What changed in this filing

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Item 1. Financial Statements

2026-05-14 compared with 2025-11-13 · 1296 added, 1183 removed, 411 unchanged (86% of the section changed)

1 unchanged sentence

Balance Sheets

September 30,

March 31, 2026

December 31, 2025

Current assets:

Cash and cash equivalents

Crypto assets - treasury

Crypto assets - DeFi

Crypto assets - staked

Non-fungible tokens

Digital assets - treasury

Digital assets - DeFi

Digital assets - staked

Digital assets – liquidity pool positions

Digital assets – non-fungible tokens

Prepaid expenses

Total current assets

Other assets:

Investments, at value (Cost $ 500,000 )

Investments (Cost $ 600,000 )

Property and equipment, net

Total other assets

$ 129,025,504

$ 214,631,822

Liabilities and Stockholders’ Equity:

4 unchanged sentences

Loans payable - DeFi protocol

Dividends payable

Warrant liabilities

Total current liabilities

Non-current liabilities:

Convertible notes payable, net

Total non-current liabilities

Total liabilities

Commitments and contingencies (Note 11)

Stockholders’ equity:

2 unchanged sentences

Series V Preferred Stock;

15,671,405 and 15,033,231 shares issued and

outstanding as of September 30, 2025 and December 31, 2024, respectively

15,671,405 and 15,671,405 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Preferred stock value

Common Stock, $ 0.001 par value per share;

975,000,000 shares authorized;

47,075,189 and 18,717,743

shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

49,775,371 and 46,852,737 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital

5 unchanged sentences

$ 129,025,504

$ 214,631,822

accompanying notes are an integral part of these unaudited condensed financial statements.

1 unchanged sentence

For the Three Months Ended

For the Nine Months Ended

Blockchain infrastructure revenues

7 unchanged sentences

General and administrative

Compensation and related expenses

Research and development

Realized (gains) losses on crypto asset transactions

Loss on extinguishment of debt

Compensation and related expenses

Impairment loss on intangible digital assets

Realized losses on digital asset transactions

Unrealized loss on digital assets

Total operating expenses

Other income (expenses):

Interest income

Interest expense

( 1,547,859 )

( 1,718,423 )

Change in unrealized appreciation (depreciation) of

crypto assets

( 7,396,380 )

Change in fair value of warrant liabilities

1 unchanged sentence

( 1,547,859 )

Net income (loss)

$ ( 69,164,319 )

$ ( 17,268,697 )

Net income (loss) per share attributable to common stockholders

Weighted-average shares of common stock used to compute net income per

Basic net loss per share attributable to common stockholders

Diluted net loss per share attributable to common stockholders

Basic weighted average number of common shares outstanding

Diluted weighted average number of common shares outstanding, basic and diluted

accompanying notes are an integral part of these unaudited condensed financial statements.

Statements of Changes in Stockholders’ Equity

the Nine Months Ended September 30, 2025

the Three Months Ended March 31, 2026

Preferred Stock

Stockholders’

3 unchanged sentences

$ ( 173,301,710 )

Issuance of common stock, net of offering cost / At-the-market offering

Issuance of warrants in connection with convertible note

Issuance of common stock upon exercise of warrants

Issuance of common stock upon exercise of options

Stock-based compensation

Shares repurchased

$ 139,416,779

( 3,000,000 )

Forfeiture of stock-based awards

Dividends declared

( 2,392,351 )

( 3,175,921 )

Net income (loss)

Balance at September 30, 2025

15,671,405 (1)

47,075,189 (2)

$ 311,128,354

$ ( 87,746,633

$ 225,404,497

322,580 restricted shares of Series V Preferred Stock held by employees that remain subject to forfeiture based on time-based and

market cap target vesting conditions.

See Note 6 – Stockholders’ Equity (Deficit) for further details.

565,080 restricted shares of Common Stock held by employees that remain subject to forfeiture based on time-based and market cap

target vesting conditions.

See Note 6 – Stockholders’ Equity (Deficit) for further details.

the Nine Months Ended September 30, 2024

Stockholders’

Balance December 31, 2023

$ 162,263,634

$ ( 138,677,103 )

Issuance of common stock, net of offering cost / At-the-market offering

Stock-based compensation

Net income (loss)

( 3,511,070 )

Balance September 30, 2024

$ 164,803,541

$ ( 142,188,173 )

the Three Months Ended September 30, 2025

Stockholders’

Balance at June 30, 2025

16,004,738 (1)

$ 181,565,367

$ ( 153,335,442 )

Issuance of common stock, net of offering cost / At-the-market offering

Issuance of warrants in connection with convertible note

Issuance of common stock upon exercise of warrants

Issuance of common stock upon exercise of options

Stock-based compensation

Shares repurchased

( 2,999,348 )

( 3,000,000 )

Forfeiture of stock-based awards

Dividends declared

( 2,392,351 )

Dividends paid

( 69,164,319 )

Net income (loss)

Balance at September 30, 2025

( 69,164,319 )

Balance at March 31, 2026

15,671,405 (1)

2 unchanged sentences

$ ( 242,466,029 )

322,580 restricted shares of Series V Preferred Stock held by employees that remain subject to forfeiture based on time-based and

market cap target vesting conditions.

See Note 6 – Stockholders’ Equity (Deficit) for further details.

565,080 restricted shares of Common Stock held by employees that remain subject to forfeiture based on time-based and market cap

target vesting conditions.

See Note 6 – Stockholders’ Equity (Deficit) for further details.

the Three Months Ended September 30, 2024

Includes 278,375 restricted shares of Series V Preferred Stock held

by employees that remain subject to forfeiture based on time-based vesting conditions.

See Note 9 – Stockholders’ Equity (Deficit)

for further details.

Includes 3,069,272 restricted shares of Common Stock held by employees

that remain subject to forfeiture based on time-based vesting conditions.

See Note 9 – Stockholders’ Equity (Deficit) for

further details.

the Three Months Ended March 31, 2025

Preferred Stock

Stockholders’

Balance June 30, 2024

Balance at December 31, 2024

15,033,231 (1)

4 unchanged sentences

Stock-based compensation

Net income (loss)

Forfeiture of stock-based awards

( 17,268,697 )

Balance September 30, 2024

Balance at March 31, 2025

16,004,738 (1)

2 unchanged sentences

$ ( 157,216,974 )

accompanying notes are an integral part of these unaudited condensed financial statements.

Includes 1,069,801 restricted shares of Series V Preferred Stock held

by employees that remain subject to forfeiture based on time-based vesting conditions.

See Note 9 – Stockholders’ Equity (Deficit)

for further details.

Includes 1,312,301 restricted shares of Common Stock held by employees

that remain subject to forfeiture based on time-based vesting conditions.

See Note 9 – Stockholders’ Equity (Deficit) for

further details.

Statements of Cash Flows

For the Nine Months Ended

Net cash flows used in operating activities:

Net income (loss)

For the Three Months Ended

Cash flows from operating activities:

$ ( 69,164,319 )

Adjustments to reconcile net income to net cash used in operating activities:

$ ( 17,268,697 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation expense

3 unchanged sentences

( 1,688,935 )

Builder payments (non-cash)

Blockchain network fees (non-cash)

( 1,012,026 )

Blockchain-based payments settled in digital assets

DeFi interest expense settled in digital assets

Blockchain network fees

Change in fair value of warrant liabilities

Purchase of non-productive crypto assets

Amortization on debt discount and issuance costs

Realized losses on crypto assets transactions

Change in unrealized (appreciation) depreciation of

crypto assets

( 67,987,220 )

Realized losses on digital asset transactions

Unrealized loss on digital assets

Impairment loss on intangible digital assets

Changes in operating assets and liabilities:

Intangible digital assets

Prepaid expenses and other current assets

Receivable for capital shares sold

Accounts payable and accrued expenses

6 unchanged sentences

Cash flows from investing activities:

Purchase of productive crypto assets for validating

( 199,858,288 )

Sale of productive crypto assets

Purchase of productive digital assets for validating

Sale of productive digital assets

Purchase of investments

2 unchanged sentences

Net cash provided by (used in) investing activities

( 196,833,133 )

Cash flow from financing activities:

Net proceeds from issuance common stock/ At-the-market

Payments for shares repurchased

( 3,000,000 )

Proceeds from issuance of convertible notes, net

Net proceeds from issuance common stock/ At-the-market offering

Proceeds from DeFi borrowing

Payments to Defi borrowing

Payments on DeFi borrowing

( 18,221,577 )

Payments of debt issuance costs

Net cash provided by financing

Net (decrease)/increase in cash

Net cash (used in) provided by financing activities

( 17,721,577 )

Net decrease in cash

( 1,241,764 )

( 1,707,849 )

Cash, beginning of period

Cash, end of period

Supplemental disclosure of non-cash investing and financing

Series V Preferred Stock Distribution

Supplemental disclosure of cash flow information:

Cash paid for interest

Non-cash discount on convertible notes

Extinguishment of USDT-denominated debt via on-chain

Issuance of GHO-denominated debt via on-chain protocol

Supplemental disclosure of non-cash investing, financing and other activities:

Series V Preferred Stock Distribution

Dividends distributions paid in ETH

DeFi borrowing activity

USDT received against ETH collateral from new DeFi borrowing

ETH swapped to USDT in settlement of DeFi borrowing principal

ETH swapped to USDT in settlement of accrued DeFi interest

Liquidity pool activity:

ETH swapped into stablecoins for liquidity pool deployment

Deployments of digital assets into liquidity pool positions

( 12,555,020 )

Issuance of common stock upon non-cash exercise of warrants and stock options

Withdrawals of digital assets from liquidity pool positions

accompanying notes are an integral part of these unaudited condensed financial statements.

2 unchanged sentences

(“BTCS” or the “Company”), short for Blockchain Technology Consensus Solutions, is a Nevada corporation

listed on Nasdaq and headquartered in the United States.

The Company is an Ethereum-first blockchain technology business focused on scalable

revenue generation and ETH (the Ethereum network’s native token) accumulation through its blockchain-based infrastructure and decentralized

finance (“DeFi”) operations.

operations comprise three primary business lines:

Node Operations (“NodeOps”) – BTCS operates Ethereum validator nodes (“nodes”) and earns ETH-denominated

staking rewards for performing validation and consensus activities that secure the network.

Building (“Builder+”) – Through its Builder+ operations, the Company participates in the block-building supply

chain on the Ethereum and Binance Smart Chain (“BSC”) networks by operating block builders that construct and submit

optimized transaction blocks to validators.

Revenues are derived by execution layer rewards, including transaction fees and maximal

extractable value (“MEV”) earned from successful block submissions.

Operations (“Imperium”) – Beginning in 2025, BTCS expanded its blockchain operations to include DeFi activities

under its Imperium business line.

Through Imperium, the Company participates directly in DeFi ecosystems by deploying crypto assets,

including ETH and stablecoins, into smart contract-based protocols that facilitate decentralized lending, liquidity provision, and

other on-chain services.

The Company earns variable crypto asset rewards based on its participation and the utilization of its deployed

assets within these protocols.

these business lines, which may be vertically integrated, represent complementary components of the Company’s broader blockchain

strategy, designed to generate recurring on-chain revenues, enhance operational scalability, and increase ETH holdings and long-term

treasury value.

each operation has distinct economic drivers and technology components, NodeOps and Builder+ collectively comprise the Company’s

blockchain infrastructure activities, whereas Imperium represents distinct DeFi operations within the Company’s overall blockchain

Revenues from NodeOps and Builder+ are aggregated and presented as Blockchain infrastructure revenues , while revenues

from Imperium are presented separately as DeFi revenues in the statements of operations.

Segment results for these business lines,

and their reconciliation to the financial-statement line items presented on the face of the statements of operations, are disclosed in

Note 12 – Segment Reporting .

operations are strategically supported by its DeFi/TradFi Flywheel, a capital formation and reinvestment framework that integrates decentralized

finance (e.g., on-chain borrowing) with traditional capital markets (e.g., at-the-market (“ATM”) equity offerings and structured

convertible notes).

This framework is designed to scale blockchain infrastructure operations, accelerate revenue growth and increase

ETH accumulation while minimizing shareholder dilution.

the nine months ended September 30, 2025, the Company completed a strategic wind-down of its validator node operations on Avalanche (AVAX),

Cosmos (ATOM), Akash (AKT), and Kava (KAVA), and liquidated the majority of its non-Ethereum token holdings.

These actions were undertaken

to align operations and capital allocation with the Company’s Ethereum-centric focus.

Company’s operations are subject to various risks, including technological complexity, regulatory uncertainty, market volatility,

and competition within the blockchain infrastructure space.

BTCS’s future success depends on Ethereum’s continued adoption,

the evolution of decentralized infrastructure markets, and the Company’s ability to operate blockchain infrastructure efficiently

listed on the Nasdaq Stock Market and headquartered in the United States.

The Company is a blockchain technology business that operates

revenue-generating blockchain infrastructure and decentralized finance (“DeFi”) activities, primarily on the Ethereum network.

BTCS is an Ethereum-first operator focused on generating on-chain revenues while strategically deploying “ETH” (the Ethereum

network’s native token) and other digital assets through its operations.

The Company operates as an active

blockchain infrastructure and DeFi participant rather than as a passive holder of digital assets.

While BTCS maintains significant Ethereum

holdings, those assets are actively deployed across its operations to support revenue generation and operational scalability across the

Company’s business lines.

conducts its operations through the following primary business lines:

Node Operations (“NodeOps”) – BTCS operates validator nodes (“nodes”) on the Ethereum network as

a validator (“Validator”).

Validator nodes perform validation and consensus-related activities that contribute to network

security and block finalization.

In exchange, the Company earns ETH-denominated staking revenue, which include protocol-defined rewards

and execution layer transaction fees.

Building (“Builder+”) – Through its Builder+ operations, the Company participates in the blockspace value chain

on the Ethereum and other supported networks by operating block builders (“Builders”) that construct and submit optimized

transaction blocks to Validators.

Builder+ revenues are derived from the fees earned when BTCS-constructed blocks are successfully

proposed on-chain.

Operations (“Imperium”) – BTCS’s blockchain operations include DeFi activities conducted through its

Imperium business line.

Through Imperium, the Company deploys digital assets, including ETH and stablecoins, into smart contract-based

protocols that support decentralized lending, borrowing, liquidity provision, and other on-chain services.

The Company earns variable

digital asset rewards and transaction-based fees based on its participation, including returns generated from decentralized lending

protocols and liquidity pool participation, and the utilization of its deployed assets within these protocols and prevailing market

these business lines represent complementary components of the Company’s blockchain technology strategy, designed to generate recurring

on-chain revenues and increase long-term value.

each operation has distinct economic drivers and technology components, revenues generated from NodeOps and Builder+ are aggregated and

presented as Blockchain infrastructure revenues , while revenues from Imperium are presented separately as DeFi revenues

in the statements of operations.

The Company’s operating segments and the reconciliation of segment results to the financial statements

are disclosed in Note 8 – Segment Reporting .

Strategy and Operations

operations are supported by an integrated capital formation and deployment framework that combines decentralized finance mechanisms with

traditional capital markets activities (the “DeFi/TradFi Flywheel”).

This framework includes the use of tools such as at-the-market

equity (“ATM”) offerings, structured convertible notes, and ETH-backed DeFi borrowing to fund operations, scale infrastructure,

and deploy digital assets while managing liquidity and dilution.

Company actively allocates digital assets across staking, block-building, and DeFi deployments based on expected returns, risk

considerations, and market conditions, including the use of overcollateralized borrowing arrangements and liquidity pool participation

to generate scalable revenue streams and enhance gross profit.

and Dependence on the Ethereum Ecosystem

Company’s operations are subject to various risks, including technological complexity, cybersecurity risks, regulatory

uncertainty, digital asset price volatility, and competition within the blockchain infrastructure and DeFi markets.

Company’s future performance depends in part on the continued adoption and development of the Ethereum network, the evolution

of decentralized infrastructure markets, and BTCS’s ability to operate blockchain infrastructure and engage in DeFi activities

efficiently at scale, including the effective management of risks associated with DeFi protocols such as collateral liquidation,

smart contract vulnerabilities, and liquidity constraints.

2 - Basis of Presentation

6 unchanged sentences

results of operations and cash flows for the interim periods presented.

Interim results for the three months ended September 30, 2025

are not necessarily indicative of results for the full year ending December 31, 2025.

The unaudited condensed financial statements and

notes should be read in conjunction with the financial statements and notes for the year ended December 31, 2024.

Interim results for the three months ended March 31, 2026 are

not necessarily indicative of results for the full year ending December 31, 2026.

The unaudited condensed financial statements and notes

should be read in conjunction with the financial statements and notes for the year ended December 31, 2025.

Reclassifications

prior period amounts have been reclassified in order to conform with the current period presentation in the unaudited condensed financial

statements and accompanying notes.

The reclassifications did not have a material impact on the Company’s unaudited condensed financial

statements and related disclosures.

The impact on any prior period disclosures was immaterial.

inception on December 24, 2024, the Company paid approximately $ 2,000 of formation costs on behalf of BTCS Labs Inc.

(“BTCS Labs”)

in exchange for 100 shares of its common stock.

In September 2025, BTCS Labs reimbursed the Company for the original payment of formation

costs, and the 100 shares originally issued were repurchased and retired.

As a result, BTCS Labs is no longer presented as a subsidiary

in the accompanying financial statements.

prior period amounts have been reclassified to conform to the current period presentation in the unaudited condensed financial statements

and accompanying notes.

These reclassifications did not have a material impact on the Company’s financial position, results of

operations, or cash flows.

3 - Summary of Significant Accounting Policies

have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2024 Annual

Report on the Company’s Form 10-K filed with the Securities and Exchange Commission.

have been no material changes to the Company’s significant accounting policies as disclosed in the Company’s Annual Report

on Form 10-K for the year ended December 31, 2025.

the Company continues to apply these policies to evolving blockchain-based activities, including digital asset deployments in staking

and DeFi arrangements and revenue-generating activities associated with blockchain infrastructure operations.

The application of these

policies requires significant judgment and may evolve as the Company’s operations and the underlying protocols continue to develop.

and Cash Equivalents

1 unchanged sentence

The Company maintains cash and cash equivalent balances at financial institutions that are insured by the FDIC.

As of September 30, 2025

and December 31, 2024, the Company had approximately $ 4,486,000 and $ 1,978,000 in cash.

The Company has not experienced any losses in

such accounts and believes it is not exposed to any significant credit risk on cash.

As of March 31, 2026

and December 31, 2025, the Company had approximately $ 285,000 and $ 1,526,000 in cash, respectively.

The Company has not experienced any

losses in such accounts and believes it is not exposed to any significant credit risk on cash.

instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits.

1 unchanged sentence

institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 .

As of September 30, 2025 and

December 31, 2024, the Company had approximately $ 4,018,000 and $ 1,474,000 in excess of the FDIC insured limit, respectively.

As of March 31, 2026 and December

31, 2025, the Company had approximately $ 0 and $ 1,122,000 in excess of the FDIC insured limit, respectively.

Company holds stablecoins, including, but not limited to USDT (Tether), USDC (USD Coin), and GHO (Aave Protocol’s native stablecoin),

which are crypto assets that are pegged to the value of designed to maintain a value equivalent to one U.S.

