What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-04-13 compared with 2025-03-11 · 298 added, 118 removed, 10 unchanged (98% of the section changed)

management’s discussion and analysis of financial condition and results of operations

LOOKING STATEMENTS

of this Form 10-K including the Management’s Discussion and Analysis or Plan of Operation, contain “forward-looking statements”.

These forward-looking statements are subject to risks and uncertainties and other factors that may cause our actual results, performance

or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking

You should not unduly rely on these statements.

Forward-looking statements involve assumptions and describe our plans, strategies,

and expectations.

You can generally identify a forward-looking statement by words such as “may,” “will,” “should,”

“would,” “could,” “plans,” “goal,” “potential,” “expect,” “anticipate,”

“estimate,” “believe,” “intent,” “project,” and similar words and variations thereof.

Media Corporation (“Thumzup” or “Company”) was incorporated on October 27, 2020, under the laws of the State

of Nevada, and its headquarters is located in Los Angeles.

The Company’s primary business is software as a service provider dedicated

to connecting businesses with consumers and allowing the business to incentivize consumers to post about their experience on social media.

Thumzup mission is to democratize social media marketing by connecting advertisers with non-professional people, who can be paid for

their posts about products and services they love through its technology which utilizes a proprietary mobile app (“App”).

The App generates scalable word-of-mouth product posts and recommendations for advertisers on social media and is designed to connect

advertisers with individuals who are willing to promote their products online.

Thumzup App enables users to select a brand they want to post about on social media.

Once the Thumzup user selects the brand and takes

a photo (using the App), the App will post the photo and a caption to the user’s social media account(s).

As of the date of this

filing, Instagram is the Company’s initial social media platform that is being used, due to its wide acceptance and its great functionality

using photographs.

The Company expects to add other social media platforms in the future.

For the advertiser, the Thumzup system enables

brands to get real people to promote products to their friends, rather than displaying banner ads that consumers now mostly ignore, or

contracting with expensive professional influencers.

The Company has recorded nominal revenues during the year ended December 31, 2024

and continues with the development of enhancements to its App and marketing efforts.

Company is an “emerging growth company” as that term is used in the Jumpstart our Business Startups Act of 2012, and as such,

has elected to comply with certain reduced public company reporting requirements.

Products and Services

Company operates in a single business segment which is social media marketing and advertising.

The Thumzup® App works on both iPhone

and Android mobile operating systems and connects brands and people who use and love these brands.

For the Advertiser, Thumzup® incentivizes

ordinary people to become paid content Creators and post authentic valuable posts on social media about the Advertiser and its products.

Company seeks to capitalize on nationwide-wide gig economy and business democratization trends.

Immense value and opportunity have been

created through the democratization of ride sharing, hospitality, finance and other industries.

The Thumzup® tools are designed to

facilitate this democratization trend for the consumer and the Advertiser within the online marketing and advertising space.

Company has built the technology to support an influencer and “gig” economy community around its Thumzup® App.

This technology

and community are designed to generate scalable authentic product posts and recommendations for advertisers on social media.

It is designed

to connect advertisers with individuals who are willing to tell their friends about the advertisers’ products online and offline.

Growth Company

are an emerging growth company under the JOBS Act.

We shall continue to be deemed an emerging growth company until the earliest of:

last day of the fiscal year of the issuer during which it had total annual gross revenues of $1.07 billion (as such amount is indexed

for inflation every five years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published

by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;

last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities

of the issuer pursuant to an effective IPO registration statement;

date on which such issuer has, during the previous three-year period, issued more than $1.0 billion in nonconvertible debt;

date on which such issuer is deemed to be a ‘large accelerated filer’, as defined in section 240.12b-2 of title 17, Code

of Federal Regulations, or any successor thereto.’

Section 107 of the JOBS Act provides that we may elect to utilize the extended transition period for complying with new or revised accounting

standards and such election is irrevocable if made.

