NOTE 8 – STOCKHOLDERS’ EQUITY

Preferred stock

The Company’s authorized preferred stock consists of 5,000,000 shares of preferred stock, with a par value of $0.001 per share. On November 20, 2020, the Company designated 1,000,000 shares of Series A preferred stock. The Series A preferred stock has a liquidation preference to all other securities, a liquidation value of $25 per share, receives cumulative dividends payable in cash of 12% per year, payable monthly. The Series A preferred stock does not have voting rights, except that the Company may not: 1) create any additional class or series of stock, nor any security convertible into stock of the Company; 2) modify the Series A preferred stock designation; 3) initiate and dividend outside of without approval of at least two-thirds of the holders of the Series A preferred stock. The Company has the right, but not obligation to redeem the Series A preferred stock beginning January 1, 2026, at the liquidation value per share plus any unpaid dividends.

During the six months ended June 30, 2026 and 2025, the Company recognized $254,155 and $199,851 in dividends to the Series A preferred stockholders, respectively, and made cash dividend payments of $253,010 and $201,848, respectively. As of June 30, 2026 and December 31, 2025, the Company has remaining unpaid dividends of $122,934 and $121,789, respectively.

As of June 30, 2026 and December 31, 2025, there were 169,460 Series A preferred stock outstanding, respectively.

Common stock

The Company’s authorized common stock consists of 300,000,000 shares of common stock, with a par value of $0.001 per share. All shares of common stock have equal voting rights and, when validly issued and outstanding, are entitled to one non-cumulative vote per share in all matters to be voted upon by shareholders. The shares of common stock have no pre-emptive, subscription, conversion or redemption rights and may be issued only as fully paid and non-assessable shares. Holders of the common stock are entitled to equal ratable rights to dividends and distributions with respect to the common stock, as may be declared by the Board of Directors out of funds legally available. The Company has not declared any dividends on common stock to date.

Equity Purchase Agreement

On April 10, 2026, the Company entered into an Equity Purchase Facility Agreement (the “Purchase Agreement”) with a certain institutional investor (the “Investor”).

Pursuant to the Purchase Agreement, the Company has the right, but not the obligation, to sell to the Investor, from time to time and in the Company’s sole discretion, up to an aggregate of $100 million of newly issued shares of the Company’s common stock, during the term of the Purchase Agreement.

During the period commencing on the date of the Purchase Agreement and expiring upon the date of termination of the Purchase Agreement, and subject to the satisfaction or waiver, on each Advance Notice Date (as defined in the Purchase Agreement), of each of the conditions precedent set forth in the Purchase Agreement, sales of common stock under the Purchase Agreement may be made in one or more advances (each, an “Advance”) initiated by the Company through delivery of a notice (each, an “Advance Notice”) to the Investor. The purchase price per share issued pursuant to any Advance Notice will be determined pursuant to the terms of the Purchase Agreement.

There is no mandatory minimum number of shares that may be sold in any Advance, provided that each requested Advance may not exceed the Maximum Advance Amount (as defined in the Purchase Agreement) and each Advance is subject to certain limitations described in the Purchase Agreement, including, but not limited to, a beneficial ownership limitation prohibiting the Investor and its affiliates from beneficially owning more than 9.99% of the outstanding common stock of the Company at any time.

Pursuant to the Purchase Agreement, and in accordance with the requirements of Nasdaq Listing Rule 5635(d), issuances under the Purchase Agreement are further limited such that the aggregate number of shares issued may not exceed 19.99% of the outstanding common stock of the Company as of the date of the Purchase Agreement, unless the Company has obtained stockholder approval from the requisite number of stockholders of the common stock approving such issuances. Pursuant to the terms of the Purchase Agreement, the Company is required to use its best efforts to solicit its stockholders’ approval of the issuance of all of the shares of common stock issuable pursuant to the Purchase Agreement in compliance with the rules and regulations of Nasdaq.