Our stablecoins are

typically held in secure digital wallets or on crypto asset exchanges.

The Company acquires and holds stablecoins primarily to facilitate

crypto asset transactions, including, but not limited to, payments to third-party vendors.

While not accounted for as cash or cash equivalents,

these stablecoins are considered a liquidity resource.

Company’s crypto assets primarily consist of Ethereum and other crypto assets held in non-custodial wallets.

These assets are maintained

under the Company’s control through secure private keys and are not held by any third-party custodian.

The Company’s crypto

assets are used to support its blockchain infrastructure operations, including NodeOps, Builder+ and Imperium.

Value Measurement

Company accounts for its crypto assets under Accounting Standards Codification (“ASC”) 350-60, Intangibles—Goodwill

and Other—Crypto Assets , and measures such assets at fair value in accordance with ASC 820, Fair Value Measurement .

Fair value represents the price that would be received for an asset in a current sale, assuming an orderly transaction between market

participants on the measurement date.

Market participants are considered to be independent, knowledgeable, and willing and able to transact.

It requires the Company to assume that its crypto assets are sold in their principal market or, in the absence of a principal market,

the most advantageous market to which it has access.

serves as the principal market for the Company’s crypto assets, being the Company’s primary cryptocurrency exchange for both

purchases and sales.

Coinbase is designated as the secondary principal market.

This determination results from a comprehensive evaluation

considering various factors, including compliance, trading activity, and price stability.

fair value of crypto assets is primarily determined based on pricing data obtained from Kraken, the Company’s principal market.

In the absence of Kraken data, pricing from Coinbase serves as a secondary source.

Kraken is designated as the primary exchange, the Company retains flexibility to conduct cryptocurrency transactions on other exchanges

where it maintains accounts.

This flexibility allows the Company to adapt to changing market conditions and explore alternative platforms

when necessary to ensure cost-effective execution and fair value measurement using the most advantageous market.

selection of Kraken as the principal market reflects the Company’s commitment to informed decision-making and achieving the most

accurate representation of fair value for its crypto assets.

Regular reviews ensure alignment with the Company’s objectives and

cryptocurrency market dynamics.

for Crypto Assets

Company measures its crypto assets at fair value in accordance with ASC 820, Fair Value Measurement , using the last closing price

of the day in the UTC time zone at each reporting period end.

assets are categorized based on their operational use as follows:

assets – treasury represent unencumbered holdings maintained for liquidity and

investment purposes.

assets – DeFi represent assets deployed in decentralized finance protocols for

lending and liquidity provision.

assets – staked represent assets actively staked to validator nodes and deployed

in blockchain validation activities to earn staking rewards.

crypto assets are measured at fair value under ASC 350-60 and are presented as current assets unless they are subject to protocol-imposed

restrictions exceeding twelve months.

Staked crypto assets are classified as non-current if their lock-up periods extend beyond one year.

majority of the Company’s crypto assets are deployed either in staking arrangements with lock-up periods of less than seven days

or in DeFi liquidity pools that permit near-immediate redemption.

Accordingly, these assets are classified as current under ASC 210-10-20,

Balance Sheet , due to the Company’s ability to sell them in a liquid marketplace, as we have a reasonable expectation that

they will be realized in cash or sold or consumed during the normal operating cycle of our business to support operations when needed.

January 1, 2025, the Company enhanced its accounting systems and processes related to the receipt and valuation of crypto assets.

a result of these enhancements, the Company updated its accounting policy for determining the cost basis of crypto assets received.

cost basis is now measured at fair value based on the hourly spot price at the time of receipt, consistent with the applicable guidance

under ASC 350-60.

to January 1, 2025, the cost basis of crypto assets was measured using the last close price of the day in the UTC (Coordinated Universal

Time) time zone on the date of receipt.

change has been applied prospectively and did not have a material impact on the Company’s financial statements.

Relief in Determining Realized Gains and Losses

conjunction with ongoing system and process enhancements, the Company updated its method for determining the cost basis of crypto assets

used in computing realized gains and losses.

Effective January 1, 2025, the Company adopted the Last-In, First-Out (“LIFO”)

method for determining the cost basis of crypto assets disposed of.

This method assumes that the most recently acquired assets are sold

or used first and replaces the Company’s previous use of the specific identification method, which tracked the actual cost of each

individual asset sold.

Company determined that the change in accounting principle is preferable as it better aligns with the Company’s operational systems

and financial reporting objectives.

The change has been applied prospectively beginning January 1, 2025, as retrospective application

was deemed impracticable due to the nature of prior lot-level selection processes under the specific identification method.

gains (losses) on sale of crypto assets are included in operating expenses in the statements of operations.

The Company recorded

realized gains (losses) on crypto assets of approximately ($ 4,408,000 ) and ($ 122,000 ) for the three months ended September 30, 2025 and

2024, respectively, and approximately ($ 8,568,000 ) and $ 176,000 for the nine months ended September 30, 2025 and 2024, respectively.

Company does not believe the change materially impacts comparability of results.

While the realized loss for the three and nine months

ended September 30, 2025, reflects application of the new LIFO method, it is not practicable to quantify the exact impact of the change

as compared to the prior method, given the subjective lot selection involved in specific identification.

Based on this assessment, the

Company does not believe the change has a material effect on the financial statements.

of Crypto Assets in the Statements of Cash Flows

classification of purchases and sales in the statements of cash flows is determined based on the nature of the crypto assets, which can

be categorized as ‘productive’ (i.e.

acquired for purposes of staking or liquidity provision) or ‘non-productive’

(e.g., NFTs).

Acquisitions of non-productive crypto assets are treated as operating activities, while acquisitions of productive crypto

assets are classified as investing activities in accordance with ASC 230-10-20, Investing activities .

which are digital assets designed to maintain a value substantially equivalent to one U.S.

Stablecoins are generally held in

Company-controlled digital wallets, on centralized digital assets exchanges, or deployed into DeFi protocols for liquidity provision and other revenue-generating activities.

Company accounts for its stablecoins as indefinite-lived intangible assets in accordance with Accounting Standards Codification (“ASC”)

350, Intangibles – Goodwill and Other .

While stablecoins are not accounted for as cash or cash equivalents, management considers

them a liquidity resource due to their intended price stability and high on-chain and off-chain liquidity.

deployed into DeFi protocols are evaluated for continued control and restrictions on accessibility.

As of March 31, 2026, approximately

$ 534,000 of USDC was deployed in DeFi vaults and remained readily withdrawable.

Company’s digital assets primarily consist of Ethereum and other digital assets held in non-custodial wallets.

These assets are

maintained under the Company’s control through secure private keys and are not held by any third-party custodian.

The Company’s

digital assets are used to support its blockchain infrastructure operations, including NodeOps, Builder+ and Imperium.

Company accounts for its digital assets under two distinct accounting models depending on the nature of the asset:

assets at fair value consist of cryptocurrencies such as Ethereum that are actively traded

in liquid markets and are measured at fair value in accordance with ASC 350-60.

These include

digital assets held in treasury, deployed in DeFi protocols, or staked in validator operations.

assets accounted for as indefinite-lived intangible assets consist of assets that do

not have readily determinable fair values or do not represent fungible tokens, including

tokenized liquidity pool positions (“LP positions”) and non-fungible tokens (“NFTs”).

These assets are recorded at cost less impairment under ASC 350.

Assets Measured at Fair Value

Company accounts for its digital assets under ASC 350-60, Intangibles—Goodwill and Other—Digital assets , and measures

such assets at fair value in accordance with ASC 820, Fair Value Measurement .

Fair value represents the price that would be received

for an asset in a current sale, assuming an orderly transaction between market participants on the measurement date.

Market participants

are considered to be independent, knowledgeable, and willing and able to transact.

Company measures fair value based on its principal market, or in the absence of a principal market, the most advantageous market to which

it has access.

Kraken serves as the principal market as it is the primary cryptocurrency exchange for both purchases and sales.

is designated as the secondary market.

This determination results from a comprehensive evaluation considering various factors, including

compliance, trading activity, and price stability.

The fair value of digital assets is primarily determined based on pricing data obtained

from Kraken, with Coinbase used as a secondary source when necessary.

The Company retains flexibility to transact on other exchanges

where it maintains accounts in order to adapt to market conditions and achieve cost-effective execution.

Company measures its digital asset holdings at fair value in accordance with ASC 820, Fair Value Measurement , using the last closing

price of the day in the UTC (Coordinated Universal Time) time zone.

assets are categorized based on their operational use and presented on the balance sheet as follows:

assets – treasury represent unencumbered holdings maintained for liquidity and investment purposes.

assets – DeFi represent assets deployed in decentralized finance protocols for lending and liquidity provision.

assets – staked represent assets actively staked to validator nodes and deployed in blockchain validation activities to

earn staking rewards.

assets measured at fair value are further disaggregated in Note 4 – Digital Assets (Fair Value) .

assets measured at fair value are presented as current assets unless they are subject to protocol-imposed restrictions exceeding twelve

Staked digital assets are classified as non-current if their lock-up periods extend beyond one year.

The majority of the Company’s

digital assets are deployed either in staking arrangements with average lock-up periods of less than seven days or in DeFi arrangements

that permit redemption on a near-immediate basis.

Accordingly, these assets are classified as current under ASC 210-10-20, Balance

Sheet , due to the Company’s ability to sell them in a liquid marketplace and its reasonable expectation that they will be realized

in cash or in operations within the normal operating cycle.

The cost basis of digital assets received is measured at fair value based on the hourly spot price at the time of receipt,

consistent with ASC 350-60.

Relief Method :

The Company uses the Last-In, First-Out (“LIFO”) method to determine the cost basis of digital assets

Realized gains and losses on the sale of digital assets are included in operating expenses in the statements of operations.

of Cash Flows:

The classification of purchases and sales in the statements of cash flows is determined based on the nature of the

digital assets.

Acquisitions of non-productive digital assets (e.g.

NFTs) are treated as operating activities, while acquisitions of

productive digital assets (e.g.

assets acquired for purposes of staking or liquidity provision) are classified as investing activities

in accordance with ASC 230-10-20, Investing activities .

involving the settlement of obligations through transfers of digital assets (i.e., in-kind transactions) are treated as non-cash activities

for purposes of the Statement of Cash Flows.

Accordingly, such transactions are excluded from the face of the Statement of Cash Flows

and presented within supplemental disclosures of non-cash investing and financing activities, as applicable.

Amounts settled in-kind

are excluded from cash-based disclosures, including cash interest paid.

Deployed in DeFi Arrangements

DeFi arrangements, such as those transacted on the Aave protocol, the Company participates as a Liquidity Provider, depositing ETH into

Aave’s decentralized lending pools.

When ETH is supplied, it becomes part of the protocol’s available liquidity that borrowers

may draw upon.

The deposited ETH earns variable rewards based on market supply and demand for borrowing within the protocol.

ETH supplied by the Company is also eligible to serve as collateral supporting on-chain borrowing activities.

The collateral value of

the deposited ETH contributes to the overall “health factor” of the Company’s Aave wallet.

The health factor is a protocol

metric that measures the ratio of collateral value to outstanding borrowings and automatically updates with changes in ETH market prices.

The health factor determines the safety buffer against liquidation;

maintaining a value greater than 1.0 ensures sufficient collateralization,

while a decline below 1.0 could trigger partial liquidation of the collateral by the protocol’s smart contracts.

DeFi arrangements, such as those on the Aave protocol, the Company participates as a liquidity provider by depositing ETH

into decentralized lending pools.

The deposited ETH becomes part of the protocol’s available liquidity that borrowers may draw

upon and earns variable rewards based on market supply and demand for borrowing within the protocol.

Deposited ETH may also serve as

collateral supporting on-chain borrowing activities.

The collateral contributes to the Company’s overall “health factor”,

a protocol-defined metric representing the ratio of collateral value to outstanding borrowings that automatically adjusts with changes

in ETH market prices.

The health factor determines the margin of safety against liquidation;

maintaining a value above 1.0 indicates sufficient

collateralization, while a decline below 1.0 may trigger partial liquidation of the collateral by the protocol’s smart contracts.

deposit, ETH is automatically wrapped into Aave Wrapped ETH (“WAETH” or “aEthWETH”) to enable ERC-20 interoperability

and facilitate reward accrual within the lending pool.

The Company has concluded that this conversion does not constitute a derecognition

The Company has concluded that this wrapping does not constitute a derecognition

event under ASC 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets , as no other counterparty

obtains control or economic benefits of the deposited ETH.

obtains control or economic benefits of the underlying ETH.

Rather, WAETH serves as a receipt or claim token evidencing the Company’s

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deployed into DeFi protocols remains recognized at its fair value under ASC 350-60.

is not recognized as a separate intangible asset since it is economically equivalent to the

underlying ETH.

deployed within DeFi protocols is disclosed as encumbered when serving as collateral for

borrowing arrangements or liquidity provision activities.

is not recognized as a separate asset, as it is economically equivalent to the underlying ETH.

deployed within DeFi protocols is disclosed as encumbered when serving as collateral for borrowing arrangements or liquidity provision

gain or loss is recognized upon wrapping or unwrapping ETH within DeFi protocols.

reward earned from such DeFi deployments is recognized as DeFi revenues on the statements of operations in accordance with ASC

606, as discussed in Note 3 - Revenue Recognition section.

of September 30, 2025, the Company had approximately 38,999 ETH deployed within DeFi protocols, which remains reflected as ETH within

Crypto assets - DeFi on the balance sheet and disclosed separately in Note 4 – Crypto Assets , including disclosure

of their restricted status.

Deployed ETH is subject to protocol-specific risks, including smart-contract vulnerabilities, liquidity constraints,

collateral liquidation risk, and potential protocol governance changes.

Tokens (NFTs)

Company holds certain non-fungible tokens (“NFTs”), which are unique digital assets recorded on a blockchain.

represent ownership interests in an entity or contractual rights to cash flows, and therefore do not qualify as financial instruments

or equity securities under ASC 320 or ASC 321.

Consistent with the accounting treatment applied to other crypto assets, the Company accounts

for NFTs as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other .

are initially recorded at cost and are not amortized.

NFTs are assessed for impairment each reporting period to determine if any events

or changes in circumstances indicate that it is more likely than not that the asset is impaired.

If the fair value of an NFT is less

than its carrying value, an impairment loss is recognized equal to the difference.

Subsequent increases in fair value are not recorded.

Realized gains or losses on the sale of NFTs are included in other income (expense) in the statements of operations.

value used in impairment testing is determined in accordance with ASC 820, Fair Value Measurement .

Unlike fungible crypto assets,

NFTs typically do not trade on centralized exchanges with quoted prices.

Instead, the Company evaluates impairment by reference to observable

transactions, where available, on active NFT marketplaces.

the three and nine months ended September 30, 2025, the Company purchased multiple NFTs for aggregate consideration of approximately

These NFTs are included within Non-fungible tokens on the balance sheets.

No impairment losses were recognized for the

three or nine months ended September 30, 2025.

Company’s blockchain operations include three revenue-generating business lines corresponding to its distinct sources of on-chain

validator node operations (“NodeOps”), block building (“Builder+”) and DeFi operations (“Imperium”).

Company’s Chief Operating Decision Makers (“CODMs”) are comprised of several members of its executive management team,

including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), who are responsible for evaluating

the Company’s financial performance, managing operations, and allocating capital and resources.

CODMs regularly review discrete financial information related to Builder+ NodeOps and Imperium, assessing financial performance based

on gross profit (loss), direct operating expenses, and key financial metrics.

These financial reviews direct operational decisions and

shape capital deployment strategies for each activity.

the CODMs evaluates NodeOps, Builder+, and Imperium individually for internal management purposes, NodeOps and Builder+ share common

economic characteristics, technological infrastructure, and operational oversight and are therefore aggregated into a single operating

segment, Blockchain infrastructure operations , under ASC 280, Segment Reporting .

Imperium, which generates revenue through

participation in DeFi protocols, is presented as a separate reportable segment, DeFi operations , due to its distinct economic

drivers and underlying market characteristics.

earned from DeFi activities are recognized as DeFi revenues on the statements of operations in accordance with ASC 606, as discussed

in Revenue Recognition section of Note 3 as well as Note 7 – Revenues and Cost of Revenues .

assets deployed in DeFi protocols are subject to protocol-specific risks, including smart contract vulnerabilities, liquidity constraints,

and collateralization requirements.

These assets may be pledged as collateral in connection with borrowing arrangements and are continuously

remeasured based on the fair value of the underlying assets.

A decline in the market value of collateralized assets may reduce the Company’s

health factor and could result in partial or full liquidation of collateral by the protocol’s smart contracts without prior notice.

As of March 31, 2026, a significant

majority of the Company’s digital assets measured at fair value were deployed within the Aave Protocol as collateral in connection

with DeFi borrowing arrangements.

These assets, while held in Company-controlled wallets, are subject to protocol-enforced restrictions

and are not freely available for general corporate purposes while the related borrowings remain outstanding.

Accordingly, the Company has a significant concentration of its digital assets within the Aave protocol and is exposed

to risks associated with such concentration, including smart contract vulnerabilities, changes in collateral requirements, liquidity constraints

that may limit the Company’s ability to access or withdraw its assets, and the risk of partial or full liquidation in the event

of adverse market movements.

Assets Accounted for as Indefinite-Lived Intangible Assets

Company holds certain digital assets that do not represent ownership interests in an entity or contractual rights to cash flows and,

therefore, do not meet the definition of financial instruments or equity securities under ASC 320 or ASC 321.

These assets consist of

non-fungible tokens (NFTs), tokenized liquidity pool positions (LP positions), and other similar digital assets associated with blockchain-based

assets are accounted for as indefinite-lived intangible assets in accordance with ASC 350.

They are initially recorded at cost and are

not amortized.

Company evaluates these assets for impairment each reporting period to determine if any events or changes in circumstances indicate that

it is more likely than not that the asset is impaired.

If the carrying value of an asset exceeds its estimated fair value, an impairment

loss is recognized equal to the difference.

Subsequent reversals of impairment losses are not permitted.

value is determined in accordance with ASC 820 based on observable market transactions where available.

Due to the nature of these assets,

quoted prices in active markets are not always available, and management may be required to apply judgment in estimating fair value.

For NFTs, the Company considers observable transactions on active NFT marketplaces, where available.

gains or losses on the disposition of these assets are included in operating expenses in the statements of operations.

Note 5 – Digital Assets (Liquidity Pool Positions and Other Intangible Digital Assets ) for additional information.

Pool Positions

The Company participates

in decentralized exchange liquidity pools by depositing digital assets into smart contract-based protocols.

In exchange, the Company

receives liquidity pool positions, which may be represented by non-fungible tokens or similar instruments and represent a distinct asset

that provides the Company with protocol-defined rights to remove liquidity, claim fees or other rewards, and participate in the economic

results of the underlying pool of digital assets.

The Company accounts for liquidity

pool positions as indefinite-lived intangible assets under ASC 350.

The Company has concluded that liquidity pool positions do not meet

the definition of financial instruments under U.S.

GAAP because they do not represent ownership interests in a legal entity and do not

provide the Company with a contractual right to receive cash or another financial asset from an issuer or counterparty.