As such, we have made the election to use the extended transition period for complying

with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.

have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of

the JOBS Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public

and private companies until those standards apply to private companies.

As a result of this election, our financial statements may not

be comparable to companies that comply with public company effective dates.

were formed in October 2020 and have not yet established profitable operations.

For the year ended December 31, 2024, we incurred a net

loss available to shareholders of $3,999,905 primarily due to software research and development expenses of $244,909, marketing expenses

of $1,392,661, and general and administrative expenses of $2,210,775.

For the year ended December 31, 2023, we incurred a net loss of

$3,384,380, primarily due to software research and development expenses of $513,088, marketing expenses of $855,270, professional and

consulting expenses of $727,554, and general and administrative expenses of $395,624.

following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial

statements and the related notes appearing elsewhere in this Annual Report.

In addition to historical information, the following discussion

contains forward-looking statements that involve risks, uncertainties and assumptions.

See “Cautionary Note on Forward-looking

Statements” for a discussion of the uncertainties and assumptions associated with these statements.

Our actual results may differ

materially from those discussed below.

Factors that could cause or contribute to such differences include, but are not limited to, those

identified below, and those discussed in the section titled “Risk Factors” included elsewhere in this Annual Report on Form

(“Datacentrex,” the “Company,” “we,” “us,” or “our”) is a digital infrastructure

and capital deployment company that owns and operates Scrypt-based proof-of-work (“PoW”) compute assets.

On December 15,

2025, the Company consummated the acquisition of Doge through a reverse recapitalization

(the “Transaction”), following which the combined company changed its name to Datacentrex, Inc.

Doge, the accounting

acquirer, had commenced digital asset mining operations prior to the Transaction.

The following discussion reflects the operations of

Doge and its successors for the full fiscal year ended December 31, 2025, which represents the Company’s inaugural year of

mining operations.

There was no comparable activity in the prior-year period.

generate revenue by deploying owned Scrypt application-specific integrated circuit (“ASIC”) hardware to produce PoW hashrate,

which we monetize primarily through a hashrate marketplace model with settlement typically denominated in Bitcoin.

Our Scrypt compute

contributes hashrate to the Litecoin blockchain, and through merged-mining architecture, simultaneously secures and validates additional

Scrypt-based networks, including Dogecoin, without incremental energy consumption.

The Company’s mining operations produce exposure

to multiple digital asset networks from a single deployment of compute and power, with Dogecoin representing the largest share of protocol-native

coin production during the period and Bitcoin representing the primary settlement asset received through marketplace monetization channels.

manage a treasury of digital assets and cash intended to preserve capital, maintain liquidity, and enhance long-term value creation.

As of December 31, 2025, the Company held over $4.5 million in digital assets, comprising a mix of Bitcoin accumulated through hashrate

marketplace settlement and unsold Dogecoin and Litecoin from pool-based mining.

Management expects that future treasury concentration

will favor Bitcoin over time, consistent with the Company’s hashrate marketplace monetization model in which settlement is typically

received in Bitcoin.

Year 2025 Operational Highlights

year 2025 represented the Company’s inaugural year of digital asset mining operations, during which the Company scaled from initial

deployment to a fully operational mining platform.

Key operational highlights for the year include:

Scaling and Deployment.

The Company began the first quarter of 2025 with an initial deployment of approximately 1,500 Scrypt ASIC

miners at a single colocation facility outside of the United States.

During the second quarter, the Company evaluated additional colocation

partners and deployed approximately 1,000 additional units across two new domestic colocation sites.

In the third quarter, in response

to changes in the tariff environment and to capture lower operating expenses, the Company relocated the original fleet of approximately

1,500 miners back to the United States and distributed them across two facilities.

In the fourth quarter, the Company deployed an additional

520 rigs, bringing the total operating fleet to 3,094 Scrypt ASIC miners as of December 31, 2025, deployed across four geographically

diversified colocation facilities, all located in the United States.

and Power Capacity.

