NOTE 18 – SUBSEQUENT EVENTS

Stock Grant

Effective July 1, 2026, the Company issued a restricted stock award to its Chief Operating Officer for a total of 200,000 shares of restricted stock with 3-year cliff vesting with an aggregate grant-date fair value of $2,300,000 based on a $11.50 price per share. The share value will be recognized over the 36-month vesting period.

Completion of Divestiture of Duos Technologies, Inc.

On August 5, 2026, the Company completed the previously announced divestiture of its wholly owned subsidiary, Duos Technologies, Inc. ("DTI"), pursuant to a Stock Transfer Agreement effective as of June 30, 2026 (the “Stock Transfer Agreement”) between the Company and Sandbank Acosta, LLC, a Florida limited liability company (the “Purchaser”). The transaction is considered a related party transaction because Adrian Goldfarb, the Company’s Interim CFO is also a 50% owner of the Purchaser. At the closing, the Purchaser acquired all of the issued and outstanding shares of capital stock of DTI, and DTI ceased to be a subsidiary of the Company.

In connection with the transaction: (i) prior to the closing, the Company contributed all outstanding intercompany balances between the Company and DTI to DTI as a capital contribution; (ii) the Company funded cash into DTI’s accounts in an amount equal to a negotiated target cash amount of $3,500,000; and (iii) at the closing, DTI executed and delivered to the Company a promissory note in the principal amount of $5,435,403, bearing simple interest at 5% per annum and payable in full on August 5, 2031, with no penalty for prepayment. This note equals the $3.5 million cash plus the net equity of DTI on the sale date. The note is subject to a contractual right of setoff for certain out-of-pocket costs incurred by DTI to complete the installation and commissioning of rail inspection portals under specified customer contracts in New York and Maryland, solely to the extent such costs exceed the related customer payments received during a defined lookback period.

Also at the closing, the Company and the Purchaser entered into (i) a Transition Services Agreement, under which the Company will provide DTI with human resources, payroll and benefits administration, and accounting coordination support through December 31, 2026 on a cost-reimbursement basis plus a 5% handling fee, and (ii) an Employee Leasing Agreement, under which the Company will remain the employer of record for certain leased employees providing services to DTI through December 31, 2026, with all allocated employment costs reimbursed by the Purchaser. In connection with the closing, the officers and directors of DTI affiliated with the Company resigned from their positions with DTI except that Mr. Goldfarb resigned as President of DTI but remains Chairman of DTI.

The Purchaser is owned 50% by an executive officer of DTI and 50% by an unaffiliated private investor, and the transaction was reviewed and approved by the Company’s Board of Directors. Accordingly, the transaction constitutes a related party transaction.

As a result of the closing, the Company expects to derecognize the carrying amounts of the DTI assets and liabilities classified as held for sale, recognize the note receivable at its estimated fair value, and record the resulting gain or loss on disposal during the third quarter of 2026. The estimated gain or loss on disposal has not yet been finalized. See Note 3 – Discontinued Operations.

The Company is currently evaluating the income tax consequences of the transaction. Based on its preliminary analysis, the divestiture is expected to generate a tax loss that may provide a significant tax benefit and substantially offset the Company's estimated income tax liability for the year ending December 31, 2026. Because the transaction closed subsequent to June 30, 2026, the related tax effects were not recognized in the Company's consolidated financial statements as of and for the three and six months ended June 30, 2026. The Company expects to recognize the tax effects of the transaction during the third quarter of 2026.

Completion of Columbus, Georgia Data Center Purchase

Subsequent to June 30, 2026, the Company completed the purchase of the Columbus, Georgia data center facility described in Note 12 for a purchase price of $30.0 million, consisting of $15.0 million in cash and a $15.0 million two-year seller promissory note bearing interest at 0% per annum, secured by a first-lien security deed on the property and payable in installments as additional power capacity is made available to the property. The facility is being equipped to support the Company’s GPU-as-a-service operations.

Office Lease

Subsequent to June 30, 2026, the Company entered into an office lease as a subtenant of Dark Matter Technologies LLC, a tenant of McKesson Corporation and MG3 Jacksonville Office, LLC. The office is located at 6651 Gate Parkway, Suite 410, Jacksonville, Florida 32256. The lease commenced on July 17, 2026 and expires on July 31, 2029, unless terminated earlier in accordance with the provisions of the sublease. The Company’s total contractual lease payments over the lease term are approximately $1.2 million, payable in monthly installments. The lease will be accounted for in accordance with ASC 842, Leases, including recognition of the applicable right-of-use asset and lease liability upon commencement.