The Company has

also concluded that liquidity pool positions are not derivatives under ASC 815 because they require an initial deposit of digital assets

approximating the fair value of the position, do not provide for contractual net settlement, and represent a nonfinancial liquidity position

rather than a derivative contract with an identifiable counterparty.

Upon deposit into a liquidity

pool, the Company transfers digital assets to the liquidity pool smart contract and no longer controls the specific digital assets contributed.

The contributed assets become part of the shared pool liquidity governed by automated market maker protocol rules and may be used in swaps

initiated by third-party market participants.

In exchange, the Company receives a new liquidity pool position that represents a different

unit of account from the contributed digital assets.

Accordingly, the Company derecognizes the digital assets contributed and recognizes

the liquidity pool position at cost, measured based on the fair value of the digital assets deposited at the time of the transaction.

Any difference between the fair value used to measure the liquidity pool position and the carrying amounts of the digital assets derecognized

is recognized as a realized gain or loss on digital asset transactions in the statements of operations.

While a liquidity pool position

remains open, the relative amounts of the underlying digital assets attributable to the position may change as a result of automated market

maker activity, price movements, and third-party interactions with the pool.

The Company treats these changes as internal economic rebalancing

of the liquidity pool position and does not recognize separate gains or losses from changes in the underlying asset mix while the position

remains open.

Upon withdrawal from a liquidity

pool, the Company derecognizes the liquidity pool position, or the portion withdrawn, and recognizes the digital assets received at fair

Any difference between the carrying value of the liquidity pool position derecognized and the fair value of the digital assets

received is recognized as a realized gain or loss in the statements of operations.

Fees and other rewards earned

through participation in liquidity pools are recognized as DeFi revenues in accordance with ASC 606 as the Company’s liquidity provision

performance obligation is satisfied and are measured based on the fair value of the digital assets earned.

Note 5 – Digital Assets (Liquidity Pool Positions and Other Intangible Digital Assets) for additional information.

Company’s blockchain operations include three primary revenue-generating activities:

validator node operations (NodeOps), block

building (Builder+), and DeFi operations (Imperium).

The Company’s

Chief Operating Decision Makers (“CODMs”) are comprised of several members of its executive management team, including the

Chief Executive Officer (“CEO”), the Chief Financial Officer (“CFO”) and the Chief Technology Officer (“CTO”),

who are responsible for evaluating the Company’s financial performance, managing operations, and allocating capital and resources.

CODMs regularly review discrete financial information for Builder+, NodeOps, and Imperium, assessing financial performance against gross

profit (loss), direct operating expenses, and key financial metrics.

These financial reviews direct operational decisions and shape capital

deployment strategies for each business activity.

the CODMs evaluate NodeOps, Builder+, and Imperium individually for internal management purposes, NodeOps and Builder+ share common economic

characteristics, technological infrastructure, and operational oversight and are therefore aggregated into a single operating segment,

Blockchain infrastructure operations , under ASC 280, Segment Reporting .

Imperium, which generates revenue through participation

in DeFi protocols, is presented as a separate reportable segment, DeFi operations , due to its distinct economic drivers and underlying

market characteristics.

with ASU 2023-07, Segment Reporting (Topic 280):

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Refer to Note 8 – Segment

Information for more information.

Company recognizes revenue under ASC 606 , Revenue from Contracts with Customers , which requires an entity to recognize revenue

when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the entity

expects to be entitled to in exchange for those goods or services.

ASC 606, the Company applies the following five-step model to all revenue-generating arrangements:

Identify the contract with the customer

Identify the performance obligations in the contract

Determine the transaction price

Allocate the transaction price to the performance obligations in the contract

Recognize revenue when the Company satisfies a performance obligation

Company’s revenues are generated from blockchain-based operations and comprise three primary sources:

(i) staking rewards earned

from validator node operations (NodeOps);

(ii) execution-layer transaction fees, priority fees, and maximal extractable value (“MEV”)

rewards earned from block-building activities (Builder+);

and (iii) protocol-driven rewards earned from participation in DeFi protocols

Revenues from NodeOps and Builder+ are aggregated and presented as Blockchain infrastructure revenues , while revenues

from Imperium are presented separately as DeFi revenues in the statements of operations.

transaction consideration the Company receives in the form of native crypto assets, such as ETH or other network tokens, represents non-cash

consideration measured at fair value on the date the crypto assets are earned.

Collectively,

these activities represent the outputs of the Company’s ordinary blockchain infrastructure operations and are measured at the fair

value of the crypto assets earned at the time each performance obligation is satisfied.

Company engages in network-based smart contracts by running its own crypto asset validator nodes as well as by staking (or “delegating”)

crypto assets directly to both its own validator nodes and nodes run by third-party operators.

Through these contracts, the Company provides

crypto assets to stake to a node for the purpose of validating transactions and adding blocks to a respective blockchain network.

term of a smart contract can vary based on the rules of the respective blockchain and typically lasts from a few days to several weeks

after it is cancelled (or “un-staked”) by the delegator and requires that the crypto assets staked remain locked up during

the duration of the smart contract.

exchange for staking the crypto assets and validating transactions on blockchain networks, the Company is entitled to all of the fixed

crypto asset award earned from the network when delegating to the Company’s own node and is entitled to a fractional share of the

network-determined crypto asset award a third-party node operator receives (less crypto asset transaction fees payable to the node operator,

which are immaterial and are recorded as a deduction from revenue), for successfully validating or adding a block to the blockchain.

The Company’s fractional share of awards received from delegating to a third-party validator node is proportionate to the crypto

assets staked by the Company compared to the total crypto assets staked by all Delegators to that node at that time.

certain blockchain networks on which the Company operates a validator node, the Company earns a validator node fee (“Validator

Fee”), determined as a node operator’s published percentage of the crypto asset rewards earned on crypto assets delegated

rewards earned from staking, as well as tokens earned as Validator Fees, are calculated and distributed directly to BTCS digital wallets

by the blockchain networks as part of their consensus mechanisms.

provision of validating blockchain transactions is an output of the Company’s ordinary activities.

Each separate block creation

or validation under a smart contract with a network represents a performance obligation.

The satisfaction of the performance obligation

for processing and validating blockchain transactions occurs at a point in time when confirmation is received from the network indicating

that the validation is complete, and the awards are available for transfer.

At that point, revenue is recognized.

Company earns revenue by participating as a Builder on blockchain networks that have implemented a Proposer-Builder Separation (PBS)

framework, including Ethereum and Binance Smart Chain (“BSC”).

In these roles, the Company bundles and proposes transaction

blocks for submission to network Validators (“block building”), and is compensated when its blocks are selected, proposed,

and successfully finalized on the applicable network.

Block Building

Company participates in the Ethereum blockchain network by engaging in the construction of blocks containing strategically bundled transactions

from the Ethereum mempool and from searchers who connect to the Company’s endpoint with the intent of the Company’s builder

proposing their transactions.

Revenue recognition for these activities, conducted through Builder+, entails the recognition of execution

layer transaction fees (or “transaction fees”) and priority fees (or “tips”) earned in exchange for successfully

constructing blocks of bundled transactions and having these blocks selected and proposed by a validator to the Ethereum network for

validation and successfully finalized on the network.

transaction fees and tips are earned as a direct result of the Company’s fulfillment of its performance obligations, which include

the construction of blocks by bundling transactions to maximize the value of the included fees and the proposal of that block by a Validator.

Each constructed block under a smart contract with the Ethereum network signifies a distinct performance obligation.

part of the block construction and proposal process, the Company’s Builder purchases block space through a fixed non-negotiable

fee paid to a Validator (a “Validator Payment”) embedded in each proposed block.

The Validator Payment, predetermined by

the Builder, is paid to Validators as compensation for selecting and proposing the Company’s block to the network for validation.

The Validator Payment is intrinsically linked to the Company’s performance obligations and is disbursed in the block constructed

by the Builder if our Builder’s block is both selected by a Validator and successfully proposed to, and finalized on, the Ethereum

otherwise, our Validator Payment may be included in a subsequent block.

The Validator Payment represents a direct and fixed

pre-determined cost.

satisfaction of the performance obligation occurs at a point in time when the constructed block is both proposed by a Validator and successfully

finalized on the Ethereum network.

At this juncture, the Company has fulfilled its obligations, and the transaction fees and tips associated

with the transactions included in the block become available and are transferred to the Company’s digital wallet.

Company recognizes revenue, reflecting the fair value of the total transaction fees and tips earned from the constructed block.

Smart Chain (BSC) Block Building

Company also operates as a Builder on Binance Smart Chain (BSC), which uses a Proof-of-Staked-Authority (“PoSA”) consensus

and a distinct block-building and reward structure.

The native token of BSC is BNB, which is used for both transaction fees and transaction-based

on BSC construct block bids composed of transactions and optional searcher tips.

Unlike Ethereum, transaction fees on BSC are paid directly

to the Validator’s coinbase and are not received by the Builder.

Instead, the Builder earns revenue in the form of BNB-denominated

tips, which are voluntarily sent by searchers to a Builder-controlled smart contract as priority fees.

These tips accumulate in the smart

contract and are periodically withdrawn to the Company’s Builder wallet.

Company recognizes revenue from BSC block building at the time the BNB tips are withdrawn from the tip smart contract to the Company’s

wallet, measured at the fair value of BNB at the time the withdrawal occurs.

Because BSC validator payments are embedded in the transaction

fees of a self-transfer transaction appended by the Builder, the associated transaction cost is treated as cost of revenue.

performance obligations on BSC are satisfied when the constructed block is selected and proposed by a Validator and finalized on-chain.

Similar to Ethereum, each block is considered a separate performance obligation.

in 2025, the Company expanded its blockchain infrastructure operations to include DeFi activities under its Imperium business line.

Imperium, the Company participates directly in DeFi ecosystems by deploying crypto assets, including ETH and stablecoins, into smart

contract-based protocols that facilitate decentralized lending, liquidity provision, and other on-chain financial services.

the Company deposits ETH into a DeFi protocol, such as Aave, the ETH is converted into a tokenized representation (for example, Aave

Wrapped ETH, “WETH” or “aEthWETH”) that represents the Company’s on-chain deposit position and entitles

it to earn variable crypto asset rewards (e.g., ETH).

These rewards accrue continuously based on protocol activity, supply-and-demand

dynamics, and utilization of the Company’s deployed assets within the lending pool.

Company’s participation in DeFi protocols represents a distinct performance obligation that is satisfied over time, as the protocol’s

users simultaneously receive and consume the benefits of the Company’s contributed liquidity or other deployed assets.

is recognized over time in proportion to the variable rewards accrued to the Company’s position, measured at the fair value of

the native token at the time the consideration is earned.

Variable consideration is constrained to amounts not subject to significant

reversal, consistent with ASC 606-10-32-11.

earned through Imperium are classified as DeFi revenues in the statements of operations.

The Company is considered the principal

in these transactions because it controls the deployed crypto assets, bears protocol and market risks (including smart-contract, liquidity,

and liquidation risk), and earns consideration directly from the protocol rather than through an intermediary.

following table summarizes the revenues earned from the Company’s operations for the three and nine months ended September 30,

2025 and 2024.

Schedule of Revenues Earned from Company’s Operations

Three Months Ended September 30,

Nine Months Ended September 30,

Blockchain infrastructure revenues

Total blockchain infrastructure revenues

DeFi revenues (Imperium)

Total revenues

following tables detail the native token rewards and their respective fair market value recognized as revenue for the three and nine

months ended September 30, 2025 and 2024.

Revenues earned from blockchain infrastructure staking activities through NodeOps include token

rewards earned from the delegation of cryptocurrency assets to third-party validator nodes as well as token rewards derived from BTCS-operated

validator nodes, which include staking of the Company’s crypto assets to BTCS nodes and Validator Fees earned from third-parties

asset delegations to our nodes.

Revenues earned from block-building through Builder+ includes block rewards generated by BTCS Builders.

assets earned from blockchain infrastructure staking activities through NodeOps

of Crypto Assets Earned from Blockchain Infrastructure Staking Activities

the Three Months Ended September 30,

the Nine Months Ended September 30,

Ethereum (ETH)

Cosmos (ATOM)

Solana (SOL)*

Axie Infinity (AXS)*

NEAR Protocol (NEAR)*

Avalanche (AVAX)*

Polkadot (DOT)*

Rocket Pool (RPL)*

Polygon (POL)*

Oasis Network (ROSE)

Cardano (ADA)*

Evmos (EVMOS)*

Total earned from blockchain infrastructure staking

activities through NodeOps

or a portion of revenue earned from staking to third-party validator nodes

assets earned from block-building through Builder+

Schedule of Crypto Assets Earned From

the Three Months Ended September 30,

the Nine Months Ended September 30,

Ethereum (ETH)

BNB Chain (BNB)

Total earned from block-building

through Builder+

assets earned from DeFi activities through Imperium

the Three Months Ended September 30,

the Nine Months Ended September 30,

Ethereum (ETH)

Total earned from DeFi activities through Imperium

Company’s cost of revenues primarily consists of direct expenses incurred in connection with its blockchain operations, including

NodeOps, Builder+ and Imperium activities.

Infrastructure Operations (NodeOps and Builder+)

Company’s cost of revenues related to its blockchain infrastructure operations primarily includes direct production costs associated

with transaction validation and block construction on blockchain networks.

These costs include cloud-based server hosting expenses related

to our validator nodes and Builders and allocated employee compensation related to the monitoring, maintenance and support of these operations.

Additionally,

for Ethereum block building, cost of revenues includes Validator Payments made by the Company’s Builder to Validators as compensation

for proposing constructed blocks.

These are fixed amounts embedded within the proposed blocks and are paid only when the block is successfully

finalized on-chain.

Binance Smart Chain (BSC) block building, although the Builder does not receive the transaction fees attached to the bundled

transactions included in a finalized block, it must still compete for inclusion by proposing an additional bid, structured as a self-transaction,

that specifies extra fees intended to incentivize the Validator to select its block.

This self-transaction results in a direct payment

to the Validator’s coinbase address.

These Builder-specified bids are separate from the transaction fees attached to user transactions

and represent incremental value added by the Builder intended to increase the likelihood of block inclusion.

The Company records these

Builder-specified bid payments as cost of revenues, as they are a direct cost of fulfilling the block-building performance obligations

under the BSC block-building arrangement in accordance with ASC 606.

Company also includes in cost of revenues any third-party fees for hosting, infrastructure support, or software maintenance related to

validator or builder operations.

expenses are collectively presented as Cost of blockchain infrastructure revenues in the statements of operations.

in 2025, the Company’s DeFi operations under its Imperium business line generated revenues from participation in decentralized

finance protocols.

Related costs of revenues primarily consist of allocated employee compensation and related expenses associated with

establishing, monitoring, and maintaining DeFi activities, as well as any third-party services that support these operations and other

direct on-chain expenses incurred in connection with deploying or interacting with DeFi protocols.

These costs are presented as Cost

of DeFi revenues in the statements of operations.

following table further details the costs of revenues for the three and nine months ended September 30, 2025 and 2024.

Schedule of Costs of Revenues

the Three Months Ended

the Nine Months Ended

Cost of blockchain infrastructure revenues

Cost of staking revenues (NodeOps)

Cost of block-building revenues

Total cost of blockchain infrastructure revenues

Cost of DeFi revenues (Imperium)

Total cost of revenues

Developed Software

developed software consists of the core technology of the Company’s ChainQ platform.

For internally developed software, the Company

uses both its own employees as well as the services of external vendors and independent contractors.

The Company accounts for computer

software used in the business in accordance with ASC 985-20 and ASC 350.

985-20, Software-Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed, requires that software development costs

incurred in conjunction with product development be charged to research and development expense until technological feasibility is established.

Thereafter, until the product is released for sale, software development costs must be capitalized and reported at the lower of unamortized

cost or net realizable value of the related product.

Some companies use a “tested working model” approach to establishing

technological feasibility (i.e., beta version).

Under this approach, software under development will pass the technological feasibility

milestone when the Company has completed a version that contains essentially all the functionality and features of the final version

and has tested the version to ensure that it works as expected.

350, Intangibles-Goodwill and Other , requires computer software costs associated with internal use software to be charged to operations

as incurred until certain capitalization criteria are met.

Costs incurred during the preliminary project stage and the post-implementation

stages are expensed as incurred.

Certain qualifying costs incurred during the application development stage are capitalized as property,

equipment and software.

These costs generally consist of internal labor during configuration, coding, and testing activities.

Capitalization

begins when (i) the preliminary project stage is complete, (ii) management with the relevant authority authorizes and commits to the

funding of the software project, and (iii) it is probable both that the project will be completed and that the software will be used

to perform the function intended.

Reporting for more information.

Company recognizes revenue under ASC 606 , Revenue from Contracts with Customers.

The Company’s revenues are generated from

blockchain-based operations and comprise staking rewards earned from validator node operations (NodeOps), execution-layer transaction

fees, priority fees and maximal extractable value (“MEV”) rewards earned from block-building activities (Builder+), and protocol-driven

rewards and transaction-based fees earned from participation in DeFi protocols (Imperium), including decentralized lending and liquidity

pool activities.

The timing of revenue recognition

depends on the nature of the underlying blockchain or DeFi activity.

Revenues from NodeOps and Builder+ are generally recognized at a

point in time when the applicable validation, attestation, block proposal or constructed block is confirmed or finalized on-chain and

the related digital asset consideration is earned or made available to the Company.

Revenues from DeFi lending and liquidity pool activities

are recognized continuously during the period in which the Company’s digital assets are deployed and available to the applicable

protocol, as protocol-defined fees and rewards accrue and are earned under the applicable protocol mechanics.

For liquidity pool activities,

fees and other rewards are earned based on the Company’s proportional participation in the pool and applicable protocol activity

while the liquidity position remains deployed.

Revenue is measured based on the fair value of the native digital assets or stablecoins

earned at the time the consideration is earned.

Substantially all revenues are earned and settled in native digital assets and stablecoins.

See Note 7– Revenues and Cost of Revenues for further information.

of revenues consists primarily of direct expenses incurred in connection with the Company’s blockchain infrastructure and decentralized

finance operations, including hosting, infrastructure costs, validator payments, and other direct on-chain costs.

Such costs may include

expenses associated with DeFi activities, such as transaction fees and other protocol-related costs incurred in connection with digital

asset deployment.

See Note 7 – Revenues and Cost of Revenues for further information.

and Development

and development (“R&D”) costs are accounted for in accordance with ASC 730, Research and Development .

costs consist primarily of employee compensation, fees paid to third-party contractors and consultants, data and software costs, and

other expenses incurred in connection with the development and evaluation of the Company’s blockchain infrastructure and DeFi capabilities.

These activities include block-building systems and DeFi-related infrastructure and tools where technological, operational, or economic

feasibility has not yet been established.

costs are expensed as incurred.

The Company allocates employee compensation to R&D based on management’s estimate of the time

devoted to research and development activities during the period.

and Equipment

and equipment consists of computers, equipment and office furniture and fixtures, all of which are recorded at cost.

Depreciation and

amortization are recorded using the straight-line method over the respective useful lives of the assets ranging from three 3 to five years .