As of December 31, 2025, the Company’s fleet of 3,094 operating Scrypt ASIC miners had an average nameplate

capacity of approximately 14 GH/s per unit, representing aggregate deployed hashrate of approximately 43.3 TH/s at full uptime.

average nameplate power consumption was approximately 3.95 kW per unit, representing approximately 12.5 MW of total deployed power capacity

across the Company’s four colocation facilities.

and Financial Performance.

For the year ended December 31, 2025, the Company generated revenues of approximately $7.0 million from

digital asset mining operations, with cost of revenue of approximately $3.6 million and gross profit of approximately $3.4 million.

Company reported a net loss attributable to common stockholders of approximately $8.5 million, driven primarily by depreciation expense

of $7.5 million on mining equipment (amortized over a two-year useful life), professional fees, stock-based compensation, and other operating

expenses associated with building operational infrastructure during the Company’s first year of operations.

The Company generated

positive Adjusted EBITDA of approximately $0.6 million for the period.

On December 15, 2025, the Company consummated the Transaction, issuing an aggregate of 13,835,188 shares of Common Stock

and 16,239.812 shares of Series D Convertible Preferred Stock (convertible into 16,239,812 shares of Common Stock) to the stockholders

Following the Transaction, the Company changed its name to Datacentrex, Inc.

and its shares continued to trade on the Nasdaq

Capital Market under the ticker symbol “DTCX.”

results are primarily driven by realized revenue rates per unit of hashrate deployed, power costs and facility-level economics, fleet

uptime and operational execution, hardware supply and replacement cycle dynamics, digital asset market conditions, and treasury and capital

allocation decisions.

For a further discussion of these key operating inputs, see Item 1, “Business — Key Operating Inputs”

and the discussion of results of operations below.

OF OPERATIONS

THE YEARS ENDED DECEMBER 31, 2024 and 2023

the Fiscal Year ended

ENDED DECEMBER 31, 2025

following table sets forth certain selected consolidated statements of operations data for the year ended December 31, 2025.

For the Year ended

December 31, 2025

Cost of Revenue

Operating Expenses

Loss from Operations

Other Income (Expense)

Net Income (Loss) Applicable to Common Stockholders

$ (3,999,905 )

Total Other Income (Expense)

$ (8,502,885 )

Company generated revenues of $71 and $2,048 for the years ended December 31, 2024 and 2023, respectively, a decrease of $1,307, as the

Company focused on expanding its footprint of listed businesses in fiscal year 2024.

the years ended December 31, 2024 and 2023, the Company incurred operating expenses of $3,946,663 and $2,521,078, respectively, an

increase of $1,425,585.

The increase in operating expenses was caused by costs of revenues decreasing by $144 from $144 during the

year ended December 31, 2023 to $0 during the year ended December 31, 2024, marketing expenses increasing $540,692 from $855,270

during the year ended December 31, 2023 to $1,395,962 during the year ended December 31, 2024, general and administrative expenses

increasing $257,987 from $395,624 during the year ended December 31, 2023 to $653,611 during the year ended December 31, 2024,

depreciation and amortization expenses increasing $68,919 from $29,398 during the year ended December 31, 2023 to $98,317 during the

year ended December 31, 2024, an increase in professional and consulting of $826,310 from $727,554 during the year ended December

31, 2023 to $1,553,864 during the year ended December 31, 2024, offset in part by a decrease in software research development

expenses of $268,179 from $513,088 during the year ended December 31, 2023 to $244,909 during the year ended December 31,

Company generated revenues of $6,963,477 for the years ended December 31, 2025.

The Company was incorporated and commenced operations,

specifically its digital mining operations in fiscal year 2025 and therefore had no activity in 2024.