The Company is not obligated to make sales of common stock under the Purchase Agreement to the Investor and there are no minimum draw requirements, commitment fees (other than described below), or penalties for non-use. The Investor has no right to require the Company to initiate any Advance.

The proceeds from any sales of common stock under the Purchase Agreement must be used by the Company as follows: (i) twenty five percent (25%) to acquire cryptocurrencies to serve as a reserve asset, and (ii) the remaining seventy five percent (75%) for working capital purposes and general corporate purposes, subject to further exceptions described in the Purchase Agreement.

As consideration for the Investor’s commitment to purchase shares of common stock in accordance with the Purchase Agreement, the Company also agreed to pay a commitment fee in an amount equal to 1,000 shares of common stock on the date of the Purchase Agreement. The fair value of the shares in the amount of $30,000 was recorded as deferred offering costs.

The Purchase Agreement also contains customary representations, warranties, covenants, conditions to each Advance, and termination provisions. The term of the Purchase Agreement is 24 months from the date of the Purchase Agreement and may be terminated upon the occurrence of specified events, including the exhaustion of the commitment amount or other customary termination events. Additionally, the Purchase Agreement may be terminated by the Company at any time without penalty.

In connection with the Purchase Agreement, also on April 10, 2026, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Investor, pursuant to which the Company agreed to file and maintain a registration statement (the “Registration Statement”) registering the resale of the shares of common stock issuable pursuant to the Purchase Agreement within thirty (30) calendar days of the date of the Registration Rights Agreement. The Company has agreed to use its best efforts to cause the Registration Statement to be declared effective as soon as practicable, but in no event later than ninety (90) calendar days of the date of the Registration Rights Agreement (subject to certain extensions).

Curvature Securities, LLC (the “Placement Agent”), acted as the placement agent in connection with the transactions contemplated by the Purchase Agreement, for which the Company has agreed to pay a cash fee, payable at each closing, equal to 3.0% of the aggregate gross proceeds raised pursuant to the Purchase Agreement and to reimburse certain expenses of the Placement Agent.

As of June 30, 2026, no sales have been made under the purchase agreement.

Other equity issuances

On April 6, 2026, at a special meeting of stockholders, the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation (the “Charter Amendment”) to increase the number of authorized shares of common stock of the Company from 50,000,000 shares to 300,000,000 shares. On May 8, 2026, the Company filed the Charter Amendment with the Secretary of State of the State of Delaware, and the increase in the number of authorized shares of common stock became effective on that date.

On May 8, 2026, the Company issued 980 shares of common stock for the cashless exercise of 1,800 common stock options at an exercise price of $25.50 per share, previously granted under the Company’s 2020 Equity Incentive Plan.

During the six months ended June 30, 2026, the Company issued 3,072 shares of common stock to ATW Digital Assets XI LLC, the holder of the Senior Secured Notes, in payment of $80,000 in monthly interest instalments due under the Senior Secured Notes.

During the six months ended June 30, 2026, the Company issued an aggregate of 28,146 shares of common stock to the holder of the Senior Secured Notes upon the conversion of $487,500 of principal and $1,169 of fees (see Note 10).

Stock Options

On June 1, 2026, the Company granted 500 stock options with an exercise price of $32.50 per share to a contractor. The options expire on June 1, 2029 and vest in equal monthly instalments over 24 months.

A summary of stock option information is as follows:

The weighted average remaining contractual life is approximately 5.83 years for stock options outstanding with $0 of intrinsic value as of June 30, 2026. The Company recognized stock-based compensation of $15,259 and $26,013 during the three months ended June 30, 2026 and 2025, respectively. The Company recognized stock-based compensation of $30,048 and $298,948 during the six months ended June 30, 2026 and 2025, respectively. The Company has $25,602 additional compensation cost related to options that are expected to vest.

Common Stock Warrants

A summary of stock warrant information is as follows:

The weighted average remaining contractual life is approximately 1.15 years for stock warrants outstanding with no intrinsic value of as of June 30, 2026.