Long-lived assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may

not be recoverable.

accompanying condensed financial statements have been prepared in conformity with U.S.

GAAP, which requires management to make estimates

and assumptions that affect certain reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at

the date of the financial statements, and the reported amounts of revenue and expenses during the period.

Company’s significant estimates and assumptions include, but are not limited to, the recoverability and useful lives of indefinite

life intangible assets, stock-based compensation, valuation allowances related to deferred tax assets, allocations of compensation and

other shared costs among functional expense categories, accruals for employee bonuses and incentives, and the fair value of certain financial

instruments, when applicable.

results could differ from those estimates due to changes in external conditions or other factors, and such differences may be material

to the financial statements.

and amortization are recorded using the straight-line method over the respective useful lives of the assets ranging from 3 three to

Long-lived assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of

these assets may not be recoverable.

accompanying financial statements have been prepared in conformity with U.S.

GAAP, which requires management to make estimates and assumptions

that affect certain reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the

financial statements, and the reported amounts of revenue and expenses during the period.

Company’s significant estimates and assumptions include, but are not limited to the valuation of digital assets, including fair

value measurements and the recoverability of indefinite-lived intangible digital assets, stock-based compensation, the valuation allowance

related to deferred tax assets, allocations of compensation and other shared costs among functional expense categories, accruals for

employee bonuses and incentives, and the fair value of certain financial instruments, when applicable.

results could differ from those estimates due to changes in external conditions, market conditions, or other factors, including those

affecting digital asset prices and decentralized finance protocols, and such differences may be material to the financial statements.

Company recognizes income taxes on an accrual basis based on tax positions taken or expected to be taken in its tax returns.

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accordance with ASC 815-40, these instruments are measured at fair value upon issuance and at each subsequent reporting period, with

changes in fair value recognized in the statements of operations as “Change in fair value of warrant liabilities.” These

warrants are classified as Level 3 liabilities within the fair value hierarchy due to the use of unobservable inputs in the valuation

model (see Note 5 - Fair Value of Financial Assets and Liabilities ).

changes in fair value recognized in the statements of operations as change in fair value of warrant liabilities.

These warrants

are classified as Level 3 liabilities within the fair value hierarchy due to the use of unobservable inputs in the valuation model (see

Note 6 - Fair Value Measurements ).

Company estimates the fair value of these warrants using a Black-Scholes option pricing model, with key inputs including the Company’s

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The warrant liability is presented as a current liability on the Company’s balance sheet.

outstanding liability-classified warrants expired during the three months ended March 31, 2026 and as a result, there were no liability-classified

warrants outstanding as of March 31, 2026.

Equity-Classified

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that are expected to vest and will result in a charge to operations.

payment awards exchanged for services are accounted for at the fair value of the award on the estimated grant date.

options issued under the Company’s long-term incentive plans are granted with an exercise price equal to no less than the fair

market value of the Company’s stock at the date of grant and expire up to ten years from the date of grant.

Compensation cost is recognized only for those awards that are expected

to vest, and previously recognized compensation cost is reversed in the period in which an award is forfeited due to failure to satisfy

the applicable vesting conditions.

payment arrangements include equity instruments issued in exchange for employee and nonemployee services, including arrangements used

to satisfy compensation obligations such as performance-based compensation and director compensation.

Awards are measured at the fair

value on the estimated grant date and recognized as compensation cost over the requisite service period, unless the award is fully vested

at grant, in which case compensation cost is recognized on the grant date.

options issued under the Company’s long-term incentive plans are granted with an exercise price equal to no less than the fair value of the Company’s stock at the date of grant and expire up to ten years from the date of grant.

These options generally

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to the expected term of the option.

For options granted on or after January 1, 2025, historical volatility is determined using a two-year

lookback period.

Management selected this approach to better reflect the Company’s current market conditions and exclude periods

of non-representative volatility associated with significant changes in the Company’s business, market conditions, and capital

The two-year lookback period balances capturing industry and market cycles with avoiding outdated and non-representative data.

For options granted on January 1, 2025, historical volatility is determined using a two-year lookback

Management selected this approach to better reflect the Company’s current market conditions and exclude periods of non-representative

volatility associated with significant changes in the Company’s business, market conditions, and capital structure.

lookback period balances capturing industry and market cycles with avoiding outdated and non-representative data.

Interest Rate – The risk-free interest rate is based on the U.S.

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any recurring cash dividends in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models.

Stock Units (RSUs)

Stock and Restricted Stock Units (RSUs)

Company grants restricted stock and restricted stock units as part of its stock-based compensation arrangements.

Restricted stock represents

issued common shares that are subject to forfeiture until vesting conditions are satisfied, whereas restricted stock units represent

the right to receive common shares upon satisfaction of vesting conditions.

Restricted stock and restricted stock units may include service

conditions, performance conditions, or market conditions.

awards vesting upon the achievement of a service condition, compensation cost measured on the grant date will be recognized on a straight-line

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target as well as a service condition in order for these RSUs to vest.

Company estimates the fair value of market-based RSUs as of the grant date and expected derived term using a Monte Carlo simulation that

incorporates pricing inputs covering the period from the grant date through the end of the derived service period.

Company estimates the fair value of market-based Restricted Stock and RSUs as of the grant date and expected derived term using a Monte

Carlo simulation that incorporates pricing inputs covering the period from the grant date through the end of the derived service period.

Volatility – The Company uses historical volatility as it provides a reasonable estimate of the expected volatility.

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Company accounts for DeFi lending and borrowing arrangements, such as those executed through the Aave protocol, in accordance with ASC

the Company borrows crypto assets under a DeFi protocol, the arrangement is recognized as a financial liability measured at the principal

amount of the borrowed tokens, net of repayments, in accordance with ASC 470.

Such borrowings are presented on the balance sheet as Loans

payable – DeFi protocol .

are collateralized by the Company’s crypto assets, such as ETH, which are deposited into protocol-specific smart contracts as collateral.

The deposited collateral remains recorded on the balance sheet within Crypto Assets , as the Company retains both custody and beneficial

Collateralized assets are considered restricted while serving as security for DeFi borrowings and are disclosed as such in

the notes to the financial statements.

When the Company borrows under

a DeFi protocol, the Company’s borrowings are currently denominated primarily in USD-pegged stablecoins, such as USDT, USDC or

GHO, rather than ETH or other non-USD-pegged digital assets.

Such arrangements are recognized as financial liabilities in accordance

with ASC 470 and are measured at the principal amount of the stablecoin units borrowed, net of repayments.

Because the borrowed stablecoins

are designed to maintain a value substantially equivalent to one U.S.

dollar, management believes the carrying amount of the liability

approximates the U.S.

dollar value of the settlement obligation.

Such borrowings are presented on the balance sheet as Loans payable

– DeFi protocol .

are collateralized by the Company’s digital assets, such as ETH, which are deposited into protocol-specific smart contracts as

The deposited collateral remains recorded on the balance sheet within Digital assets , as the Company retains both

custody and beneficial ownership.

Collateralized assets are considered restricted while serving as security for DeFi borrowings and are

disclosed as such in the notes to the financial statements.

value measurement of the collateralized ETH follows the guidance in ASC 820 , Fair Value Measurement .

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and subject to liquidation risk, the Company continues to account for the underlying asset at fair value under ASC 350-60 , Intangibles

– Crypto Assets .

– Digital assets .

modifications and extinguishments

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participant (e.g., Imperium) is recognized as revenue under DeFi revenues rather than interest income.

are recognized when approved by the Board of Directors and payable to stockholders.

Cash dividends are recorded at the declared amount,

and noncash dividends, including distributions settled in Ethereum, are measured at the fair value of the assets to be distributed when

the dividend payable is recorded, with any difference upon settlement recognized in the statements of operations under Loss on settlement

of dividend payable .

Dividends subject to conditions or participation rights contingent upon conversion of outstanding convertible

notes are not recorded until the obligation becomes determinable and payable.

Company accounts for share repurchases under the retirement method of accounting.

Accordingly, shares repurchased are immediately retired

and deemed cancelled, reducing both issued and outstanding shares.

In connection with these retirements, the Company reduces Common Stock

and Additional Paid-in Capital (“APIC”) based on a pro rata (average per-share) APIC allocation method, with any differences

between the repurchase price and the book value of equity retired recorded to APIC – Share Repurchase.

If necessary, amounts are

recorded to Retained Earnings once APIC – Share Repurchase is exhausted.

costs are expensed as incurred and included in Marketing expenses in the statements of operations.

costs are expensed as incurred and included in Marketing expenses.

Income (Loss) per Share

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share includes the effect of dilutive potential common shares, if any.

Company reported net income for the three and nine months ended September 30, 2025 and net losses for the three and nine months ended

September 30, 2024.

The following potentially dilutive securities were excluded from the computation of diluted loss per share during

the 2024 periods of net loss, as their effect would have been anti-dilutive:

of Earnings Per Share Anti-diluted

September 30, 2024

Company reported net losses for the three months ended March 31, 2026 and 2025.

The following potentially dilutive securities were excluded

from the computation of diluted loss per share during the 2026 and 2025 periods of net loss, as their effect would have been anti-dilutive:

Schedule of Earnings Per Share Anti-diluted

As of March 31,

Warrants to purchase common stock

Non-vested restricted stock unit awards

Non-vested restricted common stock

Shares issuable upon conversion of convertible notes

Anti-dilutive securities

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and assures that there are proper controls in place to ascertain that the Company’s Financial Statements properly reflect the change.

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU

ASU 2023-07 is intended to enhance reportable segment disclosures by requiring disclosures of significant segment expenses

regularly provided to the CODMs, requiring disclosure of the title and position of the CODMs and explanation of how the reported measures

of segment profit and loss are used by the CODMs in assessing segment performance and a location of resources.

ASU 2023-07 is effective

for the Company for annual periods beginning after December 31, 2023.

The Company adopted ASU 2023-07 for the year ended December 31,

As a result of the adoption, the Company expanded its disclosures in Note 12 - Segment Information , to present significant

expenses that are included within cost of revenue, by reportable segment, which are presented to the CODMs.

December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740):

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five percent of total income taxes paid (net of refunds received).

The amendments in ASU 2023-09 are effective January 1, 2025.

The amendments in ASU 2023-09 were effective January 1, 2025.

adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

The Company is currently

evaluating the impacts of ASU 2023-09 on its financial statements.

The Company adopted

ASU 2023-09 for the year ended December 31, 2025 in its Form 10-K.

The adoption expanded the Company’s income tax disclosures within

Note 14 – Income Taxes and did not have a material impact on the Company’s financial statements.

December 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures

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Company is evaluating the impact the updated guidance will have on its disclosures.

recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public

Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s

present or future financial statements.

4 – Crypto Assets

following table presents the Company’s crypto assets held as of September 30, 2025, which are measured at fair value in accordance

with ASC 350-60, Intangibles – Crypto Assets .

Measurement is based on quoted prices in active markets (Level 1 inputs under

ASC 820, Fair Value Measurement ).

Other recent accounting pronouncements

issued by the FASB, including guidance and interpretive publications from the American Institute of Certified Public Accountants (“AICPA”),

as well as regulations and guidance from the Securities and Exchange Commission (“SEC”), did not, or are not expected to have

a material impact on the Company’s present or future financial statements.

4 – Digital Assets (Fair Value)

following tables present the Company’s digital assets held as of March 31, 2026 and December 31, 2025:

Schedule of Crypto Assets Held

Fair Market Value

As of March 31, 2026

As of December 31, 2025

Ethereum (ETH)

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$ 115,852,099

$ 215,204,804

$ 210,592,607

BNB Chain (BNB)

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$ 115,955,855

of September 30, 2025, the Company’s ETH holdings included:

$ 215,373,726

$ 210,764,252

of March 31, 2026, the Company’s ETH holdings included:

Approximately

30,784 ETH staked to validator nodes with an approximate fair market value of $ 127,642,000 , presented in Crypto assets –

4,160 ETH staked to validator nodes with an approximate fair value of $ 8,753,000 , presented in Digital assets – staked ;

Approximately

49,970 Aave aEthWETH tokens representing wrapped ETH deployed in DeFi protocols and serving as collateral for outstanding DeFi borrowings,

with a fair market value of approximately $ 161,704,000 .

The underlying ETH remains recognized within Crypto assets - DeFi

with a fair value of approximately $ 105,135,000 .

The underlying ETH remains recognized within Digital assets - DeFi

at fair value on the balance sheet.

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to protocol-enforced restrictions while the related borrowing is outstanding.

assets remain recorded as ETH within Crypto Assets – DeFi at fair value on the balance sheet and are subject to protocol

restrictions and smart-contract risk while serving as staking or collateralized assets.

described in Note 3, the Company classifies its crypto assets by operational use into three categories:

of Crypto Assets by Operational Use

Crypto assets – treasury

Crypto assets – DeFi

Crypto assets – staked

described in Note 3, the Company classifies its digital assets by operational use into three categories:

Schedule of Digital Assets by Operational Use

March 31, 2026

December 31, 2025

Digital assets – treasury

Digital assets – DeFi

Digital assets – staked

Total crypto assets

assets – treasury represent unencumbered crypto assets maintained for liquidity

and general corporate purposes.

assets – DeFi represent crypto assets deployed in DeFi protocols, primarily Aave,

for lending and liquidity provision.

When ETH is deposited into Aave, the protocol issues

an equivalent amount of Wrapped Aave ETH (“WAETH”) to the Company’s wallet.

Management concluded under ASC 610-20 that these transactions do not constitute exchanges

and that the underlying ETH remains recognized at fair value.

assets – staked represent crypto assets actively deployed in validator operations

to earn staking rewards.

These assets are subject to protocol lock-ups and governance risks.

assets – treasury represent unencumbered digital assets maintained for liquidity and general corporate purposes.

assets – DeFi represent digital assets deployed in DeFi protocols, primarily Aave, for lending and liquidity provision.

Deposits into Aave do not result in derecognition of the underlying ETH, consistent with the Company’s accounting policy in

assets – staked represent digital assets actively deployed in validator operations to earn staking rewards.

are subject to protocol lock-ups and governance risks.

Value Measurement

categories of crypto assets are valued using quoted prices in active markets for identical assets and are therefore classified as Level

1 within the fair-value hierarchy (see Note 5 – Fair Value of Financial Assets and Liabilities ).

Encumbrances arising from

staking or DeFi deployments do not affect fair-value classification because such restrictions are entity-specific and do not influence

observable market pricing.

following table summarizes the activity in the Company’s crypto assets for the nine months ended September 30, 2025:

of Crypto Assets Rollforward Activity

December 31, 2024 - Fair Market Value

Additions and purchases of crypto assets

Rewards earned from blockchain infrastructure

and DeFi operations

Sales of crypto assets

All categories of digital assets

are valued using quoted prices in active markets for identical assets and are therefore classified as Level 1 within the fair-value hierarchy

(see Note 6 – Fair Value Measurements ).

Encumbrances arising from staking or DeFi deployments do not affect fair-value classification

because such restrictions are entity-specific and do not influence observable market pricing.

gains and losses on digital assets represent the period-over-period change in the fair value of digital assets held by the Company and

are recognized in earnings in the period in which the change occurs.

of Digital Assets Measured at Fair Value

following table presents a roll forward of the Company’s digital assets measured at fair value for the three months ended March

Schedule of Crypto Assets Rollforward Activity

December 31, 2025 - Fair Value

$ 210,764,252

Crypto payments

Additions and purchases of digital assets

Digital asset rewards earned from blockchain infrastructure and DeFi activities

Sales of digital assets

( 23,757,452 )

Realized gains on sale of crypto assets

Realized losses on sale of crypto assets

Deposits into Liquidity Pool positions

( 6,285,427 )

Change in unrealized appreciation (depreciation)

of crypto assets

September 30, 2025 - Fair Market Value

Digital asset payments

( 1,089,233 )

5 – Fair Value of Financial Assets and Liabilities

Dividends distributions paid in ETH

Digital asset fees

Realized gains on sale of digital assets

Realized losses on sale of digital assets

( 29,182,928 )

Unrealized gains and losses on digital assets

( 35,685,176 )

March 31, 2026 - Fair Value

$ 115,955,855

into liquidity pool positions represent the transfer of digital assets measured at fair value

into liquidity pool arrangements, resulting in the derecognition of such digital assets and

the recognition of liquidity pool positions accounted for as indefinite-lived intangible

assets (see Note 5).

gains (losses) presented in this rollforward include only transactions related to digital

assets measured at fair value and exclude realized gains (losses) associated with liquidity

pool positions and stablecoin transactions.

(3) Unrealized

gains and losses exclude changes in value of liquidity pool positions, which are accounted

for under the impairment model described in Note 3.

5 - Digital Assets (Liquidity Pool Positions and Other Intangible Digital Assets)

Company holds certain digital assets that are not measured at fair value on a recurring basis and are instead accounted for as

indefinite-lived intangible assets in accordance with ASC 350.

These assets consist of (i) tokenized LP positions and (ii) NFTs,

which primarily represent digital art.

These assets are distinct from digital assets measured at fair value, which are presented

separately in Note 4.

LP positions represent the Company’s

ownership interest in decentralized exchange liquidity pools and provide exposure to a proportional share of the underlying pooled digital

assets, pool-generated fees and other rewards, where applicable.

These assets do not represent ownership interests in a legal entity or

contractual rights to cash flows and are therefore accounted for as indefinite-lived intangible assets.

of March 31, 2026 and December 31, 2025, the carrying value of these assets consisted of:

of Carrying Value of Digital Assets

March 31, 2026

December 31, 2025

Liquidity pool positions

NFTs (digital art)

following table presents the activity of the Company’s digital assets accounted for as indefinite-lived intangible assets:

Schedule of Digital Assets Accounted for as Indefinite-lived Intangible Assets

December 31, 2025 – Carrying Value

Carrying Value

Deposits into Liquidity Pools

Withdrawals from Liquidity Pools

( 1,031,535 )

Realized gains (losses) on withdrawals from Liquidity Pools

Impairment losses

March 31, 2026 – Carrying Value

Carrying Value

into liquidity pools represent the Company’s contribution of digital assets into decentralized exchange protocols in exchange for

LP positions.

Withdrawals represent the redemption of such positions for underlying digital assets.

gains or losses are recognized upon withdrawal based on the difference between the carrying value of LP position and the fair value of

the digital assets received.

Realized gains or losses are included in realized gains or losses on digital asset transactions in the statements

of operations.

During the three

months ended March 31, 2026, the Company recognized impairment losses of approximately $210,000 related to its LP positions and NFTs.

Impairment losses are included in impairment loss on intangible digital assets in the statements of operations.

Due to the absence of quoted market prices for LP positions,

the Company estimates fair value based on the observable value of the underlying assets in the liquidity pools, considering pool composition,

and quoted market prices for the underlying digital assets.

See Note 6 – Fair Value Measurements for additional

information regarding nonrecurring fair value measurements.

6 - Fair Value Measurements

Company measures certain assets and liabilities at fair value.

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bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

1 – Valuations based on unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that are accessible

1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that are accessible

at the measurement date.

Since valuations are based on quoted prices that are readily and regularly available in an active market, these

valuations do not entail a significant degree of judgment.