Cryptocurrency mining are impacted

significantly by volatility in coin prices, as well as increases in the Blockchain’s Network Hash Rate resulting from the growth

in the overall quantity and quality of rigs utilizing the Scrypt mining algorithm working to solve blocks on the blockchain and the difficulty

index associated with the secure hashing algorithm employed in solving the blocks.

of Mining Results

following table presents additional information about our cryptocurrency mining activities in coins and amounts during the year ended

December 31, 2025.

of revenue for the year ended December 31, 2025 approximately $3.560 million consisted primarily of direct production costs of the mining

operations, including utilities and fees paid to one of the Company’s colocation agreement hosts ($3.353 million) and value added

tax expense ($206,000), but excluding depreciation and amortization, which are separately stated.

the year ended December 31, 2025 the Company incurred operating expenses of $11,332,284.

Operating expenses consisted mainly of office

expenses of $802,667, contract labor of $155,676, professional fees of $954,679, depreciation expense of $7,503,386 and stock based compensation

of $1,389,989.

Office expenses are primarily attributable to the Company moving colocation locations during the year and shipping mining

equipment between locations.

Contract labor and professional fees is related to operational activity for the company’s first year

operations and the reverse recapitalization consummated during the year.

Depreciation expense is attributable to in-service mining equipment

which is amortized over two-year useful life.

Stock based compensation is attributable to expense under the employee’s equity plan

for eligible employees.

Loss from operations

Company realized a net loss from operations of $3,945,922 and $2,519,030 for the years ended December 31, 2024 and 2023, respectively,

an increase of $1,426,892 for the reasons stated above.

the years ended December 31, 2024 and 2023, the Company had $70,444 and $73,498 in interest expense primarily related to preferred stock

dividends and liquidated damages, respectively.

For the years ended December 31, 2024 and 2023, the Company had a liquidated damages

expense of $0 and $731,652, respectively.

For the years ended December 31, 2024 and 2023, the Company had a liquidated damages expense

of $0 and $731,652, respectively.

For the years ended December 31, 2024 and 2023, the Company had interest income of $16,641 and $0,

respectively.

Loss applicable to common shareholders

Company realized a net loss applicable to shareholders of $3,999,905 , and $3,324,180 for the years ended December 31, 2024 and 2023,

respectively, an increase of $675,725 for the reasons stated above.

Company realized a net loss from operations before income taxes of $7,918,371 for the year ended December 31, 2025 which is attributed

to the reasons stated above in the section “Operating Expenses.”

income (expense)

the year ended December 31, 2025, the Company had ($584,514) in other income (expense).

This included the net unrealized and realized

loss on digital assets (cryptocurrencies) of ($443,696) during the year ended December 31, 2025 $(140,818) of net interest expense.

Loss Before Income Taxes

Company realized a net loss before income taxes of $8,502,885 for the year ended December 31, 2025, and is due to the

reasons stated above in the preceding sections.

and capital resources

of December 31, 2024 and 2023, the Company had cash in the amount of $4,680,840 and $259,212, respectively.

of December 31, 2024 and 2023, the Company had stockholders’ equity of $4,767,261 and $349,327, respectively.

Company’s accumulated deficit was $9,691,708 and $5,691,803 as of December 31, 2024 and 2023, respectively.

Company used net cash in operations of $3,485,899 and $2,326,523 for the years ending December 31, 2024 and 2023, respectively.

cash used in investing activities for years ending December 31, 2024 and 2023 was $211,950 and $176,499, respectively, primarily utilized

for capitalized software development, along with the purchase of computer equipment.

cash provided by financing activities was $8,119,477 for the year ended December 31, 2024, comprised of $7,339,477, $210,000, and $805,000,

from the sale of common stock (net offering costs), issuance of related-party notes payable, and the sale of preferred stock, respectively,

offset by $210,000 in repayment of related-party notes payable and $25,000 in offering costs for sales of preferred stock.

cash provided by financing activities was $1,606,891 net of offering costs of $17,601 for the year ended December 31, 2023 comprised

of $33,000 from subscription receivable and $1,591,492 from the sale of common stock.

of December 31, 2025, the Company had cash in the amount of $38,919,486.

