Note 7 – United Dogecoin Merger Agreement

On April 30, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Shuttle Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company organized for the purpose of effecting the merger, and United Dogecoin. Upon the closing of the merger on May 6, 2026, Shuttle Merger Sub, Inc. merged with and into United Dogecoin, with United Dogecoin surviving the Merger. As a result of the Merger, United Dogecoin became wholly-owned by the Company.

Merger Consideration

In connection with the Merger Agreement, the Company issued 8,403 shares of newly designated Series B-1 Convertible Preferred Stock, par value $0.00001 per share, to the shareholders of United Dogecoin, in exchange for 100% of their outstanding equity interests. The Series B-1 Convertible Preferred Stock is convertible into shares of the Company’s common stock only following receipt of stockholder approval, subject to the terms of the Series B-1 Convertible Preferred Stock, including applicable conversion limitations and beneficial ownership limitations. Further, the Series B-1 Convertible Preferred Stock is a non-voting security prior to its conversion into the Company’s common stock.

Subject to receipt of stockholder approval, each share of Series B-1 Convertible Preferred Stock is convertible into 403.3 shares of the Company’s common stock, par value $0.00001 per share, at an initial conversion price of $12.40 per share, subject to adjustment. The Series B-1 Convertible Preferred Stock is also subject to a beneficial ownership limitation of 4.99%, which may be increased up to 19.99% at the election of the holder.

In addition, holders of United Dogecoin common stock may be entitled to receive up to 12,292,753 2026 Pre-Funded Warrants exercisable for an equivalent number of shares of the Company’s common stock. The 2026 Pre-Funded Warrants are issuable in equal installments only upon the receipt of the required stockholder approval and achievement of one or more of the Milestone Events (as defined in Note 8, subject to Note 12).

On August 31, 2026, one of the Milestone Events was amended to reduce the number of Mining Rigs required for issuance of 2026 Pre-Funded Warrants under the Merger Agreement (see Note 12).

Accounting for the Merger

As the Series B-1 Convertible Preferred Stock is non-voting prior to its conversion, and its conversion is predicated on the receipt of the required stockholder approval, the former shareholders of United Dogecoin do not obtain any voting interests in the Company upon the completion of the Merger, and until such time that the Series B-1 Convertible Preferred Stock converts into the Company’s common stock. Further, the terms of the Merger Agreement provide for contractual restrictions on the ability of the Company or its board of directors to exercise operational authority or control over any of the key operating activities of United Dogecoin, such as access and control of United Dogecoin bank accounts, authority for the approval or disapproval of United Dogecoin expenditures, obligations and other commitments of funds, the authorization of any hiring, termination or compensation decisions and the receipt, use and disbursement of any and all funds or other assets of United Dogecoin, until the required stockholder approval is obtained.

Given the non-voting nature of the Series B-1 Convertible Preferred Stock prior to conversion to the Company’s common stock and the contractual restrictions on the ability of the Company to exercise any operational authority or control over United Dogecoin, the Company concluded that there was no transfer or change of control that occurred upon the closing of the Merger, and such transfer or change of control would be deferred until the receipt of approval by the Company’s stockholders, after which the Series B-1 Preferred Stock would automatically convert to the Company’s common stock and provide the holders of United Dogecoin with a majority interest in the voting stock of the Company. As of June 30, 2026, such stockholder approval had not been obtained. Accordingly, the Company concluded that it did not obtain control of United Dogecoin as of June 30, 2026, and the transaction did not qualify as a completed business combination or acquisition for accounting purposes as of that date.

The Company also concluded that United Dogecoin was a variable interest entity, but the Company was not the primary beneficiary, therefore they were not required to consolidate, nor were they required to be accounted for as an equity method investment under ASC 323, Investments—Equity Method and Joint Ventures, due to the lack of ability to exercise significant influence over United Dogecoin. As a result, the Company has accounted for its interest in United Dogecoin as an investment in equity securities and initially recorded at cost as of the closing of the Merger. The Company viewed the completion of the Merger and the PIPE financing as a single, integrated financing transaction. In connection with this transaction, The Company recognized the Series B-1 Convertible Preferred Stock and 2026 Pre-Funded Warrants at fair value, resulting in an allocation of $2,064,730 to the Series B-1 Preferred Stock and $7,477,157 million to the 2026 Pre-Funded Warrants. The aggregate fair value of $9,541,887 was recorded as the initial cost basis of the Investment in United Dogecoin, with a corresponding increase to additional paid-in capital. Additionally during the three months ended June 30, 2026, the Company recognized an additional $3.9 million investment in United Dogecoin, measured at cost, for PIPE proceeds provided to UD, which are not expected to be repaid to the Company. to support UD’s operations.

The balance of Investment in United Dogecoin as of June 30, 2026 consists of the following:

Schedule balance of Investment in United Dogecoin

The Company has elected to subsequently measure the investment in United Dogecoin using the measurement alternative for investments in equity securities without readily determinable fair values. As of June 30, 2026, there were no identified revaluation events and no indicators of impairment identified. The Company will continue to evaluate the investment for impairment and will reassess the accounting treatment in future periods upon the occurrence of additional events, including receipt of the required stockholder approval or other changes in facts and circumstances that may result in the Company obtaining control of United Dogecoin.

Financial Advisor Fee

In connection with the Merger Agreement, the Company issued to E.F. Hutton & Co. 750 shares of Series B-1 Convertible Preferred Stock, each of which are convertible into 403.3 shares of the Company’s common stock at an initial conversion price of $12.40 per share, subject to adjustment and applicable beneficial ownership limitations. The Company also agreed to issue 2026 Pre-Funded Warrants exercisable for an aggregate of 1,475,482 2026 Pre-Funded Warrants exercisable for an equivalent number of shares of the Company’s common stock. The 2026 Pre-Funded Warrants are issuable only upon the receipt of the required stockholder approval, and are exercisable upon the achievement of three specified milestone events, each corresponding to one-third of the total 2026 Pre-Funded Warrants that may be issuable (see Note 8). The Company recognized the fair value of the Series B-1 Convertible Preferred Stock and 2026 Pre-Funded Warrants, totaling $857,390, within general and administrative expenses, with a corresponding increase to additional paid-in capital.

Due to United Dogecoin

Certain operating expenses of the Company, including legal, professional, and rent expenses, were paid directly by United Dogecoin, which is presented as Due to United Dogecoin on the consolidated balance sheets.