2 – Valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted

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that market participants would use in pricing the asset or liability.

Company’s crypto assets (treasury, DeFi, and staked) are measured at fair value in accordance with ASC 350-60 using quoted prices

in active markets for the underlying tokens, primarily on major digital-asset exchanges.

These quoted prices represent Level 1 inputs

within the fair-value hierarchy.

Company’s digital assets measured at fair value, which include assets held in treasury, deployed in DeFi protocols, and staked

in validator operations, are accounted for in accordance with ASC 350-60 and are valued using quoted prices in active markets for the

underlying tokens, primarily on major digital-asset exchanges.

These quoted prices represent Level 1 inputs within the fair-value hierarchy.

The Company also holds certain

digital assets, including liquidity pool positions and NFTs that are accounted for as indefinite-lived intangible assets under ASC 350

and are measured at cost less impairment.

These assets are not measured at fair value on a recurring basis and, therefore, are not included

in the recurring fair value hierarchy disclosures presented in this note.

To the extent impairment is recognized, the related fair value

measurement is disclosed as a nonrecurring fair value measurement.

See Note 5 – Digital Assets (Liquidity Pool Positions and

Other Intangible Digital Assets) for additional information.

resulting from staking lock-ups or DeFi collateralization do not affect classification within the fair-value hierarchy because such restrictions

are entity-specific and do not impact the market prices of the respective tokens available to other market participants.

all of the Company’s crypto assets are classified as Level 1.

financial instruments, including cash and cash equivalents, stablecoins, accounts and other receivables, accounts payable and accrued

liabilities are carried at cost, which management believes approximates fair value due to the short-term nature of these instruments.

following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and the Company’s

estimated level within the fair value hierarchy of those assets and liabilities as of September 30, 2025 and December 31, 2024:

all digital assets measured at fair value on a recurring basis are classified as Level 1.

Financial instruments not measured

at fair value on a recurring basis include cash and cash equivalents, accounts and other receivables, accounts payable and accrued liabilities,

accrued compensation, accrued interest, loans payable – DeFi protocol, and convertible notes payable.

The carrying amounts of cash and

cash equivalents, accounts and other receivables, accounts payable and accrued liabilities, accrued compensation, and accrued interest

approximate fair value due to the short-term nature of these instruments.

The carrying amount of loans payable

– DeFi protocol approximates fair value because the borrowings are denominated primarily in USD-pegged stablecoins, bear variable

rates determined by the applicable DeFi protocol, have no fixed maturity, and may be repaid or liquidated in accordance with protocol

the related fair value measurement would be categorized within Level 2 of the fair value hierarchy.

The Company’s convertible notes payable are carried at amortized cost, net of unamortized debt discount and

issuance costs.

Management believes the estimated fair value of the convertible notes approximated carrying value as of March 31, 2026

and December 31, 2025;

the related fair value measurement would be categorized within Level 3 of the fair value hierarchy due to the absence

of an active market for the notes and the use of significant unobservable inputs, including the Company’s estimated credit risk,

liquidity considerations, and assumptions regarding conversion and settlement.

The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and

the Company’s estimated level within the fair value hierarchy of those assets as of March 31, 2026 and December 31, 2025.

equity investments accounted for under the ASC 321 measurement alternative are not measured at fair value on a recurring basis and are

presented separately below.

Schedule of Fair Value of Assets and Liabilities Valued on Recurring Basis

Value Measured at September 30, 2025

Crypto Assets

Fair Value Measured at March 31, 2026

Balance at March 31,

Quoted prices in active markets

Significant other observable inputs

Significant unobservable inputs

Digital assets measured at fair value

$ 115,955,855

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$ 115,955,855

Warrant Liabilities

Value Measured at December 31, 2024

Crypto Assets

Fair Value Measured at December 31, 2025

Balance at December 31,

Quoted prices in active markets

Significant other observable inputs

Significant unobservable inputs

Digital assets measured at fair value

$ 210,764,252

Warrant liabilities

Company did not make any transfers between the levels of the fair value hierarchy during the nine months ended September 30, 2025 and

3 Valuation Techniques

3 financial assets consist of private equity investments for which there is no current public market for these securities such that the

determination of fair value requires significant judgment or estimation.

As of September 30, 2025 and December 31, 2024, the Company’s

Level 3 investments were carried at the original cost of the investments, with a value of $ 500,000 and $ 100,000 , respectively.

has elected to apply the measurement alternative under ASC 321, Investments—Equity Securities , for these investments.

3 financial liabilities consist of the warrant liabilities for which there is no current market for these securities such that the determination

of fair value requires significant judgment or estimation.

in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates

or assumptions and recorded as appropriate.

significant decrease in volatility or a significant decrease in the Company’s stock price, in isolation, would result in a significantly

lower fair value measurement.

Changes in the values of the warrant liabilities are recorded in “change in fair value of warrant

liabilities” in the Company’s statements of operations.

March 2, 2021, the Company entered into a securities purchase agreement with certain purchasers which closed on March 4, 2021 pursuant

to which the Company sold an aggregate of (i) 950,000 shares of Common Stock, and (ii) Common Stock warrants (the “Warrants”)

to purchase up to 712,500 shares of Common Stock for gross proceeds of $ 9.5 million in a private placement offering.

Warrants require, at the option of the holder, a net-cash settlement following certain fundamental transactions (as defined in the Warrants).

At the time of issuance, the Company maintained control of certain fundamental transactions and as such the Warrants were initially classified

As of September 30, 2025, the Company no longer maintained control of certain fundamental transactions because it did not

hold a majority of shareholder voting power.

As such, the Company may be required to cash settle the Warrants if a fundamental transaction

occurs which is outside the Company’s control.

Accordingly, the Warrants are classified as liabilities.

The Warrants have been

recorded at their fair value using the Black-Scholes valuation model, and will be recorded at their respective fair value at each subsequent

balance sheet date.

This model incorporates transaction details such as the Company’s stock price, contractual terms, maturity,

risk-free rates, as well as volatility.

Warrants require the issuance of registered shares upon exercise, and do not expressly preclude an implied right to cash settlement and

are therefore accounted for as derivative liabilities.

The Company classifies these derivative warrant liabilities on the balance sheet

as a current liability.

summary of quantitative information with respect to the valuation methodology and significant unobservable inputs used for the Company’s

warrant liabilities that are categorized within Level 3 of the fair value hierarchy at the date of issuance and, as of September 30,

2025 and December 31, 2024, is as follows:

Summary of Valuation Methodology and Significant Unobservable Inputs Warrant Liabilities

Risk-free rate of interest

Expected volatility

Expected life (in years)

Expected dividend yield

risk-free interest rate was based on rates established by the Federal Reserve Bank.

For the Warrants, the Company estimates expected

volatility, giving primary consideration to the historical volatility of its Common Stock.

The expected volatility is calculated using

the standard deviation of the Company’s underlying stock price’s daily logarithmic returns.

The expected life of the warrants

was determined by the expiration date of the warrants.

The expected dividend yield was based on the fact that the Company has not historically

paid dividends on its Common Stock and does not expect to pay recurring dividends on its Common Stock in the future.

following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial assets and liabilities

for the nine months ended September 30, 2025 that are measured at fair value on a recurring basis:

Company did not make any transfers between the levels of the fair value hierarchy during the three months ended March 31, 2026.

3 Liabilities

3 financial liabilities previously consisted of warrant liabilities for which there was no active market and fair value was determined

using valuation models incorporating unobservable inputs.

warrant liabilities originated from warrants issued in a prior financing transaction and were previously classified as derivative liabilities.

These warrants were classified as derivative liabilities because certain terms could have required net-cash settlement under circumstances

outside the Company’s control.

Prior to their expiration, the warrant liabilities were measured at fair value using an option pricing

model that incorporated inputs such as the Company’s stock price, expected volatility, risk-free interest rate, and expected term.

outstanding liability-classified warrants expired during the three months ended March 31, 2026.

As a result, there were no warrant liabilities

outstanding as of March 31, 2026, and the Company will no longer remeasure warrant liabilities in future periods.

As of December 31,

2025, the estimated fair value of these warrant liabilities was approximately $ 0 .

Equity Investments Accounted for Under ASC 321 Measurement Alternative

Company holds private equity investments without readily determinable fair values.

The Company has elected to account for these investments

using the measurement alternative under ASC 321, Investments—Equity Securities , under which such investments are measured

at cost, less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical

or similar investments of the same issuer.

of March 31, 2026 and December 31, 2025, the carrying amount of the Company’s private equity investments accounted for under the

measurement alternative was $ 600,000

and $ 600,000 ,

respectively.

No impairments, upward adjustments, or downward adjustments were recognized during the three months ended March 31, 2026.

The following table summarizes changes in the carrying amount of private equity investments accounted for under the

ASC 321 measurement alternative for the three months ended March 31, 2026 and the year ended December 31, 2025:

Schedule of Changes in Fair Value and Other Adjustments of Warrants

September 30,

Beginning balance

Unrealized appreciation (depreciation)

Ending balance

September 30,

Three Months Ended

March 31, 2026

December 31, 2025

Beginning balance

Fair value adjustment of warrant

Ending balance

Fair Value Measurements of Intangible Digital Assets

Company holds certain digital assets, including liquidity pool positions and NFTs, that are accounted for as indefinite-lived intangible

assets under ASC 350 and measured at cost less impairment.

These assets are not measured at fair value on a recurring basis and, therefore,

are excluded from the recurring fair value hierarchy tables presented below.

When the Company recognizes an impairment loss, the fair

value measurement used to measure the impairment represents a nonrecurring fair value measurement under ASC 820.

See Note 5 – Digital

Assets (Liquidity Pool Positions and Other Intangible Digital Assets) for additional information.

the three months ended March 31, 2026, the Company recognized impairment losses of approximately $ 210,000

related to intangible digital assets, including approximately

$ 194,000 impairment

of liquidity pool positions and approximately $ 16,000

impairment of NFTS, because the carrying amounts of certain

assets exceeded their estimated fair values.

After recognizing impairment, the carrying amounts of liquidity pool positions and NFTs

as of March 31, 2026 were approximately $ 11,358,000

and $ 26,000 ,

respectively.

To the extent the related assets were written down to fair value during the period, these amounts represent the assets’

fair values as of the March 31, 2026 nonrecurring measurement date.

The impairment losses are included in impairment loss on intangible

digital assets in the statements of operations.

fair value of liquidity pool positions was estimated using a market approach based on the observable value of the underlying digital

assets withdrawable from the applicable liquidity pools as of the measurement date, including observable on-chain pool composition, pool

liquidity and quoted market prices for the underlying digital assets.

Because the measurement was based principally on observable inputs

and no significant unobservable adjustments were applied, the related nonrecurring fair value measurement was categorized within Level

2 of the fair value hierarchy.

fair value of NFTs was estimated using a market approach based on available NFT marketplace information, including recent transactions,

floor prices or other marketplace indications for comparable NFTs, as adjusted for asset-specific characteristics and limited market

The related nonrecurring fair value measurement was categorized within Level 3 of the fair value hierarchy because there are

no quoted prices in active markets for identical NFTs and the measurement involves management judgment.

For the Level 3 NFT measurement,

significant unobservable inputs consisted primarily of management’s judgment in selecting comparable NFT marketplace data and evaluating

asset-specific characteristics and market activity.

The Company did not develop material quantitative unobservable adjustments in measuring

7 – Revenues and Cost of Revenues

Company generates revenue from blockchain infrastructure operations, including validator node operations, block building activities,

and DeFi arrangements.

These revenue streams are accounted for under ASC 606 , Revenue from Contracts

with Customers , as the Company provides services that generate consideration in the form of digital assets.

ASC 606, the Company applies the following five-step model to all revenue-generating arrangements:

Identify the contract with the customer

Identify the performance obligations in the contract

Determine the transaction price

Allocate the transaction price to the performance obligations in the contract

Recognize revenue when the Company satisfies a performance obligation

Company’s revenues are generated from blockchain-based operations and comprise three primary sources:

(i) staking rewards earned

from validator node operations (NodeOps);

(ii) execution-layer transaction fees, priority fees, and MEV rewards earned from block-building

activities (Builder+);

and (iii) protocol-driven rewards earned from participation in DeFi protocols (Imperium).

Revenues from NodeOps

and Builder+ are aggregated and presented as Blockchain infrastructure revenues , while revenues from Imperium are presented separately

as DeFi revenues in the statements of operations.

transaction consideration the Company receives in the form of native digital assets, such as ETH or other network tokens, represents

non-cash consideration at fair value on the date the digital assets are earned.

Collectively,

these activities represent the outputs of the Company’s ordinary operations and are measured at the fair

value of the digital assets earned at the time each performance obligation is satisfied.

The Company operates digital asset

validator nodes on the Ethereum network (“NodeOps”) through which it participates directly in the network’s consensus

In this role, the Company stakes its own digital assets to validate transactions and propose or attest to blocks on the Ethereum

Staked assets are subject to protocol-defined lock-up and withdrawal periods.

In exchange for validating transactions

and participating in block production, the Company earns protocol-determined rewards, including consensus layer issuance and priority

fees, which are distributed by the Ethereum network as part of its consensus mechanism.

Company earns these rewards directly from the Ethereum protocol, which calculates and distributes such rewards to the Company’s

digital wallets, and does not act as an agent or intermediary for third parties.

provision of validation services represents an output of the Company’s ordinary activities.

Validation activities, including block

proposals and attestations, represent the Company’s performance obligations.

The performance obligation is satisfied at a point

in time when the validation is confirmed by the network and the associated rewards are earned and available for transfer, at which point

revenue is recognized.

Company earns revenue by participating as a Builder on blockchain networks that have implemented a proposer-builder separation (“PBS”)

framework, including Ethereum and Binance Smart Chain (“BSC”).

In these roles, the Company bundles and proposes transaction

blocks for submission to network Validators (“block building”), and is compensated when its blocks are selected, proposed,

and successfully finalized on the applicable network.

Block Building

Company participates in the Ethereum blockchain network by engaging in the construction of blocks containing strategically bundled transactions

from the Ethereum mempool and from searchers who connect to the Company’s endpoint with the intent of the Company’s Builder

proposing their transactions.

Revenue recognition for these activities, conducted through Builder+, entails the recognition of execution

layer transaction fees (or “transaction fees”) and priority fees (or “tips”) earned in exchange for successfully

constructing blocks of bundled transactions and having these blocks selected and proposed by a validator to the Ethereum network for

validation and successfully finalized on the network.

transaction fees and tips are earned as a direct result of the Company’s fulfillment of its performance obligations, which include

the construction of blocks by bundling transactions to maximize the value of the included fees and the proposal of that block by a Validator.

Each constructed block under a smart contract with the Ethereum network signifies a distinct performance obligation.

part of the block construction and proposal process, the Company’s Builder purchases block space through a fixed non-negotiable

fee paid to a Validator (a “Validator Payment”) embedded in each proposed block.

The Validator Payment, predetermined by

the Builder, is paid to Validators as compensation for selecting and proposing the Company’s block to the network for validation.

The Validator Payment is intrinsically linked to the Company’s performance obligations and is disbursed in the block constructed

by the Builder if our Builder’s block is both selected by a Validator and successfully proposed to, and finalized on, the Ethereum

otherwise, our Validator Payment may be included in a subsequent block.

The Validator Payment represents a direct and fixed

pre-determined cost.

satisfaction of the performance obligation occurs at a point in time when the constructed block is both proposed by a Validator and successfully

finalized on the Ethereum network.

At this juncture, the Company has fulfilled its obligations, and the transaction fees and tips associated

with the transactions included in the block become available and are transferred to the Company’s digital wallet.

Company recognizes revenue, reflecting the fair value of the total transaction fees and tips earned from the constructed block.

Smart Chain (BSC) Block Building

Company also operates as a Builder on Binance Smart Chain (“BSC”), which uses a Proof-of-Staked-Authority (“PoSA”)

consensus and a distinct block-building and reward structure.

The native token of BSC is BNB, which is used for both transaction fees

and transaction-based payments.

on BSC construct block bids composed of transactions and optional searcher tips.

Unlike Ethereum, transaction fees associated with user

transactions included in a finalized BSC block are paid directly to the Validator’s coinbase address and are not received by the

Instead, the Builder earns revenue in the form of BNB-denominated tips that are directed to a Builder-controlled tip smart contract

as priority fees and transferred or made available to the Company as part of the block-level settlement mechanics for each successfully

finalized block.

performance obligations on BSC are satisfied on a block-by-block basis when the constructed block is selected and proposed by a Validator

and finalized on-chain.

Each finalized block is considered a separate performance obligation.

The Company recognizes BSC block-building

revenue at the time each block is finalized and the related BNB-denominated tips are transferred or otherwise made available to the Company,

measured at the fair value of BNB at that time.

connection with BSC block building, the Company includes a Builder-specified bid payment, structured through a self-transfer transaction

appended by the Builder, to incentivize the Validator to select the Company’s block.

Such payments are recorded as cost of revenues

because they represent direct costs of fulfilling the BSC block-building performance obligation.

Lending Revenue (Aave)

Company earns rewards from DeFi lending arrangements, primarily through the Aave protocol, by supplying digital assets to decentralized

lending pools.

These arrangements generate variable returns based on supply and demand dynamics within the protocol.

the Company deposits ETH into Aave, the underlying ETH remains recognized at fair value on the balance sheet, consistent with the accounting

policy described in Note 3.

The Company earns variable rewards, typically in ETH, which accrue continuously based on utilization of the

lending pool.

Company has concluded that its participation in these arrangements represents a performance obligation satisfied over time, as the protocol’s

users simultaneously receive and consume the benefits of the Company’s supplied liquidity.

Revenue is recognized over time in proportion

to rewards earned and is measured at the fair value of the digital assets at the time the consideration is earned.

Variable consideration

is constrained to amounts not subject to significant reversal in accordance with ASC 606-10-32-11.

The Company also earns fees and

other rewards through participation in decentralized exchange liquidity pools.

By depositing digital assets into these pools, the Company

provides liquidity to decentralized markets and earns a proportional share of fees generated by the protocol.

contrast to DeFi lending arrangements, deposits into liquidity pools result in the derecognition of the underlying digital assets and

the recognition of liquidity pool positions accounted for as indefinite-lived intangible assets, as described in Note 3 and Note 5.

The Company’s participation

in liquidity pools represents a performance obligation satisfied over time, as liquidity is continuously provided to the protocol.

is recognized over time based on the Company’s proportional share of fees and other rewards generated and is measured at the fair

value of digital assets received at the time the fees are earned.

Variable consideration is constrained to amounts not subject to significant

earned through Imperium are classified as DeFi revenues in the statements of operations.

The Company is considered the principal

in these arrangements because it controls the deployment of its digital assets, bears protocol and market risks (including smart-contract,

liquidity, and liquidation risk), and earns consideration directly from the protocol rather than through an intermediary.

Disaggregation

following table summarizes the revenues earned from the Company’s operations for the three months ended March 31, 2026 and 2025:

Schedule of Disaggregation of Revenues

For the Three Months Ended March 31,

Blockchain infrastructure revenues

Total blockchain infrastructure revenues

DeFi revenues (Imperium)

Total revenues

Company’s cost of revenues primarily consists of direct expenses incurred in connection with its blockchain operations, including

NodeOps, Builder+ and Imperium activities.