Of the cash held at December 31, 2025, $36,408,077 relates

to Doge (the accounting acquirer) and $2,511,409 relating to Thumzup (the legal acquirer) and Thumzup Inc.

which is excluded from

the statement of cash flows as discussed in Note 2 of the consolidated financial statement.

As of December 31, 2025, the Company had

stockholders’ equity of $66,247,252.

Company’s accumulated deficit was $(8,502,885) as of December 31, 2025.

Company used net cash in operating activities of $6,447,474 for the year ended December 31, 2025.

For the year ended December 31, 2025,

cashflows were impacted by depreciation of $7,503,386, digital asset mining revenue of $6,963,477, stock based compensation of $1,389,989,

net unrealized and realized loss on digital assets, $443,696, loss on sale of equipment $395, change in prepaid expense of $198,707,

change in other assets of $621,660 and change in accrued expenses of $501,789.

cash used in investing activities for the year ended December 31, 2025 was $24,866,515.

During the year ended December 31, 2025, we invested

$25,938,181 in mining equipment, received $29,990 proceeds from sale of equipment, deposited $3,600,100 on mining equipment to be received

and received $4,641,776 in proceeds from sale of digital assets.

was cash generated by financing activities for the year ended December 31, 2025 of $70,233,475.

For the year ended December 31, 2025,

this was comprised of $8,550,000 in proceeds from long term debt, offset by repayments of $8,550,000, cash acquired in reverse recapitalization

of $42,140,304, proceeds from the issuance Class A-1 units of $17,945,000, proceeds from the issuance of Class A-2 units net of issuance

costs of $10,422,402, and the repurchase of treasury stock of $274,321.

of December 31, 2025, we had cash and cash equivalents on hand of $38,919,486.

We currently have minimal sources of liquidity such as

arrangements with credit institutions that will have or are reasonably likely to have a current or future effect on our financial condition

or immediate access to capital.

from Mining Operations

our operations on a go-forward basis will rely significantly on our ability to continue to mine cryptocurrency and the spot or market

price of the cryptocurrency we mine and raise additional funds as equity, debt or convertible securities.

We expect to generate ongoing

revenues from the production of cryptocurrencies, primarily Dogecoin currency rewards, for example, in our mining facilities and our

ability to liquidate for currency rewards at future values will be evaluated from time to time to generate cash for operations.

Dogecoin and other currency rewards, for example, which exceed our production and overhead costs will determine our ability to report

profit margins related to such mining operations, although accounting for our reported profitability is significantly complex.

regardless of our ability to generate revenue from the sale of our cryptocurrency assets, we may need to raise additional capital in

the form of equity or debt to fund our operations and pursue our business strategy.

ability to raise funds as equity, debt or conversion of cryptocurrency to maintain our operations is subject to many risks and uncertainties.

Company utilizes third-party data center facilities to support its digital asset mining operations.

Specifically, the Company has entered

into colocation and hosting services agreements with independent data center providers for the ongoing provision of rack space, electrical

power capacity, network connectivity, and cooling infrastructure required to operate the Company’s mining hardware.

ended December 31, 2025, the Company incurred $3,353,355 of colocation and hosting-related service expenses, which are included in cost

of revenues in the accompanying consolidated statements of operations.

Financial Measures

addition to our results determined in accordance with GAAP, we rely on Adjusted EBITDA to evaluate our business, measure our performance,

and make strategic decisions.

Adjusted EBITDA is a non-GAAP financial measure.

We define Adjusted EBITDA as net income (loss), adjusted

for impacts of interest expense, income tax provision or benefit and depreciation and amortization, and non-cash stock-based compensation.

You are encouraged to evaluate each

of these adjustments and the reasons our Board and management team consider them appropriate for supplemental analysis.

board of directors and management team use Adjusted EBITDA to assess our financial performance because it allows them to compare our

operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of

interest expense and income), asset base (such as depreciation and amortization), and other items (such as non-recurring transactions

mentioned above) that impact the comparability of financial results from period to period.

income (loss) is the GAAP measure most directly comparable to Adjusted EBITDA.

