upfront preliminary purchase consideration of $30.0 million consisted of $14.0 million satisfied through the issuance of 140,000 shares of the Company’s Series E Preferred Stock and $16.0 million in unsecured promissory notes. The Company also issued the sellers warrants to purchase 1,500,000 shares of common stock, and agreed to pay contingent consideration of up to $20.0 million in additional shares of Series E Preferred Stock upon the achievement of specified revenue and Adjusted EBITDA milestones.

 

The results of operations of CS Digital are included in the Company’s condensed consolidated financial statements from May 26, 2026 through the end of the period presented. For the period from the acquisition date through June 30, 2026, CS Digital contributed revenue of $1,452,752 and a net loss of $564,104.

 

The following table summarizes the preliminary allocation of the consideration transferred to the assets acquired and liabilities assumed at the acquisition date:

 

    Preliminary  
Cash and cash equivalents   $ 514,751  
Prepaid expenses     35,240  
Cryptocurrency holdings     1,296,413  
Property and equipment     25,983,795  
Co-location hosting security deposits     2,274,534  
Liabilities assumed     (104,733 )
Net identifiable assets acquired     30,000,000  
Preliminary excess of net identifiable assets over consideration transferred     -  
Total preliminary consideration transferred   $ 30,000,000  

 

The purchase price allocation and consideration transferred is preliminary and subject to change as the Company completes its valuation of the assets acquired and liabilities assumed, including property and equipment, intangible assets, the Series E Preferred stock, the warrants and the contingent consideration issued to the sellers at closing. Accordingly, the preliminary excess of net identifiable assets over consideration transferred reflected above is subject to adjustment upon completion of these valuations. The Company expects to finalize the allocation within the measurement period, which will not exceed one year from the acquisition date.

 

Supplemental unaudited pro forma revenue and earnings information presenting the combined results as if the acquisition had occurred as of January 1, 2025, is as follows:

 

    Six Months Ended
June 30,		  
    2026     2025  
Revenues   $ 7,512,560     $ 9,224,677  
                 
Net loss   $ (7,725,367 )   $ (9,645,579 )