Infrastructure Operations (NodeOps and Builder+)

Company’s cost of revenues related to its blockchain infrastructure operations primarily includes direct production costs associated

with transaction validation and block construction on blockchain networks.

These costs include cloud-based server hosting expenses related

to our validator nodes and Builders, allocated employee compensation related to the monitoring, maintenance and support operations.

Additionally,

for Ethereum block building, cost of revenues includes Validator Payments made by the Company’s Builder to Validators as compensation

for proposing constructed blocks.

These are fixed amounts embedded within the proposed blocks and are paid only when the block is successfully

finalized on-chain.

BSC block building, although the Builder does not receive the transaction fees attached to the bundled

transactions included in a finalized block, it must still compete for inclusion by proposing an additional bid, structured as a self-transaction,

that specifies extra fees intended to incentivize the Validator to select its block.

This self-transaction results in a direct payment

to the Validator’s coinbase address.

These Builder-specified bids are separate from the transaction fees attached to user transactions

and represent incremental value added by the Builder intended to increase the likelihood of block inclusion.

The Company records these

Builder-specified bid payments as cost of revenues, as they are a direct cost of fulfilling the block-building performance obligations

under the BSC block-building arrangement in accordance with ASC 606.

Company also includes in cost of revenues any third-party fees for hosting, infrastructure support, or software maintenance related to

Validator or Builder operations.

expenses are collectively presented as Cost of blockchain infrastructure revenues in the statements of operations.

in 2025, the Company’s DeFi operations under its Imperium business line generated revenues from participation in decentralized

finance protocols.

Related costs of revenues primarily consist of allocated employee compensation and related expenses associated with

establishing, monitoring, and maintaining DeFi activities, as well as any third-party services that support these operations and other

direct on-chain expenses incurred in connection with deploying or interacting with DeFi protocols.

These costs are presented as Cost

of DeFi revenues in the statements of operations.

Disaggregation

of Cost of Revenues

following table further details the costs of revenues for the three months ended March 31, 2026 and 2025:

Schedule of Disaggregation of Cost of Revenues

For the Three Months Ended March 31,

Cost of blockchain infrastructure revenues

Cost of staking revenues (NodeOps)

Cost of block-building revenues (Builder+)

Total cost of blockchain infrastructure revenues

Cost of DeFi revenues (Imperium)

Total cost of revenues

8 – Segment Reporting

Company operates within a single 1 reportable segment under ASC 280, Segment Reporting , focused on blockchain based revenue

generation through its blockchain infrastructure and DeFi operations.

this reportable segment, the Company’s operations are organized around three primary business lines that represent distinct revenue-generating

Node Operations (“NodeOps”) – earns ETH-denominated staking rewards and validator fees from operating validator

nodes that secure proof-of-stake blockchain networks.

Building (“Builder+”) – generates execution-layer transaction fees and MEV rewards from the construction and

submission of optimized transaction blocks to validators on Ethereum and Binance Smart Chain (BSC).

Operations (“Imperium”) – represents the Company’s decentralized finance activities, including

decentralized lending and liquidity pool participation, through which the Company earns protocol-denominated fees and rewards for supplying digital asset liquidity to smart contract-based protocols.

from NodeOps and Builder+ are aggregated and presented as Blockchain infrastructure revenues , while revenues from Imperium are

presented separately as DeFi revenues in the statements of operations.

Although these business lines have distinct economic drivers

and operational processes, management evaluates them together as part of the Company’s single reportable segment due to shared

infrastructure, integrated management oversight, and the common objective of on-chain revenue generation.

activities include both DeFi lending arrangements and decentralized exchange liquidity pool participation, which have distinct economic

characteristics but are managed together within the Company’s DeFi operations.

Gross profit (loss) is the primary

measure of segment performance reviewed by the Company’s CODMs, which comprises members of executive management including the Chief

Executive Officer and Chief Financial Officer.

In evaluating performance and allocating resources, the CODMs reviews segment revenues,

direct production costs, validator payments, hosting expenses, and allocated employee compensation.

with ASU 2023-07 , the Company discloses the significant segment expenses regularly provided to the CODMs for decision-making purposes,

including validator payments, infrastructure hosting costs, allocated employee compensation, and other direct operating costs associated

with blockchain infrastructure and DeFi operations.

following tables present segment revenue and gross profit (loss), including the significant expense items reviewed by the CODMs, for the

three months ended March 31, 2026 and 2025:

Schedule of Segment Revenue and Gross Profit (loss)

For the Three Months Ended March 31, 2026

Cost of revenues

Validator payments

Cloud and server hosting costs

Compensation costs

Third-party support costs

Gross profit (loss)

$ ( 111,816 )

For the Three Months Ended March 31, 2025

Cost of revenues

Validator payments

Cloud and server hosting costs

Compensation costs

Third-party support costs

Gross profit (loss)

$ ( 172,249 )

following table reconciles total segment gross profit to net income (loss):

For the Three Months Ended

Total operating expenses

( 68,630,772 )

( 17,614,123 )

Other income (expense)

( 1,547,859 )

Net income (loss)

$ ( 69,164,319 )

$ ( 17,268,697 )

9 – Stockholders’ Equity

of September 30, 2025, the Company had 975,000,000 shares of Common Stock, $ 0.001 par value, authorized, of which 47,075,189 shares were

issued and outstanding.

At-The-Market

Offering Agreement

September 14, 2021, the Company entered into an At-The-Market Offering Agreement (the “ATM Agreement”) with H.C.

& Co., LLC, as agent (“H.C.

Wainwright”), pursuant to which the Company may offer and sell, from time-to-time, shares

of the Company’s Common Stock through H.C.

Wainwright, as agent.

Initially, the aggregate offering price of shares issuable under

the ATM Agreement was $ 98,767,500 , registered pursuant to the Company’s Form S-3 registration statement that became effective in

September 2021.

October 4, 2024, a new Form S-3 registration statement became effective, increasing the total amount of securities that may be offered

and sold under the base prospectus to $ 250,000,000 .

July 22, 2025, the Company entered into an amendment to its engagement with H.C.

Wainwright in connection with a new Form S-3 registration

statement filed on July 23, 2025, to register up to $ 2,000,000,000 of securities for future issuance (the “New Registration Statement”).

The New Registration Statement was approved by the Securities and Exchange Commission (“SEC”) and declared effective on August

to the July 2025 amendment, H.C.

Wainwright will continue to act as the Company’s exclusive sales agent for any at-the-market offerings

through November 12, 2027.

Under the amended terms, the Company shall pay H.C.

Wainwright a commission of up to 3.0 %.

other terms and conditions of the original ATM Agreement and prior engagement letters remain in full force and effect.

the nine months ended September 30, 2025, the Company sold a total of 26,394,414 shares of Common Stock under the ATM Agreement for aggregate

total gross proceeds of approximately $ 139,437,000 at an average selling price of $ 5.28 per share, resulting in net proceeds of approximately

$ 135,161,000 after deducting commissions and other transaction costs.

of March 31, 2026 the Company had 975,000,000 shares of Common Stock, $ 0.001 par value, authorized, of which 49,775,371 shares were issued

and outstanding.

The Market Offering Agreement

Company has an At-The-Market Offering Agreement (the “ATM Agreement”) with H.C.

Wainwright & Co., LLC, as agent (“H.C.

Wainwright”), pursuant to which the Company may offer and sell, from time-to-time, shares of the Company’s Common Stock.

The ATM Agreement operates under the Company’s effective registration statement, which registers up to $ 2,000,000,000 of securities

for potential future issuance, and provides for a commission to H.C.

Wainwright of up to 3.0 % of the gross proceeds from sales.

the three months ended March 31, 2026, the Company did not sell any shares of Common Stock under the ATM Agreement.

During the three

months ended March 31, 2025, the Company sold a total of 127,249 shares of Common Stock under the ATM Agreement for aggregate gross proceeds

of approximately $ 238,000 at an average selling price of $ 1.87 per share, resulting in net proceeds of approximately $ 229,000 after deducting

commissions and other transaction costs.

Repurchase Program

September 4, 2025, the Company’s Board of Directors (the “Board”) approved a share repurchase program authorizing the

Company to repurchase up to $ 50 million of its common stock over a three-year period.

Repurchases may be made from time to time in the

open market, in privately negotiated transactions, or otherwise, in such quantities, at such prices, and in such manner as determined

by the Company’s Chief Executive Officer consistent with the Board’s authorization.

Repurchases will be conducted in compliance

with Rule 10b-18 under the Securities Exchange Act of 1934 and applicable state law.

Company has a share repurchase program authorizing the repurchase of up to $ 50 million of its common stock.

Repurchases may be made from

time to time in the open market or in privately negotiated transactions in compliance with Rule 10b-18 under the Securities Exchange

Act of 1934 and applicable state law.

The Company has engaged H.C.

Wainwright & Co.,

LLC as the sole broker to implement the program.

(i) no repurchases may occur at a price per share greater than the current

fair market value of the Company’s crypto assets and cash divided by its outstanding common shares, as determined in good faith

and (ii) repurchases may not occur if the purchase price is less than a 25% discount to any limit orders in any 10b5-1 plan

of a named executive officer, or within 20 calendar days of any market-based order under any such plan.

The program does not obligate

the Company to repurchase any specific number of shares and may be modified, suspended, or discontinued at any time.

Company accounts for share repurchases under the retirement method of accounting.

Accordingly, shares repurchased are immediately retired

and deemed cancelled, reducing both issued and outstanding shares.

In connection with these retirements, the Company reduces Common Stock

and Additional Paid-in Capital (“APIC”) based on a pro rata (average per-share) APIC allocation method, with any differences

between the repurchase price and the book value of equity retired recorded to APIC – Share Repurchase.

If necessary, amounts are

recorded to Retained Earnings once APIC – Share Repurchase is exhausted.

the nine months ended September 30, 2025, the Company repurchased and retired 652,020 shares of its common stock for an average purchase

price of $ 4.60 .

As of September 30, 2025, approximately $ 47,000,000 remained available for repurchases under the authorization.

following table sets forth information regarding purchases of the Company’s common stock during the three months ended September

of Purchases of Common Stock

Number of Shares Purchased

Price Paid per Share

Number of Shares Purchased as Part of Publicly Announced Program

Dollar Value of Shares that May Yet Be Purchased Under the Program

July 1 – July 31, 2025 (1)

August 1 – August 31, 2025 (1)

September 1 – September

Total for Quarter Ended September

Company’s share repurchase program commenced on September 4, 2025.

No shares were repurchased

prior to that date.

Based Payments

Company issues $ 12,500 of Common Stock to each independent director at the end of each calendar quarter, subject to continued service.

The number of shares is determined based on the closing price of the Company’s Common Stock on the last trading day of the applicable

For the nine months ended September 30, 2025, the Company issued 49,812 shares of Common Stock with a grant date fair value

of approximately $ 113,000 to independent directors.

Bonus Payments

the nine months ended September 30, 2025, the Company issued 329,110 shares of Common Stock to officers and employees as part of the

payment of accrued bonus compensation for the year ended December 31, 2024.

The total fair value of the shares issued was approximately

$ 813,000 based on the Company’s closing stock price on the issuance date.

Of the shares issued, 33,731 were returned to net settle

the issuance and pay related taxes, resulting in a net share issuance of 295,379 shares of Common Stock.

V Preferred Stock

Company previously designated and issued 14,542,803 shares of Series V Preferred Stock (“Series V”) on June 2, 2023 to shareholders

of record as of May 12, 2023.

The Series V:

(i) is non-convertible (subject to potential conversion rights, as described below), (ii)

has a 20% liquidation preference over the shares of Common Stock, (iii) is non-voting, and (iv) has certain rights to dividends and distributions

(at the discretion of the Board).

the Company’s 2024 Annual Meeting on September 6, 2024, stockholders approved an amendment to the Series V Certificate of Designation

granting the Board the discretion to convert each share of Series V into one share of Common Stock.

As of September 30, 2025, the Board

has not filed the amendment or elected to convert any Series V shares.

Series V Issuances and Activity

January 13, 2025, the Company issued 1,020,834 restricted shares of Series V Preferred Stock concurrently with the acceleration and settlement

of previously outstanding long-term incentive (“LTI”) restricted stock units (“RSUs”).

These restricted Series

V shares were issued in the same proportion as restricted Common shares to preserve dividend equivalency under the LTI plan and remain

subject to the original market capitalization-based performance conditions and time-based vesting schedules ranging from one to three

August 7 and August 15, 2025, the Company determined that the market capitalization vesting thresholds of $100 million and $150 million,

respectively, had been achieved and sustained for 30 consecutive days.

In connection with these milestones—consistent with the

vesting of related restricted Common shares— 413,888 restricted Series V shares became fully vested and were reclassified from restricted

to outstanding Series V Preferred Stock.

February 3, 2025, following the resignation of the Company’s Chief Technology Officer, 49,327 restricted Series V shares were forfeited

in tandem with the forfeiture of related restricted Common shares.

On August 18, 2025, 333,333 restricted Series V shares were similarly

forfeited upon the transition of the Company’s Chief Operating Officer to Operations Specialist.

All forfeited shares were returned

to the Company and are no longer outstanding.

of September 30, 2025, a total of 322,580 restricted shares of Series V Preferred Stock were issued and outstanding, of which 93,413

shares remain subject solely to time-based vesting conditions, which extend over a one- to three-year period, with full vesting expected

by December 31, 2027.

2021 Equity Incentive

Company’s 2021 Equity Incentive Plan (the “2021 Plan”) was effective on January 1, 2021 and approved by shareholders

on September 30, 2021 and amended on June 13, 2022.

The Company received shareholder approval on July 11, 2023 to increase the authorized

amount under the 2021 Plan from 7,000,000 shares to 12,000,000 shares.

Incentive Plan Milestone Achievement

August 7, 2025, upon the recommendation of the Compensation Committee, the Board determined that it had exceeded the highest level tier

for the liquidity milestone under its 2025 Annual Performance Incentive Plan.

Specifically,

the Company maintained a cash and crypto balance in excess of $75 million for twenty consecutive days, thereby satisfying the highest

tier (cutoff level being $75 million) of the liquidity milestone.

This liquidity milestone accounts for 25% of each executive officer’s

target incentive compensation and is designed to reward financial strength and liquidity.

accordance with the plan and consistent with the Company’s pay-for-performance philosophy, the Board approved the payment of this

performance-based award to all eligible employees in the form of non-qualified stock options under the 2021 Plan., resulting in the grant

of 330,985 options.

These options:

(i) have a term of seven years, (ii) have an exercise price equal to $4.20 per share, (iii) vest in

full on December 31, 2026, and (iv) are subject to the terms and conditions set forth in the applicable award agreements.

the nine months ended September 30, 2025, option holders exercised 1,100,000 stock options on a cashless basis, surrendering 353,637

options to cover the exercise price and receiving 746,363 net shares.

No cash proceeds were received in connection with these exercises.

Activity Summary

summary of stock option activity under the Company’s 2021 Equity Incentive Plan for the nine months ended September 30, 2025 and

2024 is presented below:

Wainwright & Co., LLC as the sole broker to implement the program.

Repurchases are subject to certain pricing and timing limitations, including those related to the Company’s fair value and

named executive officer trading plans.

The program does not obligate the Company to repurchase any specific number of shares and may

be modified, suspended, or discontinued at any time.

the three months ended March 31, 2026, the Company did not repurchase any shares of its common stock.

As of March 31, 2026, approximately

$ 46,000,000 remained available for repurchases under the authorization.

Purchase Warrants

following is a summary of warrant activity for the three months ended March 31, 2026:

Summary of Warrant Activity

Outstanding as of December 31, 2025

Expiration of warrants

Outstanding as of March 31, 2026

of March 31, 2026, no warrants were classified as derivative liabilities, as all liability-classified warrants expired during the period.

The remaining warrants issued in connection with the convertible notes are classified as equity.

2023, the Company issued Series V Preferred Stock to shareholders on a one-for-one basis.

The Series V is non-convertible, has a 20%

liquidation preference over common stock, is non-voting, and includes certain rights to dividends and distributions at the discretion

of the Board.

2024, stockholders approved an amendment to the Certificate of Designation to provide the Board discretion to convert each share of Series

V into one share of common stock.

As of March 31, 2026, the Board has not elected to convert any Series V shares.

of March 31, 2026, the Company had Series V Preferred Stock authorized, of which 15,671,405 shares were issued and outstanding as of

March 31, 2026.

shares of Series V Preferred Stock have been issued as restricted shares in connection with the conversion of RSUs to restricted shares

of common stock in prior periods.

These restricted shares remain subject to the original vesting conditions of the underlying RSU awards,

including market-based and service-based vesting criteria.

of March 31, 2026, the Company had approximately 278,000 restricted shares of Series V Preferred Stock outstanding.

These restricted

shares do not participate in voting rights and are subject to forfeiture if the underlying vesting conditions are not satisfied.

compensation, including options, RSUs, restricted shares, and share payments, may be granted to directors and employees of the Company

under the Company’s 2021 Equity Incentive Plan (the “2021 Plan”).

The 2021 Plan became effective on January 1, 2021,

was approved by shareholders on March 31, 2021, and was amended on June 13, 2022.

On July 11, 2023, the Company received shareholder

approval to increase the number of shares authorized for issuance under the 2021 Plan from 7,000,000 shares to 12,000,000 shares.

of March 31, 2026, the Company had approximately 205,647 shares remaining available for future grants under the 2021 Plan, after giving

effect to RSU awards granted under the 2026 LTI Program that were issued within the existing authorized share limit.

the three months ended March 31, 2026, the Company approved additional RSU awards under the 2026 LTI Program in excess of the number

of shares currently authorized for issuance under the 2021 Plan.

The portion of such awards that exceeds the currently authorized share

limit is subject to stockholder approval of an increase in the number of authorized shares at the Company’s 2026 Annual Meeting

of Stockholders.

No shares underlying such awards will be issued unless and until stockholder approval is obtained.

accounting purposes, RSUs approved within the existing authorized share limit are considered granted as of January 1, 2026.

RSUs approved

in excess of the currently authorized share limit are not considered granted for accounting purposes until stockholder approval is obtained.

for the three months ended March 31, 2026, the Company has included all RSUs approved under the 2026 LTI Program in the RSU activity

and ending balances presented below and has recognized stock-based compensation expense for such awards based on an estimated fair value

using the closing price of the Company’s common stock on January 1, 2026, consistent with ASC 718 guidance for awards with unresolved

grant date conditions.

receipt of stockholder approval, the Company will establish the grant date for such awards and will remeasure the fair value based on

the closing price of the Company’s common stock on the grant date.

Any difference between the estimated fair value and the grant

date fair value will be recognized as an adjustment to stock-based compensation expense on a prospective basis over the remaining requisite

service period.

and Restricted Shares

Company grants RSUs, including long-term incentive (“LTI”) awards, to employees and officers under its equity incentive plans

as part of its overall compensation and retention strategy.