In evaluating Adjusted EBITDA, you should be aware that

in the future we may incur expenses that are the same as or similar to some of the adjustments in such presentation.

Our presentation

of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

There can be no assurance that we will not modify the presentation of Adjusted EBITDA in the future, and any such modification may be

Adjusted EBITDA has important limitations as an analytical tool and you should not consider Adjusted EBITDA in isolation or

as a substitute for analysis of our results as reported under GAAP.

Because Adjusted EBITDA may be defined differently by other companies

in our industry, our definition of this non-GAAP financial measure may not be comparable to similarly titled measures of other companies,

thereby diminishing its utility.

Reconciliations

of Adjusted EBITDA to the most comparable U.S.

GAAP financial metric as of December 31, 2025 is presented in the table below:

$ (8,502,885 )

Stock based compensation

Interest expense, net

Adjusted EBITDA

Company’s results of operations have not been affected by inflation and management cannot predict the impact, if any, inflation

might have on its operations in the future.

of Disclosure Controls and Procedures

management, with the participation of our Chief Executive Officer evaluated the effectiveness of Doge’s disclosure controls and

procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act and regulations promulgated thereunder) as

of December 31, 2025.

Based on this evaluation, our management concluded that our disclosure controls and procedures were effective as

of December 31, 2025.

Our disclosure controls and procedures are designed to provide reasonable assurance that information required to

be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported, within

the time periods specified in the rules and forms of the SEC.

Disclosure controls and procedures include, without limitation, controls,

and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under

the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial

officers, as appropriate, to allow for timely decisions regarding required disclosure.

Trends, Events and Uncertainties

Company is subject to risks and uncertainties common to companies in the digital asset mining industry.

The following discussion highlights

trends, events, and uncertainties that management believes are reasonably likely to have a material effect on the Company’s financial

condition, results of operations, or liquidity.

For a more detailed discussion, see the section entitled “Risk Factors.”

for Power and Infrastructure from AI and HPC Demand.

The rapid growth in demand for data center capacity driven by artificial intelligence

(“AI”) and high-performance computing (“HPC”) workloads has intensified competition for power infrastructure

across the United States.

Large-scale AI training and inference operations require reliable, high-density power at scale, and operators

of these workloads have demonstrated willingness to pay power rates that exceed the economics available to digital asset miners under

current market conditions.

This trend is driving an industry-wide reassessment of the highest and best use of the electron, as power

assets that were historically allocated to PoW mining are increasingly being evaluated for, or converted to, AI and HPC applications.

We expect this dynamic to continue and potentially accelerate.

As a colocation-based operator, the Company is exposed to rising competition

for hosting capacity and power allocation, which could result in increased colocation costs, reduced availability of hosting at favorable

rates, or pressure to relocate operations to lower-cost jurisdictions.

Uncertainty and ASIC Hardware Supply.

The Company’s Scrypt ASIC mining hardware is manufactured primarily in China.

fiscal year 2025, evolving U.S.

trade policy, including the imposition and adjustment of tariffs on Chinese-manufactured goods, materially

impacted the Company’s deployment strategy.

In the first quarter of 2025, the Company initially deployed its fleet at a colocation

facility outside of the United States in part to mitigate tariff-related cost exposure.

In the third quarter, following changes to the

tariff environment, the Company relocated those miners to domestic facilities.

The continued uncertainty surrounding U.S.

tariff policy

on ASIC mining hardware has disrupted supply chains across the industry, with many operators reducing or ceasing imports of rigs into

the United States due to the adverse impact on equipment economics.

Prolonged tariff uncertainty could constrain the Company’s

ability to procure replacement or next-generation hardware on commercially favorable terms, increase capital expenditure requirements,

and limit the Company’s ability to deploy rigs in jurisdictions with lower operating costs outside the United States.

Asset Market Volatility and Network Difficulty.