RSUs are generally subject to service-based vesting conditions and, in certain

cases, market-based performance conditions.

certain circumstances, RSUs may be settled through the issuance of restricted shares of common stock, including in connection with tax

elections or other administrative considerations, while retaining the original vesting conditions of the underlying awards.

are entitled to dividend equivalents, including Series V preferred stock, and may be settled in a combination of common stock and Series

V preferred stock, as applicable.

forfeitures represent unvested awards that were cancelled in connection with employee departures in the ordinary course of business.

following tables present the activity in RSUs and restricted shares for the three months ended March 31, 2026, followed by additional

detail regarding the nature, valuation, and vesting conditions of such awards.

Activity Rollforward

Summary of RSU

Activity Rollforward

Average Grant

Nonvested as of December 31, 2025

Vested and converted to restricted common shares

( 2,590,897 )

Nonvested as of March 31, 2026

RSU activity presented above includes all RSUs approved under the 2026 LTI Program, including awards subject to stockholder approval

for additional authorized shares under the 2021 Plan.

Stock Activity Rollforward

Summary of RSU Activity Rollforward

Restricted Shares

of Common Stock

Outstanding and nonvested as of December 31, 2025

Converted from restricted stock units

Outstanding and Nonvested as of March 31, 2026

shares of common stock outstanding primarily relate to RSUs that were previously converted into restricted shares, including in connection

with tax planning strategies (e.g., Section 83(b) elections), and continue to be subject to the original vesting conditions of the underlying

The outstanding and nonvested balance of restricted shares as of December 31, 2025 primarily represents legacy LTI

awards that were previously converted from RSUs and are subject to a combination of market-based performance conditions (including a requirement

for the Company to achieve a specified market capitalization threshold of $ 300 million) and service-based vesting conditions.

three months ended March 31, 2026, the increase in nonvested restricted shares primarily reflects the conversion of RSUs granted under

the 2026 LTI Program into restricted shares, which continue to be subject to their respective vesting conditions.

Compensation expense

for awards subject to market conditions is recognized regardless of whether the market condition is ultimately achieved.

Shares - LTI RSU Issuances (2026)

RSU Awards and Share Availability

the three months ended March 31, 2026, the Board approved a long-term incentive program for 2026 (the “2026 LTI Program”)

that contemplates the issuance of restricted stock units, certain of which were granted pursuant to the Company’s 2021 Equity Incentive

Plan, as described below, and certain of which will be subject to the availability of additional shares under the Plan and any required

stockholder approvals.

the three months ended March 31, 2026, the Company approved an aggregate of 5,424,248 RSUs under the 2026 LTI Program.

Of these awards,

2,712,108 RSUs were approved within the existing authorized share limit under the 2021 Plan, and 2,712,140 RSUs are subject to stockholder

approval of an increase in authorized shares under the Plan.

The amounts presented above reflect RSUs approved by the Board during the

period and are not adjusted for subsequent forfeitures.

Such forfeitures are reflected in the RSU activity rollforward presented above.

allocation of RSUs between awards granted under the Plan and those subject to stockholder approval, as well as the timing of issuance,

depends on share availability and the receipt of such stockholder approval.

No shares of common stock underlying RSUs will be issued

until the applicable RSUs have vested and, with respect to RSUs subject to stockholder approval, such approval has been obtained.

Framework Applicable to 2026 Long-Term Incentive RSUs

granted under the 2026 LTI Program vest over a five-year period based on a combination of stock price performance, market capitalization

performance, and continued service.

Each vesting milestone represents a specified percentage of the total RSUs granted to a recipient,

with the number of RSUs that vest upon satisfaction of any milestone determined in accordance with the applicable RSU award agreement

and the Plan.

Schedule of Vesting Trigger

Vesting Trigger

Stock Price Performance

Closing stock price equals or exceeds $4.50

Closing stock price equals or exceeds $6.00

Closing stock price equals or exceeds $7.50

Closing stock price equals or exceeds $9.00

Closing stock price equals or exceeds $12.00

Market Capitalization Performance

Market capitalization equals or exceeds $325 million

Market capitalization equals or exceeds $400 million

Market capitalization equals or exceeds $475 million

Market capitalization equals or exceeds $550 million

Market capitalization equals or exceeds $625 million

Continued Service

Continued employment through January 1, 2027

Continued employment through January 1, 2028

Continued employment through January 1, 2029

Continued employment through January 1, 2030

Continued employment through January 1, 2031

of March 31, 2026, the Company had 5,272,732

unvested equity awards outstanding under the 2026 LTI Program (net of forfeitures), consisting of RSUs and restricted shares that

remain subject to vesting conditions.

These awards consisted of:

awards are subject to service-based (time) vesting conditions;

awards are subject to stock price-based vesting conditions;

awards are subject to market capitalization-based vesting conditions.

portion of these awards has been converted from RSUs into restricted shares of common stock;

however, such conversions did not change

the underlying vesting conditions or the accounting treatment of the awards.

awards represent the Company’s primary long-term incentive structure and are expected to result in continued stock-based compensation

expense over the remaining vesting periods.

recognition of this expense will vary based on the vesting conditions of the underlying awards.

Expense related to service-based awards

will be recognized on a straight-line basis over the requisite service period, while expense related to market-based awards will be recognized

over the derived service period regardless of whether the applicable market conditions are ultimately achieved.

fair value of RSUs granted with market-based vesting conditions, including stock price and market capitalization targets, was estimated

using a Monte Carlo simulation model.

The following assumptions were used in the Monte Carlo simulation model for RSUs granted on January

Schedule of Weighted-Average Assumptions Used to Estimate Fair Value

Exercise price

$ 4.50 - $ 13.25

Expected stock price volatility

Risk-free rate of interest

weighted-average grant date fair value of RSUs with market-based vesting conditions was approximately $ 2.21 per unit.

RSUs with only service-based vesting conditions that are subject to stockholder approval, a grant date has not yet been established for

accounting purposes.

Accordingly, the Company has used the closing price of its common stock on January 1, 2026 as an estimate of fair

value for purposes of recognizing stock-based compensation expense during the three months ended March 31, 2026.

Upon receipt of stockholder

approval, the Company will establish the grant date for accounting purposes and will remeasure the fair value of such awards based on

the closing price of the Company’s common stock on the grant date.

Any difference between the estimated fair value and the grant

date fair value will be recognized as an adjustment to stock-based compensation expense on a prospective basis over the remaining requisite

service period.

price performance milestones are achieved when the closing price of the Company’s common stock equals or exceeds the applicable

threshold for 20 consecutive calendar days.

Market capitalization performance milestones are achieved when the Company’s market

capitalization equals or exceeds the applicable threshold for 20 consecutive calendar days, with market capitalization calculated as

the number of shares of common stock outstanding on a given day, as reported by the Company’s transfer agent, multiplied by the

closing stock price on such day.

stock price and market capitalization performance thresholds will be equitably adjusted by the Board or the Compensation Committee to

reflect any stock split, reverse stock split, stock dividend, recapitalization, reclassification, or similar transaction, in each case

in a manner intended to preserve the original economic intent of the awards.

service milestones vest solely based on the recipient’s continued employment with the Company through the applicable vesting date,

subject to the terms of the applicable RSU award agreement and the Plan.

RSUs granted under the 2026 LTI Program are subject to the terms and conditions of the Plan and applicable RSU award agreements, including

provisions relating to forfeiture, termination of service, change in control, and clawback, as applicable.

of RSUs to Restricted Common Stock

February 23, 2026, 2,590,897 RSUs were converted into restricted shares of Common Stock issued to executive officers and employees.

restricted shares of Common Stock retain the original vesting conditions of the RSUs, including multiple market capitalization and stock

price vesting thresholds, as well as time-based vesting schedules, which range from one to five years.

These conversions were made primarily

to permit recipients to make elections under Section 83(b) of the Internal Revenue Code.

conversion of RSUs to restricted shares did not result in incremental compensation cost, as the awards retained the same underlying vesting

conditions and fair value measurement established at the original grant date.

RSUs granted under the 2026 LTI Program are subject to the terms and conditions of the Plan and applicable RSU award agreements, including

provisions relating to forfeiture, termination of service, change in control, and clawback, as applicable.

Company grants stock options to employees and officers under its equity incentive plans as part of its overall compensation and retention

Stock options are generally granted with service-based vesting conditions and contractual terms of up to seven years.

the three months ended March 31, 2026, stock options were granted primarily in connection with the settlement of performance-based bonuses

earned for fiscal year 2025 and paid in equity in January 2026.

During the three months ended March 31, 2025, stock options were granted

primarily in connection with:

(i) the settlement of performance-based bonuses earned for fiscal year 2024 and paid in equity in January

and (ii) sign-on and retention equity awards granted to new employees.

summary of options activity under the Company’s stock option plan for the three months ended March 31, 2026 and 2025 are presented

Summary of Option Activity

Average Exercise Price

Intrinsic Value

Average Remaining Contractual Life (in years)

Contractual Life (in years)

Options outstanding as of December 31, 2025

1 unchanged sentence

Employee options exercised

( 1,100,000 )

Employee options expired

Employee options forfeited

Options outstanding as of September 30, 2025

Options vested and exercisable as of September 30, 2025

Average Exercise Price

Intrinsic Value

Average Remaining Contractual Life (in years)

Employee options forfeitures

Options outstanding as of March 31, 2026

Options vested and exercisable as of December 31, 2025

forfeitures reflect unvested awards that were cancelled in connection with employee departures in the ordinary course of business.

Options outstanding as of December 31, 2024

Employee options granted

Employee options expired

Options outstanding as of September 30, 2024

Options vested and exercisable as of September 30, 2024

following weighted-average assumptions were used to estimate the fair value of options granted during the nine months ended September

30, 2025 and 2024, using the Black-Scholes option pricing model:

Weighted-Average Assumptions Used to Estimate Fair Value

Nine Months Ended September 30,

Options outstanding as of March 31, 2025

Options vested and exercisable as of March 31, 2025

following weighted-average assumptions were used to estimate the fair value of options granted during the three months ended March 31,

2026 and 2025, using the Black-Scholes model:

Schedule of Weighted-Average Assumptions Used to Estimate Fair Value

For the Three Months Ended March 31,

Exercise price

2 unchanged sentences

assumptions are consistent with the methods described in Note 3 – Summary of Significant Accounting Policies .

Restricted Stock

Incentive Plan (LTI) RSUs

January 1, 2025, the Board approved the grant of 150,000 RSUs under the Company’s Long-Term Incentive Plan (“LTI”)

to a non-officer employee.

These RSUs are subject to both market capitalization and time-based vesting conditions.

RSUs vest in three equal tranches of 50,000 RSUs each, based on the Company achieving and sustaining specific market capitalization thresholds

for 30 consecutive days on or before December 31, 2026, as follows:

of Restricted Stock Units

Cap Vesting Thresholds

RSUs for which the market capitalization condition is not met by December 31, 2026, will be forfeited and automatically terminate without

consideration.

any tranche in which the market capitalization condition is achieved, the RSUs remain subject to a time-based vesting schedule, with

20 % of the eligible RSUs in such tranche vesting annually over five years, with the first vesting date occurring on December 31, 2025

and subsequent vesting dates occurring on December 31 of each year through 2029, provided that the grantee remains in continuous service

with the Company through each applicable vesting date.

fair value of these market-based RSUs was determined using a Monte Carlo simulation and totaled approximately $ 181,000 as of the grant

The following assumptions were used to determine fair value as of the grant date, January 1, 2025:

Schedule of Weighted-Average Assumptions Used to Estimate Fair Value

Vesting Hurdle Price

5.26 - $ 15.79

Expected stock price volatility

Risk-free rate of interest

Company will recognize compensation expense for these RSUs over the requisite service period, subject to acceleration upon meeting the

market capitalization criteria.

Vesting of RSUs and Conversion to Restricted Common Stock

January 13, 2025, the Company accelerated the vesting of all previously outstanding long-term incentive (“LTI”) restricted

stock units (“RSUs”), totaling 1,170,834 RSUs granted to executive officers and employees.

These RSUs were settled through

the issuance of restricted shares of Common Stock.

Because a portion of these RSUs were entitled to the previously declared Series V

preferred stock dividend, 1,020,834 restricted shares of Series V were concurrently issued, in the same proportion as the related restricted

Common shares, to maintain dividend equivalency under the original RSU terms.

restricted shares of Common Stock and Series V preferred stock issued upon acceleration remain subject to the original market capitalization-based

performance conditions and applicable time-based vesting schedules, which range from one 1 to five years .

of Certain Long-Term Incentives

August 7, 2025, the Company determined that the market capitalization vesting condition for certain previously granted Long-Term Incentive

(“LTI”) awards had been satisfied.

Under the applicable award agreements, vesting required the Company to maintain a market

capitalization in excess of $100 million for 30 consecutive days .

Additionally,

on August 15, 2025, the Company determined that the market capitalization vesting condition for certain previously granted Long-Term

Incentive (“LTI”) awards had been satisfied.

Under the applicable award agreements, vesting required the Company to maintain

a market capitalization in excess of $150 million for 30 consecutive days .

a result, 413,888 shares of Common Stock and 413,888 shares of Series V Preferred Stock, originally issued on January 13, 2025, upon

conversion of vested RSUs into restricted equity, became fully vested in accordance with their terms.

These shares, previously classified

as restricted Common Stock and restricted Series V Preferred Stock, were reclassified to outstanding Common Stock and Series V Preferred

Stock, respectively.

of LTI RSUs and Restricted Shares of Common Stock

February 3, 2025, upon the voluntary resignation of the Company’s Chief Technology Officer, 120,137 unvested LTI RSUs and 129,327

restricted shares of Common Stock were forfeited in accordance with the terms of the applicable award agreements.

August 18, 2025, upon the transition of the Company’s Chief Operating Officer to the role of Operations Specialist, 333,333 restricted

shares of Common Stock were forfeited in accordance with the terms of the applicable award agreements.

accordance with ASC 718, Compensation—Stock Compensation , the Company reversed approximately $ 812,000 of previously recognized

stock-based compensation expense during the nine months ended September 30, 2025.

No further expense will be recognized for these forfeited

Activity Summary

following table summarizes RSU activity under the 2021 Plan for the nine months ended September 30, 2025:

Summary of Restricted Stock

Average Grant

Date Fair Value

Nonvested as of December 31, 2024

Vested and converted to restricted

common shares

( 1,170,834 )

Nonvested as of September 30, 2025

Shares of Common Stock Activity Summary

following table summarizes restricted Common Stock activity under the 2021 Plan for the nine months ended September 30, 2025:

of Restricted Stock

Outstanding and nonvested as of December 31, 2024

Converted from restricted stock units

Outstanding and nonvested as of September 30, 2025

of September 30, 2025, a total of 565,080 restricted shares of Common Stock were issued and outstanding, of which 285,913 shares remain

subject solely to time-based vesting conditions, which extend over a one- to three-year period, with full vesting expected by December

Stock-based Compensation

compensation expenses are allocated among general and administrative expenses, compensation expenses and cost of revenues.

compensation expense for the nine months ended September 30, 2025 and 2024 was as follows:

Share-Based Payments

Performance-Based

Company maintains performance-based incentive compensation programs for officers and employees, which may be settled in cash, shares

of common stock, stock options, or a combination thereof, as approved by the Board of Directors.

Compensation expense related to performance-based

bonuses is recognized in the period in which the applicable performance conditions are achieved or deemed probable.

Amounts accrued but

not yet settled are recorded within Accrued compensation on the balance sheets until payment or issuance.

the three months ended March 31, 2026, the Company issued 398,208 shares of common stock to officers and employees in January 2026 as

part of the settlement of accrued bonus compensation earned for the year ended December 31, 2025.

The total fair value of the shares

issued was approximately $ 1,051,000 based on the Company’s closing stock price on the issuance date.

Of the shares issued, 87,602

were returned to net settle the issuance and pay related taxes, resulting in a net share issuance of 310,606 shares of common stock.

The issuance of shares represents the settlement of previously accrued compensation and did not result in additional stock-based compensation

expense during the period.

the three months ended March 31, 2025, the Company issued 329,110 shares of common stock to officers and employees in January 2025 as

part of the settlement of accrued bonus compensation earned for the year ended December 31, 2024.

The total fair value of the shares

issued was approximately $ 813,000 based on the Company’s closing stock price on the issuance date.

Of the shares issued, 33,731

were returned to net settle the issuance and pay related taxes, resulting in a net share issuance of 295,379 shares of common stock.

compensation included approximately $ 251,000 and $ 1,609,000 related to performance-based bonus accruals as of March 31, 2026 and December

31, 2025, respectively.

January 19, 2023, the Board approved the issuance of $ 50,000 of common stock to each independent director, payable in four equal quarterly

installments of $ 12,500 , subject to continued service.

The number of shares issued is based on the closing price of the Company’s

common stock on the last trading day prior to each quarter-end.

the three months ended March 31, 2026, 26,979 shares of common stock approximating $ 37,500 were issued to independent directors related

to the quarterly approved issuances.

For the three months ended March 31, 2025, 25,002 shares of common stock approximating $ 38,000 were

issued to independent directors related to the quarterly approved issuances.

compensation expenses are recorded as a part of general and administrative expenses, compensation expenses and cost of revenues.

compensation expenses for the three months ended March 31, 2026 and 2025 were as follows:

Schedule of Stock-based Compensation Expense

the Three Months Ended September 30,

the Nine Months Ended September 30,

For the Three Months Ended March 31,

Employee stock option awards

Employee restricted stock awards

Forfeiture of employee restricted stock unit and share

Employee share-based salary payments

Non-employee restricted stock awards

Employee restricted stock and restricted stock unit awards

Forfeitures of employee options, restricted stock and restricted stock unit awards

Non-employee stock awards

Total stock-based compensation

Stock Purchase Warrants

the nine months ended September 30, 2025, holders exercised 1,369,725 warrants on a cashless basis, surrendering 554,401 warrants and

receiving 815,324 net shares.

No cash proceeds were received in connection with these exercises.

Activity Summary

following is a summary of warrant activity for the three months ended September 30, 2025:

Summary of Warrant Activity

Outstanding as of December 31, 2024

Issuance of warrants in connection with convertible note

( 1,369,725 )

Outstanding as of September 30, 2025

of September 30, 2025, 712,500 warrants were classified as derivative liabilities, and 1,411,566 warrants issued in connection with the

convertible notes were classified as equity.

Note 7 – Dividends and Capital

Distributions

Dividends Payable

August 1, 2025, the Board approved, and on August 18, 2025 the Company announced, a special dividend of $ 0.05 per share (the “Bividend”),

payable to stockholders of record as of the close of business on September 26, 2025.

Holders of the Company’s common stock may

elect to receive the Bividend in either cash or Ethereum (ETH), while holders of the Company’s Series V Preferred Stock are entitled

to receive the Bividend solely in cash.

The total dividend payable as of September 30, 2025 was approximately $ 3,176,000 , which is recorded

as dividends payable within stockholders’ equity.

The Bividend was subsequently settled in early October 2025 through aggregate

cash payments of approximately $ 2,680,000 and distributions of approximately 123 ETH to stockholders who elected ETH.