The Company’s revenues and the carrying value of its digital asset treasury

are directly affected by the market prices of the digital assets it mines and holds, including Bitcoin, Dogecoin, and Litecoin.

asset prices have historically exhibited significant volatility and may be influenced by factors beyond the Company’s control,

including macroeconomic conditions, investor sentiment, regulatory developments, technological changes, and the liquidity of digital

asset markets.

In addition, PoW mining economics are influenced by network difficulty, which adjusts dynamically based on total hashrate

deployed across each respective blockchain.

Increases in total network hashrate, whether driven by new entrants, fleet upgrades by existing

miners, or changes in mining economics, increase mining difficulty and reduce expected rewards per unit of hashrate.

During fiscal year

2025, the global Scrypt network hashrate experienced fluctuations that affected the Company’s per-unit mining economics.

network is expected to undergo its next block reward halving event in August 2027, which would reduce the Litecoin block subsidy by 50%

and may materially affect the mining economics of Scrypt-based operations.

Regulatory Environment.

The regulatory environment for digital assets in the United States and globally continues to evolve.

and regulatory actions at the federal and state level, including potential changes to the classification, taxation, or permissibility

of digital asset mining, staking, or custody activities, could materially affect the Company’s operations and the broader market

for digital assets.

Changes in energy policy, environmental regulation, or reporting requirements applicable to data centers and PoW

mining operations could also increase compliance costs or constrain operational flexibility.

The Company monitors regulatory developments

and engages with industry groups, but cannot predict the timing, scope, or impact of future regulatory actions.

and Macroeconomic Conditions.

Ongoing geopolitical conflicts, including the conflicts between Russia and Ukraine and between Israel

and Hamas, and broader macroeconomic uncertainty, including the effects of inflation, interest rate policy, and global trade tensions,

may adversely affect digital asset markets, the cost and availability of capital, and the Company’s operating environment.

policy implemented by the U.S.

Congress or the executive branch, including policies affecting tariffs, international trade, taxation,

and the regulatory environment, have impacted and may continue to impact the Company’s business and the broader economy in ways

that are difficult to predict.

Sheet Arrangements

the years presented, we did not have any off-balance sheet arrangements.

Accounting Policies and Estimates

discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements.

These financial statements are prepared in accordance with U.S.

GAAP, which requires the Company to make estimates and assumptions

that affect the reported amounts of our assets, liabilities, revenues, and expenses, to disclose contingent assets and liabilities

on the dates of the consolidated financial statements, and to disclose the reported amounts of revenues and expenses incurred during

the financial reporting periods.

The most significant estimates and assumptions include, but are not limited to, the accounting for

digital assets, revenue recognition, useful lives of equipment and the evaluation allowance related to deferred tax assets.

continue to evaluate these estimates and assumptions that we believe to be reasonable under the circumstances.

We rely on these

evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from

other sources.

Since the use of estimates is an integral component of the financial reporting process, actual results could differ

from those estimates as a result of changes in our estimates.

Some of our accounting policies require higher degrees of judgment

than others in their application.

We believe critical accounting policies as disclosed in this release reflect the more significant

judgments and estimates used in preparation of our consolidated financial statements.

For a summary of significant accounting

policies, refer to Note 3.

Summary of Significant Accounting Policies in our Notes to consolidated financial statements

included elsewhere herein.

than as discussed above and elsewhere in this Annual Report on Form 10-K, we are not currently aware of any trends, events, or uncertainties

that are reasonably likely to have a material effect on our financial condition.

For a further discussion of factors that may affect

future operating results, see the section entitled “Risk Factors.”

Quantitative and Qualitative Disclosures about Market Risk

to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as

it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

Company is not required to provide the information required by this Item as it is a smaller reporting company.

financial statements and supplementary data

information for this Item 8 is included following the “Index to Financial Statements” on page F-1 of this Annual Report.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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-K

Item 7. Management’s Discussion and Analysis