Convertible Notes Eligible for Capital

Distributions – Contingent Liability

of September 30, 2025, the Company had outstanding convertible notes that provide holders the right, upon any subsequent conversion of

such notes, to participate in dividends or other distributions on the Company’s common stock declared during the period the notes

are outstanding, to the same extent as if the notes had been converted immediately prior to the record date of such distribution.

of September 30, 2025, there were 2,107,757 shares of common stock underlying the outstanding convertible notes that would be entitled

to the dividend payments if converted in accordance with the note terms, representing a potential contingent distribution totaling approximately

Because the obligation to deliver such distributions is contingent upon future conversions, no liability has been recorded

as of September 30, 2025, in accordance with ASC 450-20, Contingencies .

Loyalty Payment – Contingent Liability

addition, the Board authorized a one-time loyalty payment of $ 0.35 per share (the “Loyalty Payment”), payable solely in ETH.

The Loyalty Payment is available only to holders of common stock of record on September 26, 2025 who (i) completed the required ETH Opt-In

and (ii) maintained their shares at the Company’s transfer agent through January 26, 2026.

Holders of Series V Preferred Stock

are not eligible for the Loyalty Payment.

Loyalty Payment is contingent on stockholder actions through January 26, 2026, and accordingly, no liability has been recorded as of

September 30, 2025.

For both the Bividend and the Loyalty Payment, the number of ETH units per share is fixed based on the ETH/USD exchange

rate on the September 26, 2025 record date.

of September 30, 2025, approximately 3,858,000 common shares had completed the Opt-In process and were held at the transfer agent.

all such shares were to remain eligible through January 26, 2026, the hypothetical maximum Loyalty Payment would be approximately $ 1,350,000

(shares × $ 0.35 ).

Using an ETH/USD rate of $ 4,036 as of the September 26, 2025 record date, this would correspond to approximately

The actual payout, if any, will depend on the final number of qualifying shares and the program’s ETH settlement terms

at the time of eligibility.

Note 8 – Debt

Loans Payable –

Defi Protocol

of March 31, 2026, the Company had approximately $ 1,981,770 of unrecognized stock-based compensation cost related to unvested stock option

awards, which is expected to be recognized over a weighted-average period of 0.54 years, and $ 11,793,973 of unrecognized stock-based

compensation cost related to unvested restricted stock and RSU awards, which is expected to be recognized over a weighted-average period

of 1.98 years.

significant portion of the unrecognized compensation cost relates to awards subject to market-based vesting conditions, which may result

in variable expense recognition over the remaining service periods of such awards.

Payable – DeFi Protocol

Company participates in decentralized finance (DeFi) borrowing activity through Aave, a smart contract–based protocol that facilitates

overcollateralized loans backed by crypto assets.

Borrowings have no fixed maturity date and remain outstanding until repaid or liquidated

in accordance with Aave’s protocol terms.

Loans are subject to full or partial liquidation if the loan’s “health factor”

falls below a protocol-defined minimum threshold, generally 1.0x.

The health factor is calculated based on the value of the collateral

relative to the loan balance and Aave’s liquidation threshold, which is generally 80 % for Ethereum (ETH) collateral.

the nine months ended September 30, 2025, the Company borrowed an aggregate of approximately $ 59,447,000 , which includes borrowings issued

in connection with an on-chain debt refinancing transaction executed during the third quarter.

In that transaction, the Company utilized

Aave’s flash loan functionality to extinguish approximately $ 1,500,000 in outstanding USDT-denominated debt and simultaneously

issue an equivalent amount of new borrowings denominated in GHO, Aave’s native overcollateralized stablecoin token, at a lower

variable interest rate.

Due to substantive differences in the borrowing terms, including a change in the underlying asset and revised

rate structure, the transaction was accounted for as a debt extinguishment under ASC 470-50, and the Company recognized a loss on extinguishment

of debt of approximately $ 9,000 during the period.

The Company also repaid approximately $ 1,447,000 in principal during the period.

following table summarizes the Company’s Defi borrowing activity during the nine months ended September 30, 2025:

overcollateralized loans backed by digital assets.

The Company accounts for these borrowings as financial liabilities in accordance with

ASC 470, as the arrangements represent obligations to repay borrowed assets.

have no fixed maturity date and remain outstanding until repaid or liquidated in accordance with Aave’s protocol terms.

subject to full or partial liquidation if the loan’s health factor falls below a protocol-defined minimum threshold, generally

Such liquidation events could result in material losses and the Company has no recourse against the protocol or any counterparty

in the event of liquidation, technical failure, smart contract vulnerabilities, or oracle manipulation.

The health factor is calculated

based on the value of the collateral relative to the loan balance and Aave’s liquidation threshold, which is generally 80 % for

ETH collateral.

As of March 31, 2026, the Company has not experienced any full or partial liquidation events related to these borrowings.

the three months ended March 31, 2026, the Company borrowed an aggregate of approximately $ 500,000 .

following table summarizes the Company’s DeFi borrowing activity during the three months ended March 31, 2026:

Summary of Defi Protocol Lending Activity

the Nine Months Ended

September 30, 2025

For the Three Months Ended

March 31, 2026

Beginning balance – January 1, 2026

Proceeds from DeFi borrowings

Addition of debt (via swap)

Extinguishment of debt (via swap)

( 1,500,000 )

Repayments of principal

( 18,221,577 )

Ending balance – September 30, 2025

of September 30, 2025, the Company’s outstanding borrowings consisted primarily of USD-pegged stablecoins, including USDT and GHO,

obtained through the Aave protocol.

The use of USD-pegged tokens does not materially impact the economic characteristics or risk profile

of the borrowings.

of September 30, 2025, the Company had approximately 38,999 Aave aEthWETH tokens representing wrapped ETH deployed within DeFi protocols

Ending balance – March 31, 2026

As of March 31, 2026, the Company’s outstanding DeFi borrowings were denominated primarily in USD-pegged stablecoins,

including USDT and GHO, rather than ETH or other non-USD-pegged digital assets.

The Company’s obligation is to repay the borrowed

stablecoin units, plus accrued protocol interest, in accordance with Aave’s protocol terms.

Because the borrowed stablecoins are

designed to maintain a value substantially equivalent to one U.S.

dollar, management believes the carrying amount of the borrowings approximates

dollar value of the settlement obligation.

See Note 6 – Fair Value Measurements for

additional information regarding the estimated fair value of outstanding DeFi borrowings.

of March 31, 2026, the Company had approximately 49,970 Aave aEthWETH tokens representing wrapped ETH deployed within DeFi protocols

and serving as collateral for outstanding borrowings, with a fair value of approximately $ 105,135,000 .

These assets remain recorded as

ETH within Crypto assets - DeFi on the balance sheet in accordance with ASC 350-60 and are measured at fair value using quoted

ETH within Digital assets - DeFi on the balance sheet in accordance with ASC 350-60 and are measured at fair value using quoted

prices in active markets (Level 1 inputs under ASC 820).

See Note 3 – Summary of Significant Accounting Policies and Note

4 – Crypto Assets for further detail regarding the accounting treatment and classification of these assets.

loans accrue interest at variable rates determined by Aave’s on-chain interest-rate model, which automatically adjusts based on

market utilization and liquidity conditions.

4 – Digital Assets (Fair Value) for further detail regarding the accounting treatment and classification of these assets.

The loans accrue interest at variable

rates determined by Aave’s on-chain interest-rate model, which automatically adjusts based on market utilization and liquidity conditions

for each borrowed asset.

These rates are published and updated in real-time on the Aave protocol’s website.

the three and nine months ended September 30, 2025, the Company recognized approximately $ 665,000 in interest expense, of which approximately

During the three months

ended March 31, 2026, the weighted-average annualized borrowing rate on the Company’s DeFi borrowings was 3.65 %, calculated based

on the applicable protocol borrowing rates and outstanding USDT and GHO borrowings during the period.

the three months ended March 31, 2026, the Company recognized approximately $ 469,000 in interest expense, of which approximately $ 219,000

remained unpaid and is included in Accrued interest payable on the balance sheet at period end.

Board has approved the use of Aave for borrowing activities, subject to a maximum loan-to-value (LTV) ratio and debt-to-asset (DTA) coverage

limitation of 40 % at the time of borrowing.

The Board also approved temporary exceedances of these limitations for operational purposes,

provided such exceedances do not exceed two days.

Convertible Notes Payable

Board has approved the use of Aave for borrowing activities, subject to a maximum loan-to-value (“LTV”) ratio and debt-to-asset

(“DTA”) coverage limitation of 40 % at the time of borrowing.

The Board also approved temporary exceedances of these limitations

for operational purposes, provided such exceedances do not exceed two days.

Notes Payable

May 13, 2025 and July 21, 2025, the Company entered into separate Securities Purchase Agreements with accredited investors, pursuant

10 unchanged sentences

quarterly in either cash or freely tradable shares at the Company’s election, contain a 4.99 % beneficial ownership conversion limitation

(subject to increase to 9.99 % upon notice), and are secured by substantially all of the Company’s assets, excluding Ethereum deposited

as collateral for USDT borrowings on Aave and certain other customary exclusions.

In connection with the July Offering, the Company agreed

not to amend the conversion terms of its Series V Preferred Stock for a period of 18 months while the July Notes remain outstanding.

(subject to increase to 9.99 % upon 61 days notice), and are secured by substantially all of the Company’s assets, excluding Ethereum

deposited as collateral for USDT borrowings on Aave and certain other customary exclusions.

In connection with the July Offering, the

Company agreed not to amend the conversion terms of its Series V Preferred Stock for a period of 18 months while the July Notes remain

May Offering included participation by the Company’s Chairman and Chief Executive Officer, who invested $ 95,000 , as well as a trust

9 unchanged sentences

to be freestanding equity-classified instruments and were valued using the Black-Scholes option pricing model.

the three and nine months ended September 30, 2025, the Company recognized total interest expense of approximately $ 1,053,000 , which

includes both contractual interest and the amortization of debt discounts and issuance costs using the effective interest method.

this amount, approximately $ 299,000 related to contractual interest on the Company’s convertible notes, $ 754,000 represented non-cash

amortization of debt discount and issuance costs, and approximately $ 665,000 related to interest incurred on decentralized finance (DeFi)

The Company paid approximately $ 300,000 of interest in cash during the period, with the remainder representing non-cash or

accrued amounts.

Note 9 – Accrued

expenses consist of the following:

of Accrued Expenses

Accrued compensation

Accrued interest

Accounts payable and accrued expenses

Total accrued expenses

compensation includes performance bonus accruals of approximately $ 1,050,000 and $ 3,907,000 as of September 30, 2025 and December 31,

2024, respectively.

The significant decrease in bonus accruals reflects bonus payments made during the first quarter of 2025.

the three months ended March 31, 2026, the Company recognized total interest expense of approximately $ 1,548,000 , which includes contractual

interest, the amortization of debt discounts and issuance costs using the effective interest method, and variable interest on DeFi borrowings.

this amount, approximately $ 268,000 related to contractual interest on the Company’s convertible notes, approximately $ 811,000

represented non-cash amortization of debt discount and issuance costs, and approximately $ 469,000 related to interest incurred on DeFi

Company paid approximately $ 518,000

of interest during the period, consisting of $ 268,000 paid in cash and $ 250,000 paid in stablecoins, with the

remainder representing non-cash or accrued amounts.

11 – Dividends and Capital Distributions

Period Dividend

August 2025, the Company’s Board approved a special dividend of $ 0.05 per share (the “Bividend”), payable to stockholders

of record as of September 26, 2025.

The dividend was paid in October 2025 in a combination of cash and ETH.

There were no dividends declared

during the three months ended March 31, 2026.

2025, the Company’s Board approved a one-time loyalty payment of $ 0.35 per share (the “Loyalty Payment”), payable solely

in ETH to eligible holders of common stock who satisfied specified holding and election requirements.

February 2026, the Company settled the Loyalty Payment through the distribution of approximately 329 ETH, with an aggregate fair value

of approximately $ 723,000 at the time of distribution.

The distribution was recognized at its fair value at the time of settlement as

a reduction to stockholders’ equity.

Notes Eligible for Capital Distributions – Contingent Liability

of March 31, 2026, the Company had outstanding convertible notes that provide holders the right, upon conversion, to participate in dividends

or other distributions declared on the Company’s common stock during the period the notes are outstanding, as if the notes had

been converted immediately prior to the applicable record date.

of March 31, 2026, there were approximately 2,107,757 shares of common stock underlying the outstanding convertible notes that would

be entitled to such distributions if converted in accordance with the note terms, representing a potential contingent distribution totaling

approximately $ 105,000 .

Because the obligation to deliver such distributions is contingent upon future conversion, no liability has been

recorded as of March 31, 2026, in accordance with ASC 450-20, Contingencies .

12 – Employee Benefit Plans

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up to 100% of employee contributions.

For the nine months ended September 30, 2025 and 2024, the Company made contributions to the 401(k)

For the three months ended March 31, 2026 and 2025, the Company made contributions to the 401(k)

Plan of $ 179,000 and $ 122,000 , respectively.

13 – Liquidity

Company follows “ Presentation of Financial Statements—Going Concern (Subtopic 205-40):

4 unchanged sentences

in the normal course of business.

reflected in the financial statements, the Company has historically incurred a net loss and has an accumulated deficit of approximately

$ 87,747,000 at September 30, 2025, and net cash used in operating activities of approximately $ 6,032,000 for the reporting period then

The Company is actively implementing its business plan, generating revenue, and executing a deliberate financing strategy that

includes DeFi protocol borrowing and convertible note issuances to accelerate the accumulation of Ethereum (ETH) and scale its blockchain

reflected in the condensed unaudited financial statements, the Company has historically incurred net losses and has an accumulated

deficit of approximately $ 242,466,000

at March 31, 2026, and net cash used in operating activities of approximately $ 1,742,000

for the reporting period then ended.

The Company is actively implementing its business plan, generating revenue, and executing a

deliberate financing strategy that includes DeFi protocol borrowing and convertible note issuances to scale its blockchain

infrastructure and DeFi operations.

Based on the Company’s cash position and liquid crypto assets as of November 10, 2025, management

has determined that these resources are sufficient to support its daily operations over the next twelve months.

Segment Information

Company operates within a single 1 reportable segment under ASC 280, Segment Reporting , focused on blockchain-based revenue generation

through its blockchain infrastructure and DeFi operations.

this reportable segment, the Company’s operations are organized around three primary business lines that represent distinct revenue-generating

Validator Node Operations (“NodeOps”) – earns

ETH-denominated staking rewards and validator fees from operating validator nodes that secure proof-of-stake blockchain networks.

Block Building (“Builder+”) – generates execution-layer

transaction fees and maximal extractable value (“MEV”) from the construction and submission of optimized transaction

blocks to validators on Ethereum and Binance Smart Chain (BSC).

DeFi Operations (“Imperium”) – represents

the Company’s decentralized finance activities, including liquidity provision and other on-chain DeFi operations, through which

the Company earns protocol-denominated rewards for supplying crypto-asset liquidity to decentralized markets.

from NodeOps and Builder+ are aggregated and presented as Blockchain infrastructure revenues , while revenues from Imperium are

presented separately as DeFi revenues in the statements of operations.

Although these business lines have distinct economic drivers

and operational processes, management evaluates them together as part of the Company’s single reportable segment due to shared

infrastructure, integrated management oversight, and the common objective of ETH accumulation and on-chain revenue generation.

profit (loss) is the primary measure of segment performance reviewed by the Company’s Chief Operating Decision Maker (“CODM”),

which comprises members of executive management including the CEO and CFO.

In evaluating performance and allocating resources, the CODM

reviews segment revenues, direct production costs, validator payments, hosting expenses, and allocated employee compensation.

with ASU 2023-07 , the Company discloses the significant segment expenses regularly provided to the CODM for decision-making purposes,

including validator payments, infrastructure hosting costs, and allocated employee compensation.

following tables present segment revenue and gross profit (loss), including the significant expense items reviewed by the CODM, for the

three and nine months ended September 30, 2025 and 2024:

of Segment Revenue and Gross Profit (loss)

the Three Months Ended September 30, 2025

the Nine Months Ended September 30, 2025

Cost of Revenues

Validator Payments

Cloud and server hosting costs

Compensation costs

Third-party support costs

Gross profit (loss)

$ ( 479,012 )

$ ( 981,912 )

the Three Months Ended September 30, 2024

the Nine Months Ended September 30, 2024

Cost of Revenues

Validator Payments

Cloud and server hosting costs

Compensation costs

Third-party support costs

Gross profit (loss)

$ ( 217,213 )

following table reconciles total segment gross profit to net income (loss):

the Three Months Ended

the Nine Months Ended

Total operating expenses

( 7,079,833 )

( 1,920,693 )

( 14,610,198 )

( 4,376,909 )

Other income (expense)

( 7,314,943 )

Net income (loss)

$ ( 9,039,787 )

$ ( 3,511,070 )

on the Company’s cash position and liquid digital assets, consisting primarily of Ethereum held directly and not subject to long-term

lockups, as of May 14, 2026, management has determined that these resources are sufficient to support its daily operations and meet

its obligations for at least twelve months from the issuance date of these financial statements.

Management’s assessment considers

expected operating cash flows, scheduled debt service, collateral requirements associated with DeFi borrowings, and potential variability

in digital asset prices.

Accordingly, management has determined that there is no substantial doubt about the Company’s ability

to continue as a going concern.

14 – Related Party Transactions

parties include the Company’s executive officers, directors, and entities in which such persons have a beneficial interest.

May 2025, the Company’s Chairman and Chief Executive Officer and a trust for which he is a beneficiary participated as investors

in the Company’s 5% Original Issue Discount Senior Secured Convertible Notes for an aggregate investment of $ 342,500 .

The participation

by the Chairman and Chief Executive Officer and the related trust was approved by an independent committee of the Board.

of March 31, 2026, these related parties continue to hold a portion of the outstanding convertible notes, and the Company continues to

incur interest expense and has repayment obligations associated with these instruments in accordance with their terms.

See Note 10 –

Debt for additional information regarding the terms of the convertible notes and related warrants.

as described above, the Company did not have any other material related party transactions during the three months ended March 31, 2026.

15 – Subsequent Events

Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued.

Based upon the

evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure

in the financial statements other than disclosed.

Share Repurchases

the period from October 1, 2025 to November 10, 2025, the Company repurchased and retired 236,657 shares of its common stock for an average

purchase price of $ 4.23 .

As of November 10, 2025, approximately $ 46,000,000

remained available for repurchases under the authorization.

DeFi Borrowing

the period from July 1, 2025 to November 10, 2025 the Company borrowed an additional $ 3,500,000 in stablecoins through Aave, a decentralized

finance protocol, using Ethereum (ETH) as collateral.

As of November 10, 2025, the Company had approximately $ 61,052,000 in outstanding

borrowings, inclusive of accrued interest, collateralized by approximately 39,077 ETH with a fair market value of approximately $ 138,988,000 ,

based on the ETH closing price of $ 3,557 on that date.

accrue interest at variable rates determined by Aave’s on-chain smart contracts, which adjust dynamically based on protocol liquidity

and market demand.

ETH collateral posted also accrues variable interest.

These rates are published and updated in real-time on the Aave

protocol’s website, and the net cost of capital may fluctuate based on protocol-level market conditions.

the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment

to or disclosure in the financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements