UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2025~~ 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission ~~file~~ ~~number~~File Number: 001-38105

Forum Markets, Incorporated (formerly ETHZilla Corporation)

(Exact name of registrant as specified in its charter)

Delaware		90-1890354
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2875 South Ocean Blvd Suite 200 Palm Beach, FL		33480
(Address of principal executive offices)		(Zip Code)
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (650) 507-0669

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		~~ETHZ~~FRMM		The Nasdaq Stock Market LLC (The Nasdaq Capital Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~November~~May 1215, ~~2025~~2026, 2114,~~398~~542,~~839~~979 shares of ~~common stock, par value $0.0001 per share, were issued and outstanding. The foregoing reflects~~ the ~~reverse stock split of the~~ registrant’s common stock ~~that~~were ~~became~~issued ~~effective on October 20, 2025~~ and ~~began trading on a post-split adjusted basis on October 20, 2025~~outstanding.

~~ETHZILLA CORPORATION~~FORUM MARKETS, INCORPORATED, FORMERLY ETHZILLA ~~180~~CORPORATION ~~LIFE SCIENCES CORP.~~ AND SUBSIDIARIES

FORM 10-Q

FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2025~~2026

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	72
Item 4.	Controls and Procedures.	72
PART II - OTHER INFORMATION		74
Item 1.	Legal Proceedings.	74
Item 1A.	Risk Factors.	74
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	99
Item 3.	Defaults upon Senior Securities.	100
Item 4.	Mine Safety Disclosures.	100
Item 5.	Other Information.	100
Item 6.	Exhibits.	102

PART I – FINANCIAL INFORMATION	1

Item 1. Financial Statements	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	34
Item 4. Controls and Procedures.	34

PART II - OTHER INFORMATION	36

Item 1. Legal Proceedings.	36
Item 1A. Risk Factors.	36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3. Defaults upon Senior Securities.	38
Item 4. Mine Safety Disclosures.	38
Item 5. Other Information.	38
Item 6. Exhibits.	39

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Report”), contains forward-looking statements under federal securities laws, including within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by the following words: “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “targets,” “scheduled,” “anticipates,” “soon,” “goal,” “intends,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Report, including those factors described under the heading “Risk Factors” contained in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission (“SEC”) on April 1, 2026 (the “Annual Report”), and our other filings with the SEC.

In particular, forward-looking statements include, but are not limited to, statements that are not statements of current or historical facts, such as statements relating to the Company’s consideration of strategic alternatives and the Company’s ability to execute its plans, undertake tokenization activities and achieve future performance.

Factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements include, among others:

	●	failure to realize the anticipated benefits of the tokenization of real-world assets (“RWAs”);

	●	the Company’s ability to expand into new markets, including the tokenization of RWAs, the timing and costs associated therewith, and regulatory compliance costs, compliance and issues related thereto;

	●	the concentration of digital assets with custodians and service providers, including insolvency, non-performance, and limits on insurance coverage;

	●	risks relating to the Company’s recent acquisitions and strategic investments;

	●	our ability to identify, evaluate, and consummate strategic alternatives, including acquisitions, mergers, sales of the Company or material assets of the Company, strategic partnerships, capital raises and distributions of the Company’s capital and assets;

	●	the performance of the Eurus Aero Token I (the “Aero Token”) or future tokens that we develop, including anticipated yields thereof;

	●	digital asset market and network dynamics risks, including the slowing or stopping of the development or acceptance of blockchain networks and blockchain assets would have an adverse material effect on the successful development and adoption of the Company’s tokens;

	●	failure to realize the anticipated benefits of the Company’s digital asset holdings and tokenization strategies;

	●	our ability to raise sufficient capital to support our operations, fund growth initiatives and repay outstanding indebtedness;

	●	the Company’s ability to achieve profitable operations;

	●	the potential need for changes in our long-term strategy in response to future developments;

	●	the Company’s success in retaining or recruiting, or changes required in, its officers, key employees or directors;

	●	expectations regarding the capitalization, resources and ownership structure of the Company;

	●	the Company’s ownership of digital assets, the Company’s current and anticipated yield strategies, including its participation in decentralized finance industry (“DeFi”) protocols and tokenization of RWAs;

	●	fluctuations in the market price of Ether (“ETH”), the native cryptocurrency of the Ethereum blockchain, that will impact the Company’s accounting and financial reporting;

	●	government regulation of cryptocurrencies, digital assets, and tokenized securities, including evolving SEC interpretations thereof;

	●	constrained access to banking or capital markets for digital asset-related companies;

	●	the Company’s ability to repurchase shares of common stock, the timing thereof, purchase price thereof, and the fact that repurchases may not be undertaken under the stock repurchase program;

	●	risks associated with the Company’s debt, liens, secured obligations and collateral provided in connection therewith;

	●	exchange listing requirements and compliance;

	●	changes in business, market, financial, political and regulatory conditions;

	●	risks relating to the Company’s over-the-counter transactions, including the Company’s ability to repay such facilities, covenants associated therewith and security interests associated therewith, including security interests over certain of our cash and ETH;

	●	risks relating to the Company’s at-the-market equity offering (the “ATM Program”), including potential downward pressure on the Company’s stock price associated therewith;

	●	dilution associated with equity offerings and convertible instruments;

	●	risks relating to the Company’s operations and business, including the highly volatile nature of the price of ETH and other cryptocurrencies;

	●	the risk that the Company’s stock price may be highly correlated to the price of the digital assets that it holds;

	●	risks related to increased competition in the industries in which the Company does and will operate;

iii

	●	risks relating to significant legal, commercial, regulatory and technical uncertainty regarding digital assets generally;

	●	dependence on access to reliable, low-cost electricity and hosting, uninterrupted internet activity, and the integrity and availability of the Ethereum network;

	●	utility rate structures, curtailments, grid constraints and weather events;

	●	evolving U.S. and foreign laws and policies applicable to digital assets, custody, staking, market structure, sanctions/anti-money laundering (“AML”), securities and commodities regulation, and tax treatment, and possible conflicting or extraterritorial regulations, potential investigations and litigation;

	●	changes in the accounting treatment and taxation of the Company’s ETH and other digital asset holdings;

	●	accounting risks associated with fair value measurements and potential impairment charges;

	●	our ability to remediate a material weakness in our internal control over financial reporting and maintain an effective system of internal control over financial reporting;

	●	cybersecurity incidents or technological difficulties which may compromise systems and secondary market platforms, digital wallets, custodial accounts, or third-party service providers;

	●	token transactions may be irreversible and losses due to fraudulent or accidental transactions may not be recoverable;

	●	potential litigation involving the Company;

	●	global economic conditions;

	●	geopolitical events and regulatory changes;

	●	the concentration of digital assets with custodians and service providers, including insolvency, non-performance, and staking-related penalties and liquidity constraints;

	●	the possibility that the Company could be classified as an investment company or again be deemed a shell company;
	●	vulnerabilities in smart contracts, blockchain protocol changes or forks, and the limited operating history of the Company’s tokenization activities;

	●	the Company’s stock trading at a premium or discount to the value of its digital asset holdings, and competition from spot ETH exchange-traded products;

	●	access to additional financing, and the potential lack of such financing; and

	●	the Company’s ability to raise funding in the future and the terms of such funding, including dilution caused thereby.

Any forward-looking statement in this Report reflects our current views with respect to future events or to our future financial performance and involves known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. All forward-looking statements included herein speak only as of the date of the filing of this Report. All subsequent written and oral forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements above. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

General Information

The following discussion is based upon our unaudited Condensed Consolidated Financial Statements (the “Condensed Consolidated Financial Statements”) included elsewhere in this Report, which have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Report, and in other reports we file with the SEC, and in our most recent Annual Report.

This information should be read in conjunction with the interim unaudited Condensed Consolidated Financial Statements and the notes thereto included in this Report, and the audited financial statements and notes thereto and “Part II. Other Information – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”, contained in our Annual Report.

Certain capitalized terms used below and otherwise defined below, have the meanings given to such terms in the footnotes to our unaudited Condensed Consolidated Financial Statements included above under “Part I – Financial Information” – “Item 1. Financial Statements”.

Our logo and some of our trademarks and tradenames are used in this Report. This Report also includes trademarks, tradenames and service marks that are the property of others. Solely for convenience, trademarks, tradenames and service marks referred to in this Report may appear without the ®, ™ and SM symbols. References to our trademarks, tradenames and service marks are not intended to indicate in any way that we will not assert to the fullest extent under applicable law our rights or the rights of the applicable licensors if any, nor that respective owners to other intellectual property rights will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend the use or display of other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

The market data and certain other statistical information used throughout this Report are based on independent industry publications, reports by market research firms or other independent sources that we believe to be reliable sources. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information and have not commissioned any such information. We are responsible for all of the disclosures contained in this Report, and we believe these industry publications and third-party research, surveys and studies are reliable. While we are not aware of any misstatements regarding any third-party information presented in this Report, their estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties, and are subject to change based on various factors, including those discussed under, and incorporated by reference in, the section entitled “Item 1A. Risk Factors” of this Report. These and other factors could cause our future performance to differ materially from our assumptions and estimates. Some market and other data included herein, as well as the data of competitors as they relate to the Company, are also based on our good faith estimates.

See also “Cautionary Statement Regarding Forward-Looking Statements”, above, which includes information on forward-looking statements used herein and other matters which are applicable to this Report, including, but not limited to this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Unless the context requires otherwise, references to the “Company,” “we,” “us,” “our,” “Forum Markets”, and “Forum Markets, Incorporated” refer specifically to Forum Markets, Incorporated, formerly ETHZilla Corporation and its consolidated subsidiaries.

In addition, unless the context otherwise requires and for the purposes of this Report only:

“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

“SEC” refers to the United States Securities and Exchange Commission; and

“Securities Act” refers to the Securities Act of 1933, as amended.

Additional Information

We file annual, quarterly, and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s website at www.sec.gov and are available for download, free of charge, when such reports are filed with or furnished to the SEC, on the “Investors”– “Financials”– “SEC Filings” page of our website at https://forum-markets.com. Copies of documents filed by us with the SEC are also available from us without charge, upon oral or written request to our General Counsel, who can be contacted at the address and telephone number set forth on the cover page of this Report. The information on, or that may be accessed through, our website is not incorporated by reference into this Report and should not be considered a part of this Report.

We use, and will continue to use, our website (https://forum-markets.com), press releases and various social media channels, including our X account (x.com/forum markets) and our LinkedIn account (https://www.linkedin.com/company/forummarkets/), as additional means of disclosing public information to investors, the media and others interested in the Company. It is possible that certain information that we post on our website, disseminated in press releases and on social media could be deemed to be material information, and we encourage investors, the media and others interested in the Company to review the business and financial information that we post on our website and disseminate in press releases and on the social media channels identified above, as such information could be deemed to be material information. The contents on our website and our social media channels are not incorporated by reference into this Report and should not be considered a part of this Report.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

~~ETHZILLA CORPORATION,~~FORUM ~~FORMERLY~~MARKETS ~~180 LIFE SCIENCES CORP~~INC., ~~AND~~FORMERLY ~~SUBSIDIARIES~~ETHZILLA CORPORATION

Condensed Consolidated Balance Sheets

	September 30,			December 31,
	2025			2024
	(unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	53,309,509		$	4,567,251
Restricted cash equivalents		505,591,875			-
Prepaid expenses and other current assets		2,963,219			477,507
Current assets of discontinued operations		83,844			96,613
Total Current Assets		561,948,447			5,141,371
Marketable securities		8,826,571			-
Digital assets		180,933,721			-
Staking receivables		257,604,249			-
Other assets of discontinued operations		-			7,622,041
Total Assets	$	1,009,312,988		$	12,763,412
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	1,198,981		$	305,588
Accounts payable – related parties		20,246			53,380
Accrued expenses		372,864			4,228
Loans payable - current portion		485,846			584
Collateralized loan		50,000,000			-
Current liabilities of discontinued operations		3,710,570			3,141,105
Total Current Liabilities		55,788,507			3,504,885
Convertible debt, net at fair value		496,276,461			-
Derivative liabilities		12,110,655			-
Long term liabilities of discontinued operations		-			6,616
Total Liabilities		564,175,623			3,511,501
Commitments and contingencies (Note 12)
Stockholders’ Equity:
Preferred stock, $0.0001 par value; 5,000,000 shares authorized; (see designations and shares authorized for Series A, Class B, Class C and Class K preferred stock)
Class B Convertible Preferred stock liability, $0.001 par value, 0 and 1,000,000 shares authorized, issued and outstanding at September 30, 2025 and December 31, 2024, respectively		-			100
Class C Preferred Stock; 1 share authorized, 0 issued and outstanding at September 30, 2025 and December 31, 2024		-			-
Class K Preferred Stock; 1 share authorized, 0 issued and outstanding at September 30, 2025 and December 31, 2024, respectively		-			-
Common stock, $0.0001 par value; 5,000,000,000 shares authorized; 16,667,286 and 317,705 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		1,666			32
Treasury stock 645,043 and 0 shares at September 30, 2025 and December 31, 2024, respectively		(16,121,428	)		-
Additional paid-in capital		826,176,044			153,692,041
Accumulated other comprehensive income		(2,557,681	)		(2,916,918	)
Accumulated deficit		(362,361,236	)		(141,523,344	)
Total Stockholders’ Equity		445,137,365			9,251,911
Total Liabilities and Stockholders’ Equity	$	1,009,312,988		$	12,763,412

(In thousands, except per share data)

~~The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.~~(Unaudited)

	March 31, 2026			December 31, 2025
Assets
Current Assets:
Cash and cash equivalents	$	65,905		$	8,018
Restricted cash equivalents		-			1,016
Accounts receivable		375			-
Loans receivable		11,458			-
Prepaid expenses and other current assets		4,531			4,514
Current assets of discontinued operations		256			22
Total Current Assets		82,525			13,570
Marketable securities		31,771			4,411
Non-marketable securities		45,718			45,718
Digital assets		28,307			61,587
Staking receivables		-			181,011
Property and equipment, net		17,556			-
Right of use assets - operating		1,734			-
Total Assets	$	207,611		$	306,297
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	436		$	1,539
Accounts payable – related parties		15			17
Accrued expenses		11,497			6,377
Right of use liabilities - operating		903			-
Loans payable - current portion		251			251
Collateralized loan - current portion		-			31,513
Current liabilities of discontinued operations		223			1,232
Total Current Liabilities		13,325			40,929
Collateralized loan - non current		25,950			25,950
Total Liabilities		39,275			66,879
Commitments and contingencies (Note 13)
Stockholders’ Equity:
Preferred stock, $0.0001 par value; 5,000,000 shares authorized; (see designations and shares authorized for Series A, Class B, Class C and Class K preferred stock)		-			-
Class B Convertible Preferred stock liability, $0.001 par value, 0 and 1,000,000 shares authorized, issued and outstanding at March 31, 2026 and December 31, 2025, respectively		-			-
Class C Preferred Stock; 1 share authorized, 0 issued and outstanding at March 31, 2026 and December 31, 2025		-			-
Class K Preferred Stock; 1 share authorized, 0 issued and outstanding at March 31, 2026 and December 31, 2025, respectively		-			-
Common stock, $0.0001 par value; 5,000,000,000 shares authorized; 20,313,111 and 19,012,231 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively		2			2
Additional paid-in capital		839,837			834,453
Accumulated other comprehensive income		(3,195	)		(2,993	)
Accumulated deficit		(668,308	)		(592,044	)
Total Stockholders’ Equity		168,336			239,418
Total Liabilities and Stockholders’ Equity	$	207,611		$	306,297

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

~~ETHZILLA CORPORATION,~~FORUM ~~FORMERLY~~MARKETS ~~180 LIFE SCIENCES CORP~~INC., ~~AND~~FORMERLY ~~SUBSIDIARIES~~ETHZILLA CORPORATION

Condensed Consolidated Statements of Operations and Comprehensive Loss

(~~unaudited~~In thousands, except per share data)

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Revenue:
Revenue	$	4,110,169		$	-		$	4,110,169		$	-
Total Revenue		4,110,169			-			4,110,169			-
Operating Expenses:
General and administrative		224,604,532			596,172			227,954,479			3,471,965
Total Operating Expenses		224,604,532			596,172			227,954,479			3,471,965
Loss From Operations		(220,494,363	)		(596,172	)		(223,844,310	)		(3,471,965	)
Other (Expense) Income:
Dividend income		616,725			-			616,725			-
Interest income		327,211			-			340,085			-
Other income		-			76,639			-			1,789,443
Interest expense		(319,909	)		(10,552	)		(319,909	)		(28,977	)
Change in fair value of convertible debt		3,724,344			-			3,724,344			-
Change in fair value of available for sale securities		(74,788	)		-			(74,788	)		-
Digital asset gains and losses		7,549,815			-			7,549,815			-
Change in fair value of derivative liabilities		-			-			-			58
Gain (loss) on settlement of liabilities		-			(2,304	)		-			52,695
Total other (expense) income, net		11,823,398			63,783			11,836,272			1,813,219
Loss Before Income Taxes		(208,670,965	)		(532,389	)		(212,008,038	)		(1,658,746	)
Income tax benefit		-			-			-			-
Net Loss From Continuing Operations		(208,670,965	)		(532,389	)		(212,008,038	)		(1,658,746	)
Net Loss From Discontinued Operations		(8,071,091	)		(304,331	)		(8,829,854	)		(235,937	)
Net Loss		(216,742,056	)		(836,720	)		(220,837,892	)		(1,894,683	)
Other Comprehensive Loss:
Foreign currency translation adjustments		556,600			(67,332	)		348,474			(81,733	)
Change in fair value of held to maturity securities		10,763			-			10,763			-
Total other comprehensive income (loss)		567,363			(67,332	)		359,237			(81,733	)
Total Comprehensive Loss	$	(216,174,693	)	$	(904,052	)	$	(220,478,655	)	$	(1,976,416	)
Basic and Diluted Net Loss per Common Share
Continuing operation	$	(16.80	)	$	(5.43	)	$	(47.20	)	$	(19.59	)
Discontinued operation	$	(0.65	)	$	(3.10	)	$	(1.97	)	$	(2.79	)
Weighted Average Number of Common Shares Outstanding:
Basic		12,417,757			98,064			4,491,691			84,653
Diluted		12,417,757			98,064			4,491,691			84,653

(Unaudited)

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

	For the Three Months Ended
	March 31,
	2026			2025
Revenue:
Aircraft engine rental revenue	$	1,088		$	-
Staking revenue		1,771			-
Total Revenue		2,859			-

Operating Expenses:
General and administrative		7,492			1,967
Total Operating Expenses		7,492			1,967
Loss From Operations		(4,633	)		(1,967	)

Other (Expense) Income:
Dividend income		54			-
Interest income		104			-
Other income		-			6
Interest expense		(1,000	)		-
Other expense		(2,231	)		-
Change in fair value of derivative liabilities		(11,010	)		-
Change in fair value of available for sale securities		46			-
Digital asset gains and losses		(6,342	)		-
Change in fair value of long term receivable derivative		(48,637	)		-
Loss on make whole provision		(3,885	)		-
Total other (expense) income, net		(72,901	)		6
Loss Before Income Taxes		(77,534	)		(1,961	)
Income tax expense (benefit)		-			-
Net Loss From Continuing Operations		(77,534	)		(1,961	)
Net Income (Loss) From Discontinued Operations		1,270			(408	)
Net Loss		(76,264	)		(2,369	)

Other Comprehensive Loss:
Foreign currency translation adjustments		(202	)		(65	)
Total other comprehensive income (loss)		(202	)		(65	)
Total Comprehensive Loss	$	(76,466	)	$	(2,434	)

Basic and Diluted Net Loss per Common Share
Continuing operation	$	(3.64	)	$	(5.54	)
Discontinued operation	$	0.06		$	(1.15	)
Weighted Average Number of Common Shares Outstanding:
Basic		21,300,374			353,933
Diluted		21,300,374			353,933

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

~~ETHZilla CORPORATION,~~FORUM ~~formerly180~~MARKETS ~~LIFE SCIENCES CORP~~INC., ~~AND~~FORMERLY ~~SUBSIDIARIES~~ETHZILLA CORPORATION

Condensed Consolidated Statements of Changes in Stockholders’ Equity ~~(Deficit)~~

For ~~The~~ the Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~ 2025

(~~unaudited~~In thousands)

	For the Three and Nine Months Ended September 30, 2025 and 2024
	Series B Preferred						Common Stock						Treasury			Additional Paid-in			Accumulated Other Comprehensive			Accumulated			Total Stockholders' Equity
	Shares			Amount			Shares			Amount			Stock			Capital			Income			Deficit			(Deficit)
Balance - January 1, 2025		1,000,000		$	100			317,705		$	32		$	-		$	153,692,041		$	(2,916,918	)	$	(141,523,344	)	$	9,251,911
Cancelled shares		-			-			(239	)		-			-			-			-			-			-
Shares issued for settlement of liabilities		-			-			24,317			2			-			309,998			-			-			310,000
Stock-based compensation		-			-			45,000			5			-			577,579			-			-			577,584
Conversion of Series B Convertible Preferred Stock		(1,000,000	)		(100	)		131,800			13			-			87			-			-			-
Comprehensive loss:
Net loss		-			-			-			-			-			-			-			(2,369,232	)		(2,369,232	)
Other comprehensive loss		-			-			-			-			-			-			(64,691	)		-			(64,691	)
Balance - March 31, 2025		-			-			518,583			52			-			154,579,705			(2,981,609	)		(143,892,576	)		7,705,572
Shares issued for settlement of liabilities		-			-			50,971			5			-			441,401			-			-			441,406
Stock-based compensation		-			-			34,373			3			-			103,621			-			-			103,624
Commitment to repurchase common stock		-			-			-			-			(1,000,000	)		-			-			-			(1,000,000	)
Comprehensive loss:
Net loss		-			-			-			-			-			-			-			(1,726,604	)		(1,726,604	)
Other comprehensive loss		-			-			-			-			-			-			(143,435	)		-			(143,435	)
Balance - June 30, 2025		-			-			603,927			60			(1,000,000	)		155,124,727			(3,125,044	)		(145,619,180	)		5,380,563
Cancelled shares		-			-			(131,800	)		(13	)		1,000,000			(999,987	)		-			-			-
Shares issued for cash and warrants, net		-			-			15,545,821			1,555			-			458,129,883			-			-			458,131,438
Exercise of warrants		-			-			504,743			50			-			5,605,656			-			-			5,605,706
Cashless exercise of warrants		-			-			132,000			13			-			(13	)		-			-			-
Exercise of options		-			-			8,000			1			-			74,319			-			-			74,320
Stock based compensation		-			-			-			-			-			208,241,459			-			-			208,241,459
Share repurchases		-			-			-			-			(16,121,428	)		-			-			-			(16,121,428	)
Adjustment related to reverse stock split		-			-			4,595			-			-			-			-			-			-
Comprehensive loss:
Net loss		-			-			-			-			-			-			-			(216,742,056	)		(216,742,056	)
Other comprehensive income		-			-			-			-			-			-			567,363			-			567,363
Balance - September 30, 2025		-		$	-			16,667,286		$	1,666		$	(16,121,428	)	$	826,176,044		$	(2,557,681	)	$	(362,361,236	)	$	445,137,365
Balance - January 1, 2024		-		$	-			53,476		$	5		$	-		$	130,117,258		$	(2,901,339	)	$	(127,343,657	)		(127,733	)
Shares issued from exercise of August 2023 pre-funded warrants		-			-			25,721			3			-			486			-			-			489
Adjustment related to reverse stock split		-			-			6,085			1			-			(1	)		-			-			-
Stock-based compensation		-			-			-			-			-			236,062			-			-			236,062
Comprehensive loss:
Net loss		-			-			-			-			-			-			-			(1,069,744	)		(1,069,744	)
Other comprehensive income		-			-			-			-			-			-			6,460			-			6,460
Balance - March 31, 2024		-			-			85,282			9			-			130,353,805			(2,894,879	)		(128,413,401	)		(954,466	)
Shares issued for settlement of liabilities		-			-			8,882			1			-			523,250			-			-			523,251
Stock based compensation		-			-			-			-			-			22,308			-			-			22,308
Comprehensive income (loss):
Net income		-			-			-			-			-			-			-			11,781			11,781
Other comprehensive loss		-			-			-			-			-			-			(20,861	)		-			(20,861	)
Balance -June 30, 2024		-		$	-			94,164		$	10		$	-		$	130,899,363		$	(2,915,740	)	$	(128,401,620	)	$	(417,987	)
Shares issued for settlement of liabilities		-			-			8,534			1			-			190,010			-			-			190,011
Stock based compensation		-			-			-			-			-			16,456			-			-			16,456
Warrants issued for asset acquisition		-			-			-			-			-			4,849,346			-			-			4,849,346
Comprehensive income (loss):
Net loss		-			-			-			-			-			-			-			(836,720	)		(836,720	)
Other comprehensive loss		-			-			-			-			-			-			(67,332	)		-			(67,332	)
Balance -September 30, 2024		-		$	-			102,698		$	11		$	-		$	135,955,175		$	(2,983,072	)	$	(129,238,340	)	$	3,733,774

(Unaudited)

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

	Series B Preferred				Common Stock					Additional Paid-in			Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Shares			Amount		Capital			Income			Deficit			Equity
Balance - January 1, 2026		-	$	-		19,012,231		$	2	$	834,453		$	(2,993	)	$	(592,044	)		239,418
Shares issued for cash, net		-		-		1,335,766			-		5,503			-			-			5,503
Common stock cancelled for withholding taxes		-		-		(34,886	)		-		(223	)		-			-			(223	)
Stock based compensation		-		-		-			-		104			-			-			104
Comprehensive loss:
Net loss		-		-		-			-		-			-			(76,264	)		(76,264	)
Other comprehensive loss		-		-		-			-		-			(202	)					(202	)
Balance – March 31, 2026		-	$	-		20,313,111		$	2	$	839,837		$	(3,195	)	$	(668,308	)	$	168,336

	Series B Preferred					Common Stock					Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares			Amount		Shares			Amount		Capital		Income			Deficit			Equity
Balance - January 1, 2025		1,000,000		$	-		317,705		$	-	$	153,692	$	(2,917	)	$	(141,523	)	$	9,252
Cancelled shares		-			-		(239	)		-		-		-			-			-
Shares issued for settlement of liabilities		-			-		24,317			-		310		-			-			310
Stock based compensation		-			-		45,000			-		578		-			-			578
Conversion of Series B Convertible Preferred Stock		(1,000,000	)		-		131,800			-		-		-			-			-
Comprehensive loss:
Net loss		-			-		-			-		-		-			(2,369	)		(2,369	)
Other comprehensive loss		-			-		-			-		-		(65	)		-			(65	)
Balance – March 31, 2025		-		$	-		518,583		$	-	$	154,580	$	(2,982	)	$	(143,892	)	$	7,706

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

~~ETHZilla CORPORATION~~FORUM ~~formerly~~MARKETS ~~180 LIFE SCIENCES CORP~~INC., ~~AND~~FORMERLY ~~SUBSIDIARIES~~ETHZILLA CORPORATION

Condensed Consolidated Statements of Cash Flows

(~~Expressed in~~In ~~US Dollars~~thousands)

(~~unaudited~~Unaudited)

	For the Nine Months Ended
	Three Months Ended March 31,
	September 30,
	2026			2025
	2025			2024
Cash Flows from Operating Activities
Net loss from continuing operations	$	(~~212~~77,~~008,038~~534	)	$	(1,~~658,746~~961	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		~~208,922,667~~104			~~274,826~~578
Change in fair value of derivative liabilities		-			(58	)
Depreciation and amortization		473			-
Digital asset gains and losses		(7,549,815	)		-
Amortization of loan premiums		2			-
Change in fair value of available for sale securities		74,788			-
Change in fair value of long term receivable derivative		48,637			-
Non-cash settlement expense		(3,724,344	)		-
Digital asset gains and losses		6,342			-
Non-cash staking and incentive revenue		(4,110,169	)		-
Change in fair value of available for sale securities		(46	)		-
Gain loss on settlement of liabilities		-			(52,695	)
Change in fair value of derivative liability		11,010			-
Non-cash staking and incentive revenue		460			-
Loss on make whole provision		3,885			-
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(1,763,712	)		1,092,963
Accounts receivable		(375	)		-
Accounts payable		785,392			(143,939	)
Prepaid expenses and other current assets		(12,308	)		220
Accounts payable - related parties		(33,134	)		72,616
Right of use asset – operating lease		72			-
Accrued expenses		1,120,042			(116,532	)
Accounts payable		(2,007	)		(23	)
Total adjustments		193,721,715			1,127,181
Accounts payable - related parties		(3	)		30
Net cash used in operating activities from continuing operations		(18,286,323	)		(531,565	)
Accrued expenses		1,013			263
Net cash used in operating activities from discontinued operations		(132,277	)		(14,612	)
Total adjustments		57,259			1,068
Net cash used in operating activities		(18,418,600	)		(546,177	)
Net cash used in operating activities from continuing operations		(20,275	)		(893	)
Net cash provided by (used in) operating activities from discontinued operations		(175	)		6
Net cash used in operating activities		(20,450	)		(887	)
Cash Flows from Investing Activities
Purchases of marketable securities		(827,~~890,596~~313	)		-
Purchases of digital assets		(~~243,479,818~~757	)		-
Net cash used in investing activities from continuing operations		(252,370,414	)		-
Sale of cryptocurrency		128,096			-
Net cash used in investing activities from discontinued operations		-			-
Purchase of loans receivable		(11,455	)		-
Net cash used in investing activities		(252,370,414	)		-
Repayment of loans receivable		60			-
Purchase of property and equipment		(16,813	)		-
Net cash provided by investing activities from continuing operations		71,818			-
Net cash provided by investing activities from discontinued operations		-			-
Net cash provided by investing activities		71,818			-
Cash Flows from Financing Activities
Proceeds from exercise of pre-funded warrants from the Amendment to August 2023 Offering		-			489
Proceeds from shares issued for cash, net		5,503			-
Repayment of loans payable		(128,738	)		(996,494	)
Net cash provided by (used in) financing activities from continuing operations		5,503			-
Repayment of loans payable related parties		(1,000,000	)		-
Net cash used in financing activities from discontinued operations		-			(3	)
Treasury stock purchases		(16,121,428	)		-
Net cash provided by (used in) financing activities		5,503			(3	)
Proceeds from collateralized loan		50,000,000			-
Net Change In Cash, cash equivalents and restricted cash equivalents		56,871			(890	)
Proceeds from convertible debt, net		500,000,805			-
Cash, cash equivalents and restricted cash equivalents - Beginning of Period		9,034			4,567
Proceeds from exercise of common stock options		74,320			-
Cash, cash equivalents and restricted cash equivalents - End of Period	$	65,905		$	3,677
Proceeds from exercise of common stock warrants		5,605,706			-
Proceeds from shares issued for cash and warrants, net		286,843,926			-
Net cash provided by (used in) financing activities from continuing operations		825,274,591			(996,005	)
Net cash used in financing activities from discontinued operations		(151,444	)		(13,973	)
Net cash provided by (used in) financing activities		825,123,147			(1,009,978	)
Net Change In Cash, cash equivalents and restricted cash equivalents		554,334,133			(1,556,155	)
Cash, cash equivalents and restricted cash equivalents - Beginning of Period		4,567,251			1,706,292
Cash, cash equivalents and restricted cash equivalents - End of Period	$	558,901,384		$	150,137
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for income taxes	$	-		$	-
Cash paid during the period for interest expense	$	-		$	12~~,078~~
Non cash investing and financing activities
Conversion of Series B Convertible Preferred Stock	$	100		$	-
Shares issued for settlement of liabilities	$	-		$	310
Shares issued for settlement of liabilities	$	751,406		$	523,251
Reclassification of deposit for aircraft engines	$	1,216		$	-
Prepaid expense financed with notes payable	$	722,000		$	777,702
Loan proceeds received in cryptocurrency	$	67,039		$	-
Commitment to repurchase common stock	$	1,000,000		$	-
Loan repayments denominated in cryptocurrency	$	98,552		$	-
Warrants and Series B Convertible Preferred Stock issued for asset acquisition	$	-		$	7,622,041
Capitalization of ROU assets and liabilities - operating	$	1,806		$	-
ETH holdings contributed in exchange for common stock	$	171,287,512		$	-
Common stock cancelled for withholding taxes	$	223		$	-
Staking receivable	$	256,931,437		$	-
Cashless exercise of warrants	$	13		$	-

The accompanying notes are an integral part of these unaudited ~~condensed~~Condensed ~~consolidated~~Consolidated ~~financial~~Financial ~~statements~~Statements.

~~ETHZilla CORPORATION,~~FORUM ~~FORMERLY~~MARKETS ~~180 LIFE SCIENCES CORP~~INC. ~~AND SUBSIDIARIES~~

Notes to Unaudited Condensed Consolidated Financial Statements

~~(unaudited)~~NOTE 1 – BUSINESS ORGANIZATION AND NATURE OF OPERATIONS

~~NOTE~~Forum Markets, Inc. (formerly 1ETHZilla -Corporation) ~~BUSINESS~~(the ~~ORGANIZATION~~“Company”) ~~AND~~was ~~NATURE~~incorporated OFin ~~OPERATIONS~~the State of Delaware on September 7, 2016.

~~ETHZilla CORPORATION~~On February 24, ~~formerly~~2026, ~~180~~the Company ~~Life~~filed ~~Sciences~~a ~~Corp.,~~Certificate ~~formerly~~of ~~known~~Amendment asto ~~KBL~~its ~~Merger~~Second ~~Corp.~~Amended IVand ~~(“180LS”,~~Restated orCertificate ~~together~~of ~~with~~Incorporation ~~its subsidiaries,~~to change the “Company~~”),~~’s name ~~was~~from a“ETHZilla ~~blank~~Corporation” ~~check~~to ~~company~~“Forum ~~organized~~Markets, ~~under~~Incorporated,” ~~the~~which ~~laws~~became ofeffective ~~the~~at ~~State~~12:01 ofa.m. ~~Delaware~~Eastern Time on ~~September 7~~February 25, ~~2016~~2026. ~~The~~Effective ~~Company~~March ~~was~~2, ~~formed~~2026, ~~for~~ the ~~purpose~~Company’s ofcommon ~~effecting~~stock a(“Common ~~merger,~~Stock”) ~~share~~began ~~exchange,~~trading on ~~asset~~The ~~acquisition,~~Nasdaq ~~share~~Capital ~~purchase,~~Market ~~reorganization, or~~under ~~similar~~the ~~business~~ticker ~~combination~~symbol ~~with one or~~“FRMM,” ~~more~~replacing ~~businesses~~the ticker symbol “ETHZ.”

180 Life Corp. (“180”, f/k/a 180 Life Sciences Corp. and CannBioRx Life Sciences Corp.) is a wholly-owned subsidiary of the Company and was incorporated in the State of Delaware on January 28, 2019. The Company is located in the United States (“U.S.”) and is a medical pharmaceutical company focused upon unmet medical needs in the areas of inflammatory diseases, fibrosis, and chronic pain by employing innovative research and, where appropriate, combination therapies, through 180’s ~~three wholly-owned subsidiaries,~~continuing ~~180 Therapeutics~~operations ~~L.P.~~consist ~~(“180~~primarily LP”), CannBioRex Pharmaceuticals Corp. (“CBR Pharma”), and Katexco Pharmaceuticals Corp. (“Katexco”). 180 LP, CBR Pharma and Katexco are together, the “180 Subsidiaries.” Katexco was incorporated on March 7, 2018 and CBR Pharma was incorporated on March 8, 2018, under the provisions of the ~~British~~development ~~Corporation Act~~ of ~~British Columbia. 180 LP was formed as~~ a ~~limited partnership on September 6, 2013, in Delaware. Additionally, 180’s wholly~~blockchain-~~owned subsidiaries~~based ~~Katexco~~platform ~~Callco,~~focused ~~ULC,~~on ~~Katexco~~the ~~Purchaseco~~acquisition, ~~ULC~~structuring, ~~CannBioRex Callco, ULC,~~ and ~~CannBioRex Purchaseco, ULC were formed in the~~tokenization ~~Canadian Province~~ of ~~British Columbia on May 31~~RWAs, ~~2019~~including toassets ~~facilitate~~such ~~the~~as ~~acquisition~~aerospace ~~of Katexco~~equipment, ~~CBR~~auto ~~Pharma~~loans, ~~and~~manufactured ~~180~~home ~~LP. On July 1~~loans, ~~2021, the assets~~ and ~~liabilities~~commercial ofreal ~~the~~estate ~~Canadian companies (Katexco~~ and ~~CBR Pharma) were transferred to their respective subsidiaries~~land, which ~~are~~the ~~Katexco~~Company ~~Pharmaceuticals~~intends ~~Corp.~~to ~~(“Katexco~~structure ~~U.S.”)~~into ~~and~~regulated, ~~CannBioRex~~tokenized ~~Pharma~~financial ~~Limited (“CBR Pharma U~~products.~~K.”).~~

~~Historically~~During 2025, hethe Company determined ~~had~~to ~~been~~discontinue aits ~~clinical~~historical ~~stage~~pharmaceutical ~~biotechnology~~research ~~company~~activities ~~focused~~and onto ~~the~~cease ~~development~~pursuing commercialization of ~~therapeutics~~the ~~for~~blockchain-based ~~unmet~~gaming technology ~~medical~~platform ~~needs~~(the “Gaming Technology Platform”) acquired in ~~chronic~~September ~~pain,~~2024. ~~inflammation, fibrosis,~~The assets and ~~other~~liabilities ~~inflammatory~~and ~~diseases,~~results of operations related to these activities have been classified as discontinued operations for all periods presented.

~~In November~~NOTE ~~2024,~~2 ~~the~~– ~~biotechnology~~SUMMARY ~~related~~OF toSIGNIFICANT ~~α7nAChR was returned to Stanford University and the Company is currently evaluating~~ACCOUNTING strategic options for the TNF and CBD programs, including but not limited to a sale or disposition, return of these assets to the underlying owners or other strategic alternatives. While there are several parties conducting preliminary due diligence, no formal bids have been received to date, and the Company has not yet made a final determination with respect to these assets.POLICIES

~~On September~~Basis 29, 2024, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Elray Resources, Inc. (“Elray”). Pursuant to the Purchase Agreement, Elray agreed to sell us certain source code and intellectual property relating to a “back-end technology platform” which is a key component of ~~creating~~Presentation ~~an online blockchain casino (the “Purchased Assets”). Elray agreed to provide support~~ and ~~assistance~~Principles ~~to the Company in connection with the building and launching~~ of ~~a fully operational casino utilizing the Purchased Assets.~~Consolidation

AtThe ~~the~~Condensed ~~time~~Consolidated ofFinancial ~~the~~Statements ~~closing of~~include the ~~Purchase Agreement, the Company planned to use this technology platform to establish a blockchain-based business aimed at the~~accounts ~~global~~of ~~iGaming market. However, during~~ the ~~three months ended September 30, 2025, the~~ Company ~~made~~and aentities ~~strategic shift~~ in ~~its operations and determined it would no longer pursue the commercialization of its “back-end” gaming platform,~~ which ~~incorporates blockchain technology and cryptocurrency operability, which we acquired in September 2024 (~~the ~~“Gaming~~Company ~~Technology~~has ~~Platform”), and its~~a ~~pharmaceutical~~controlling ~~research~~financial ~~business~~interest. AsThey ahave ~~result,~~been prepared in accordance with ~~Financial Accounting Standards Board (“FASB”)~~GAAP. ~~Accounting~~The ~~Standards~~Company ~~Codification~~reports ~~(“ASC”)~~financial 205, the assets and operations relating to the Gaming Technology Platform and the pharmaceutical research business are reflected on the September 30, 2025 and December 31, 2024 Consolidated Balance Sheets as “assets or liabilities of discontinued operations” and the results ~~of operations are reflected~~ in ~~the Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2025 and 2024 as “net loss from discontinued operations”~~U. ~~See~~S. ~~Note 3 and 15~~dollars.

5 The Company consolidates entities in which it holds a controlling financial interest in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation. As of March 31, 2026, the Company conducts its continuing operations directly through the parent entity. All intercompany transactions and balances have been eliminated in consolidation.

~~NOTE~~The Condensed Consolidated 2Financial -Statements, ~~GOING~~in ~~CONCERN~~the ~~AND~~opinion ~~MANAGEMENT~~of management, reflect all adjustments, which include normal and recurring adjustments, necessary to fairly state the Company’Ss ~~PLANS~~financial position, results of operations, and cash flows for the periods presented herein.

InAdditional ~~the~~information ~~consolidated~~regarding ~~financial statements as of and for~~ the ~~three months ended June 30, 2025 and prior periods, management disclosed substantial doubt about the~~ Company’s ~~ability~~ ~~to continue as a going concern. Due to the~~ significant ~~fundraising events undertaken by the Company during the three months ended~~accounting ~~September~~policies ~~30,~~is ~~2025,~~included ~~as disclosed below~~ in ~~Notes 8 and 13, management determined that~~ the Company ~~will have sufficient cash flows to meet its obligations over the next 12 months, and as such the substantial doubt about the Company~~’s ~~ability~~Annual ~~to continue as a going concern has been alleviated~~Report.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared on a going concern basis in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial reporting and as required by Regulation S-X, Rule 10-01. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (including those which are normal and recurring) considered necessary for a fair presentation of the interim financial information have been included. When preparing financial statements in conformity with U.S. GAAP, the Company must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the date of the financial statements. Actual results could differ from those estimates. Additionally, operating results for the three and nine months ended September 30, 2025, are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2025. For further information, refer to the financial statements and footnotes included in the Company’s annual financial statements for the fiscal year ended December 31, 2024, which are included in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 31, 2025.

Use of Estimates

The preparation of accompanying financial statements, in conformity with ~~U.S.~~ GAAP, requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the ~~condensed~~ ~~consolidated~~ financial statements. The Company’s significant estimates and assumptions used in these ~~condensed~~Condensed ~~consolidated financial~~Consolidated ~~statements~~Financial Statements include, but are not limited to, the fair value of financial instruments (including staking receivables and convertible debt), the valuation of the Company’s digital assets, warrants, ~~option~~ options, and embedded derivatives. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company’s estimates and may cause actual results to differ from those estimates.

~~Foreign Currency Translation~~5

The Company’s reporting currency is the United States dollar. The functional currency of certain subsidiaries was the British Pound (“GBP”). Equity accounts are translated at historical exchange rates. The resulting translation adjustments are recognized in stockholders’ equity as a component of accumulated other comprehensive income.

Comprehensive income is defined as the change in equity of an entity from all sources other than investments by owners or distributions to owners and includes foreign currency translation adjustments as described above.

Foreign currency gains and losses resulting from transactions denominated in foreign currencies, including intercompany transactions, are included in results of operations. Such amounts have been classified within general and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive loss.

Cash, cash equivalents and restricted cash equivalents

We consider all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents, including certificates of deposits and United States Treasury securities. As of September 30, 2025 and December 31, 2024, our cash and cash equivalents totaled $53,309,509 and $4,567,251, respectively. Restricted cash equivalents of $505,591,875 included cash equivalents pledged as collateral against the Company’s convertible debt. See note 10.

Concentrations of Credit Risk

The Company is subject to concentration of credit risk arising from its cash, cash equivalents, digital assets, and counterparties, including financial institutions, custodians, and Ethereum blockchain (“ETH”), liquid staking tokens (“LST”), and liquid staking incentive tokens. The Company maintains cash balances with financial institutions that, at times, may exceed federally insured limits. The Company manages this risk by placing its cash with high-credit-quality institutions.

The Company holds significant balances of digital assets, including ETH, with third-party custodians. The Company’s risk is mitigated by using reputable, regulated custodians and by monitoring their financial health and operational controls. However, the failure of any custodian could result in a loss of some or all digital assets held.

In addition, the Company participates in liquid staking arrangements, whereby ETH is deposited into third-party protocols (such as ether.fi or Puffer) in exchange for liquid staking tokens. These protocols may not be subject to the same regulatory oversight as traditional financial institutions, and the Company is exposed to risks including, but not limited to:

● Smart contract risk: Vulnerabilities or exploits in protocol code could result in loss of staked assets.

● Counterparty risk: Protocol operators or validators may fail to perform as expected, leading to loss or slashing of staked ETH.

● Concentration risk: A significant portion of the Company’s digital assets may be held with a limited number of protocols or custodians, increasing exposure to any single point of failure.

● Liquidity risk: In periods of market stress or protocol congestion, the Company may not be able to promptly withdraw or redeem staked assets.

The Company regularly evaluates the creditworthiness and security practices of its custodians and protocol operators, and may diversify holdings across multiple platforms to mitigate concentration risk. The Company also monitors regulatory developments that may affect the safety and recoverability of its digital assets.

Intangible Assets

Intangible assets consist of licensed patents as well as technology licenses acquired in connection with the Reorganization. Licensed patents are amortized over the remaining life of the patent. Technology licenses represent the fair value of licenses acquired for the development and commercialization of certain licenses and knowledge. The technology licenses are amortized on a straight-line basis over the estimated useful lives of the underlying patents. It will be necessary to monitor and possibly adjust the useful lives of the licensed patents and technology licenses depending on the results of the Company’s research and development activities.

In addition, the Company acquired the Gaming Technology Platform from Elray in 2024. Both the licensed patents and Gaming Technology Platform are classified as discontinued operations in accordance with ASC 205. See Note 15.

Digital Assets

The Company’s ~~digital~~accounts for crypto assets ~~include~~within ~~Ether~~the scope of ASC 350-60, Intangibles ~~the~~– ~~native~~Goodwill ~~cryptocurrency~~and ofOther ~~the~~– ~~Ethereum~~Crypto ~~blockchain~~Assets (“~~ETH~~ASC 350-60”), at cost with subsequent measurement at fair value, with changes in fair value recognized in earnings. Certain liquid staking arrangements are accounted for as non-monetary ~~tokens(“LST”)~~receivables with embedded derivatives, which are separated and ~~liquid~~accounted ~~staking~~for ~~incentive~~under ~~tokens~~ASC 815, Derivatives and Hedging (“ASC 815”).

~~Crypto assets~~Cash, ~~within~~Cash ~~the~~Equivalents ~~scope of ASC 350-60 Intangibles—Goodwill~~ and ~~Other—Crypto~~Restricted ~~Assets(“ASC 350-60):~~Cash Equivalents

~~ETH~~The Company considers ~~and~~all highly liquid ~~staking~~temporary ~~incentive~~cash ~~tokens~~investments ~~have~~with ~~been~~an ~~determined~~original maturity of three months or less to ~~fall~~be ~~within~~cash ~~the~~equivalents, ~~scope~~including certificates of ~~ASC~~deposits ~~350-60~~and United States Treasury securities. ~~The~~As ~~company~~of ~~reflects~~March ~~crypto~~31, ~~assets~~2026 ~~held~~and December 31, 2025, cash and cash atequivalents ~~fair~~totaled ~~value~~$65.9 onmillion ~~the~~and ~~consolidated~~$8.0 million, ~~balance~~respectively. ~~sheets~~As ~~within~~of March 31, 2026, the ~~Digital~~Company ~~Assets~~had ~~line~~no ~~item.~~restricted ~~Changes~~cash equivalents, inas the ~~fair~~$1.0 ~~value~~million of ~~crypto~~restricted ~~assets~~cash ~~are recognized~~equivalents inpreviously ~~income,~~pledged ~~reflected~~as ~~within~~collateral against the ~~Digital~~Company’s convertible ~~asset~~debt ~~gains~~were held in controlled accounts at December 31, 2025, and ~~losses~~were ~~within~~released to the ~~consolidated~~Company ~~statement~~in ofJanuary ~~operations~~2026.

~~In determining~~Concentrations ~~the fair value~~ of ~~digital~~Credit assets in accordance with ASC 820, Fair Value Measurement (“ASC 820”). The Company utilizes Coinbase as the principal market. The Company uses a first-in, first-out methodology to assign costs to digital assets. Risk

The Company is subject to concentration of credit risk arising from its cash and cash equivalents, digital assets, and related counterparties, including financial institutions, custodians, and participants in liquid staking protocols. Cash balances may, at times, exceed federally insured limits. The Company mitigates this risk by placing cash with high-credit-quality financial institutions.

The Company also holds digital assets, including ETH, with third-party custodians and participates in liquid staking arrangements through third-party protocols. These arrangements expose the Company to risks related to counterparty nonperformance, custodian insolvency, and protocol-level events.

As of March 31, 2026, the Company’s maximum exposure to loss related to these concentrations, assuming complete nonperformance by counterparties and no recovery of collateral, consists primarily of (i) cash and cash equivalents, including restricted cash equivalents, with a carrying value of approximately $65.9 million, and (ii) digital assets held with third-party custodians with a carrying value of approximately $28.3 million.

The Company has not recognized an allowance for credit losses related to cash and receivable-type balances, including staking receivables, as of March 31, 2026.

Segment Reporting

ASC 280, Segment Reporting (“ASC 280”), requires annual and interim reporting for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers. An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenues and expenses, and about which separate financial information is regularly evaluated by the Chief Operating Decision Maker (the “CODM”) in deciding how to allocate resources and assess performance.

Segment information is prepared on the same basis that the Company’s Chief Executive Officer (“CEO”), who serves as the CODM, manages the business, evaluates financial results, and makes key operating decisions. The Company has a single reportable operating segment based on how the CODM reviews financial performance and allocates resources. All assets of the Company’s continuing operations are managed on a consolidated basis.

The CODM uses net income to evaluate and make key operating decisions. Because the Company has a single reportable segment and the measure of segment profit or loss is consolidated net income, the required disclosures under ASC 280 are presented on a consolidated basis. Accordingly, no additional disaggregated segment disclosures are required.

Aircraft Engine Acquisition

The Company, through its wholly-owned subsidiary, ETHZilla Aerospace LLC, acquired three aircraft engines and related equipment in transactions accounted for as asset acquisitions. The aircraft engines are recorded at cost, including transaction costs directly attributable to the acquisition, and are presented within “Property and equipment, net” on the Condensed Consolidated Balance Sheets.

At the time of acquisition, the aircraft engines were subject to existing lease arrangements, which were assumed by the Company in connection with the transactions. The Company retained the prior classification of the leases as operating leases. Accordingly, the aircraft engines are depreciated on a straight-line basis over their estimated useful lives. Management reviews estimated useful lives and residual values periodically and revises such estimates prospectively, when appropriate.

Lease revenue is recognized in accordance with ASC 842, Leases (“ASC 842”). Lease income consists of fixed lease payments and variable consideration based on engine usage. Fixed lease payments are recognized on a straight-line basis over the lease term, while variable lease payments are recognized in the period in which the underlying usage occurs. Lease revenue is recognized only from the date control of the aircraft engines transfers to the Company and is presented within “Aircraft engine rental revenue” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

The Company has entered into third-party servicing arrangements related to the aircraft engines. Fees associated with these servicing arrangements are expensed as incurred.

The aircraft engines are evaluated for impairment in accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”) whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized to the extent the carrying value exceeds the estimated fair value of the asset.

Eurus Aero Tokens

The Company, through its wholly owned subsidiary, ETHZilla Aerospace LLC, issued profit participation interests in the form of cryptographic digital tokens (the “Eurus Aero Tokens”) that entitle holders to receive pro rata cash distributions derived from net cash flows generated by specified aircraft engines, including lease income and proceeds from a potential liquidity event. The Eurus Aero Tokens do not represent equity interests in the Company and do not convey voting or governance rights. Proceeds received from the issuance of the Eurus Aero Tokens are initially recorded as a liability, as the tokens represent contractual obligations to remit future cash flows to token holders. The liability is reduced as distributions are paid or become payable in accordance with the token documentation.

Warehouse Facility

The Company, through its wholly owned subsidiary, ETHZilla Auto Loans LLC (“ETHZilla Auto Loans”), provides a revolving warehouse credit facility (the “Warehouse Facility”) to Anchored Finance, LLC (“Anchored Finance”) which is engaged in the business of funding auto loan receivables. Advances under the Warehouse Facility are secured by a first-priority perfected security interest in the underlying eligible receivables and related proceeds. The Company determined that advances made under the Warehouse Facility are classified as held for investment. As such, the loans will be reported on the balance sheet at their amortized cost basis.

In accordance with ASC 310, Receivables (“ASC 310”), loan receivables are recognized when advances are funded and are subsequently measured at amortized cost, net of an allowance for expected credit losses, as applicable. Interest income on funded advances is recognized over time using the effective interest method and presented as “Interest income” in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Warehouse Facility also provides for commitment fees on the unfunded portion of the commitment, which are recognized as income over the commitment period.

Loan receivables arising under the Warehouse Facility are derecognized upon repayment or settlement of the related advance, including repayment in connection with take-out of the pledged receivables. The Company evaluates these loan receivables for expected credit losses in accordance with ASC 326, Financial Instruments – Credit Losses (“ASC 326”), including consideration of historical experience, current conditions, reasonable and supportable forecasts, and the nature and value of collateral securing the advances.

~~Non-monetary receivable~~Zippy ~~with~~Manufactured anHome ~~embedded derivative within the scope of ASC 310, Receivables (“ASC 310”) and ASC 815-15, Derivatives and Hedging – Embedded Derivatives (“815-15”):~~Loans

The Company’s, ~~LST~~through its wholly owned subsidiary, ~~comprised~~ETHZilla ofModular ~~weETH~~Mortgage ~~and~~LLC ~~pufETH~~(“ETHZilla Modular Mortgage”), ~~has~~acquires ~~been~~manufactured ~~determined~~and tomodular home ~~fall~~loan ~~within~~receivables (the ~~scope~~“Zippy ofLoans”). ~~ASC~~During ~~310~~the ~~and~~three ~~ASC~~months ~~815-15~~ended ~~and~~March is31, ~~accounted for~~2026, asthe Company acquired a ~~non-monetary~~portfolio of ~~receivable~~manufactured ~~with~~home anloan ~~embedded~~receivables ~~derivative.~~pursuant ~~The~~to ~~host~~a ~~contract~~loan ~~represents~~purchase ~~the~~agreement ~~holder’s~~and ~~right~~entered tointo ~~receive~~additional ~~ETH~~purchase ~~denominated~~and servicing arrangements inthat ~~USD~~provide ~~and~~a isframework ~~carried~~to atacquire ~~cost~~additional loans from time to time.

The ~~embedded~~ ~~derivative~~Company ~~component~~determined isthat ~~measured~~the atZippy ~~fair~~Loans ~~value~~transaction atrepresents the ~~each~~purchase ~~reporting~~of ~~date,~~financial ~~using~~assets ~~observable~~rather ~~prices~~than ina ~~the~~secured ~~principal~~financing ~~market~~because incontrol ~~accordance with~~of ~~ASC~~the ~~815-15~~loans ~~and~~is ~~ASC~~transferred ~~820,~~to ~~Fair~~the ~~Value~~Company ~~Measurement~~and ~~(“ASC~~the ~~820”).~~sale criteria ~~Where~~under ~~quoted~~ASC ~~prices~~860, ~~are~~Transfer ~~directly~~and ~~available~~Servicing inare ~~active~~met. ~~markets~~Accordingly, the ~~embedded~~Zippy ~~derivatives~~Loans are ~~classified~~accounted for as ~~Level~~loan 1receivables ~~within~~under ASC ~~the~~310. ~~fair~~The ~~value~~Company ~~hierarchy;~~also ifdetermined ~~observable~~the ~~market~~transaction ~~prices~~represents ~~are~~an ~~not~~asset ~~available,~~acquisition ~~management utilizes~~under ~~other~~ASC ~~relevant inputs and valuation techniques~~805, ~~which~~Business ~~may result in Level 2 or Level 3 classification~~Combinations.

~~Upon~~Zippy Loans are recognized ~~redemption~~when ofthe ~~liquid~~Company ~~staking~~obtains ~~tokens~~control ~~for~~of ~~ETH,~~the loans and the ~~Company~~contractual ~~derecognizes~~rights ~~both~~to principal and interest cash flows. The loans are initially recorded at cost, which includes the ~~receivable~~purchase price and ~~the~~directly ~~embedded~~attributable ~~derivative~~transaction costs, ~~recognizing~~and ~~ETH~~ are subsequently measured at ~~fair~~amortized cost, ~~value~~net of an allowance for expected credit losses. ~~Any~~Purchase ~~difference~~price ~~between~~premiums or discounts that are integral to the ~~carrying~~loans’ ~~amount~~yield are ~~and~~accreted or amortized into interest income over the ~~fair~~expected ~~value~~life of ~~ETH~~the ~~received~~loans using the effective interest method. Interest income earned on the Zippy Loans is ~~recognized~~presented as a“Interest ~~gain~~income” orin ~~loss,~~the ~~which~~Company’s ~~amounted to~~Condensed ~~$24,199,453~~Consolidated ~~for~~Statements ~~the~~of ~~period~~Operations and Comprehensive Loss.

~~Management~~The Company evaluates ~~has~~the ~~exercised~~Zippy ~~judgment~~Loans for expected credit losses in ~~determining~~accordance ~~the~~with ~~principal~~ASC ~~market,~~326 ~~fair~~and ~~value~~records ~~hierarchy,~~an allowance for expected credit losses upon acquisition and ~~bifurcation~~reassesses ofthe ~~embedded~~allowance ~~derivatives~~at each reporting date. ~~There~~The isZippy ~~diversity in~~Loans ~~industry~~include ~~practice~~Community ~~regarding~~Recourse ~~the~~Loans ~~measurement~~which ~~and~~management considers ~~recognition~~in ofassessing ~~liquid~~credit ~~staking~~risk ~~tokens~~characteristics and ~~related~~estimating ~~rewards~~expected credit losses. ~~The~~In ~~Company~~estimating ~~continually~~expected credit losses, the ~~evaluates~~Company considers the ~~principal~~extent ~~market~~to ~~and~~which contractual recourse provisions mitigate the ~~reliability~~Company’s ofexposure ~~inputs~~to credit losses and evaluates expected credit losses based on the amounts expected to ~~ensure~~be ~~that~~collected ~~fair~~from ~~value~~borrowers ~~measurements~~and, ~~reflect~~as ~~current~~applicable, ~~market~~from counterparties ~~conditions~~providing recourse.

~~ETH~~Zippy Loans, LLC (or an affiliate) ~~Staking~~services the loans pursuant to a servicing arrangement. Servicing fees are recognized as incurred and included in “Loans receivable.” Loan purchases under the forward-flow arrangements are evaluated and accounted for as separate transactions at the time of acquisition, and the forward-flow arrangements do not, in and of themselves, result in recognition of loan receivables or liabilities prior to settlement. The Company determined that customary representations and warranties, indemnification, repurchase, recourse, and side letter provisions do not provide the seller with effective control over the transferred loans and do not give rise to separate liabilities at acquisition.

~~Beginning in~~Recently ~~August~~Issued ~~2025,~~Accounting the Company used the proceeds from its capital raising activities to acquire and deploy ETH in staking activities, which can include native staking, liquid staking and restaking. The Company has entered into separate contractual agreements with various third-party entities to facilitate its ETH staking activities. The Company commenced both native staking in August of 2025 and commenced liquid staking in September 2025. The Company intends for staking to become a primary yield generation strategy of the Company within the current fiscal year.Pronouncements

~~Native~~In November ~~Staking~~2024, the FASB issued ASU No. 2024-04, Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”), which amends ASC 470-20, Debt - Debt with Conversions and Other Option. ASU 2024-04 clarifies the requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion. The Company adopted ASU 2024-04 effective January 1, 2026. As the Company did not have any convertible debt outstanding during the period, the adoption of ASU 2024-04 did not have a material impact on the Company’s Condensed Consolidated Financial Statements or related disclosures.

The Company utilized one third-party asset manager to manage and stake ETH on its behalf as of September 30, 2025. Under these arrangements, the Company’s ETH is held by a qualified custodian and staked in the Ethereum protocol through a third-party validator operator (e.g., Coinbase). The validator operator manages the staking process and delegates the Company’s ETH to network validators. When selected by the Ethereum network, these validators earn staking rewards and transaction fees proportional to the amount of stake delegated.

ETH used in native staking is retained on the Company’s balance sheet as a crypto asset measured at fair value in accordance with ASC 350-60. The Company does not derecognize ETH when participating in native staking because it retains the ability to direct the use of the asset and obtain substantially all benefits.

The validator operator (e.g., Coinbase) is considered the customer, as it receives the Company’s staking capacity (the performance obligation) and, in exchange, provides staking rewards. The contract duration for native staking is typically determined by the daily reward cycle, consistent with the period in which enforceable rights and obligations exist under the Company’s agreements with validator operators. The Company has determined that a new contract is effectively renewed each day, such that contract inception changes daily. Revenue from native staking is recognized over time because the customer simultaneously receives and consumes the benefit of the Company’s performance throughout the daily reward cycle.

Revenue from native staking is recognized at the end of each daily period, when the Company’s right to staking rewards becomes determinable (i.e., when the constraint is lifted). The amount of revenue recognized is measured at the fair value of rewards at contract inception for that day, net of validator commissions, in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”) and ASC 820. Rewards represent noncash consideration and are measured using quoted prices in the principal market at contract inception. Subsequent changes in the fair value of ETH after initial recognition are recorded as unrealized gains or losses.

Because the Company is not the principal to the block validation service, but rather provides staking capacity to third parties, it does not control the full output of the reward-generating activity and instead receives net staking rewards after validator commissions are deducted. Staking revenue is presented on a net basis, reflecting only the portion of protocol rewards to which the Company is entitled. Asset manager fees are presented as separate operating expenses.

~~Liquid~~In November 2024, the ~~Staking~~FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”), which amends ASC 220-40, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (“ASC 220-40”). In January 2025, the FASB issued ASU No. 2025-01, Clarifying the Effective Date (“ASU 2025-01”), which also amends ASC 220-40 and clarifies the effective date of ASU 2024-03. ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement, including specific information about certain costs and expenses. As clarified by ASU 2025-01, the amendments are effective for the Company for annual reporting beginning in fiscal 2028 and interim reporting beginning in fiscal 2029, applied prospectively. Early adoption is permitted. The Company is currently evaluating the impact of adopting these standards on its Condensed Consolidated Financial Statements and related disclosures.

~~The Company~~NOTE ~~participates~~3 in– ~~liquid~~PREPAID ~~staking~~EXPENSES ~~arrangements,~~AND ~~whereby~~OTHER ~~ETH~~CURRENT is deposited into third-party protocols (such as ether.fi or Puffer) in exchange for liquid staking tokens (e.g., weETH, pufETH). These tokens represent the right to redeem underlying ETH and accrued rewards, and may be transferred, traded, or used in other decentralized finance (DeFi) transactions, providing ongoing liquidity and access to additional yield opportunities. In certain arrangements, liquid staking tokens may also be restaked into additional protocols to earn incremental rewards.ASSETS

~~Upon deposit,~~Prepaid ~~the~~expenses ~~Company derecognizes the ETH~~ and ~~recognizes a non-financial receivable with an embedded derivative, reflecting the right~~other tocurrent ~~receive~~assets ~~ETH~~consist ~~and protocol rewards. The host contract is measured at cost (the value~~ of ~~ETH deposited), while~~ the ~~embedded~~following ~~derivative is bifurcated and measured at fair value through earnings, reflecting exposure to ETH price and protocol yield variability,~~ (in accordance with ASC 310 and ASC 815-15. Subsequent changes in the fair value of liquid staking tokens and embedded derivatives after initial recognition are not included in revenue but are recognized separately in earnings as unrealized gains or losses. Gains or losses realized upon redemption or sale of liquid staking tokens are recognized in accordance with ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”thousands).:

The protocol or platform (e.g., ether.fi or Puffer) to which the Company delegates its ETH is considered the customer, as it receives the Company’s staking capacity (the performance obligation) and, in exchange, provides staking rewards and incentive tokens (based on hitting certain ETH deposit thresholds). The contract duration for liquid staking is based on the ability of either party to terminate with 30 days’ notice; for accounting purposes, a new contract is considered to begin each day, reflecting the daily renewal of enforceable rights and obligations (i.e., a new 30 day contract is renewed on a daily basis). Revenue from liquid staking is recognized over time because the customer simultaneously receives and consumes the benefit of the Company’s performance throughout the duration of the contract.

	March 31, 2026		December 31, 2025
Director and officer’s insurance	$	1,589	$	2,212
Aircraft engines deposit		-		1,216
Derivative instruments, including collateral posted¹		1,634		-
Leasehold improvement deposit		988		988
Professional fees		314		78
Other		6		20
Total prepaid expenses and other current assets	$	4,531	$	4,514

~~Revenue from liquid staking is recognized at the end of each daily period, when the Company’s right to staking rewards and incentive tokens~~ (~~e.g., PUFFER, ETHFI~~1) ~~becomes~~Includes ~~determinable~~cash ~~(i.e.,~~collateral ~~when~~related the constraint is lifted). The amount of revenue recognized is measured at the fair value of rewards and incentive tokens at contract inception for that day, net of validator commissions, in accordance with ASC 606 and ASC 820. Rewards represent noncash consideration and are measured using quoted prices in the principal market at contract inception. Fair value for liquid staking tokens is determined based on the underlying ETH and accrued rewards to ~~which the Company is entitled, rather than the quoted token price, because the redemption ratio between~~ ETH-denominated ~~and~~derivative ~~liquid staking tokens (e~~instruments.~~g.,~~ ~~weETH,~~See ~~pufETH)~~Note ~~fluctuates over~~5 ~~time~~– asDigital ~~rewards accrue and protocol fees apply~~Assets.

~~Because the~~NOTE ~~Company~~4 is– not the principal to the block validation service, but rather provides staking capacity to third parties, it does not control the full output of the reward-generating activity and instead receives net staking rewards after validator commissions are deducted. Asset manager or protocol fees are presented as separate operating expenses.INVESTMENTS

~~Revenue Recognition~~Marketable Securities

The following table presents ~~Company~~the ~~recognizes~~amortized ~~revenue~~cost, ingross ~~accordance~~unrealized ~~with~~gains ~~ASC~~and ~~606.~~losses, and fair value of the Company’s marketable securities (in thousands):

To determine revenue recognition for contracts with customers, the Company performs the following five steps:

	March 31, 2026
Security Type:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available-for-sale debt securities:
Other fixed income securities	$	33,146	$	13	$	(1,442	)	$	31,717
Equity securities measured at fair value:
REITs		53		1		-			54
Total	$	33,199	$	14	$	(1,442	)	$	31,771

(1.) ~~identify~~Available ~~the~~for ~~contract~~sale debt securities consist primarily of U.S. Treasury securities with ~~the~~contractual ~~customer,~~maturities of one year or less and other fixed income securities.

(2.) ~~identify~~No ~~the~~allowance ~~performance~~for ~~obligations~~credit inlosses was recorded for the ~~contract,~~periods presented.

3. determine the transaction price, including variable consideration to the extent it is probable a significant future reversal will not occur,

4. allocate the transaction price to the respective performance obligations in the contract, and

5. recognize revenue when (or as) the Company satisfies the performance obligation.

The Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange.

Native Staking Revenue

The validator operator (e.g., Coinbase) is considered the customer, as it receives the Company’s staking capacity (the performance obligation). The Company acts as an agent in native staking transactions, delegating ETH to third-party validator operators who perform the technical validation responsibilities.

The contract duration for native staking is defined by the daily reward cycle under the Company’s agreements. Native staking rewards are recognized as revenue over time and at the end of each contract period (typically daily) when the Company’s share of rewards is determinable. The fair value of staking rewards, which are received as noncash consideration, is measured using quoted prices from the principal market at contract inception of each daily period, in accordance with ASC 606 and ASC 820. Subsequent changes in the fair value of ETH after initial recognition are recorded as unrealized gains or losses. The amount of revenue recognized is presented net of validator or other protocol fees.

~~Liquid Staking~~Equity ~~Revenue~~Investments

~~The protocol~~Satschel or platform (e.g., ether.fi or Puffer) is considered the customer, as it receives the Company’s staking capacity (the performance obligation). The Company acts as an agent in liquid staking transactions, delegating ETH to third-party protocols or platforms who perform the technical validation responsibilities.Investment

The ~~contract~~ ~~duration~~Company ~~for~~holds ~~liquid~~an ~~staking~~investment representing isapproximately ~~based~~15% onownership ~~the~~in ~~ability~~Satschel, ofInc. ~~either party to terminate the contract with 30 days’ notice without cause~~(“Satschel”). The ~~Company~~investment ~~has determined that a new 30-day contract~~ is ~~effectively~~accounted ~~renewed~~for ~~each~~as ~~day,~~an ~~such that contract inception changes daily.~~equity ~~Revenue~~security ~~from~~under ~~staking~~ASC ~~rewards~~321, ~~and~~Investments ~~incentive~~– ~~tokens~~Equity isSecurities ~~recognized~~(“ASC ~~over~~321”) ~~time~~using ~~and at~~ the ~~end~~measurement ~~of each day when the Company’s proportional~~alternative. ~~share~~As of ~~rewards~~March ~~is determinable~~31, ~~measured at fair value at contract inception for that day~~2026, ~~net of validator commissions. Fair value is based on~~ the ~~underlying~~carrying ~~ETH~~amount ~~and accrued rewards, not the market price~~ of the ~~liquid~~investment ~~staking~~was ~~tokens~~$13.7 ~~The~~million. ~~ratio~~Management ~~between~~evaluated ~~ETH~~the ~~and~~investment ~~liquid staking~~for ~~tokens~~impairment ~~changes over time as rewards accrue~~ indicators and ~~protocol~~observable ~~economics~~price ~~adjust;~~changes ~~this~~during ~~variability does not affect~~ the ~~timing~~three ofmonths ~~revenue recognition~~ended ~~but~~March is31, ~~considered~~2026, inand ~~determining~~did ~~fair~~not ~~value~~recognize atany ~~contract~~impairment ~~inception.~~losses ~~Rewards~~or ~~represent noncash consideration and are measured~~observable ~~using~~price ~~quoted prices in the principal market at contract inception~~adjustments.

~~Segment~~Karus ~~Reporting~~Investment

~~ASC~~The ~~Topic~~Company ~~280,~~holds ~~“Segment Reporting,” requires annual and interim reporting for~~ an ~~enterprise’s~~investment ~~operating~~representing ~~segments~~approximately ~~and~~20% ~~related disclosures about its~~ownership ~~products,~~in ~~services~~Karus, ~~geographic~~Inc. ~~areas and major customers~~(“Karus”). AnThe ~~operating~~Company ~~segment~~accounts isfor ~~defined~~its asCommon aStock ~~component~~investment ofunder anthe ~~enterprise~~equity ~~that~~method ~~engages~~pursuant to inASC ~~business~~323, ~~activities~~Investments ~~from~~– ~~which~~Equity itMethod ~~may~~and ~~earn~~Joint ~~revenues~~Ventures and ~~expenses,~~its ~~and~~preferred ~~about~~stock ~~which~~investment ~~separate~~as ~~financial~~an ~~information~~equity issecurity ~~regularly~~under ~~evaluated~~ASC by321 using the ~~chief~~measurement ~~operating~~alternative. ~~decision~~As ~~maker~~of inMarch ~~deciding~~31, ~~how~~2026, tothe ~~allocate~~carrying ~~resources.~~amount Inof ~~November 2023,~~ the ~~FASB~~equity-method ~~issued~~investment ~~ASU~~was ~~No.~~not ~~2023-07~~material, ~~“Segment~~and ~~Reporting~~the ~~(Topic~~carrying ~~280):~~amount ~~Improvements~~of tothe ~~Reportable~~equity ~~Segment~~security ~~Disclosure.”~~measured ~~The~~under ~~ASU~~ASC ~~updates~~321 ~~reportable~~was ~~segment~~$9.8 ~~disclosure~~million. ~~requirements, primarily~~The ~~through~~Company ~~requiring~~did ~~enhanced~~not ~~disclosures~~recognize ~~about~~a ~~significant~~material ~~segment~~share ~~expenses~~of income ~~and~~or ~~information~~loss ~~used~~from tothe ~~assess~~equity-method ~~segment~~investment ~~performance. The~~during ~~amendments~~the dothree ~~not~~months ~~change~~ended ~~how~~March ~~segments are determined~~31, ~~aggregated~~2026, orand ~~how~~management ~~thresholds~~did ~~are~~not ~~applied~~identify toany ~~determine reportable segments.~~impairment ~~The~~indicators ~~Company~~or ~~adopted~~observable ~~ASU~~price ~~No.~~changes ~~2023-07~~requiring onadjustment ~~January~~for 1,either ~~2025~~investment.

~~Segment~~Zippy information is prepared on the same basis that the Company’s CEO, who is the Chief Operating Decision Maker (“CODM”), manages the business, evaluates financial results, and makes key operating decisions. The Company has a single reportable operating segment, digital asset operations, the primary activity from which the Company earns revenue. All assets of the Company’s continuing operations are related to the digital asset operations. The CODM uses net income to evaluate and make key operating decisions of the business. As such, no further segment disclosures are presented within the consolidated financial statements and footnotes.Investment

~~Fair~~The Company holds an investment representing approximately 15% ownership ~~Value~~in Zippy, Inc. (“Zippy”), which is accounted for as an equity security under ASC 321 using the measurement alternative. As of ~~Financial~~March ~~Instruments~~31, 2026, the carrying amount of the investment was $22.3 million. Management evaluated the investment for impairment indicators and observable price changes during the three months ended March 31, 2026, and did not recognize any impairment losses or observable price adjustments.

~~The~~As ~~Company~~of ~~measures~~March ~~its financial~~31, ~~assets~~2026, and ~~liabilities~~December in31, ~~accordance~~2025, ~~with~~the ~~U.S.~~Company ~~GAAP.~~estimated the ~~For~~fair ~~certain~~value of ~~our~~the ~~financial~~final ~~instruments,~~make ~~including~~whole ~~cash,~~amount ~~accounts~~(the ~~payable, accrued~~“Final ~~expenses,~~Make ~~and~~Whole ~~short-term~~Amount”) ~~loans,~~under the ~~carrying~~Zippy ~~amounts~~Purchase ~~approximate~~Agreement ~~fair~~(the “Zippy ~~value~~Purchase ~~due~~Agreement”) to ~~their~~be ~~short~~$10.2 ~~maturities~~million and $6.3 ~~The~~million, ~~Company~~respectively, ~~elected to~~which ~~account~~was ~~for~~recognized ~~its~~as ~~convertible~~a ~~notes~~contingent liability ~~payable~~and ~~under~~included in “Accrued expenses” on the ~~fair~~Company’s ~~value~~Condensed ~~option~~Consolidated ~~available~~Balance ~~under~~Sheets. ~~ASC~~The ~~820~~Company recognized a loss on make whole provision of $3.9 ~~See~~million ~~Note~~during 10the three months ended March 31, 2026.

We follow accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

	Level 1:	Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
	Level 2:	Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
	Level 3:	Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

The Company adopted the provisions of FASB ASC 820 (the Fair Value Topic) which defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements.

Net Loss Per Common Share

Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding, plus the number of additional common shares that would have been outstanding if the common share equivalents had been issued (computed using the treasury stock or if converted method), if dilutive.

Discontinued Operations

In September 2025 the Company decided to cease the operations of 180 Life Corp. (f/k/a 180 Life Sciences Corp.) (“180”), Katexco Pharmaceuticals Corp. (“Katexco”), CannBioRex Pharmaceuticals Corp. (“CBR Pharma”), 180 Therapeutics L.P. (“180 LP” and together with Katexco, CBR Pharma and 180 Life Sciences Corp, the “180 Parties”). As such, the 180 Parties are reported as discontinued operations in the financial statements included herein. Additionally, the Gaming Technology Platform will no longer be part of the Company’s future business strategy and are also included in discontinued operations.

The assets and liabilities of the discontinued operations are aggregated and reported separately as assets and liabilities of discontinued operations in the Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024. The results of the discontinued operations are aggregated and presented separately in the Condense Consolidated Statements of Operations and Comprehensive Loss as net income (loss) from discontinued operations for the three and nine months ended September 30, 2025 and 2024. The cash flows of the discontinued operations are reflected as cash flows of discontinued operations within the Company’s Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024.

Amounts presented in discontinued operations have been derived from our condensed consolidated financial statements and accounting records using the historical basis of assets, liabilities, results of operations, and cash flows of 180 Parties and the Gaming Technology Platform. The discontinued operations exclude general corporate allocations.

Subsequent Events

The Company has evaluated events that have occurred after the balance sheet date but before these condensed consolidated financial statements were issued. Based upon that evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements, except as disclosed in Note 16.

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standard Board (“FASB”) issued ASU 2023-07, Improvements to Reportable Segment Disclosures, which amends the existing segment reporting guidance (ASC Topic 280) to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, an amount for other segment items by reportable segment and a description of its composition, the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The Company adopted this standard effective January 1, 2025.

In November 2024, the FASB issued ASU 2024-04, Debt - Debt with Conversions and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”). ASU 2024-04 is intended to clarify requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion. This ASU is effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the potential impact of this guidance on its disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued Accounting Standards Update No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for us for our annual reporting for fiscal 2028 and for interim period reporting beginning in fiscal 2029 on a prospective basis. Both early adoption and retrospective application are permitted. The Company is currently evaluating the impact that the adoption of these standards will have on its consolidated financial statements and disclosures.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires enhanced disclosures surrounding income taxes, particularly related to rate reconciliation and income taxes paid information. In particular, on an annual basis, companies will be required to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Companies will also be required to disclose, on an annual basis, the amount of income taxes paid, disaggregated by federal, state, and foreign taxes, and also disaggregated by individual jurisdictions above a quantitative threshold. The standard is effective for the Company for annual periods beginning January 1, 2025 on a prospective basis, with retrospective application permitted for all prior periods presented. The Company will adopt ASU 2023-09 for the annual period ending December 31, 2025 and is currently evaluating the impact of this guidance on its disclosures.

NOTE 4 - PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following as of September 30, 2025 and December 31, 2024:

	September 30,		December 31,
	2025		2024
Director and Officer’s Insurance	$	2,822,671	$	377,473
Professional fees		108,135		100,034
Other receivable		32,413		-
Total prepaid expenses and other current assets	$	2,963,219	$	477,507

NOTE 5 – DIGITAL ASSETS

~~The~~Crypto ~~Company~~assets ~~holds~~within ~~ETH~~the ~~and liquid staking incentive tokens (both in~~ scope of ASC 350-60), as well as liquid staked ETH (in scope of ASC 310 and ASC 815-15). The following presents a summary of the Company’s digital asset holdings as of September 30, 2025, and activity for the nine months then ended. For detailed accounting policies related to digital assets, refer to Note 3.

~~Crypto assets~~The ~~within~~following table presents the ~~scope~~Company’s significant ofdigital ~~ASC~~asset ~~350-60~~holdings (in thousands):

The following table presents the Company’s significant crypto assets holdings as of September 30, 2025:

	March 31, 2026
	Quantity		Cost Basis¹		Fair Value¹
ETH		12,441	$	41,165	$	26,223
USDC (USDC is a stablecoin meant to track the value of the U.S. dollar, backed by U.S. dollars and dollar-denominated assets)		2,083,424		2,082		2,084
Liquid staking incentive tokens ²		-		-		-
Total digital asset holdings		2,095,865	$	43,247	$	28,307

	September 30, 2025
	Quantity		Cost basis2		Fair value2
ETH1		42,898	$	170,652,241	$	180,933,721
Liquid staking tokens and incentive tokens 2		6,780,857	$	245,493,054	$	257,604,249
Total			$	416,145,295	$	438,537,970

(1)	Cost basis is equal to the cost of the digital assets net of any transaction fees, if any, at the time of purchase or upon receipt. Fair value represents the quoted digital asset prices within the Company’s principal market at the time of measurement.

(12) Liquid staking incentive tokens include PUFFER and ETHFI incentive tokens. Incentive tokens are governance tokens earned for deposited certain amounts of ETH into protocols for a specified period of time.

(2) Cost basis is equal to the cost of the digital assets net of any transaction fees, if any, at the time of purchase or upon receipt. Fair value represents the quoted digital asset prices within the Company’s principal market at the time of measurement.10

The following table presents a ~~rollforward~~roll forward of the Company’s digital ~~ETH~~asset ~~for~~holdings, ~~the~~consisting ~~nine~~of ~~months~~ETH ~~ended~~and ~~September~~staking ~~30,~~incentive ~~2025~~tokens (in thousands):

	Fair value
	Three Months Ended March 31, 2026
ETH as of December 31, 2024	$	-
Digital Assets as of December 31, 2025	$	61,587
Additions1		~~414,766,791~~757
Receipt and accrual of ETH from native staking activities		4,110,169
Dispositions		(128,096	)
Deposits of ETH into liquid staking activities		(245,493,054	)
Receipt and accrual of ETH from native staking activities		(460	)
Change in fair value of ETH		7,549,815
Receipt of ETH from derecognition of liquid staking activities		132,374
ETH fair value as of September 30, 2025 2	$	180,933,721
Cryptocurrency denominated loan proceeds2		67,039
Cryptocurrency denominated loan repayments2		(98,552	)
Change in fair value of digital assets		(6,342	)
Digital assets fair value	$	28,307

(1)

Additions are the results of purchases and receipts of ETH.

(2) ~~Includes~~Represents ~~$50,485,550 representing the fair value of~~ ETH-denominated ~~pledged~~proceeds asreceived ~~collateral~~during ~~under~~ the ~~Collateralized~~year ~~Loan~~from ~~Agreement~~a ~~discussed~~collateralized inloan ~~Note~~that 8,was ~~including~~fully anrepaid ~~unrealized~~prior ~~loss~~to ofMarch $231,~~089,409~~ 2026.

During the three months ended March 31, 2026, the Company sold approximately 57,726 ETH for an aggregate of $128.1 million, at an average price of $2.2 thousand per ETH. During the three months ended March 31, 2026, the Company recognized cumulative realized losses of $124.6 million and unrealized gains of $118.2 million related to digital asset transactions.

As of March 31, 2026, the Company held approximately 12,441 ETH, which are pledged as collateral under a crypto-collateralized borrowing arrangement. See Note 9 – Debt for additional information.

Non-monetary receivable with an embedded derivative within the scope of ASC 310-10 and ASC 815-15

During the three months ended March 31, 2026, the Company closed its liquid staking position. The Company recognized a change in fair value of the embedded derivative of $48.6 million and the net value of liquid staking activities of $132.3 million was reclassified to digital assets. The Company recognized staking revenue of $0.3 million during the three months ended March 31, 2026.

As of March 31, 2026, the carrying amount of the host contract was $0, and the fair value of the embedded derivative liability was $129.9 million, and as of December 31, 2025 the carrying amount of the host contract (representing the 50,000 deposited ETH into Ether.Fi and 10,575 into PufETH) was $262.3 million and $81.3 million, respectively, both of which are included within “Staking Receivables” on the Condensed Consolidated Balance Sheets.

Derivative Instruments and Collateral Arrangements

The Company may transfer or pledge digital assets or cash as collateral in connection with certain derivative instruments. During the three months ended March 31, 2026, the Company entered into a series of derivative trades with a single counterparty in connection with the Company’s disposal of digital asset holdings, including call and put options and non-deliverable forward contracts, with a total notional amount of approximately $83.0 million.

Certain derivative contracts may require the posting of collateral, which can include cash or digital assets, depending on the terms of the arrangement. Results of the Company’s ETH-denominated derivative instruments, including realized and unrealized gains and losses, are recognized in earnings and presented within “Digital asset gains and losses” in the Condensed Consolidated Statements of Operations and Comprehensive Loss, as the instruments are used to economically manage exposure to changes in the fair value of ETH. During the three months ended March 31, 2026, the Company recognized realized losses of $10.5 million and unrealized gains of $0.5 million related to these instruments.

Collateral posted in connection with derivative instruments may be returned upon settlement or early termination of the related contracts. During the three months ended March 31, 2026, certain derivative instruments were settled or early terminated and related collateral was returned. As of March 31, 2026, the Company had one open derivative position with a fair value liability of $0.5 million. In connection with these derivative instruments, the Company was required to post cash collateral of $2.1 million. The net balance of $1.6 million, representing cash collateral posted in excess of the related derivative liability, was included in “Prepaid expenses and other current assets” on the Condensed Consolidated Balance Sheets as of March 31, 2026.

As of March 31, 2026, the Company had open ETH put and call option contracts with an aggregate notional quantity of 30,000 ETH, all with an expiration date of June 26, 2026, and strike prices ranging from $1,615 to $3,000.

Sales of ETH

Between January 1, 2026 and March 31, 2026, the Company sold approximately 57,726 ETH for an aggregate of $128.1 million, at an average price of $2.2 thousand per ETH. As of March 31, 2026, the Company held approximately 12,441 ETH on its balance sheet which is collateral on ETH-denominated collateralized borrowing.

Eurus Aero Tokens

On February 12, 2026, the Company, through its wholly owned subsidiary, ETHZilla Aerospace LLC, launched a private offering of up to approximately $11.7 million in profit participation interests issued as Eurus Aero Tokens on the Arbitrum Ethereum Layer 2 network in connection with two CFM56-7B24 aircraft engines owned by the Company. The aircraft engines are subject to existing lease arrangements with third-party lessees.

As of March 31, 2026, the Company had received gross proceeds of $10,000 from the issuance of Eurus Aero Tokens.

The Eurus Aero Tokens provide holders with contractual rights to pro rata distributions from the net cash flows generated by the aircraft engines, which are derived from monthly lease collections and, upon a liquidity event, proceeds from the sale of the aircraft engines. The Company’s obligations under the Eurus Aero Tokens are secured by collateral that includes the aircraft engines, related lease receivables, reserves, and insurance proceeds.

The Eurus Aero Tokens are digital securities issued on a blockchain network. The tokens themselves do not represent ownership interests in ETH, stablecoins, or other digital assets, nor do they constitute ownership interests in the aircraft engines.

The issuance of Eurus Aero Tokens did not result in the transfer or derecognition of the underlying aircraft engines or related lease receivables. Cash proceeds received from the token issuance are recorded separately from digital assets.

During the three months ended March 31, 2026, the Company did not make any cash distributions to Eurus Aero Token holders, and there was no accrued payable related to declared but unpaid distributions as of March 31, 2026.

~~During the~~NOTE ~~nine~~6 ~~months~~– ~~ended~~LOANS ~~September 30, 2025, the Company recognized cumulative realized gains of $26,774,061 upon the deposit of ETH into liquid staking.~~RECEIVABLE

The Company’s loans ~~following~~receivable ~~table~~consist ~~presents~~primarily aof ~~rollforward~~loans acquired and financed in connection with its RWA platform activities. Loans receivable are carried at amortized cost, net of any allowance for expected credit losses, and are included in “Loans Receivable” on the Company’s Condensed ~~incentive~~Consolidated ~~tokens~~Balance ~~for~~Sheets. The Company evaluates expected credit losses on loans receivable in accordance with ASC 326, considering the ~~nine~~underlying ~~months~~collateral, ~~ended~~contractual ~~September~~recourse 30provisions, ~~2025:~~and the creditworthiness of counterparties. Based on this evaluation, management concluded no allowance was recorded as of the reporting date.

	Fair value
Liquid Staking and Incentive tokens as of December 31, 2024	$	-
Receipt and accrual of liquid staking and incentive tokens		245,493,054
Sales of liquid staking and incentive tokens in exchange of ETH		-
Change in fair value of liquid staking and incentive tokens		12,111,195
Incentive tokens fair value as of September 30, 2025	$	257,604,249

Warehouse Facility Loan Receivables

~~Non-monetary~~On March 5, 2026, ETHZilla Auto Loans, a wholly owned subsidiary of ~~receivable~~the Company, entered into a warehouse facility agreement, dated as of March 3, 2026, with anAnchored ~~embedded~~Finance ~~derivative~~pursuant ~~within~~to which ETHZilla Auto Loans, as lender, agreed to provide Anchored Finance, as borrower, with the ~~scope~~Warehouse Facility in an initial commitment amount of up ~~ASC~~to ~~310-~~$10.0 ~~and~~million. ~~ASC~~The ~~815~~Warehouse Facility is intended to provide interim financing for eligible auto loan receivables originated through Automatic USA, an automated auto finance platform partnered with Karus, an artificial intelligence-~~15:~~driven credit analytics platform in which the Company holds approximately a 20% equity interest. The auto loan receivables financed under the Warehouse Facility may be originated through the Automatic USA platform pending such receivables’ sale or other disposition.

AsThe Warehouse Facility has ~~described~~an ininitial ~~Note~~term 3,of 12 months from the ~~Company~~closing ~~accounts~~date and automatically renews for ~~liquid~~successive ~~staked~~six-month ~~ETH~~periods asunless aeither party provides at least 60 days’ prior written notice of non-~~monetary~~renewal. ~~receivable~~Advances ~~with~~under anthe ~~embedded~~Warehouse ~~derivative.~~Facility ~~The~~are ~~host~~subject ~~contract is~~to ~~measured~~a atborrowing ~~cost,~~base ~~and~~determined by the ~~embedded~~eligibility ~~derivative~~and isadvance ~~measured~~rates atapplicable ~~fair~~to ~~value~~the ~~through~~underlying ~~earnings~~auto loan receivables pledged as collateral.

As of ~~September 30, 2025, the carrying amount~~ of ~~the~~March ~~host contract (representing the 48~~31,~~800~~ ~~deposited ETH into ether.Fi and 10~~2026,~~575~~ ~~PufETH)~~advances ~~was~~had ~~$257,604,249,~~been ~~and~~made ~~the~~under ~~fair value of~~ the ~~embedded~~Warehouse ~~derivative was $12~~Facility,~~110,657.~~ ~~For~~and the ~~nine~~outstanding ~~months~~principal ~~ended~~balance ~~September~~of ~~30,~~warehouse ~~2025,~~facility ~~the~~loan ~~Company recognized~~receivables ~~unrealized~~supported ~~gains of $11,437,846 on~~ by the ~~embedded~~borrowing ~~derivative~~base ~~and~~was ~~staking rewards of~~ $~~672,811~~1.7 ~~related~~million. toSuch ~~liquid~~amount ~~staking~~is ~~activities. Changes~~included in ~~the~~“Loans ~~fair~~Receivable” ~~value~~on ~~of embedded derivatives associated with liquid staking tokens are recognized within~~ the ~~statement~~Company’s ofCondensed ~~operations~~Consolidated asBalance ~~part of Digital Asset gains and losses, separate from revenue~~Sheets.

~~The total~~As of ~~the~~March ~~host contract and embedded derivative~~31, ~~together with any accrued staking rewards (i.e.~~2026, ~~native~~the Company ~~staking~~evaluated ~~and~~these ~~liquid~~warehouse ~~staking), are~~facility ~~collectively~~loan ~~presented~~receivables asfor ~~“Staking~~expected ~~Receivables”~~credit onlosses ~~the~~in ~~Consolidated~~accordance ~~Balance~~with ~~Sheet.~~ASC ~~Accordingly~~326, ~~“Staking~~and ~~Receivables” reflects~~ the ~~combined~~related ~~fair-value~~allowance was ~~changes and reward accruals arising from both native staking and liquid staking arrangements~~immaterial.

~~NOTE 6~~Zippy -Manufactured ~~ACCRUED~~Home ~~EXPENSES~~Loan Receivables

~~Accrued~~On January 30, 2026, the Company, through its wholly owned subsidiary ~~expenses~~ETHZilla ~~consist~~Modular Mortgage, acquired 95 manufactured and modular home loans (together with the related first-lien mortgages) from Zippy Manufactured Home Credit Fund I L.P. (the “Seller”) pursuant to a loan purchase agreement for an aggregate purchase price of $4.7 million in cash (equal to 104% of the ~~following~~outstanding principal balance as of ~~September~~January 3029, ~~2025~~2026). ~~and~~The ~~December~~ Company acquired an additional 94 loans in March for a total purchase price of $5.1 million (equal to 104% of the outstanding principal balance as of the purchase date). The Company recognized an aggregate loan premium of $0.4 million on these purchases which will be amortized over the life of the loans to interest expense. The Company recognized interest income of $0.1 million during the three months ended March 31, ~~2024:~~2026, included in Revenue on the Company’s consolidated statements of operations.

	September 30,		December 31,
	2025		2024
Interest	$	319,909	$	-
Other		52,955		4,228
Total accrued expenses	$	372,864	$	4,228

The acquired loan receivables are secured by first-lien manufactured home collateral and are evidenced by promissory notes and related security agreements. The loan portfolio currently only includes Community Recourse Loans with Non-Recourse Loans to be added in later quarters as origination begins, as defined in the governing purchase agreements. Community Recourse Loans relate to manufactured homes located in designated manufactured housing communities and benefit from community recourse or repurchase arrangements under defined conditions for a limited period of time, while Non-Recourse Loans do not include such provisions and rely solely on recovery from the underlying collateral.

During the nine months ended September 30, 2025, the Company issued 75,288 share of common stock for the settlement of liabilities. See Note 12 – Commitments and Contingencies.

~~NOTE~~The loans were purchased 7at –prices ~~REVENUE~~reflecting ~~RECOGNITION~~a premium to the outstanding principal balance and are serviced by Zippy Loans, LLC, an affiliate of the Seller, in accordance with the applicable servicing arrangements.

~~Native~~The loan receivables are ~~Staking~~accounted for as loans held for investment and are measured at amortized cost, net of any allowance for expected credit losses. As of March 31, 2026, management concluded that an allowance for expected credit losses was not required, as the Company’s exposure to credit losses is mitigated by full collateralization and contractual community recourse provisions.

AsIn ofaddition ~~September~~to ~~30,~~the ~~2025~~executed loan purchase, the Company ~~had~~has ~~native~~entered into ~~staked~~forward-flow ~~12,845~~arrangements ~~ETH~~under onwhich ~~the~~it ~~Ethereum~~may ~~blockchain.~~acquire ~~For~~additional ~~the~~manufactured ~~nine~~home ~~months~~loan ~~ended~~receivables ~~September~~in ~~30,~~future ~~2025,~~periods. ~~the~~Each ~~Company~~such ~~recognized~~purchase ~~revenue~~will ~~from~~be ~~native~~evaluated ~~staking~~and ~~rewards~~accounted for as a separate transaction at the time of ~~$173~~acquisition,~~428~~ and no loan receivables or related liabilities are recognized prior to settlement.

~~Liquid~~As of March 31, 2026, the outstanding principal balance of Zippy-related ~~Staking~~manufactured home loan receivables was $9.8 million, which is included in “Loans Receivable” on the Company’s Condensed Consolidated Balance Sheets.

~~As of~~NOTE ~~September~~7 ~~30,~~– ~~2025,~~ACCRUED the Company had liquid staked 59,375 ETH on the Ethereum Blockchain. For the nine months ended September 30, 2025, the Company earned $672,811 as staking rewards through liquid staking protocols, and $3,263,930 incentive tokens, both recognized within revenue on the income statement.EXPENSES

~~NOTE~~Accrued expenses consist 8of -the ~~DEBT~~following (in thousands):

Loans Payable

	March 31, 2026		December 31, 2025
Final Make Whole Provision	$	10,210	$	6,325
Professional fees		1,278		-
Other		9		52
Total accrued expenses	$	11,497	$	6,377

~~The following~~Additional ~~table~~information ~~summarizes~~regarding the ~~activity~~Final ofMake ~~loans~~Whole ~~payable~~Provision ~~during~~is included in the ~~nine~~Company’s ~~months~~Annual ~~ended September 30, 2025:~~Report.

	Principal balance at December 31, 2024		Principal additions		Principal repayments in cash			Other			Effects of foreign exchange rates		Principal balance at September 30, 2025
First Insurance - 2024	$	584	$	-	$	-		$	(584	)	$	-		-
First Insurance - 2025		-		613,700		(127,854	)		-			-		485,846
Total loans payable	$	584	$	613,700	$	(127,584	)	$	(584	)	$	-	$	485,846
Less: loans payable – current portion		584												485,846
Loans payable – noncurrent portion	$	-											$	-

NOTE 8 – REVENUE RECOGNITION

The Company recognizes revenue from native staking and liquid staking activities on the ETH blockchain as well as aircraft engine rental revenue.

Revenue by Source

Revenue consisted of the following (in thousands):

	Three Months Ended March 31, 2026
Native staking revenue	$	1,469
Liquid staking revenue¹		302
Aircraft engine rental		1,088
Total revenue	$	2,859

(1)

Liquid staking revenue includes $0.3 million of staking rewards earned through participation in liquid staking protocols.

~~Initial Senior~~Revenue ~~Convertible~~by ~~Note~~Major ~~Sales~~Customers

OnThe ~~August~~Company 8,generated ~~2025, the Company~~revenue ~~entered~~from ~~into a Securities Purchase Agreement (~~the ~~“Securities~~following ~~Purchase~~major ~~Agreement”) with investment funds managed by an institutional investor (the “Investor”)~~customers, ~~under~~each of which ~~the~~represented ~~Company~~10% ~~agreed~~or togreater ~~sell and issue to the Investor senior secured convertible notes (the “August 2025 Convertible Notes”) in an aggregate principal amount~~ of ~~$156,250,000~~total ~~(the “Principal Amount”) in exchange for cash equal to 96~~revenue.0% ofAll ~~the~~such ~~Principal~~revenue ~~Amount~~was ~~(the~~generated ~~“Debt Financing”).~~within ~~The~~the Company’s ~~closed~~single ~~the~~reportable ~~Debt~~segment ~~Financing simultaneously with the signing of the Securities Purchase Agreement~~ (~~the~~in ~~“August 2025 Note Funding Date”~~thousands).:

The August 2025 Convertible Notes bear interest at a rate of 0.00% per annum for the first six months, and 4.00% per annum for the following six months through the maturity date, which is the third year anniversary of the issuance date of the August 2025 Convertible Notes or earlier conversion or redemption date. The interest rate will increase to a rate of 18.0% per annum upon the occurrence and during the continuance of an event of default under the August 2025 Convertible Notes. The August 2025 Convertible Notes are secured by $44.5 million of Ether (ETH) (the “August 2025 ETH Collateral”) and approximately $156.25 million in cash (the “August 2025 Cash Collateral”), which is included in restricted cash equivalents on the Company’s consolidated balance sheet.

	Three Months Ended March 31, 2026
Coinbase – staking income	$	1,469
Ether.fi – liquid staking		339
Puffer – liquid staking		(37	)
Delta Air Lines, Inc		1,088
Total revenue	$	2,859

AtAircraft ~~any~~Engine ~~time~~Purchase following the nine-month anniversary of the August 2025 Note Funding Date, the Investor has the right to require that the Company redeem all or any part of the outstanding August 2025 Convertible Notes. If at any time after the August 2025 Note Funding Date, (i) the loan to value ratio of the August 2025 Convertible Notes is greater than 85%, or (ii) upon the occurrence of any Trigger Event (as defined in the August 2025 Convertible Notes), the Investor has the right to require that the Company redeem all or any part of the outstanding note in cash at a price equal to 100% of the amount of such August 2025 Convertible Note being redeemed.Agreement

~~The~~On ~~August~~January ~~2025~~17, ~~Convertible Notes~~2026, ~~provide that~~ the ~~Investor~~Company ~~may~~acquired ~~convert~~two ~~all~~CFM56-7B24 oraircraft ~~any portion of the principal amount of such August 2025 Convertible Note, together~~engines ~~with~~from ~~any~~an ~~accrued~~unaffiliated ~~and~~seller ~~unpaid~~for ~~interest thereon, at~~ an ~~initial~~aggregate ~~conversion~~purchase price of $3412.452 ~~(the “August 2025 Conversion Price”)~~million, which iswas ~~subject~~payable toin ~~a one-time~~cash, ~~downward~~less ~~only~~certain ~~reset~~deposits ~~after the nine-month anniversary of the issuance date (the “One-Time Reset~~previously ~~Date”)~~paid ~~equal~~for toa ~~the~~total ~~closing~~acquisition ~~bid~~cost ~~price~~ of ~~the~~$11.7 ~~common~~million ~~stock~~recorded onas ~~the~~property ~~One-Time~~and ~~Reset Date to the extent such price is less than the August 2025 Conversion Price~~equipment. The ~~Investor~~engines iswere ~~not~~acquired ~~permitted~~subject to ~~convert~~existing ~~the August 2025 Convertible Notes to the extent that the shares~~lease ofarrangements ~~common~~with ~~stock~~Delta ~~deliverable~~Air ~~upon~~Lines, ~~conversion~~Inc., ~~thereof~~which ~~would~~were ~~exceed~~assumed ~~19.99%~~by of the Company’s, ~~outstanding~~and ~~shares immediately prior to executing~~ the ~~Securities~~Company ~~Purchase~~entered ~~Agreement~~into ~~(the~~a ~~“August~~servicing ~~2025~~agreement ~~Exchange~~with ~~Cap”) without prior stockholder approval. We~~an ~~were~~affiliate ~~also required to seek stockholder approval for the issuance~~ of the ~~shares~~seller ofto ~~common~~manage ~~stock upon conversion of~~ the ~~August~~engines ~~2025~~during ~~Convertible Notes in accordance with~~ the ~~Securities~~lease ~~Purchase Agreement~~term. ~~On October 7, 2025, the stockholders of the Company approved the issuance of shares of common stock in excess of the August 2025 Exchange Cap.~~

~~The August~~On ~~2025~~March ~~Convertible~~27, ~~Notes provide for certain covenants~~2026, ~~including that~~ the Company ~~shall maintain~~, atthrough ~~all~~its ~~times,~~wholly ~~(i)~~owned ~~a balance of~~subsidiary $5Eurus ~~million~~Aerospace orToken ~~more~~1 ~~held~~LLC, inacquired ~~accounts~~one ~~other than the controlled securities account entered into at the consummation of this transaction and (ii) a loan~~CFM56-~~to-value~~5B5/P ~~ratio~~aircraft ofengine nofrom ~~more~~Aero ~~than~~Engine ~~100%~~Solutions, inInc. ~~addition to other customary covenants and events of default that are typical~~ for ~~transactions~~$6.4 ofmillion ~~this~~in ~~type and certain affirmative and negative covenants~~cash.

~~Pursuant~~The aircraft engines are todepreciated over an estimated useful life of two and a half years. The Company recognized depreciation expense of $0.5 million during the ~~Securities~~three ~~Purchase~~months ~~Agreement~~ended March 31, 2026, which is included within “General and administrative” expenses on the ~~Company~~Condensed ~~has~~Consolidated Statements ~~agreed~~of toIncome ~~certain~~and ~~obligations~~Comprehensive Loss. All aircraft engines are leased to ~~register~~customers for a period of approximately 2.5 years and are ~~maintain~~classified ~~the~~as ~~registration~~operating ofleases ~~the~~under ASC 842. Lease revenue is recognized in accordance with ASC 842, Leases (“ASC ~~shares~~842”). Lease income consists of ~~common~~fixed ~~stock~~lease ~~underlying~~payments ~~the~~and ~~August~~variable ~~2025~~consideration ~~Convertible~~based ~~Notes,~~on ~~including~~engine ~~filing~~usage. ~~within~~Fixed 15lease ~~calendar~~payments are ~~days~~recognized ofon a straight-line basis over the ~~Closing~~lease ~~Date~~term, a ~~resale~~while ~~registration~~variable ~~statement~~lease topayments ~~register~~are ~~for~~recognized ~~resale~~in the ~~shares~~period ~~underlying~~in which the ~~August~~underlying ~~2025~~usage ~~Convertible~~occurs. ~~Notes,~~Lease ~~which~~revenue ~~was~~is ~~timely~~recognized ~~filed~~only from ~~and~~the ~~has~~date ~~been~~control ~~declared~~of ~~effective~~the aircraft engines transfers to ~~date~~the Company and is presented within “Aircraft engine rental revenue” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

The servicing agreement includes a mutual purchase and sale option exercisable following expiration or earlier termination of the related lease, at a fixed option price of $3.0 million, subject to specified conditions.

During the three months ended March 31, 2026, the Company recognized $1.1 million of aircraft engine lease revenue related to these assets.

NOTE 9 – DEBT

The following tables summarize the activity of loans payable (in thousands):

	Three Months Ended March 31, 2026
	Principal balance at December 31, 2025		Principal additions		Principal repayments in cash		Repayments in cryptocurrency			Principal balance at March 31, 2026

First Insurance – 2025¹	$	251	$	-	$	-	$	-		$	251
Equities First Loan		25,950		-		-		-			25,950
Aave Loan		31,513		67,039		-		(98,552	)		-
Total loans payable and collateralized loans	$	57,714	$	67,039	$	-	$	(98,552	)	$	26,201
Less: Less: loans payable and collateralized loans – current portion		31,764									251
Loans and collateralized loans payable – noncurrent portion	$	25,950								$	25,950

(1)

Represents insurance financing note payable funded in June 2025 which matures in April 2026 and bears interest at 8.99%.

~~The~~Loans ~~security~~Denominated documents consist of (i) a Pledge and Security Agreement entered into by the Company, certain subsidiaries of the Company and the collateral agent, which is an affiliate of the Investor (the “Collateral Agent”); (ii) a control agreement in ~~respect~~Digital of the August 2025 ETH Collateral entered into by the Company, the Collateral Agent and the custodian of such account, (iii) a control agreement in respect of the August 2025 Cash Collateral entered into by the Company, the Collateral Agent and the custodian of such account, and (iv) a guaranty agreement entered into by certain subsidiaries of the Company in favor of the Investor. In addition, the Company paid $150,000 in legal fees of the Investor’s counsel. The control agreement requires the Company to maintain cash and cash equivalents in an aggregate amount of approximately $504,000,000, which the Company is not allowed to withdraw without consent of the Collateral Agent. The Collateral Agent also has the right to direct activities related to any staking of the August 2025 ETH Collateral.Assets

~~Clear~~Equities ~~Street~~First LLC (“Clear Street”) provided us placement agent services in connection with the Debt Financing. As compensation for serving as the Company’s placement agent, the Company (i) paid Clear Street a total cash fee equal to 4% of the aggregate gross proceeds raised in the Debt Financing, and (ii) reimbursed certain reasonable and documented fees and expenses of legal counsel for Clear Street and other out-of-pocket expenses. In addition, the Company agreed to issue to Clear Street or its designees shares of Common Stock of the Company equal to 2.0% of the aggregate shares of common stock initially issuable upon conversion of the August 2025 Convertible Notes, with the Company issuing 90,711 shares of common stock in August 2025.Loan

~~Registration~~The Company has an outstanding collateralized loan arrangement with ~~Rights~~Equities ~~Agreement~~First Holdings, LLC. As of March 31, 2026, the outstanding principal balance of the loan was approximately $25.9 million.

~~On the~~The ~~August~~loan ~~2025~~is ~~Note~~secured ~~Funding~~by ~~Date,~~digital ~~the~~assets. ~~Company~~As ~~entered~~of March ~~into~~31, ~~a Registration~~2026, ~~Rights Agreement (~~the ~~“RRA”) with~~Company ~~the~~had ~~Investor~~transferred ~~pursuant~~12,441 toETH ~~which~~as collateral, ~~among~~with ~~other~~a ~~things,~~fair ~~and~~value ~~subject~~of toapproximately ~~certain~~$26.1 ~~limitations~~million. ~~set~~Under ~~forth~~the ~~therein~~terms of the arrangement, the ~~Investor~~lender has ~~customary demand registration~~ rights ~~and~~to the ~~Company~~transferred ~~was~~collateral ~~obligated~~during tothe ~~prepare~~term ~~and~~of ~~file~~the aloan, ~~registration~~and ~~statement~~the ~~registering~~Company ~~the~~is ~~offer~~entitled ~~and~~to ~~sale~~receive ofan ~~all~~equivalent quantity of the ~~Investor’s~~same ~~common~~type ~~stock,~~of ~~which~~digital ~~registration~~assets ~~statements~~upon ~~have~~repayment ~~been~~of ~~timely~~the ~~filed~~loan and ~~declared~~satisfaction ~~effective~~of torelated ~~date~~obligations.

~~New~~There were no material changes to the terms of the loan during the ~~Senior~~three ~~Convertible~~months ~~Note~~ended ~~Sales~~March 31, 2026.

~~On September~~Aave 22, 2025, the Company entered into an Amendment and Waiver Agreement with the Investor (the “Amendment Agreement”), pursuant to which, among other things (a) the Company agreed to sell a new series of senior secured convertible notes to the Investor (the “September 2025 Convertible Notes”, and together with the August 2025 Convertible Notes, the “Convertible Notes”); (b) the Company and the Investor agreed to partially waive and modify certain terms of the August 2025 Convertible Notes and the Securities Purchase Agreement, including: (i) to reduce the interest rate from 4% to 2% (ii) excluding the September 2025 Convertible Notes from the anti-dilutive provisions of the August 2025 Convertible Notes, except in connection with the Existing Note Conversion Price Adjustment (defined and described below), (iii) permitting the Company to Stake (as defined in the Security Purchase Agreement) the collateral held in the Company’s crypto control accounts, (iv) allowing the Company to use the yield of any cash held in the controlled accounts (less the accrued and unpaid interest on the Convertible Notes and any other amounts then due and payable to the Investor), in the ordinary course of business, and (v) to permit during the 90 day period following the August 22, 2025 effective date of a resale registration statement filed to register the resale of shares of common stock issuable upon conversion of the August 2025 Convertible Notes, pursuant to which the Company was previously restricted from taking certain actions, one or more additional subsequent placements (not including any variable rate transaction) solely consisting of the sale of common stock (x) with gross proceeds not in excess of an aggregate of $1 billion, subject to certain pre-requisites, or (y) at any time if such applicable purchase price exceeds $4.00 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events).Loan

~~The September~~During ~~2025 Convertible Notes were sold to~~ the ~~Investor~~three onmonths ~~September~~ended 23March 31, ~~2025~~2026, in the ~~aggregate~~Company ~~principal~~repaid ~~amount~~the Aave ofLoan ~~$360 million~~ (the “~~New~~Aave ~~Principal Amount~~Loan”) in ~~exchange~~full. ~~for~~There ~~cash~~were ~~equal~~no material changes to ~~97.25%~~the terms of the ~~New~~Aave ~~Principal~~Loan ~~Amount~~prior (to repayment, and the ~~“New~~Company ~~Debt~~did ~~Financing”)~~not experience any liquidation events or loss of collateral.

~~The~~NOTE ~~Company~~10 ~~closed~~– ~~the~~FAIR ~~New Debt~~VALUE ~~Financing~~MEASUREMENTS ~~on September 23, 2025 (the “New Debt Funding Date”).~~

The ~~September~~following ~~2025~~table ~~Convertible~~presents ~~Notes~~information ~~bear~~about ~~interest at a rate of 2.00% per annum through~~ the ~~maturity~~Company’s ~~date,~~assets ~~which~~and isliabilities ~~August~~measured 8,at ~~2028~~fair orvalue ~~earlier~~on ~~conversion or redemption date. The interest rate will increase to~~ a ~~rate~~recurring ofbasis ~~18.0% per annum upon the occurrence and during the continuance of an event of default under the September 2025 Convertible Notes. The September 2025 Convertible Notes are secured~~ by ~~$50,000,000~~fair ofvalue ~~Ether~~hierarchy ~~(ETH) (the “September~~level ~~2025 ETH Collateral”) and approximately $348,180,800~~ (in ~~restricted cash equivalents (the “September 2025 Cash Collateral”~~thousands)~~. Total restricted cash equivalents securing the August 2025 Convertible Notes and the September 2025 Convertible Notes was $505,591,875 as of September 30, 2025.~~:

At any time after May 8, 2026, the Investor shall have the right to require that the Company redeem all or any part of the outstanding September 2025 Convertible Notes. If at any time after the New Debt Funding Date, (i) the loan to value ratio of the September 2025 Convertible Notes is greater than 85%, or (ii) upon the occurrence of any Trigger Event (as defined in the September 2025 Convertible Notes), the Investor shall have the right to require that the Company redeem all or any part of the outstanding note in cash at a price equal to 100% of the amount of such September 2025 Convertible Note being redeemed.

	March 31, 2026
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	65,905	$	-	$	-	$	65,905
Prepaid expenses and other current assets¹		1,634		-		-		1,634
Marketable securities		31,771		-		-		31,771
Digital Assets		28,307		-		-		28,307
Total assets	$	127,617	$	-	$	-	$	127,617

(1)

Represents cash collateral paid to counterparty and open derivative positions including call and put options on ETH.

~~The September~~NOTE ~~2025~~11 ~~Convertible~~– ~~Notes~~EARNINGS ~~provide~~PER that the Investor may convert all or any portion of the principal amount of such September 2025 Convertible Notes, together with any accrued and unpaid interest thereon, at an initial conversion price of $30.50 (the “Conversion Price”), which is subject to a downward only reset on May 8, 2026, and each three month anniversary thereafter (each a “Reset Date”) equal to the closing bid price of the common stock on each such Reset Date, to the extent such price is less than the Conversion Price. The Investor is not permitted to convert the September 2025 Convertible Notes to the extent that the shares of common stock deliverable upon conversion thereof would exceed 19.99% of the Company’s outstanding shares immediately prior to executing the Amendment Agreement (the “September 2025 Exchange Cap”) without prior stockholder approval. We are also required to seek stockholder approval for the issuance of the shares of common stock upon conversion of the September 2025 Convertible Notes in accordance with the Amendment Agreement.SHARE

~~As a~~The ~~result~~computation of ~~the~~net ~~Conversion Price of the September 2025 Convertible Notes being less than the conversion price of the August 2025 Convertible~~loss ~~Notes,~~per ~~the~~share ~~conversion~~is ~~price~~as offollows ~~the August 2025 Convertible Notes automatically adjusted to the Conversion Price on the New Debt Funding Date~~ (~~the~~in ~~“Existing~~thousands, ~~Note~~except ~~Conversion~~per ~~Price~~share ~~Adjustment”~~data).:

The September 2025 Convertible Notes also provide that, at any time after March 22, 2026, the Company may require holders to convert all or a portion of the outstanding principal into shares of common stock (a “Mandatory Conversion”) if certain conditions are satisfied. Specifically, the volume-weighted average price (“VWAP”) of the Company’s common stock on its principal trading market must exceed $44.785 (as adjusted for stock splits and similar events) for 30 consecutive trading days and no Equity Conditions (defined below) failure may exist. The Company may not effect more than one Mandatory Conversion during any 20-trading-day period and may not exercise its right if an event of default has occurred and is continuing. A Mandatory Conversion is subject to cancellation if the stock price falls below the minimum conversion price or if an Equity Conditions failure occurs prior to the conversion date, unless waived by the holder. In lieu of conversion of any portion of the notes that cannot be converted due to a failure of Equity Conditions, the Company may instead require the holder to exchange such portion into the right to receive the same number of shares issuable upon conversion, pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended, on mutually agreeable terms. The “Equity Conditions” generally require, among other things, that the Company’s registration statement registering the resale of the common stock issuable upon conversion of the September 2025 Convertible Notes is effective or the shares are otherwise eligible for resale, that the common stock remains listed and tradable on an eligible market, that no event of default or material breach exists, that certain specific volume requirements have been met, that sufficient authorized shares are available, that no material, non-public information or unresolved disputes exist, and that the stockholders of the Company have approved the issuance of shares of common stock in excess of the September 2025 Exchange Cap.

	Three Months Ended March 31,
	2026			2025
Numerator:
Net loss – basic and diluted	$	(76,264	)	$	(2,369	)
Denominator:
Weighted average common shares outstanding – basic		21,300,374			353,933
Loss per common share, basic and diluted	$	(3.64	)	$	(5.54	)

~~Additionally,~~For the ~~September 2025~~three ~~Convertible~~months ~~Notes provide that, if at any time and from time to time on or after the issuance date thereof, there occurs any stock~~ended ~~split,~~March ~~stock dividend~~31, ~~stock combination recapitalization or other similar transaction involving the Company’s common stock~~2026, ~~other than~~ the 1-for-10 reverse stock effective October 20, 2025 (each, a “Stock Combination Event”, and such date thereof, the “Stock Combination Event Date”) and the Event Market Price (as defined below) is less than the Conversion Price then in effect (after giving effect to certain adjustments), then on the 16th Trading Day (as defined in the September 2025 Convertible Notes) immediately following such Stock Combination Event Date, the Conversion Price then in effect on such sixteenth (16th) Trading Day (after giving effect to certain adjustments) shall be reduced (but in no event increased) to the Event Market Price. “Event Market Price” means, with respect to any Stock Combination Event Date, the quotient determined by dividing (x) the sum of the volume weighted average ~~prices (VWAP) of the Company’s~~ common ~~stock~~shares ~~for~~outstanding ~~each~~included of1,555,574 ~~the~~shares ~~five~~underlying ~~Trading~~pre-funded ~~Days~~warrants with ~~the~~a ~~lowest VWAP of the~~nominal ~~Company’s~~exercise ~~common stock during the 15 consecutive Trading Day period ending and including the Trading Day immediately preceding the 16th Trading Day after such Stock Combination Event Date, divided by (y) five~~price.

~~Additionally, if~~The ~~the~~following ~~Company issues or sells shares of common stock after the New Debt Funding Date, at a price lower than the then-current conversion~~potentially ~~price~~dilutive ofsecurities ~~the~~were ~~September~~excluded ~~2025~~from ~~Convertible Notes, subject to certain excepted issuances,~~ the ~~conversion~~computation ~~price~~ of ~~the~~diluted ~~September~~net ~~2025~~loss ~~Convertible Notes~~per ~~will~~share bebecause ~~adjusted~~their ~~downward~~inclusion towould ~~match~~have ~~the~~been ~~price of such newly issued shares.~~antidilutive:

Finally, if the Company issues or enters into an agreement to issue common stock, options, or convertible securities with a price that varies or may vary with the market price of the common stock (excluding certain at-the-market offerings and customary anti-dilution adjustments), subject to certain customary exceptions, the holders of the September 2025 Convertible Notes have the right, but not the obligation, to elect to use such “Variable Price” for purposes of converting the September 2025 Convertible Notes. The holder may make this election on a per-conversion basis and is not required to rely on the Variable Price for any future conversions.

	Three Months Ended March 31,
	2026		2025

Stock options		1,154,352		2,164
Warrants		7,020,662		613,350
Convertible debt, net of discount		-		-
Total		8,175,014		615,514

NOTE 12 – SERIES B CONVERTIBLE PREFERRED STOCK

The Series B Convertible Preferred Stock converted in full during 2025. There were no shares outstanding as of March 31, 2026.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Litigation and Other Loss Contingencies

The Company is subject to legal proceedings, claims, regulatory inquiries, and contingencies that arise in the ordinary course of business. The Company accrues a liability for such matters when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. As of March 31, 2026, the Company has not recorded any liabilities for loss contingencies, as management believes that any such matters are either not probable or not reasonably estimable.

Certain commitments, contractual arrangements, and contingent obligations are described in the Company’s audited Consolidated Financial Statements for the year ended December 31, 2025 included in the Company’s Annual Report. Except as described below, there have been no material changes to the matters previously disclosed in the Annual Report.

~~The September~~Value ~~2025~~Added ~~Convertible~~Tax Notes provide for certain covenants, including that the Company shall maintain, at all times, (i) a balance of $5 million or more held in accounts other than the controlled securities account entered into at the consummation of the transaction and (ii) a loan-to-value ratio of no more than 100%, in addition to other customary covenants and events of default that are typical for transactions of this type and certain affirmative and negative covenants.Matters

~~Pursuant~~The Company, through its toUnited Kingdom subsidiary, is registered for Value Added Tax (“VAT”) under the ~~Amendment~~accrual ~~Agreement~~accounting scheme. Under this scheme, ~~the~~VAT ~~Company~~output tax becomes due when invoices are issued, irrespective of cash settlement. Management has ~~agreed~~identified tothat the settlement of certain ~~obligations~~existing toliabilities ~~register~~could ~~and~~give ~~maintain~~rise ~~the~~to ~~registration~~an ofobligation ~~the~~to ~~shares~~remit ~~of common~~additional ~~stock~~VAT ~~underlying~~to ~~the~~HM ~~September~~Revenue ~~2025~~& ~~Convertible~~Customs ~~Notes,~~in ~~which~~respect ~~shares~~of ~~have~~VAT that has already been ~~registered~~invoiced toor ~~date~~collected.

~~The~~As of March 31, 2026, the ~~September~~ultimate ~~2025~~amount ~~Convertible~~of ~~Notes~~any ~~are~~such ~~secured~~payment bycannot be reliably estimated and the ~~same~~likelihood ~~August~~of 8settlement remains uncertain. Accordingly, ~~2025~~no provision ~~security~~has ~~agreements~~been asrecognized ~~discussed~~in ~~above~~the accompanying Condensed Consolidated Financial Statements. The Company will continue to monitor this matter and will recognize a liability or provide additional disclosures if and when a loss becomes probable and reasonably estimable.

~~Clear~~Legal ~~Street~~Proceedings provided the Company placement agent services in connection with the New Debt Financing. As compensation therewith, the Company (i) paid Clear Street a total cash fee equal to 1% of the aggregate gross proceeds raised in the New Debt Funding, and ~~(ii) reimbursed certain reasonable and documented fees and expenses of legal counsel for Clear Street and other out-of-pocket expenses.~~Settlements

~~In aggregate~~As previously disclosed in the Company’s Annual Report, the Company has ~~incurred~~resolved ~~professional~~certain ~~fees~~litigation and ~~expenses~~other oflegal $8disputes through settlement agreements entered into during 2025. All material obligations under those settlement agreements have been satisfied,~~575,412~~ inand ~~connection~~there ~~with~~were no material developments related to such matters during the ~~Convertible~~three months ~~Notes~~ended March 31, ~~which~~2026. Accordingly, no additional accruals or disclosures are ~~included in~~required ~~general~~as ~~and~~of ~~administrative~~March ~~expenses~~31, 2026.

~~The Company~~Indemnification ~~made~~and anEmployment-Related ~~accounting election to account for the Convertible Notes at fair value with changes in fair value recognized in earnings.~~Commitments

~~As of September 30, 2025, the fair value of the convertible debt balance was $496,276,461.~~ The Company ~~recognized~~has aentered ~~gain~~into ofindemnification ~~$3,724,344~~agreements ~~related to~~with ~~the~~its ~~changes~~directors and inofficers ~~fair~~and ~~value~~employment ofand ~~the~~separation ~~convertible~~agreements ~~debt~~with ~~during~~certain ~~the~~current ~~three~~and ~~months~~former ~~ended September 30~~executives, ~~2025.~~as ~~The~~described ~~August~~in ~~2025~~the ~~Convertible Notes~~Company’s ~~had~~Annual aReport. ~~fair~~These ~~value~~arrangements atinclude ~~issuance~~customary ~~of $150~~indemnification,~~000,000,~~ ~~and the September 2025 Convertible Notes had a fair value at issuance of $348~~severance,~~086,949~~ ~~The Company also recognized $1,913,856 in gain related to the difference in pre~~ and ~~post~~compensation ~~amendment Convertible Note fair value upon issuance of the September 2025 Convertible Notes~~provisions.

~~The Company~~There ~~estimated~~have ~~the~~been ~~fair~~no ~~value~~material modifications ofto ~~the~~these ~~convertible~~arrangements ~~debt~~and ~~using~~no anew ~~Monte~~material ~~Carlo~~commitments ~~Simulation~~entered ininto aduring ~~risk-neutral framework and~~ the ~~following inputs:~~three ~~estimated~~months ~~volatility~~ended ofMarch ~~65%~~31, ~~risk-free~~2026 ~~rate~~that ~~of 3.67-3.61%, dividend yield of 0%, a probability of shareholder conversion approval~~would ofrequire ~~65%~~additional ~~and a discount for lack of marketability of 24%-32%~~disclosure.

~~For the~~NOTE ~~three~~14 ~~months~~– ~~ended~~STOCK-BASED September 30, 2025 and 2024, the Company recognized interest expense associated with the Convertible Notes of $319,909 and $0, respectively. For the nine months ended September 30, 2025 and 2024, the Company recognized interest expense associated with convertible debt of $319,909 and $0, respectively. As of September 30, 2025 and December 31, 2024, the Company had accrued interest associated with the Convertible notes of $319,909 and $0, respectively. COMPENSATION

~~Collateralized~~The Company accounts for stock-based compensation in accordance with ~~Loan~~ASC ~~Agreement~~718, Compensation – Stock Compensation and recognizes compensation cost for equity awards based on their grant-date fair value over the requisite service period.

OnStock September 8, 2025, the Company entered into a collateralized loan agreement with Cumberland DRW LLC (“Cumberland”). Under the agreement, the Company transferred 11,673 ETH as collateral in exchange for $50,000,000. The Company is obligated to repay $51,326,284 and receive back the 11,673 ETH on December 8, 2025. The Company is exposed to ETH price risk and counterparty credit risk. The agreement requires additional collateral if the price of ETH declines by 20% or more and includes early termination provisions.Options

~~The Company~~A ~~accounts~~summary ~~for the arrangement as a single collateralized loan in accordance with ASC 815, Derivatives and Hedging, and the AICPA Practice Aid, Accounting and Auditing~~ of ~~Digital Assets. The Company recorded a liability equal to $50,000,000 that will accrete interest of $1.3 million to maturity. As of September 30, 2025,~~ the ~~carrying~~option ~~amount of the liability was $50,000,000. The transferred ETH collateral~~activity is ~~derecognized,~~presented and a receivable is recognized for the right to receive ETH in the future; a realized gain of $2,574,607 was recognized upon derecognition, representing the difference between the carrying value of the ETH and the initial measurement of the receivable. As of September 30, 2025, the fair value of the ETH receivable was $50,485,550, which is included in Digital Assets on the Company’s consolidated balance sheet. For the nine months ended September 30, 2025, unrealized losses were $2,089,409, which is included in Digital asset gains and losses in the consolidated statement of operations.below:

	Three Months Ended March 31, 2026
	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Term (in Years)		Intrinsic Value
Outstanding, December 31, 2025		1,154,352	$	31.23		9.58	$	-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited		-		-		-		-
Outstanding, March 31, 2026		1,154,352	$	31.23		9.33	$	-

Exercisable, March 31, 2026		1,154,352	$	31.23		9.33	$	-

~~In accordance~~A ~~with~~summary ~~ASC~~of ~~326, Financial Instruments – Credit Losses, the Company recognizes an allowance for expected credit~~outstanding ~~losses~~and onexercisable ~~the~~stock ~~crypto~~options ~~asset loan receivable. The allowance~~ is ~~determined~~presented ~~based on management’s assessment of counterparty credit risk and reasonable and supportable forecasts.~~below:

Digital asset gains and losses, including both realized gains and losses recognized upon derecognition of digital assets (such as sales, conversions, or transfers in liquid staking arrangements) and unrealized gains and losses resulting from changes in fair value of digital assets held at period end, are presented in a single line item in the consolidated statements of operations.

March 31, 2026
Stock Options Outstanding				Stock Options Exercisable
				Weighted Average
Exercise Price		Number of Shares		Remaining Life in Years		Number of Shares
$	1,501.00		7		8.4		7
$	5,168.00		71		7.4		71
$	127.30		79		6.1		79
$	32.20		919,764		9.3		919,764
$	30.00		181,431		9.4		181,431
$	19.50		2,000		5.7		2,000
$	9.29		51,000		10.0		51,000
			1,154,352		9.33		1,154,352

~~NOTE 9~~Restricted –Stock ~~FAIR VALUE~~Units

~~The following~~A ~~table~~summary ~~presents~~of ~~information~~Restricted ~~about~~Stock ~~the~~Unit ~~Company’s~~(“RSU”) ~~liabilities measured at fair value on a recurring basis and the Company’s~~activity ~~estimated~~is ~~level~~presented ~~within the fair value hierarchy of those assets and liabilities as of September 30, 2025, and December 31, 2024~~below:

								Fair value at
	Three Months Ended March 31, 2026
	Level 1			Level 2		Level 3		September 30, 2025
	Number of Shares			Weighted- Average Grant Date Fair Value Per Share
Assets:
Nonvested at December 31, 2025		156,095		$	17.01
Cash and cash equivalents	$	53,309,509		$	-	$	-	$	53,309,509
Granted		-			-
Restricted cash equivalents		505,591,875			-		-		505,591,875
Vested		(156,095	)		17.01
Marketable securities		8,826,571			-		-		8,826,571
Forfeited and cancelled		-			-
Cryptocurrency holdings		180,933,721			-		-		180,933,721
Nonvested at March 31, 2026		-		$	-
Total assets	$	748,661,676		$	-	$	-	$	748,661,676
Liabilities:
Convertible debt	$	-		$	-	$	496,276,461	$	496,276,461
Embedded derivative liabilities		-			-		12,110,655		12,110,655
Total liabilities	$	-		$	-	$	508,387,116	$	508,387,116

							Fair value at
	Level 1		Level 2		Level 3		December 31, 2024
Assets:
Cash and cash equivalents	$	4,567,251	$	-	$	-	$	4,567,251
Total assets	$	4,567,251	$	-	$	-	$	4,567,251

During the three months ended March 31, 2026, the Company recognized $0.1 million of stock-based compensation, related to outstanding RSUs. At March 31, 2026, the Company had no unrecognized expenses related to outstanding RSUs.

~~NOTE~~Stock-based ~~10 – Earnings Per Share~~Compensation

The effects of stock-based ~~computation~~compensation on the Condensed Consolidated Statements of ~~net~~Operations ~~loss~~and ~~per~~Comprehensive ~~share~~Loss isand Condensed Consolidated Balance Sheets are as follows (in thousands):

	For the Three Months Ended						For the Nine Months Ended
	Three Months Ended March 31,
	September 30,						September 30,
	2026			2025
	2025			2024			2025			2024
Statements of Operations and Comprehensive Loss
Basic loss per common share
General and administrative	$	104		$	578
Net loss from continuing operations	$	(208,670,965	)	$	(532,389	)	$	(212,008,038	)	$	(1,658,746	)
Total stock-based compensation expense	$	104		$	578
Derivative (gain) loss associated with convertible debt		-			-			-			-
Interest expense associated with convertible debt		-			-			-			-
Net loss for dilutive calculation	$	(208,670,965	)	$	(532,389	)	$	(212,008,038	)	$	(1,658,746	)
Weighted average common shares outstanding		12,417,757			98,064			4,491,691			84,653
Dilutive effect of convertible debt		-			-			-			-
Dilutive effect of common stock warrants		-			-			-			-
Dilutive effect of common stock options		-			-			-			-
Weighted average shares outstanding for diluted net loss per share		12,417,757			98,064			4,491,691			84,653
Loss per common share, basic and diluted	$	(16.80	)	$	(5.43	)	$	(47.20	)	$	(19.59	)

For the three and nine months ended September 30, 2025, the weighted average common shares outstanding included 1,555,574 shares of common stock underlying pre-funded warrants which have a nominal exercise price.

~~The outstanding~~NOTE ~~securities~~15 ~~that~~– ~~were~~STOCKHOLDERS’ ~~excluded from the computation of diluted loss per share attributable to common stockholders for the~~(DEFICIT) ~~periods presented was because including them would have been antidilutive are as follows:~~ EQUITY

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Stock options		1,195,352		3,299		1,195,352		3,299
Warrants		7,022,523		398,327		7,022,523		398,327
Convertible debt, net of discount		15,741,019		-		15,741,019		-
Total		23,958,894		401,626		23,958,894		401,626

Shares Cancelled

~~NOTE~~During the three months ended March 31, 2026, the Company cancelled 1134,886 –shares ~~SERIES~~of BCommon ~~CONVERTIBLE~~Stock ~~PREFERRED~~to ~~STOCK~~satisfy tax withholding obligations related to equity awards.

On September 29, 2024, the Company entered into an Asset Purchase Agreement with Elray Resources, Inc. (“Elray”). Pursuant to the Asset Purchase Agreement, Elray agreed to sell us certain source code and intellectual property relating to a “back-end technology platform” which is a key component of creating an online blockchain casino (the “Purchased Assets”) in consideration for 1,000,000 shares of then newly designated Series B Convertible Preferred Stock (the “Preferred Stock”, and the shares of common stock issuable upon conversion thereof, the “Conversion Shares”) and warrants to purchase 300,000 shares of common stock of the Company (the “Purchase Warrants~~” and the shares of common stock issuable upon exercise thereof, the “Purchase Warrant Shares”).~~

OnA ~~September 30,~~summary ~~2024, in contemplation~~ of the ~~closing~~Common ofStock ~~the~~underlying ~~transactions contemplated by~~ the ~~Purchase~~warrants ~~Agreement,~~activity ~~and pursuant to the power provided to the Company by the Certificate of Incorporation of the Company, as amended, the Company’s Board of Directors~~ (~~the “Board”)~~including ~~approved~~both ~~the~~liability ~~adoption of,~~ and ~~filing~~equity ~~of,~~classified ainstruments) ~~Certificate~~is ofpresented ~~Designations~~below ~~of the Company. Establishing the Designations, Preferences, Limitations and Relative Rights of Its Series B Convertible Preferred Stock~~ (~~the~~in ~~“Series B Designation”)~~thousands, ~~which~~except ~~was~~number ~~filed with, and became effective with, the Secretary~~ of ~~State of Delaware on the same date. The Series B Designation designated 1,000,000~~ shares ~~of Series B Convertible Preferred Stock which were issued to Elray on September 30~~, ~~2024.~~exercise ~~The Series B Designation designated 1~~price,~~000,000 shares of~~ ~~Series B Convertible Preferred Stock, with a par value of $0.0001 per share~~ and ~~a stated value of $17.30 per share.~~years data):

The purchase of the Purchased Assets closed on September 30, 2024.

	Three Months Ended March 31, 2026
	Number of Shares of Common Stock Underlying Warrants			Weighted Average Exercise Price		Weighted Average Remaining Life in Years		Intrinsic Value
Outstanding, December 31, 2025		7,020,932		$	22.47		-	$	7,607
Issued		-			-		-		-
Exercised		-			-		-		-
Expired		(270	)		43,499.00		-		-
Outstanding, March 31, 2026		7,020,662		$	22.47		-	$	7,607

Exercisable, March 31, 2026		7,020,662		$	22.47		-		-

~~Based~~A onsummary ~~the terms~~ of ~~the Series~~outstanding ~~B Convertible Preferred Stock~~ and ~~the~~exercisable ~~Purchase~~Common ~~Agreement, and in accordance with FASB ASC 480-10, at issuance, the Series B Convertible Preferred~~ Stock ~~was~~underlying ~~accounted for as a liability due to~~ the ~~variable number of shares issuable under the agreement pursuant to the conversion~~ ~~terms,~~warrants with an initial value of $2,772,695. The Company estimated the fair value of the Series B Convertible Preferred Stock based on the market value of the underlying common shares into which the Series B Convertible Preferred stock is ~~convertible~~presented into at the transaction date, and an estimated fair value of the liquidation preference using option pricing models for scenarios of the liquidation preference being in effect or conversion of the Series B Convertible Preferred Stock by the holder. The Company recognized a gain/loss on the change in fair value of the Series B Convertible Preferred Stock of $1,577,305 during the year ended December 31, 2024. On December 27, 2024 (the “Stockholder Approval Date”), the Conversion Rate (defined below~~) was fixed at 0.1318 or 131,800 total shares of common stock. As a result, the fair value of the Series B Convertible Preferred Stock was reclassified within shareholders’ equity.~~:

The Purchase Warrants have an exercise price of $16.80 per share, the closing stock price of the Company’s common stock on the last trading day prior to the parties’ entry into the Purchase Agreement (as adjusted for the Reverse Stock Split), and a term of seven years (through September 30, 2031). The Purchase Warrants also provide for cashless exercise rights. No shares of common stock may be issued upon exercise of the Purchase Warrants until or unless the Company has received approval from its stockholders for the issuance of such shares of common stock upon exercise of the Purchase Warrants, which was received in December 2024.

March 31, 2026
Common Stock Underlying Warrants Outstanding				Common Stock Underlying Warrants Exercisable
Exercise Price		Number of Shares		Weighted Average Remaining Life in Years		Number of Shares
$	34.45		907,115		N/A		907,115
$	32.30		405		N/A		405
$	27.75		4,557,223		N/A		4,557,223
$	26.50		270		0.4		270
$	22.80		75		4.25		75
$	0.01		1,555,574		N/A		1,555,574
			7,020,662		0.0		7,020,662

~~On March~~During ~~27,~~the ~~2025,~~three ~~Elray~~months ~~Resources~~ended March 31, ~~Inc.~~2026, the ~~sole~~Company ~~holder~~sold 1,335,766 shares of ~~the~~Common ~~Series~~Stock Bunder ~~Convertible~~the ~~Preferred~~Second ~~Stock~~Amended ofand ~~the~~Restated ~~Company~~Sales ~~converted~~Agreement ~~all 1,000,000 outstanding shares~~(the of“Second ~~Series~~Amended Band ~~Convertible~~Restated ~~Preferred~~Sales ~~Stock~~Agreement”) for ofnet ~~the~~proceeds ~~Company~~after ~~into 131,800 shares~~fees of ~~common~~approximately ~~stock (0~~$5.~~1318 shares~~5 ofmillion ~~common stock~~at ~~for~~an ~~each~~average ~~share~~price of ~~Series~~$3.87 Bper ~~Convertible~~share. ~~Preferred~~The ~~Stock~~Company ~~converted),~~also incancelled ~~accordance~~34,886 ~~with the terms~~ shares of ~~such~~Common ~~preferred~~Stock ~~stock~~related ~~and~~to ~~the optional~~tax ~~conversion~~withholdings ~~right~~on ~~set~~Common ~~forth~~Stock ~~therein~~awards.

OnStock ~~July~~Repurchase ~~27, 2025, the Purchase Warrants were exercised in full. See Note 13.~~Program

~~The below~~During isthe athree ~~summary~~months ofended ~~the~~March ~~rights~~31, ~~and~~2026, ~~preferences~~no shares of Common Stock were repurchased by the ~~Series~~Company Bunder ~~Convertible~~its ~~Preferred~~previously announced stock repurchase program (the “Stock: Repurchase Program”).

Voting Rights. Until such time, if ever, as the shareholders of the Company approved the issuance of shares of common stock upon the conversion of the Series B Convertible Preferred Stock (“Stockholder Approval”), the Series B Convertible Preferred Stock only had rights to vote on amendments to the Series B Designation (which are subject to the approval of a simple majority of the holders of Series B Convertible Preferred Stock), and the Protective Provisions, discussed below.

~~The Series~~NOTE B16 ~~Convertible~~– ~~Preferred~~RELATED Stock requires the consent of the holders of at least a majority of the issued and outstanding shares of Series B Convertible Preferred Stock to (a) increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series B Convertible Preferred Stock of the Company; (b) adopt or authorize any new designation of any Preferred Stock or amend the Certificate of Incorporation of the Company in a manner which (i) provides any holder of common stock or preferred stock any rights upon a liquidation of the Company which are prior and superior to those of the holders of the Series B Convertible Preferred Stock; or (ii) adversely affect the rights, preferences and privileges of the Series B Convertible Preferred Stock; (c) effect an exchange, or create a right of exchange, cancel, or create a right to cancel, of all or any part of the shares of another class of shares into shares of Series B Convertible Preferred Stock; (d) alter or change the rights, preferences or privileges of the shares of Series B Convertible Preferred Stock so as to affect adversely the shares of such series; and (e) issue any shares of Series A Preferred Stock or Series B Convertible Preferred Stock, other than the Preferred Stock issued pursuant to the Purchase Agreement (collectively, the “Protective Provisions”).PARTIES

~~After Stockholder~~The ~~Approval,~~Company ~~which~~enters ~~has~~into ~~occurred to date, in addition to the above voting rights, each holder of outstanding shares of Series~~transactions ~~B Convertible Preferred Stock shall be entitled to cast the number of votes in connection~~ with ~~the~~related ~~Series~~parties, Bincluding ~~Convertible~~its Preferred Stock shares held by such holder equal to the number of whole shares of common stock into which the shares of Series B Convertible Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Fractional votes shall notofficers, ~~however~~directors, ~~be permitted~~ and ~~any~~entities ~~fractional~~affiliated voting rights available on an as-converted to common stock basis (after aggregating all fractional shares into which shares of Series B Convertible Preferred Stock held by each holder could be converted) shall be rounded down to the nearest whole share. Except as provided by law or by the other provisions of the Certificate of Incorporation or the Series B Designation, holders of Series B Convertible Preferred Stock shall vote together with ~~the~~such ~~holders of common stock as a single class and there shall be no series voting~~individuals.

~~Dividend Rights.~~Accounts ~~None,~~Payable except that if the Company declares a dividend or makes a distribution of cash (or any other distribution treated as a dividend under Section 301 of the Internal Revenue Code) on its common stock, each holder of Shares of Series B Convertible Preferred Stock is entitled to participate in such dividend or distribution in an amount equal to the largest number of whole shares of common stock into which all shares of Series B Convertible Preferred Stock held of record by such holder are convertible as of the record date for such dividend or distribution or, if there is no specified record date, as of the date of such dividend or distribution. Notwithstanding the foregoing, holders shall have no right of participation in connection with dividends or distributions made to the common stock stockholders consisting solely of shares of common stock.

~~Liquidation Preference.~~As ~~In the event~~ of ~~any~~March ~~liquidation~~31, ~~dissolution~~2026 ~~or winding up of the Company, either voluntary or involuntary (each a “Liquidation Event”), the holders of Series B Convertible Preferred Stock are entitled to receive prior~~ and ~~in preference~~ toDecember any distribution of any of the assets of the Company to the holders of the common stock or securities junior to the Series B Convertible Preferred Stock (other than the common stock) by reason of their ownership of such stock31, ~~but after any required distribution to any holders of Series B Convertible Preferred Stock~~2025, anaccounts amount in cash per share of Series B Convertible Preferred Stock for each share of Series B Convertible Preferred Stock held by them equal to the greater of (x) one times the Stated Value; and (y) the total amount of consideration that would have been payable ~~on such share upon a Liquidation Event, had such share of Series B Convertible Preferred Stock been converted into common stock, immediately prior~~ to ~~such~~related ~~Liquidation~~parties ~~Event~~were ~~(as applicable, the “Liquidation Preference”)~~$0. ~~The~~02 ~~“Stated~~million ~~Value”~~and is $170.~~30 per~~02 ~~share~~million ofrespectively. ~~Series~~These Bprimarily ~~Convertible~~relate ~~Preferred~~to ~~Stock, for a total aggregate Liquidation~~amounts ~~Preference~~due ofto ~~$17,300,000 when~~certain ~~aggregating~~officers ~~all 1,000,000 shares~~and ofdirectors ~~Series~~for Bdeferred ~~Convertible~~compensation ~~Preferred~~and ~~Stock~~reimbursable ~~originally issued~~expenses.

~~Conversion Rights.~~Zippy None prior to Stockholder Approval. After Stockholder Approval, at the option of the holder(s) thereof, each share of Series B Convertible Preferred Stock is convertible into a number of shares of common stock of the Company as equals the Conversion Rate. The “Conversion Rate” was initially 0.0685 (or 68,500 shares in aggregate, which would represent 40% of the Company’s then outstanding shares of common stock), as equitably adjusted, as applicable for stock splits and recapitalizations; provided that if at any time after the original issuance date of the Series B Convertible Preferred Stock and prior to the Stockholder Approval Date, the Company shall actually issue any additional shares of common stock of the Company (each a “Dilutive Issuance”), the Conversion Rate shall be increased to a value equal to (x)(i) the total outstanding shares of common stock (“Total Outstanding Shares”) on the date immediately following such Dilutive Issuance, divided by (ii) 60%, minus (iii) the Total Outstanding Shares on the date immediately following such Dilutive Issuance, divided by (y) 1,000,000, rounded to the thousands place, as equitably adjusted, as applicable for stock splits and recapitalizations (each a “Dilutive Adjustment”); provided that in no event will the Conversion Rate be greater than ten. The effect of any change in the Conversion Rate shall not be retroactive and shall only apply for conversions of Series B Convertible Preferred Stock following the date of any Dilutive Adjustment. The Conversion Rate is designed to result in the holders of the Series B Convertible Preferred Stock receiving 40% of the then outstanding shares of common stock upon conversion of the Series B Convertible Preferred Stock, subject to a maximum of 10 million shares of common stock, and further subject to such conversion ratio being fixed upon Stockholder Approval. The Conversion Rate of the Series B Convertible Preferred Stock was fixed at 0.1318 or 131,800 total shares of common stock on December 27, 2024, the Stockholder Approval Date.Transactions

~~Based on~~Zippy ~~the~~is ~~terms~~a greater than 10% stockholder of the ~~Series~~Company Band ~~Convertible~~as ~~Preferred~~such ~~Stock~~it ~~and~~is ~~the~~a ~~Purchase~~related ~~Agreement,~~party. ~~and~~During inthe ~~accordance~~three ~~with~~months ~~FASB~~ended ~~ASC~~March ~~480-10~~31, ~~the~~2026 ~~Series B~~and ~~Convertible~~2025, ~~Preferred~~the ~~Stock~~Company, ~~was~~through ETHZilla ~~accounted~~Modular ~~for~~Mortgage, aspurchased a$9.8 ~~liability~~million atand ~~its~~$0, ~~issuance~~respectively, ~~date~~of ~~due~~Manufactured toHome ~~the~~Loans ~~variable~~from ~~number~~Zippy, ofpaid ~~shares~~$15.0 ~~issuable~~thousand ~~under~~and ~~the~~$0, ~~agreement~~respectively ~~pursuant~~of toservicing ~~the~~fees ~~conversion~~to ~~terms~~Zippy, ~~with~~and anreceived ~~initial~~$149.2 ~~fair~~thousand ~~value~~and of $20,~~772,695.~~ Onrespectively ~~the~~of ~~Stockholder~~remittance ~~Approval~~from ~~Date,~~Zippy. ~~the~~The ~~Conversion~~Company had ~~Rate~~$59.9 ~~was~~thousand ~~fixed~~and at $0~~.1318 or 131,800 total~~ ~~shares~~ of ~~common~~outstanding ~~stock.~~accounts Asreceivable aowed ~~result,~~to ~~the~~Zippy ~~estimated~~as ~~fair value~~ of ~~the~~March ~~Series B~~31, ~~Convertible~~2026 ~~Preferred~~and ~~Stock~~December of31, $42025,~~350,000 was~~ ~~reclassified within shareholders’ equity~~respectively. ~~During~~Additional information regarding the ~~three~~Manufactured ~~months~~Home ~~ended~~Loan ~~March 31,~~purchases ~~2025,~~is ~~the~~described ~~Series~~in BNote ~~Convertible~~2 ~~Preferred~~– ~~Stock~~Summary ~~was~~of ~~fully~~Significant ~~converted~~Accounting ~~into 131,800 shares~~Policies - ofZippy ~~common~~Manufactured ~~stock~~Home Loans.

NOTE 17 – DISCONTINUED OPERATIONS

During the prior period presented, the Company executed actions to abandon its pharmaceutical research operations and the Gaming Technology Platform which met the criteria to be classified as discontinued operations in accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations.

Financial Information of Discontinued Operations

Summarized balance sheet information of discontinued operations is below (in thousands):

	March 31, 2026		December 31, 2025

Cash and cash equivalents	$	195	$	12
Prepaid expenses and other current assets		61		10
Current assets of discontinued operations		256		22
Intangible assets¹		-		-
Total assets of discontinued operations	$	256	$	22

Accounts payable	$	26	$	8
Accounts payable – related parties		162		1,185
Accrued expenses		35		32
Loan payable –current portion		-		7
Current liabilities of discontinued operations		223		1,232
Loan payable –noncurrent portion		-		-
Total liabilities of discontinued operations	$	223	$	1,232

(1)

Consists of Gaming Technology Platform intangible assets pursuant to the September 2024 Asset Purchase Agreement with Elray, which were impaired in full during the year ended December 31, 2025.

The statements of operations of discontinued operations are summarized below (in thousands):

	Three Months Ended March 31,
	2026			2025
Research and development	$	-		$	(241	)
Research and development - related parties		-			(135	)
General and administrative		(320	)		(29	)
Loss from operations		(320	)		(405	)
Other income		22			-
Interest expense		-			(3	)
Gain on settlement of liabilities		1,568			-
Net income (loss) from discontinued operations	$	1,270		$	(408	)

NOTE 12 -18 ~~COMMITMENTS~~– ~~AND~~SUBSEQUENT ~~CONTINGENCIES~~EVENTS

~~Litigation~~The Company evaluated subsequent ~~and~~events ~~Other~~that ~~Loss~~occurred ~~Contingencies~~after the balance sheet date through the date the financial statements were issued.

~~The Company~~Repurchases ~~records liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources when it is probable that a liability has been incurred and the amount~~ of ~~the~~Common ~~loss can be reasonably estimated. The Company has no liabilities recorded for loss contingencies as of September 30, 2025.~~ Stock

~~The~~Subsequent ~~Company~~to ~~through~~March ~~its~~31, ~~United~~2026, ~~Kingdom~~the ~~subsidiary~~Company isrepurchased ~~registered~~5,753,954 ~~for~~shares ~~Value~~of ~~Added~~common ~~Tax~~stock ~~(VAT) in the United Kingdom~~ under the ~~accrual~~Stock ~~accounting scheme.~~Repurchase ~~Under~~Program ~~this~~for ~~scheme~~$24, ~~VAT output tax becomes due when invoices are issued~~894,181 ~~irrespective~~ of cash ~~settlement~~.

~~As of~~Performance ~~the~~Stock ~~reporting~~Unit ~~date,~~Award management has identified that the settlement of certain existing liabilities could give rise to an obligation to remit additional VAT to HM Revenue & Customs (HMRC) in respect of VAT already invoiced or collected.Agreement

~~The amount~~On April 2, 2026, the Board of ~~any~~Directors ~~such~~of ~~payment~~the ~~cannot~~Company beupon ~~reliably~~the ~~estimated~~recommendation of atthe ~~this~~Compensation ~~time~~Committee of the Board (the “Compensation Committee”), approved (a) a one-time initial equity award and a pro-rated 2025 annual award to McAndrew Rudisill, the ~~likelihood~~Chief ofExecutive ~~settlement~~Officer ~~remains~~and ~~uncertain.~~Chairman ~~Accordingly~~of the Company, no ~~provision~~and ~~has~~(b) ~~been~~an ~~recognized~~equity inaward to John Saunders, the ~~financial~~Chief ~~statements~~Financial Officer of the Company. ~~Management~~Each ~~will~~award ~~continue~~consists 60% of performance stock units (“PSUs”) and 40% of RSUs and was granted on April 2, 2026 pursuant to ~~monitor~~the ~~this~~Company’s ~~situation~~2025 Omnibus Incentive Plan and ~~will~~a ~~make~~Performance ~~further~~Stock Unit ~~disclosures~~Award orAgreement ~~recognize~~(for the PSUs) and a ~~liability~~Restricted ~~when~~Stock Unit Award Agreement (for the ~~settlement~~RSUs). ~~becomes~~It ~~probable~~is ~~and~~anticipated ~~can~~that Mr. Rudisill will be granted ~~reasonably~~a ~~estimated~~similar annual equity award on the date of each annual meeting of the Company’s stockholders beginning with the 2026 annual meeting, subject to review and approval by the Compensation Committee.

~~Legal~~For each award, the RSUs ~~Matters~~will vest in one-third installments on each of the first, second and third anniversaries of August 1, 2025 (the start date for both Mr. Rudisill and Mr. Saunders), subject to continued employment through the applicable anniversary, and the PSUs will vest based on the achievement of Company share price hurdles within five years after the grant date, subject to continued employment through the date that the applicable hurdle is achieved (or, if later, the date that the applicable minimum vesting period described below is met). One-third of the PSUs will vest at a share price hurdle of $5.00, an additional one-third of the PSUs will vest at a share price hurdle of $7.50, and the final one-third of the PSUs will vest at a share price hurdle of $10.00. Each share price hurdle will be achieved if the closing price of a share equals or exceeds the applicable hurdle for at least 30 trading days within any consecutive 60 calendar day period. Any PSUs for which the applicable share price hurdle is not met within five years after the grant date will be forfeited. Each tranche of the PSUs is also subject to a minimum vesting period that applies regardless of when the applicable share price hurdle is met, such that, except as described below, the $5.00 tranche may not vest earlier than the first anniversary of the grant date, the $7.50 tranche may not vest earlier than the second anniversary of the grant date, and the $10.00 tranche may not vest earlier than the third anniversary of the grant date.

~~Declaratory Relief~~Second ~~Action~~Amended ~~Against~~and ~~the~~Restated ~~Company~~Sales ~~by AmTrust International~~Agreement

~~On June~~As 29previously reported, ~~2022~~on August 13, ~~AmTrust~~2025, ~~International~~the ~~Underwriters~~Company ~~DAC~~entered into a Sales Agreement (the “~~AmTrust~~Initial Sales Agreement”), ~~which~~with ~~was~~Clear ~~the~~Street ~~premerger~~LLC ~~directors’~~(“Clear ~~and~~Street”) ~~officers’~~to sell ~~insurance~~from ~~policy~~time ~~underwriter~~to ~~for~~time ~~KBL~~through Clear Street, ~~filed~~acting aas ~~declaratory~~sales ~~relief~~agent ~~action against~~for the Company in’s “at the U.market offering” program, shares of the Company’s Common Stock pursuant to the Company’s registration statement on Form S-3 (File No. ~~District~~333-288194) ~~Court~~(the ~~for~~“June Registration Statement”) and the ~~Northern~~prospectus ~~District~~supplement ofinitially ~~California~~filed on August 13, 2025 (the “~~Declaratory~~Initial ~~Relief~~Prospectus Supplement”). ~~Action~~On August 22, 2025, the Company entered into an Amended and Restated Sales Agreement (the “Amended Sales Agreement”) ~~seeking~~with aClear ~~declaration~~Street ~~that~~to, ~~AmTrust~~among isother ~~not~~things, ~~obligated~~change the registration statement and prospectus supplement pursuant to which sales of the Common Stock were to ~~reimburse~~be made to the ~~Company~~registration ~~for~~statement ~~fees~~on ~~advanced~~Form byS-3ASR (File No. 333-289811) (the “WKSI Registration Statement”) and the prospectus supplement initially filed on August 22, 2025 (the “WKSI Prospectus Supplement”). On November 14, 2025, the Company toentered Drinto an Amended and Restated Sales Agreement (the “Second Amended Sales Agreement”) with Clear Street and TCBI Securities, Inc., ~~Krauss~~doing business as Texas Capital Securities (“Texas Capital Securities”), and ~~George~~together ~~Hornig~~with ~~under~~Clear Street, the ~~directors’~~“Agents”), which, among other things, amended and ~~officers’~~restated the Amended Sales Agreement ~~insurance~~to ~~policy~~include Texas Capital Securities as a sales agent.

On~~, and~~ ~~effective on,~~ April 68, ~~2025 (the “Effective Date”)~~2026, the Company entered into athe ~~Confidential~~Second ~~Settlement~~Amended and Restated Sales Agreement with the Agents to cease all sales of Common Stock pursuant to the WKSI Registration Statement and WKSI Prospectus Supplement and ~~Release~~to (transition the ~~“AmTrust~~program ~~Settlement~~back ~~Agreement”)~~to ~~with~~the ~~AmTrust,~~June Registration Statement and ~~its~~Initial ~~wholly-owned~~Prospectus ~~subsidiary,~~Supplement. ~~AmTrust~~From ~~Financial Services,~~and ~~Inc.~~after ~~(“AFSI”).~~the ~~Pursuant~~date toof the Second ~~AmTrust~~Amended ~~Settlement~~and Restated Sales Agreement, the Company ~~and~~will ~~AmTrust~~not ~~agreed~~sell toany ~~resolve~~Common Stock pursuant to the WKSI Registration Statement and ~~ongoing~~WKSI ~~litigation~~Prospectus Supplement, and ~~disputes~~any ~~discussed~~future ~~above,~~sales ~~relating~~will be made pursuant to the ~~Company’s~~June ~~pre-merger~~Registration ~~directors’~~Statement and ~~officers’~~Initial ~~insurance~~Prospectus Supplement. ~~policy~~There (were no other material changes to the ~~“Coverage~~terms ~~Action”)~~of the Second Amended Sales Agreement as a result of such amendments.

Pursuant to the terms of the AmTrust Settlement Agreement, the Company agreed to (i) pay AmTrust a cash payment of $250,000 (the “Settlement Sum”) within 20 days of the Effective Date, which has been paid to date, and (ii) issue AFSI 50,971 shares of the Company’s common stock (the “AmTrust Settlement Shares”), within three business days of the Effective Date, which have been issued to date. The AmTrust Settlement Shares had a fair value of $441,406 (the “Shares Value”), based on the closing price of the Company’s common stock on the Effective Date, and are subject to customary anti-dilution protections, including adjustments for stock splits, combinations, and stock dividends. The Company recognized a loss on settlement of $691,406 included within general and administrative expenses on the consolidated statements of operations for the nine months ended September 30, 2025 relating to the AmTrust Settlement Agreement.

Within ten days after delivery of both the Settlement Sum and the AmTrust Settlement Shares, the parties agreed to file a joint stipulation of dismissal with prejudice of the Coverage Action, which has been filed to date, and was granted on April 30, 2025.

In connection with the settlement, the Company and AmTrust provided each other broad mutual releases of all claims, known and unknown, arising out of or relating to, among other things, the Coverage Action, certain claims relating to an SEC investigation of certain of the Company’s pre-merger officers, including Dr. Krauss, a lawsuit filed by the Company against Dr. Krauss, certain cross claims made by the Company against AmTrust, and related insurance claims and matters, including any claims for bad faith, breach of the implied covenant of good faith and fair dealing, or alleged unfair insurance practices. These releases extend to affiliates, officers, directors, employees, agents, and other related parties of both entities. The AmTrust Settlement Agreement expressly provides that it does not release the parties from obligations arising under the AmTrust Settlement Agreement itself.

~~In connection~~Item ~~with~~2. ~~the~~Management’s ~~issuance~~Discussion ~~of the AmTrust Settlement Shares~~ and ~~pursuant~~Analysis to the AmTrust Settlement Agreement, the Company agreed to provide AFSI with certain registration rights. Specifically, the Company was obligated to use commercially reasonable efforts to file a registration statement on Form S-1 (or Form S-3, if available) with the SEC within 45 days of ~~the~~Financial ~~Effective~~Condition ~~Date (i.e., prior to May 21, 2025) to register the resale of the AmTrust Settlement Shares (the “Resale Registration Statement”)~~ and ~~use~~Results ~~commercially reasonable efforts to cause the Resale Registration Statement to be declared effective within 60 days following the Effective Date, or, in the event~~ of SEC notice that the Registration Statement will not be reviewed, by the third business day thereafter, which Resale Registration Statement was timely filed and has become effective to date, within the time period set forth in the AmTrust Settlement Agreement.Operations

~~The Company~~Business is required to keep the Resale Registration Statement continuously effective until such time as AFSI no longer holds any AmTrust Settlement Shares, and to bear all related costs and expenses in connection with such registration, excluding AFSI’s legal fees. Additionally, the Company must provide legal opinion coverage at its expense, if necessary, to enable AFSI to rely on Rule 144 resale exemptions after six months.Overview

~~If the~~Forum ~~prospectus included in the Resale Registration Statement can no longer be relied upon~~Markets, ~~or if the Company fails to maintain the effectiveness~~Incorporated ofis ~~the Resale Registration Statement (each,~~ a ~~“Registration~~financial ~~Statement~~technology ~~Failure~~company ~~Event”),~~focused ~~the~~on ~~Company~~developing isinfrastructure ~~required~~that ~~to pay~~supports ~~liquidated damages equal to 3.0% of~~ the ~~Shares~~origination, ~~Value~~financing, ~~for each such failure~~ and ~~for~~distribution ~~each~~of ~~month such failure continues, subject~~RWAs tothrough ablockchain-enabled ~~cap~~capital ~~of 33~~markets.~~0% of the Shares Value.~~

~~Elray~~The Company underwent a significant strategic shift in 2025, including a rebranding and ~~Luxor~~transition ~~Settlement~~away ~~Agreement~~from its legacy biotechnology and gaming operations toward a digital asset-focused business model centered on treasury, investment, and tokenization activities. As a result, the Company’s current operations, financial profile, and key performance drivers differ materially from prior periods, and several areas of this MD&A represent first-quarter disclosures under the new strategy.

~~On April~~The ~~28, 2025, the~~ Company ~~entered~~operates ~~into~~as a ~~Settlement and Mutual Release Agreement (the “Elray Settlement Agreement”)~~ ~~with~~single ~~Elray,~~reportable ~~and~~operating ~~Luxor~~segment ~~Capital,~~under ~~LLC~~ASC ~~(“Luxor”)~~280. ~~Elray~~The ~~and~~Company’s ~~Luxor~~operations are ~~both~~focused ~~controlled~~on byblockchain ~~Anthony~~infrastructure ~~Brian~~and ~~Goodman~~operations, ~~the~~which ~~father~~are primarily ofrelated ~~the~~to ~~Company’s~~holding, ~~then director~~deploying, ~~Jay~~and ~~Goodman.~~managing ~~The~~digital ~~Elray~~assets ~~Settlement Agreement~~ and ~~related~~tokenization ~~arrangements~~activities. ~~discussed~~These ~~below~~operations ~~resolved~~represent ~~certain~~the Company’s ~~disputes~~primary ~~which~~revenue-generating ~~had~~activities, ~~arisen~~and ~~between~~all assets of the ~~parties~~Company’s ~~relating~~continuing tooperations ~~among~~are ~~other~~related ~~things,~~to ~~certain~~this ~~potential~~single ~~acquisitions~~operating segment.

~~Pursuant to~~The ~~the Elray Settlement Agreement: (a) the~~ Company ~~agreed~~has toundergone ~~acquire~~several ~~all 131,800 of~~significant ~~the~~transformations ~~shares of~~ over its ~~common~~operating ~~stock~~history. ~~(the~~Originally ~~“Elray Shares”)~~formed ~~held~~in by2016 ~~Elray,~~as ~~which~~a ~~were~~clinical-stage ~~issued~~biotechnology incompany ~~March~~operating ~~2025,~~under ~~upon~~ the ~~conversion~~name ~~of 1,000,000 shares~~180 ofLife ~~Series B Convertible~~Sciences ~~Preferred Stock which Elray then held (representing 23~~Corp.1%, of the Company’s ~~then~~previously ~~outstanding~~focused ~~shares~~on ofthe ~~common~~development ~~stock),~~of intherapeutics ~~exchange~~ for anunmet ~~aggregate~~medical ~~settlement~~needs. ~~payment~~In ofsubsequent ~~$1 million~~periods, ~~consisting of (i) $350,000 payable to Elray within five business days of~~ the Elray Settlement Agreement (the “Elray Payment”), which has been paid to date, and (ii) $650,000 payable to Luxor (“Luxor Payment”). Amounts due to Luxor will be payable by way of 20% of the proceeds raised by the Company ~~in future capital raises until paid in full, but shall be paid no later than April 28, 2026 which payments have been paid to~~expanded ~~date);~~into ~~and~~software-enabled ~~(b)~~gaming ~~the Company~~initiatives, ~~Elray,~~including ~~and Luxor exchanged mutual general releases from claims arising from prior negotiations and agreements, with limited exceptions for obligations under~~ the ~~Elray~~acquisition ~~Settlement~~of ~~Agreement~~certain ~~and~~blockchain-based ~~confidentiality~~gaming ~~requirements~~technology.

In ~~connection~~August ~~with~~2025, the ~~settlement,~~Company ~~Elray~~rebranded ~~agreed~~as toETHZilla ~~deliver five stock powers authorizing cancellation of the Elray Shares~~Corporation, toreflecting bean ~~held~~initial inshift ~~escrow~~away ~~and~~from ~~released~~its ~~proportionally at~~legacy ~~the~~operations ~~option~~during ofwhich the Company, ascompleted ~~settlement~~a ~~payments~~broader strategic ~~are made~~transition, ~~with~~exiting ~~all~~its ~~remaining~~legacy ~~shares~~biotechnology ~~canceled~~and ~~once~~gaming ~~the~~activities ~~full amounts of the Elray Payment~~ and ~~Luxor~~refocusing ~~Payment~~its ~~are~~business ~~made.~~on ~~The~~digital ~~stock~~asset ~~powers~~treasury ~~are to be released in tranches~~management, ~~with the stock power relating to the initial 46,130 Elray~~ ~~Shares~~investment ~~eligible to be released from escrow upon payment of the Elray Payment~~activities, and ~~the~~tokenization-related ~~remaining~~strategies. ~~four~~The ~~stock powers, each providing for the transfer of 21,418 shares, to be released upon the payment by the~~ Company’s totreasury ~~Luxor~~activities ofare ~~each~~primarily ~~additional~~centered ~~$162,500.~~on ~~During~~acquiring, ~~the three months ended September 30~~holding, ~~2025~~and ~~the~~deploying ~~Elray~~ETH ~~Shares~~to ~~were~~generate ~~returned~~returns tothrough ~~the~~staking ~~Company~~ and ~~cancelled~~other yield-generating arrangements.

~~Luxor~~In early 2026, the Company ~~also~~completed ~~agreed~~a further rebrand to ~~indemnify~~Forum Markets, Incorporated, aligning its name with its evolving strategy and business model. Under its current strategy, the Company ~~against~~focuses ~~any~~on ~~claims~~digital ~~brought~~asset byactivities aand ~~third~~the ~~party~~development of tokenization-related toinvestments. ~~certain~~The ~~prior~~Company is ~~negotiations~~pursuing tokenization initiatives involving anincome-generating ~~online~~assets, which are expected to generate returns through asset yields, ~~casino~~fees, and investment income over time. Revenues, expenses, and cash flows are influenced by digital asset ~~acquisition~~market conditions, capital allocation decisions, and the timing of investment and tokenization activities.

~~The Elray~~As ~~Settlement~~a ~~Agreement~~result ~~included~~of ~~customary~~this ~~representations~~strategic transformation, ~~and~~the ~~warranties~~Company’s ofcurrent ~~the~~operations, ~~parties~~revenue drivers, expense profile, and ~~confidentiality~~risk ~~requirements. The Elray~~exposures ~~Settlement~~differ ~~Agreement~~materially ~~also~~from ~~provides~~prior periods, aand ~~restriction~~financial onresults ~~Elray’s~~for ~~sale~~historical orperiods ~~transfer~~may ofnot ~~any~~be comparable to those of the ~~Elray~~current ~~Shares~~period.

The Elray Settlement Agreement also required Elray to enter into a Voting Agreement with the Company. Pursuant to the Voting Agreement, which was entered into on April 28, 2025, by Elray, the Company, and Blair Jordan, the Company’s then Chief Executive Officer, solely for the benefit of the Company, Elray agreed to vote any Elray Shares which it continued to hold, as recommended by the Board of Directors of the Company, at any meeting of stockholders or via any written consent of stockholders, which may occur prior to April 28, 2026. In order to enforce the terms of the Voting Agreement, and solely for the benefit of the Company, Elray provided Mr. Jordan (or his assigns) an irrevocable voting proxy to vote the Elray Shares pursuant to the guidelines set forth above at any meeting of stockholders or via any written consent of stockholders.23

23 Key Factors Affecting Performance

The ~~Elray~~ ~~Settlement Agreement and related transactions were approved by the Board of Directors of the~~ Company~~, as well as the Company~~’s ~~Audit~~ ~~Committee~~operating results, ~~with~~financial ~~Mr.~~condition, ~~Jay~~and ~~Goodman~~cash (aflows ~~then~~are ~~member~~influenced ofby ~~the~~a ~~Board~~number of ~~Directors)~~trends ~~abstaining.~~and ~~The~~uncertainties ~~Elray~~related ~~Settlement Agreement was determined~~ to beits adigital ~~forward purchase contract, and was recognized as a liability under ASC 480. The settlement payment was at a price per share below~~asset–focused ~~fair~~business ~~market value~~model, ~~and~~several ~~therefore~~of nowhich ~~loss~~are ~~was~~expected ~~recognized.~~to ~~The~~continue ~~Company~~to ~~recognized~~affect ~~the~~performance ~~$1,000,000 repurchase amount~~ in ~~treasury~~future ~~stock~~periods.

~~Other Commitments~~Digital Asset Price Volatility

~~Woody~~The Company’s results are sensitive to fluctuations in the market ~~Separation~~price ~~Agreement~~of Ether (ETH), the cryptocurrency that powers the ETH blockchain, and other digital assets held or deployed in its operations. Changes in digital asset prices may materially affect reported earnings, the fair value of assets, and the timing and availability of liquidity, and may contribute to increased volatility in results of operations.

~~On May~~Staking 7,Yield 2024, Dr. James N. Woody resigned as Chief Executive Officer (Principal Executive Officer), and as a member of the Board of Directors, of the Company effective the same date, and entered into a Separation and Release Agreement with the Company (the “Woody Separation Agreement”).Variability

~~On February~~Revenue 5,generated ~~2025,~~from ~~the Company entered into a First Amendment to Separation and Release Agreement with Dr. Woody (the “First~~staking ~~Amendment”).~~activities ~~Pursuant~~is tosubject ~~the First Amendment, Dr. Woody agreed~~ to ~~amend~~variability ~~the~~based ~~terms~~on ofnetwork ~~the Woody Separation Agreement~~conditions, toprotocol ~~terminate the prior requirement of the Company to pay the Future Contingent Payment. Instead~~economics, ~~pursuant~~validator ~~to the First Amendment~~performance, ~~Dr.~~and ~~Woody~~other ~~agreed to~~factors ~~accept $60,000 in shares of restricted common stock of the Company (or 4,317 shares of common stock, based on the closing~~outside ~~sales price of~~ the Company’s ~~common~~control. ~~stock~~Changes onin ~~February~~staking 5,reward ~~2025~~rates, ~~which~~protocol ~~closing price was $13.90 per share~~rules, or the ~~“Separation Shares”),~~performance ~~in lieu~~ of ~~the~~third-party ~~Future~~service ~~Contingent~~providers ~~Payment which obligation was terminated. The Separation Shares include piggyback~~may ~~registration~~affect ~~rights~~revenue ~~for~~levels aand ~~resale~~operating ~~registration statement relative to the Separation Shares for a period of six (6) months~~results.

~~The~~Growth First Amendment also required Dr. Woody to enter into a Voting Agreement with the Company. Pursuant to the Voting Agreement, which was entered into on February 5, 2025, by Dr. Woody, the Company, and Blair Jordan, the Company’s Chief Executive Officer, solely for the benefit of ~~the~~Tokenization Company, Dr. Woody agreed to vote the Separation Shares as recommended by the Board of Directors of the Company, at any meeting of stockholders or via any written consent of stockholders, which may occur prior to February 5, 2026; the date after August 5, 2025, that Dr. Woody has sold all of the Separation Shares; or the date that the Company terminates the Voting Agreement. In order to enforce the terms of the Voting Agreement, and solely for the benefit of the Company, Dr. Woody provided Mr. Jordan (or his assigns) an irrevocable voting proxy to vote the Separation Shares pursuant to the guidelines set forth above at any meeting of stockholders or via any written consent of stockholders. The Voting Agreement also provides a restriction on Dr. Woody’s sale or transfer of any of the Separation Shares until August 5, 2025. The Voting Agreement expired pursuant to its terms on August 21, 2025.Initiatives

~~Former~~The ~~Chief~~Company ~~Executive~~is ~~Officer~~in the early stages of developing and ~~Consulting~~scaling its RWA tokenization strategy. The timing, magnitude, and sustainability of revenues from tokenization ~~Agreement~~activities may affect future results of operations and cash flows and will depend on factors such as market adoption, regulatory considerations, and the availability of distribution and secondary trading infrastructure.

OnEvolving ~~February~~Regulatory 20, 2025, the Company entered into an Executive Consulting Agreement with Mr. Blair Jordan dated February 21, 2025, and Blair Jordan Strategy and Finance Consulting Inc. (an entity owned by Mr. Jordan) (“Jordan Consulting” and the “February 2025 Jordan Agreement”). The February 2025 Jordan Agreement replaced and superseded a prior consulting agreement between the parties. On June 17, 2025, the Company entered into an Amended and Restated Executive Consulting Agreement with Mr. Jordan, and Jordan Consulting, dated June 17, 2025 (as amended from time to time, the “Jordan Agreement”). The Jordan Agreement replaced and superseded the February 2025 Jordan Agreement.Environment

The regulatory framework ~~Jordan~~applicable ~~Agreement~~to ~~provided~~digital ~~for~~assets, ~~Mr.~~staking ~~Jordan~~activities, toand ~~act~~tokenized assecurities ~~Chief~~continues ~~Executive~~to ~~Officer~~evolve ofin the ~~Company,~~United States and toother bejurisdictions. Changes ~~paid~~in ~~$240~~laws,~~000~~ ~~per~~regulations, ~~year~~enforcement inpriorities, ~~consideration~~or regulatory interpretations could increase compliance costs, restrict certain ~~for~~activities, ~~services~~or ~~rendered~~require modifications to the Company’s ~~(the~~treasury ~~“Fee”),~~or ~~which~~tokenization ~~Fee~~strategies. ~~shall~~Regulatory ~~increase~~developments tomay ~~$350,000~~also ~~per~~affect market ~~year~~participation inand ~~the~~investor ~~event~~demand, ~~the~~which ~~Company completes~~could ~~any~~impact ~~material~~future ~~transaction~~operating results and cash flows.

~~The agreement~~Recent also allowed the Company to pay Mr. Jordan or Jordan Consulting an incentive bonus of up to 100% (but not less than 50% (pursuant to the amended terms)) of the Fee per year, in the form of cash or equity, in the discretion of the Compensation Committee and the Board. Any additional bonus payments in 2025, if any, and subsequent bonus payments in 2026 and 2027 from the Company to Mr. Jordan or Jordan Consulting, if any, will be based on criteria to be determined by the Compensation Committee of the Board. The Board and Compensation Committee may also pay Mr. Jordan or Jordan Consulting bonuses from time to time in cash or equity, in their sole discretion, with any bonus earned being paid by March 15th of the year following the date it is earned.Events

~~The Company~~Reinitiation ~~also agreed to grant 16,000 shares~~ of ~~restricted~~Share ~~common~~Repurchase stock to Jordan Consulting under the Company’s Third Amended and Restated 180 Life Sciences Corp. 2022 Omnibus Incentive Plan (the “Incentive Plan”), with such shares evidenced and documented by a Notice of Restricted Stock Grant and Restricted Stock Grant Agreement entered into between Jordan Consulting and the Company, and subject to vesting as follows: (a) 8,000 shares vest on January 1, 2026, subject to Jordan Consulting and Mr. Jordan’s continued service to the Company on such vesting date; and (b) 8,000 shares vest on December 31, 2026, subject to Jordan Consulting and Mr. Jordan’s continued service to the Company on such vesting date, provided that the Board of Directors accelerated the vesting of all such shares on June 17, 2025. The Company recognized $204,800 of stock-based compensation related to these shares during the nine months ended September 30, 2025.Program

24 On April 15, 2026, the Company’s Board of Directors unanimously authorized the reinitiation of the Company’s share repurchase program, effective April 15, 2026, including authorization for repurchases in volumes that may exceed the limitations of the Rule 10b-18 safe harbor under the Exchange Act.

~~On September~~Special 4,Committee ~~2025,~~and ~~Mr.~~Review ~~Blair Jordan, the then Chief Executive Officer~~ of ~~the Company, and Jordan Consulting entered into a Separation~~Strategic ~~and Release Agreement with the Company (the “Jordan Separation Agreement”).~~Alternatives

~~Pursuant~~On toApril ~~the~~17, ~~Jordan Separation Agreement~~2026, the Company ~~agreed~~announced tothat ~~(a)~~the ~~pay~~Board ~~Jordan~~of ~~Consulting~~Directors established ~~$1,350,000~~a inspecial ~~cash,~~committee ~~which~~(the ~~would~~“Special beCommittee”) ~~the~~comprised ~~amount~~entirely ~~payable~~of independent directors to ~~Jordan~~evaluate ~~Consulting~~proposals ~~pursuant~~aimed toat narrowing the ~~terms~~gap ofbetween the ~~Jordan~~Company’s ~~Agreement,~~current asmarket ~~amended,~~value inand the ~~event~~intrinsic ~~the~~value ~~Board~~ of ~~Directors~~its ofbusiness ~~the~~and ~~Company~~to ~~decided~~identify ~~that~~an optimal Mroutcome for stockholders. ~~Jordan should~~The ~~step~~Special ~~down~~Committee ~~from~~has ~~the~~been ~~role~~authorized ofto ~~Chief~~examine ~~Executive~~a ~~Officer~~full range of value-maximizing pathways available to the Company, ~~and~~including ~~such~~potential ~~departure~~mergers ~~was~~with ~~not~~or ~~considered~~acquisitions aof ~~termination~~private ~~for~~companies, ~~just cause~~the bysale of the Company or amaterial ~~resignation~~assets, ~~for~~partnerships with ~~good~~new ~~reason~~capital bypartners ~~Mr.~~to ~~Jordan~~accelerate ~~under~~growth ~~the~~and ~~Jordan~~platform ~~Consulting~~development, ~~Agreement;~~or ~~(b)~~the ~~execute~~return anof ~~assignment in~~substantially ~~order~~all toof ~~transfer~~the ~~any~~Company’s capital and ~~all~~assets ~~rights and ownership~~ to ~~the~~stockholders, ~~design~~in oran ~~domain~~orderly offashion ~~“Volaro” to Jordan Consulting;~~ and ~~(c) confirm~~ ~~that~~in ~~certain~~a ofform ~~Jordan~~to ~~Consulting’s~~be ~~options~~determined, ~~that~~if ~~have~~no ~~been~~other ~~granted~~proposal ~~were~~meets ~~fully~~the ~~vested~~Special ~~subject~~Committee’s valuation ~~to stockholder approval~~threshold.

Under the Jordan Separation Agreement, Mr. Jordan, Jordan Consulting and the Company, provided each general releases; the Company agreed to continue to indemnify and hold Mr. Jordan and Jordan Consulting harmless against any claims relating to the performance of the Jordan Consulting Agreement; and Mr. Jordan and Jordan Consulting agreed to certain confidentiality, non-disclosure, non-solicitation, non-disparagement (which were mutual), and cooperation covenants.24

~~Executive Employment~~Participation ~~Agreement~~in ~~with~~AI ~~McAndrew~~chip ~~Rudisill~~infrastructure financing

On ~~September~~ 15April 8, ~~2025~~2026, the Company participated ~~entered~~in an arrangement to deploy capital into anshort-term ~~Executive~~bridge ~~Employment~~loans ~~Agreement~~financing ~~with~~the Mracquisition and deployment of NVIDIA AI chips — the graphics processing units that power modern AI data centers. ~~McAndrew~~Under ~~Rudisill~~the arrangement, a third-party AI infrastructure bridge credit originator may present the Company’s ~~Chief Executive~~with ~~Officer~~short-duration financing opportunities, and ~~Executive~~the ~~Chairman~~Company (is not obligated to participate in any transaction. The arrangement is intended to target annualized returns in the ~~“Rudisill~~mid-teens. ~~Employment~~The ~~Agreement”)~~first contemplated transaction is expected to involve a U.S.-based neocloud operator, with the Company considering a commitment of $25 million to $50 million.

~~Pursuant to~~Second ~~the~~Amended ~~Rudisill Employment Agreement, the Company agreed to continue to engage Mr. Rudisill as Chairman of the Board~~ and ~~Chief~~Restated ~~Executive Officer~~Sales ~~of the Company, during the term of the agreement, which continues until the earlier of (i) Mr. Rudisill providing the Company 30 days written notice of his termination of the Rudisill Employment~~ Agreement, or (ii) December 31, 2028; subject to up to two additional years of automatic renewals, if neither party provides the other intent of its non-renewal prior to December 31, 2028 or if automatically renewed, December 31, 2029.

~~In consideration~~As ~~for~~previously ~~agreeing to provide services under the Rudisill Employment Agreement~~reported, weon ~~agreed:~~August ~~(a) to pay Mr. Rudisill a base salary of $450~~13,~~000~~ ~~per year~~2025, ~~with such amount to be reviewed by~~ the ~~Board~~Company ~~with~~entered ~~the recommendation of the Compensation Committee, at least annually,~~into ~~and may be increased if~~ the ~~Board~~Initial ~~deems~~Sales ~~appropriate;~~Agreement ~~(b)~~with ~~that~~Clear ~~Mr.~~Street ~~Rudisill~~to ~~would~~sell befrom ~~eligible~~time to ~~earn~~time anthrough ~~annual~~Clear ~~discretionary~~Street, ~~bonus~~acting as ~~established~~ bysales ~~the~~agent ~~Board~~for orthe ~~Compensation~~Company’s ATM ~~Committee~~program, ~~which~~shares ~~may consist~~ of ~~restricted~~the ~~stock~~Company’s ~~units~~Common ~~(RSUs)~~Stock ~~and/or~~pursuant ~~cash payments; and (c) that Mr. Rudisill would be entitled~~ to athe ~~change~~June ofRegistration ~~control~~Statement ~~payment,~~and ~~equal to two percent (2%) of~~ the ~~greater~~Initial ofProspectus ~~(i) the market capitalization~~Supplement. ofOn ~~the~~August ~~Company~~22, on2025, the ~~closing date of a Change in Control (as defined below) or (ii) the total enterprise value (defined by the~~ Company~~’s market~~ ~~capitalization~~entered oninto the ~~closing~~Amended ~~date~~Sales ofAgreement awith ~~Change~~Clear ofStreet ~~Control~~to, ~~plus~~among ~~all~~other ~~outstanding debt~~things, ~~less~~change ~~cash).~~the ~~This Change in Control payment~~registration ~~may~~statement ~~consist of both RSU’s~~ and~~/or~~ ~~cash,~~prospectus assupplement ~~determined~~pursuant byto ~~the~~which ~~Board~~sales ~~or Compensation Committee. For the purposes~~ of the ~~Rudisill~~Common ~~Employment Agreement,~~Stock awere ~~“Change~~to inbe ~~Control”~~made ~~means~~to ~~either (i) a merger or consolidation involving~~ the ~~Company~~WKSI ~~(or~~Registration ~~one~~Statement ~~of its subsidiaries~~and ~~where~~ the ~~Company~~WKSI ~~issues~~Prospectus ~~shares),~~Supplement. ~~unless~~On ~~the~~November ~~transaction~~14, is2025, ~~solely for changing~~ the Company’s ~~domicile~~entered orinto ~~results in~~ the ~~Company’s stockholders~~Second ~~retaining~~Amended ~~more~~Sales ~~than~~Agreement ~~50%~~with ofClear ~~the~~Street ~~voting power in the surviving or parent corporation immediately after the transaction, or~~and ~~(ii)~~TCBI ~~the sale~~Securities, ~~lease~~Inc., ~~transfer,~~doing ~~exclusive~~business ~~license,~~as orTexas ~~other~~Capital ~~disposition~~Securities of(“Texas ~~all~~Capital orSecurities”), ~~substantially~~and ~~all~~together ofwith ~~the Company’s or its subsidiaries’~~Clear ~~assets or equity~~Street, ~~including through~~ the ~~sale~~Agents, ~~or disposition of subsidiaries holding substantially all such assets~~which, ~~except~~among ~~where~~other ~~the transfer is to a wholly-owned subsidiary~~things, ~~provided~~amended ~~that~~and ~~transactions~~restated ~~carried out principally for bona fide equity financing purposes, where~~ the ~~Company~~ ~~receives~~Amended ~~cash~~Sales orAgreement ~~debt~~to isinclude ~~cancelled~~Texas orCapital ~~converted~~Securities ~~(or~~ as a ~~combination~~sales ~~thereof), will not constitute a Change in Control~~agent.

~~Separately, upon~~On ~~termination~~April of8, ~~the Rudisill Employment Agreement for any reason~~2026, the Company ~~must~~entered ~~promptly,~~into ~~and~~the noSecond ~~later~~Amended ~~than~~and ~~30 days after termination~~Restated ~~(or~~Sales ~~sooner~~Agreement ifwith ~~required~~the byAgents ~~law),~~to ~~pay~~cease ~~Mr.~~all ~~Rudisill~~sales ~~(or~~of ~~his~~Common ~~surviving~~Stock ~~spouse~~pursuant orto ~~estate)~~the aWKSI ~~lump~~Registration ~~sum~~Statement ~~covering~~and ~~any~~WKSI ~~portion~~Prospectus ~~of his then current~~Supplement ~~salary~~and ~~due~~to ~~through~~transition the ~~termination~~program ~~date~~back ~~and~~to ~~reimbursement~~the ofJune ~~eligible~~Registration ~~expenses~~Statement ~~incurred.~~and ~~Additionally,~~Initial ifProspectus MrSupplement. ~~Rudisill~~From ~~has~~and ~~been~~after ~~employed for more than 12 months, he will also receive a severance payment equal to two times his base salary at~~ the ~~time~~date of ~~termination. In addition,~~the ifSecond ~~his~~Amended ~~employment~~and ~~ends~~Restated ~~within~~Sales 36Agreement, ~~months of~~ the ~~start~~Company ~~date~~will ~~(September~~not ~~15,~~sell ~~2025),~~any heCommon ~~will~~Stock ~~receive~~pursuant ato ~~payment,~~the ~~payable~~WKSI inRegistration ~~stock~~Statement and~~/or cash~~ asWKSI ~~determined~~Prospectus ~~by the Board~~Supplement, ~~equal~~and toany ~~the~~future ~~greater~~sales ofwill ~~(a)~~be 1%made ofpursuant to the ~~Company’s~~June ~~market~~Registration ~~capitalization;~~Statement orand ~~(b)~~Initial 1%Prospectus ~~of the total enterprise~~Supplement. ~~value~~There ~~(market~~were ~~capitalization~~no ~~plus~~other ~~debt,~~material ~~less~~changes ~~cash)~~to of the ~~Company,~~terms atof the ~~time~~Second ofAmended ~~termination.~~Sales ~~Payment~~Agreement ofas ~~these severance benefits are conditioned on Mr. Rudisill executing~~ a ~~general~~result ~~release~~ of ~~claims~~such ~~against the Board relating to his employment or service with the Company~~amendments.

~~The Rudisill~~Components ~~Employment~~of ~~Agreement~~Results also contains customary confidentiality obligations and work made for hire language. In addition, Mr. Rudisill is eligible to receive certain employee benefits, including profit sharing, medical, disability and life insurance plans and programs, that are established and made generally available by the Company from time to time to its employees, subject, however, to the applicable eligibility requirements and other provisions of ~~such plans and programs (including, without limitation, requirements as to position, tenure, location, salary, age and health).~~Operations

Notwithstanding the terms of the Rudisill Employment Agreement, as discussed above, the Board and/or Compensation Committee may from time to time, in their discretion, increase Mr. Rudisill’s base salary or award discretionary bonuses to Mr. Rudisill, which may take the form of cash consideration or equity.Revenue

~~The~~Revenue for the three months ~~Rudisill~~ended ~~Employment~~March ~~Agreement~~31, ~~superseded~~2026 was $2.9 million. There was no revenue for the ~~offer~~three ~~letter~~months ~~previously~~ended ~~provided~~March to31, Mr2025. ~~Rudisill~~The increase compared to ~~serve~~the onprior year was driven by the Company’s ~~Board~~shift to a digital asset focused business model, as the Company did not generate revenue under its legacy operations. Going forward, revenues are expected to be driven primarily by the continued development of the Company’s ~~Directors~~digital asset and tokenization strategies as well as aircraft engine leasing activity.

25 General and Administrative

~~Appointment~~General and administrative expenses consist primarily of ~~Chief~~personnel-related ~~Accounting~~costs, ~~Officer~~including salaries, benefits, and ~~Consulting~~stock-based ~~Agreement~~compensation, as well as professional fees (such as legal, accounting, and consulting services).

~~Effective on~~Other ~~February~~general ~~15,~~and ~~2025, the Company appointed Eric R. Van Lent as the Chief Accounting Officer (Principal Accounting/Financial Officer) of~~administrative ~~the~~expenses ~~Company~~include ~~(the~~office-related ~~“Appointment”),~~and ~~which~~overhead ~~Appointment~~expenses ~~was effective as of the same date. As a result of the Appointment, Blair Jordan, the Chief Executive Officer~~ (~~Principal~~including ~~Executive Officer) of the Company~~rent, ~~who had served as the Principal Accounting/Financial Officer of the Company since October 16~~utilities, ~~2024~~software, ~~stepped down from such role~~insurance, ~~also effective on February 15, 2025. Effective on February 15, 2025, the Company entered into an Executive Consulting Agreement dated January 30, 2025 with Mr. Van Lent~~ and ~~EVL~~dues ~~Consulting, LLC (an entity owned by Mr. Van Lent) (“EVL Consulting”~~ and ~~the “EVL Consulting Agreement”~~subscriptions)~~. Pursuant to the EVL Consulting Agreement~~, ~~the Company agreed to engage EVL Consulting to provide the services of Mr. Van Lent to the Company as~~marketing ~~Chief Accounting Officer of the Company. The EVL Consulting Agreement has a term through July 30, 2025, unless otherwise terminated pursuant to the terms of the agreement (discussed below)~~ and ~~provides~~investor ~~for~~relations ~~Mr. Van Lent to act as Chief Accounting Officer of the Company~~costs, ~~and~~ tobank ~~be paid $8~~charges,~~000 per~~ ~~month~~travel ~~for~~and anentertainment ~~average of 10 hours of work per week~~expenses, ~~with~~and ~~any~~public ~~hours~~company incosts ~~excess~~such ofas ~~that~~audit ~~amount~~fees being compensated at the rate of $200 per hour, only if preapproved in writing by the Company. Notwithstanding the above, the Board of Directors, with the recommendation of the Compensation Committee, may grant Mr. Van Lent bonuses from time to time in its discretion, in cash or equity. The EVL Consulting Agreement includes customary confidentiality, non-disclosure and ~~proprietary~~SEC ~~right requirements of EVL Consulting~~filing ~~and Mr~~fees. ~~Van Lent, and a prohibition on EVL Consulting and Mr. Van Lent competing against us during the term of the agreement.~~

OnDividend July 12, 2025, and effective July 31, 2025, the Company, Mr. Van Lent and EVL Consulting entered into a First Amendment to Consulting Agreement, which amended the EVL Consulting Agreement to (a) extend the term of such agreement through December 31, 2025; and (b) increase the termination fee to $25,000.Income

~~The~~Dividend ~~Company~~income ~~has the right~~consists toof ~~terminate~~cash ~~the~~distributions ~~EVL~~received ~~Consulting~~from ~~Agreement~~marketable atsecurities ~~any time, provided~~ that itthe ~~pays~~Company ~~EVL~~holds ~~Consulting~~as ~~$25,000 upon~~part ~~such termination, payable within 60 days~~ of ~~such~~its ~~termination~~strategic ~~date~~investment portfolio.

~~The Company~~Interest is also able to terminate the EVL Consulting Agreement at any time, without notice upon: (a) the death or physical or mental incapacity of Mr. Van Lent if as a result of which Mr. Van Lent is unable to perform services for a period in excess of 30 days; (b) in the event Mr. Van Lent or a related party to Mr. Van Lent ceases to own or control 100% of EVL Consulting; or (c) “just cause”, which means any of the following events: (i) any material or persistent breach by EVL Consulting or Mr. Van Lent of the terms of the agreement; (ii) the conviction of EVL Consulting or Mr. Van Lent of a felony offence, or the equivalent in a non-American jurisdiction, or of any crime involving moral turpitude, fraud or misrepresentation, or misappropriation of money or property of the Company or any affiliate of the Company; (iii) a willful failure or refusal by EVL Consulting or Mr. Van Lent to satisfy its respective obligations to the Company under the agreement including without limitation, specific lawful directives, reasonably consistent with the agreement, or requests of the Board; (iv) any negligent or willful conduct or omissions of EVL Consulting or Mr. Van Lent that directly results in substantial loss or injury to the Company; (v) fraud or embezzlement of funds or property, or misappropriation involving the Company’s assets, business, customers, suppliers, or employees; (vi) any failure to comply with any of the Company’s written policies and procedures, including, but not limited to, the Company’s Corporate Code of Ethics and Insider Trading Policy, provided that subject to certain limited exceptions, we must first give written notice to EVL Consulting and Mr. Van Lent, as applicable, advising them of the acts or omissions that constitute failure or refusal to perform their obligations and that failure or refusal continues after EVL Consulting and Mr. Van Lent, as applicable, has had thirty (30) days to correct the acts or omissions as set out in the notice.Income

IfInterest income consists ~~the~~of ~~Company~~interest ~~terminates~~earned ~~the~~on ~~EVL~~cash ~~Consulting~~balances ~~Agreement~~and ~~for~~short-term ~~just~~investments ~~cause~~held by the Company, weincluding ~~are~~interest ~~required~~earned toon ~~pay~~U.S. ~~EVL~~Treasury securities ~~Consulting~~and ~~any~~interest-bearing ~~unpaid~~accounts. ~~fees~~Interest ~~and/or~~income ~~unpaid and~~includes ~~unreimbursed~~interest ~~expenses~~income ~~accrued~~recognized ~~but~~on ~~unpaid~~loan ~~prior~~receivables related to the Zippy ~~effective~~loan ~~termination~~portfolio ~~date~~and warehouse facility.

~~Non-Executive Director~~Other ~~Compensation~~Income

~~Effective on~~Other ~~May~~income 7,relates ~~2024, the Board of Directors set the compensation payable~~ to ~~non-executive members of~~ the ~~Board of Directors for services on~~ ~~the~~legacy ~~Board~~pharmaceutical ofbusiness Directors, at (a) $50,000 per year for service on the Board; (b) $15,000 for each Chairperson of a committee of the Board of Directors (provided that only one additional $15,000 payment shall be made even if the Director chairs multiple committees); and ~~$25,000 additional~~primarily ~~for~~reflects ~~each member of the Strategy and Alternatives Committee of the Board of Directors~~non-recurring, ~~provided~~non-operating ~~that~~gains ~~effective October~~arising ~~24,~~from ~~2024,~~settlements ~~the Board determined that the members of the Strategy~~ and ~~Alternatives,~~recoveries ~~Risk, Safety and Regulatory Committee (which~~associated ~~committee~~with ~~was~~discontinued ~~formed~~research ~~by the combination of the Strategy~~ and ~~Alternatives~~development ~~Committee and the Risk, Safety and Regulatory Committee~~(R&D), ~~would not receive any additional consideration for services on such committee other than their standard compensation for service on the Board~~activities.

On February 4, 2025, the Board of Directors of the Company appointed independent director Ryan Smith, as Lead Independent Director of the Company, and agreed to pay Mr. Smith an additional $20,000 per year for his services in such role.25

~~Board of~~Interest ~~Directors Adoption of 180 Life Sciences Corp. 2025 Option Incentive Plan~~Expense

~~On June~~Interest ~~17,~~expense ~~2025,~~consists ~~the Board~~ of ~~Directors~~interest ofincurred ~~the~~on ~~Company,~~outstanding ~~with the recommendation of the Compensation Committee of the Board of Directors,~~debt ~~adopted the Company’s 2025 Option Incentive Plan (the “2025 Plan”). Notwithstanding such adoption~~obligations, inincluding ~~accordance with~~ the ~~rules~~interest ofincurred ~~the~~on ~~Nasdaq Capital Market, following~~ the ~~date~~convertible ofnotes ~~adoption, but prior to the Shareholder Approval Date~~ (~~as defined below), (i) no stock options granted thereunder can be exercised, and (ii) if Shareholder Approval (as defined below) is not received,~~ the ~~2025 Plan is to be unwound, and the outstanding stock options granted thereunder cancelled (the~~ “~~Nasdaq~~Convertible ~~Pre-Approval Requirements~~Notes”)~~. As~~ ~~discussed~~entered ~~above,~~into ~~the 2025 Plan was approved by the Board of Directors, but has not yet been approved by the Company’s stockholders,~~during in accordance with the rules of The Nasdaq Capital Market, which allow the Company to adopt an equity arrangement and grant options thereunder prior to obtaining stockholder approval, provided that (i) no options can be exercised prior to obtaining stockholder approval, and (ii) the plan can be unwound, and the outstanding options cancelled, if stockholder approval is not obtained2025.

26 Change in Fair Value of Available for Sale Securities

~~Shareholder approval~~Change ~~of the 2025 Plan is to be obtained~~ in ~~accordance~~fair ~~with~~value ~~the Company’s Second Amended and Restated Certificate~~ of ~~Incorporation~~available-for-sale ~~and~~securities ~~Second~~reflects ~~Amended~~unrealized ~~and~~gains ~~Restated Bylaws, each as amended~~ and ~~applicable~~losses ~~laws,~~resulting ~~within~~from ~~twelve~~changes ~~(12)~~in ~~months~~market ofprices ~~the date~~ of ~~adoption~~investment ~~(the~~securities ~~“Shareholder Approval”~~held ~~and~~by the ~~date of such Shareholder Approval, the “Shareholder Approval Date”)~~Company. ~~Additionally, the grant of incentive stock options under the 2025 Plan is subject to Shareholder Approval.~~

~~The Plan~~Change ~~provides~~in anFair ~~opportunity~~Value ~~for any employee, officer, director or consultant~~ of ~~the~~Derivative Company, subject to the terms of the 2025 Plan (including as discussed above and any limitations provided by federal or state securities laws), to receive (i) incentive stock options (to eligible employees only); or (ii) nonqualified stock options. Incentive stock options granted under the 2025 Plan are intended to qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). Nonqualified (non-statutory stock options) granted under the 2025 Plan are not intended to qualify as incentive stock options under the Code.Instruments

~~A total~~Change in Fair Value of ~~100,000~~Derivative ~~shares~~Instruments consists of ~~common~~net ~~stock~~realized ~~are~~and ~~reserved~~unrealized ~~for~~gains ~~awards~~and ~~under~~losses on the ~~2025~~Company’s ~~Plan~~ETH-denominated derivative instruments. Gains and losses arise from changes in market prices and changes in fair value and settlement of the instruments, as applicable.

~~2025 Supplemental~~Digital ~~Option~~Asset ~~Plan~~Gains and Losses

~~On July~~Digital ~~29,~~asset ~~2025,~~gains ~~the~~and ~~Board~~losses consist of ~~Directors~~realized ofand ~~the~~unrealized ~~Company,~~gains ~~with~~and ~~the~~losses ~~recommendation~~on ofETH ~~the~~and ~~Compensation~~liquid ~~Committee~~staking ofincentive ~~the~~tokens ~~Board~~held ofby ~~Directors, adopted~~ the Company~~’s 2025 Supplemental Option Incentive Plan (the “2025 Supplemental Plan”)~~. ~~Notwithstanding such~~Gains ~~adoption,~~and ~~in accordance with the rules of The Nasdaq Capital Market, following the date of adoption, but prior to the Shareholder~~losses ~~Approval~~arise ~~Date~~from ~~(as~~changes ~~defined~~in ~~below),~~market ~~(i) no~~prices ~~stock options granted thereunder could be exercised,~~ and ~~(ii) if stockholder approval for~~ the ~~2025 Supplemental Plan was not received~~sale, ~~the 2025 Supplemental Plan was to be unwound~~transfer, ~~and~~or ~~the~~redeployment ~~outstanding~~of ~~stock options granted thereunder cancelled~~ETH.

~~The 2025~~Change ~~Supplemental~~in ~~Plan~~Fair ~~provides~~Value ~~an opportunity for any employee, officer, director or consultant~~ of the Company, subject to the terms of the 2025 Supplemental Plan (including as discussed above and any limitations provided by federal or state securities laws), to receive (i) incentive stock options (to eligible employees only); or (ii) nonqualified stock options. Incentive stock options granted under the 2025 Supplemental Plan are intended to qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). Nonqualified (nonLong-~~statutory~~Term ~~stock options) granted~~Receivable ~~under the 2025 Supplemental Plan are not intended to qualify as incentive stock options under the Code.~~Derivative

~~A total~~Change ofin ~~919,761~~fair ~~shares~~value of ~~common~~long-term receivable ~~stock~~derivative ~~are~~represents ~~reserved~~the ~~for~~change ~~awards~~in ~~under~~fair value of the ~~2025~~cryptocurrency ~~Supplemental~~holdings ~~Plan~~under liquid staking protocols.

~~2025 Supplemental~~Loss ~~Option~~on ~~Plan~~Make ~~Option~~Whole ~~Grants~~Provision

~~Effective July~~Loss ~~29,~~on ~~2025,~~make ~~the~~whole ~~Board~~provision ofrepresents ~~Directors of~~ the ~~Company,~~estimated ~~with~~make ~~the~~whole ~~recommendation of the Compensation Committee of the Board of Directors,~~amount ~~approved~~pursuant ~~(i) the grant of stock options~~ to ~~purchase 390,898 shares of common stock to Blair Jordan,~~ the ~~then~~Zippy ~~Chief Executive Officer of the Company; (ii) the grant of stock options to purchase 390,898~~ shares ofin ~~common~~accordance ~~stock~~with ~~to Ryan Smith,~~ the ~~Lead~~Zippy ~~Director~~Purchase of the Company; (iii) the grant of stock options to purchase 91,976 shares of common stock to Stephen Shoemaker, a then independent member of the Board of Directors of the Company; and (iv) the grant of stock options to purchase 45,988 shares of common stock to the Company’s outside legal counsel (collectively, the “2025 Supplemental Plan Options”)Agreement.

~~The 2025~~Income ~~Supplemental~~Tax ~~Plan~~Expense ~~Options were granted under the 2025 Plan and have a term of ten~~ (10Benefit) years, subject in all cases to the terms and conditions of the 2025 Plan and the award agreements entered into to evidence such grants. The 2025 Supplemental Plan Options have an exercise price of $29.20 per share, which was $0.10 above the closing sales price of the Company’s common stock on The Nasdaq Capital Market on July 28, 2025.

~~Accelerated~~Income tax expense consists ~~Vesting~~primarily of ~~Executive~~state ~~Award~~income taxes and deferred income tax effects. The Company maintains valuation allowances against certain deferred tax assets where realization is not considered more likely than not.

~~Effective June~~Net ~~17,~~Loss ~~2025,~~from ~~the~~Discontinued Board of Directors of the Company, with the recommendation of the Compensation Committee of the Board of Directors, approved the accelerated vesting of 16,000 shares of restricted common stock originally issued to Jordan Consulting for Blair Jordan, the Company’s Chief Executive Officer, in February 2025, which were to vest at the rate of 1/2 of such shares on each of January 1, 2026 and December 31, 2026, subject to Mr. Jordan’s continued service to the Company, and instead provided for such shares to vest in full as of June 17, 2025.Operations

27 Net loss from discontinued operations reflects the results of operations of business components that have been disposed of or otherwise exited and are no longer part of the Company’s continuing operations. The results of discontinued operations are presented separately from continuing operations to provide comparability across periods. Discontinued operations include all revenues, expenses, gains, and losses directly attributable to those exited activities.

~~Executive Option Grants~~26

~~Effective June~~Consolidated ~~17,~~Results ~~2025, the Board~~ of Directors of the Company, with the recommendation of the Compensation Committee of the Board of Directors, approved the grant of stock options to certain individuals, including awards to the following named executive officers: (a) Jordan Consulting for Blair Jordan, the Chief Executive Officer of the Company (options to purchase 41,000 shares); and (b) Eric R. Van Lent, the Chief Accounting Officer of the Company (options to purchase 2,500 shares), each in consideration for services rendered and to be rendered to the Company.Operations

The ~~options~~ ~~were~~following ~~granted~~table ~~under~~ presents the ~~2025~~results ~~Plan and have a term~~ of ~~ten~~our ~~years,~~operations ~~subject~~ (in ~~all~~thousands) ~~cases~~for to the ~~terms~~quarters ~~and~~ended ~~conditions~~March ~~of the 2025 Plan and the award agreements entered into to evidence such grants~~31, ~~and~~2026 ~~each officer’s continued service with the Company. The options vest at the rate of 1/2 of such options on each of the six~~ and ~~twelve month anniversaries of the grant date. The options have an exercise price of $9.29 per share, the closing sales price of the Company’s common stock on the Nasdaq Capital market on June 17,~~ 2025.:

Executive Restricted Stock Awards

	Three Months Ended March 31,						Change
	2026			2025			$			%
Revenue:
Aircraft engine rental revenue	$	1,088		$	-			1,088			100
Staking revenue		1,771			-			1,771			100
Total Revenue		2,859			-			2,859			100

Operating Expenses:
General and administrative		7,492			1,967			5,525			281
Total Operating Expenses		7,492			1,967			5,525			281
Loss From Operations		(4,633	)		(1,967	)		(2,666	)		136

Other (Expense) Income:
Dividend income		54			-			54			100
Interest income		104			-			104			100
Other income		-			6			(6	)		(100	)
Interest expense		(1,000	)		-			(1,000	)		(100	)
Other expense		(2,231	)		-			(2,231	)		(100	)
Change in fair value of derivative liabilities		(11,010	)		-			(11,010	)		(100	)
Change in fair value of available for sale securities		46			-			46			100
Digital asset gains and losses		(6,342	)		-			(6,342	)		(100	)
Change in fair value of long-term receivable derivative		(48,637	)		-			(48,637	)		(100	)
Loss on make whole provision		(3,885	)		-			(3,885	)		(100	)
Total other income (expense), net		(72,901	)		6			(72,907	)		(99	)
Loss Before Income Taxes		(77,534	)		(1,961	)		(75,573	)		(3,854	)
Income tax expense (benefit)		-			-			-			-
Net Loss From Continuing Operations		(77,534	)		(1,961	)		(75,573	)		(3,854	)
Net Income (Loss) From Discontinued Operations		1,270			(408	)		1,678			(411	)
Net Loss	$	(76,264	)	$	(2,369	)		(73,895	)		(3,119	)

Effective on June 17, 2025, the Company issued, after recommendation by the Compensation Committee of the Company’s Board of Directors and approval by the Board of Directors, 16,758 shares of restricted common stock to Jordan Consulting for Blair Jordan, Chief Executive Officer of the Company and 817 shares of restricted common stock to Eric R. Van Lent, Chief Accounting Officer of the Company, which vest at the rate of 1/2 of such shares on each of the six and twelve month anniversaries of the grant date, subject to such persons continued service to the Company on the applicable vesting dates. The grants were evidenced by Notice of Restricted Stock Grants and Restricted Stock Grant Agreements entered into between the Company and each recipient. The grants were made under, and subject to the terms of, the Company’s Third Amended and Restated 2022 Omnibus Incentive Plan (the “2022 Plan”).Revenue

~~Accelerated~~Revenue for the three months ended March 31, 2026 was $2.9 million. ~~Vesting~~There was no revenue for the three months ended March 31, 2025. The increase compared to the prior period was driven by the Company’s shift to a digital asset focused business model, as the Company did not generate revenue under its legacy operations. Going forward, revenues are expected to be driven primarily by the continued development of ~~Prior~~the ~~Awards~~Company’s tokenization strategies and the aircraft engine leasing activity.

Effective June 17, 2025, the Board of Directors of the Company, with the recommendation of the Compensation Committee of the Board of Directors, approved the accelerated vesting of 6,500 shares of Restricted Common Stock held by each of Stephen H. Shoemaker, Dr. Lawrence Steinman and Ryan Smith, each non-executive members of the Board of Directors, and 3,000 shares of Restricted Common Stock issued to the Company’s outside legal counsel, which were to vest at the rate of 1/2 of such shares on each of July 1, 2025 and December 31, 2025, subject to such persons continued service to the Company and provided instead for such shares to vest in full as of June 17, 2025.27

~~Non-Executive Director~~The ~~Option~~following ~~Awards~~discussion disaggregates total revenue into two primary revenue streams.

~~Effective June~~i. ~~17,~~Staking ~~2025,~~revenue. ~~the~~Staking ~~Board~~revenue ofconsists ~~Directors~~ of ~~the~~native ~~Company,~~staking ~~with the recommendation of the Compensation Committee of the Board of Directors~~revenue, ~~approved~~ ~~the~~liquid ~~grant~~staking ofrevenue stock options to the non-executive members of the Board of Directors as follows: Ryan Smith, Lead Director, options to purchase 25,500 shares of common stock; Stephen H. Shoemaker, director, options to purchase 16,500 shares of common stock; and ~~Dr. Lawrence~~reward ~~Steinman~~revenue, ~~director, options to purchase 11,000 shares of common stock,~~ each inas ~~consideration~~more ~~for~~fully ~~services~~described ~~rendered and to be rendered to the Company~~below.

~~The options~~a. ~~were~~Native ~~granted~~staking ~~under~~revenue. ~~the~~Native ~~2022~~staking ~~Plan and~~revenue ~~have~~was a$1.5 ~~term~~million offor ~~ten~~the ~~years,~~three ~~subject~~months inended ~~all~~March ~~cases~~31, to2026. ~~the~~There ~~terms~~was ~~and~~no ~~conditions~~native ofstaking ~~the~~revenue ~~2022 Plan~~for ~~and~~ the ~~award~~three ~~agreements~~months ~~entered~~ended ~~into~~March ~~to evidence such grants~~31, ~~and~~2025. ~~each~~The ~~director’s~~increase ~~continued~~was ~~service~~attributable ~~with~~to the ~~Company. The options~~commencement ~~vest~~of at the ~~rate~~Company’s ofnative ~~1/2~~ETH ofstaking ~~such~~activities ~~options~~during inthe ~~each~~second half of ~~the~~2025. ~~six~~Native ~~and~~staking ~~twelve~~revenue ~~month~~is ~~anniversaries~~generally ofdriven by the ~~grant~~amount ~~date. The~~of ~~options have~~ETH anstaked, ~~exercise~~applicable ~~price~~staking ofreward ~~$9.29~~rates ~~per~~and ~~share~~validator arrangements, and the ~~closing~~market ~~sales~~ price of ~~the~~ETH ~~Company’s~~at ~~common stock on~~ the ~~Nasdaq~~time ~~Capital~~rewards ~~market~~are ~~on June~~earned ~~17,~~and ~~2025~~or received.

~~Attorney Compensation~~b. ~~Option~~Liquid ~~Award~~staking revenue. Liquid staking revenue was $0.3 million for the three months ended March 31, 2026. There was no liquid staking revenue for the three months ended March 31, 2025. The increase was attributable to the commencement of the Company’s liquid staking activities during the second half of 2025. Liquid staking revenue is generally driven by the amount of ETH deposited into liquid staking protocols, applicable protocol reward rates and incentive structures, and the market price of ETH at the time rewards are earned and or received.

~~Effective on~~ii. ~~June~~Aircraft ~~17,~~engine ~~2025,~~rental ~~the~~revenue. ~~Company~~Aircraft ~~issued,~~engine ~~after~~rental ~~recommendation~~revenue bywas ~~the~~$1.1 ~~Compensation~~million ~~Committee~~for of the ~~Company’s~~three ~~Board~~months ofended ~~Directors~~March ~~and approval by the Board of Directors~~31, ~~approved~~2026. ~~the~~There ~~grant~~was ofno ~~stock~~aircraft ~~options~~rental torevenue ~~purchase~~for ~~3,500~~the ~~shares~~three ofmonths ~~common~~ended ~~stock~~March ~~to the Company’s outside legal counsel~~31, ~~in consideration for services rendered and to be rendered to the Company~~2025. The ~~options~~increase ~~were~~was ~~granted~~attributable ~~under~~to the ~~2025 Plan and~~acquisition ~~have a term~~ of ~~ten~~aircraft ~~years,~~engines subject ~~in all cases~~ to ~~the~~operating ~~terms~~lease ~~and~~arrangements ~~conditions~~during of the ~~2025~~period. ~~Plan~~Aircraft ~~and~~rental ~~the~~revenue ~~award~~is ~~agreement~~generally ~~entered into~~driven toby ~~evidence such grant, and~~ the ~~recipient’s~~contractual ~~continued~~lease ~~service~~rates, ~~with~~ the ~~Company. The~~timing ~~options vest at the rate~~ of ~~1/2~~ oflease ~~such~~commencement, ~~options in each of the six~~ and ~~twelve month anniversaries of~~ the ~~grant~~number ~~date. The options have an exercise price~~ of ~~$9.29~~engines ~~per~~under ~~share,~~lease ~~the~~during ~~closing sales price of~~ the ~~Company’s common stock on the Nasdaq Capital market on June 17, 2025~~period.

~~Non-Executive Director~~General ~~Restricted~~and ~~Stock~~Administrative ~~Awards~~

~~Effective on~~General ~~June 17, 2025, the Company issued, after recommendation by the Compensation Committee of the Company’s Board of Directors~~ and administrative ~~approval~~expenses byfor the ~~Board~~three ofmonths ~~Directors,~~ended ~~10,218~~March ~~shares of restricted common stock to Ryan Smith~~31, ~~Lead~~2026 ~~Director,~~were ~~6,744 shares of restricted common stock to Stephen H~~$7.5 ~~Shoemaker~~million, ~~director,~~compared ~~and 4,496 shares of common stock~~ to Dr$2.0 ~~Lawrence~~million ~~Steinman,~~for ~~director, which vest at~~ the ~~rate~~ ofthree ~~1/2~~months ofended ~~such~~March ~~shares on each of the six and twelve month anniversaries of the grant date~~31, ~~subject to such persons continued service to the Company on the applicable vesting dates (the “June~~ 2025. The grants were evidenced by Notice of Restricted Stock Grants and Restricted Stock Grant Agreements entered into between the Company and each recipient. The grants were made under, and subject to the terms of, the 2022 Plan.

28 The increase in general and administrative expenses compared to the prior year was driven primarily by higher professional fees of $5.6 million, consisting mainly of consulting, accounting, and legal costs incurred in connection with the Company’s strategic initiatives. The increase was also attributable to higher marketing and public relations costs of $0.9 million, stock-based compensation expense of $0.1 million related to equity awards granted during the period, and higher public company costs of $0.2 million, including audit, SEC filing, and transfer agent fees.

~~Attorney Compensation~~Dividend ~~Restricted Stock Award~~Income

~~Effective on~~Dividend ~~June~~income ~~17,~~for ~~2025,~~ the ~~Company~~three ~~issued,~~months ~~after~~ended ~~recommendation~~March by31, ~~the~~2026 ~~Compensation~~was ~~Committee~~$0.1 million, ofreflecting ~~the~~returns ~~Company’s~~earned ~~Board~~on ofmarketable ~~Directors~~securities ~~and approval~~acquired byduring ~~the~~2025 ~~Board~~as ofpart ~~Directors, 1,839 shares~~ of ~~restricted common stock to~~ the Company’s ~~outside~~strategic ~~legal~~investment ~~counsel, which vest~~activities. atThere ~~the~~was ~~rate~~no ofcomparable ~~1/2~~dividend ofincome ~~such~~in ~~shares on each of~~ the ~~six~~prior ~~and twelve month anniversaries of the grant date~~period, ~~subject~~as ~~to such person’s continued service to~~ the Company ondid ~~the~~not ~~applicable~~have ~~vesting dates. The grant was evidenced by~~ a ~~Notice~~significant ofUSD ~~Restricted~~balance ~~Stock Grant and Restricted Stock Grant Agreement entered into between the Company and the recipient. The grant was made under, and subject~~ to ~~the~~invest ~~terms~~in ~~of, the 2022 Plan~~securities.

~~Accelerated Vesting~~Interest Income

~~On July~~Interest ~~29,~~income ~~2025,~~for the ~~Board,~~three months ~~with~~ended ~~the~~March ~~recommendation~~31, of2026 ~~the~~was ~~Compensation~~$0.1 ~~Committee~~million, ofreflecting ~~the~~interest ~~Board,~~earned ~~Effective~~ on ~~July~~cash ~~11, 2025~~ and ~~July~~interest-bearing ~~12, 2025,~~accounts following the ~~Board~~Company’s capital-raising ofactivities ~~Directors~~during of2025. ~~the~~Interest ~~Company,~~income ~~approved~~also ~~the~~reflects ~~accelerated~~interest ~~vesting~~earned ofon ~~the~~loan ~~shares~~receivables. ~~and~~During ~~options,~~the ~~respectively,~~three ~~granted~~months ~~on June~~ended 17March 31, ~~2025~~2026, ~~which~~interest ~~vested~~income inrecognized ~~full~~ on ~~such~~loan ~~dates.~~receivables ~~The~~related ~~Company~~to ~~recognized~~the ~~additional~~Zippy ~~stock-based~~loan ~~compensation~~portfolio ofand warehouse facility was approximately $~~348,019~~0.08 ~~related~~million toand ~~the~~$0.02 ~~acceleration of~~million, ~~vesting~~respectively.

~~2025~~There was no comparable interest income in the prior period, as these ~~Supplemental~~balances ~~Option~~were ~~Plan~~generated ~~Grants~~during the current period.

~~On July~~Other 29, 2025, the Board, with the recommendation of the Compensation Committee of the Board, approved (i) the grant of stock options to purchase 390,898 shares of common stock to Blair Jordan, the then Chief Executive Officer of the Company; (ii) the grant of stock options to purchase 390,898 shares of common stock to Ryan Smith, the Lead Director of the Company; (iii) the grant of stock options to purchase 91,976 shares of common stock to Stephen Shoemaker, a then member of the Board; and (iv) the grant of stock options to purchase 45,988 shares of common stock to the Company’s outside legal counsel with an exercise price of $29.20 per share pursuant to the 2025 Supplemental Option Incentive Plan. If stockholder approval for the 2025 Supplemental Plan was not received, the 2025 Supplemental Option Incentive Plan was to be unwound, and the outstanding options cancelled; however, such plan was subsequently approved by stockholders.Income

~~2025~~There was no other income ~~Second~~for ~~Supplemental~~the ~~Option~~three ~~Plan~~months ~~Grants~~ended March 31, 2026. Other income for the three months ended March 31, 2025 was immaterial.

Effective August 8, 2025, the Board of Directors of the Company, with the recommendation of the Compensation Committee of the Board of Directors, approved (i) the grant of stock options to purchase 77,104 shares of common stock to Blair Jordan, the Chief Executive Officer of the Company at such time; (ii) the grant of stock options to purchase 77,104 shares of common stock to Ryan Smith, the Lead Director of the Company; (iii) the grant of stock options to purchase 18,142 shares of common stock to Stephen Shoemaker, a then independent member of the Board; and (iv) the grant of stock options to purchase 9,077 shares of common stock to the Company’s outside legal counsel. The options were granted pursuant to the Company’s 2025 Second Supplemental Option Incentive Plan. The options were granted at an exercise price of $30.10 per share. If stockholder approval is not received, the 2025 Second Supplemental Option Incentive Plan shall be unwound, and the outstanding options cancelled. If stockholder approval for the 2025 Supplemental Plan was not received, the 2025 Supplemental Option Incentive Plan was to be unwound, and the outstanding options cancelled; however, such plan was subsequently approved by stockholders.28

~~RSU Grant~~Interest Expense

~~Effective~~Interest onexpense ~~August~~for ~~8, 2025,~~ the ~~Board,~~three ~~with~~months ~~the~~ended ~~recommendation~~March ~~of the Compensation Committee~~31, ~~approved~~2026 ~~the~~was ~~grant of 33,333 restricted stock units (“RSUs”)~~$1.0 ~~to an employee of the Company~~million, inprimarily ~~consideration~~reflecting ~~for~~interest ~~services~~incurred ~~rendered,~~on ~~which vest at~~ the ~~rate~~Convertible ofNotes ½entered ofinto ~~the~~during ~~RSUs~~2025. onThere ~~each~~was ofno ~~the first and second anniversaries of the grant date~~comparable, ~~subject to the recipient’s continued service with the Company on such vesting~~meaningful ~~dates.~~interest ~~The~~expense ~~RSUs~~in ~~were granted under~~ the ~~Company’s~~prior ~~2022 Omnibus Incentive Plan, as amended~~period.

~~Indemnification Agreements~~Other Expense

~~The Company~~Other ~~has~~expense ~~entered~~for ~~into~~the three ~~Indemnity~~months ~~Agreements~~ended ~~(each~~March an31, ~~“Indemnification~~2026 ~~Agreement”)~~was ~~with~~$2.2 ~~each~~million, ofreflecting ~~its~~other ~~directors~~reward ~~and officers~~expense. ~~(each~~Other anreward ~~“Indemnitee”),~~expense towas ~~provide~~$2.2 million for ~~indemnification~~the three tomonths ~~the~~ended ~~officers~~March ~~and~~31, ~~directors~~2026. ~~under~~There ~~Delaware~~was ~~law. Among~~no other ~~things,~~reward ~~consistent~~expense ~~with~~for the ~~Company’s~~three ~~Bylaws,~~months ~~each~~ended ~~Indemnification~~March ~~Agreement~~31, ~~generally~~2025. ~~requires~~The ~~that the~~ Company ~~(i)~~began ~~indemnify~~participating ~~the~~in ~~Indemnitee~~protocol-based ~~from~~reward and ~~against~~incentive ~~all~~arrangements ~~expenses~~during ~~and~~the ~~liabilities~~second ~~with~~half ~~respect~~of to2025. ~~proceedings~~During tothe ~~which~~three ~~Indemnitee~~months ~~may be subject~~ended byMarch ~~reason~~31, of2026, the ~~Indemnitee’s service to the~~ Company toexited ~~the~~a ~~fullest~~protocol-based ~~extent~~incentive ~~authorized~~arrangement orearly ~~permitted~~and, byas ~~Delaware~~a ~~law~~result, ~~and~~retained ~~(ii)~~a ~~advance all~~pro ~~expenses~~rata ~~incurred~~portion byof the incentive ~~Indemnitee~~tokens infor ~~connection with~~ the ~~investigation,~~period ~~defense, settlement or appeal~~ of ~~any~~participation ~~proceeding,~~ and ~~in connection~~returned ~~with~~a ~~any~~portion ~~proceeding~~of topreviously ~~enforce~~granted ~~the~~tokens. ~~Indemnitee’s~~This ~~rights~~early ~~under~~exit ~~the~~required ~~Indemnification Agreement. The Indemnification Agreement~~the ~~also~~Company ~~establishes~~to ~~various~~reverse ~~related~~a ~~procedures~~portion ~~and~~of ~~processes~~reward ~~and~~revenue ~~generally~~recognized ~~requires~~in ~~the~~prior ~~Company~~periods, toresulting ~~maintain~~in ~~directors’~~other ~~and~~expense ~~officers’ liability~~for ~~insurance~~the ~~coverage~~current quarter.

~~NOTE 13~~Change -in ~~STOCKHOLDERS’~~Fair ~~(DEFICIT)~~Value ~~EQUITY~~of Derivative Liabilities

~~Reverse~~Change in fair value of derivative liabilities for the three months ~~Stock~~ended ~~Splits~~March 31, 2026 was $11.0 million, primarily reflecting the change in fair value of the Company’s ETH-denominated derivative instruments entered into during the period in connection with the Company’s disposition of digital asset holdings, as well as settlement and early termination of certain contracts during the period. There was no comparable change in the prior year, as the Company did not enter into or hold similar derivative instruments during that period.

~~On October~~Change 14, 2025, we filed a Certificate of Amendment to our Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split of the Company’s common stock, in aFair ~~ratio~~Value of ~~1-for-10,~~Available effective as of 12:01 a.m. Eastern Standard Time on October 20, 2025 (then “Reverse Stock Split”). Accordingly, each holder of common stock owned fewer shares of common stock as a result of the Reverse Stock Split. However, the Reverse Stock Split affected all holders of common stock uniformly and did not affect any stockholder’s percentage ownership interest in the Company, except to the extent that the Reverse Stock Split resulted in an adjustment to a stockholders’ ownership of common stock due to the treatment of fractional shares in the Reverse Stock Split. Therefore, voting rights and other rights and preferences of the holders of common stock were not affected by the Reverse Stock Split (other than as a result of the treatment of fractional shares, which were repurchased for ~~cash by~~Sale ~~the Company). Common stock issued pursuant to the Reverse Stock Split remained fully paid and nonassessable, without any change in the par value per share.~~Securities

29 Change in fair value of available-for-sale securities for the three months ended March 31, 2026 was $0.1 million, reflecting unrealized gains and losses resulting from changes in market prices of equity investment securities acquired during the period. There was no comparable, meaningful change in the prior period, as these investments were not held previously.

~~No fractional~~Digital ~~shares~~Asset ~~were~~Gains issued as a result of the Reverse Stock Split. Instead, each stockholder received a cash payment equal to the fraction of which such stockholder was otherwise entitled multiplied by the closing price per share of the common stock on the last trading day prior to the Effective Time as reported by Nasdaq (as adjusted to give effect to the Reverse Stock Split). The common stock began trading on a Reverse Stock Split-adjusted basis on The Nasdaq Capital Market on October 20, 2025. No change was made to the trading symbol for the Company’s shares of common stock or public warrants (since expired), “ETHZ” and ~~“ETHZW”, respectively, in connection with the Reverse Stock Split.~~Losses

~~In addition,~~Digital ~~the~~asset ~~number~~gains offor ~~shares~~the three ofmonths ~~common~~ended ~~stock~~March ~~issuable~~31, ~~upon~~2026 ~~exercise~~were of$6.3 ~~stock~~million, ~~options~~primarily ~~and~~reflecting ~~other~~approximately ~~equity~~$124.6 ~~awards~~million ~~(including~~of ~~shares~~unrealized ~~reserved~~losses resulting ~~for~~from ~~issuance~~changes ~~under~~in ~~the~~market ~~Company’s~~prices ~~equity~~of ~~compensation~~ETH ~~plans),~~ and ~~the~~liquid ~~number~~staking ofincentive ~~shares~~tokens ofheld ~~common~~during ~~stock issuable upon exercise of warrants were proportionately adjusted, using~~ the ~~1-for-10 ratio. In addition~~period, ~~the~~partially ~~exercise~~offset ~~price~~by ~~for~~approximately ~~each outstanding stock option and~~$118.2 ~~warrant~~million ~~was~~of ~~increased~~realized ingains ~~inverse~~recognized ~~proportion~~upon to the ~~1-for-10~~sale, ~~split~~transfer, ~~ratio~~or ~~such~~redeployment ~~that~~of ~~upon~~ETH. anUnrealized ~~exercise,~~gains ~~the~~and ~~aggregate~~losses ~~exercise~~were ~~price~~driven ~~payable~~primarily by ~~the~~fluctuations ~~optionee~~in ~~or warrant holder to~~ the ~~Company~~market ~~for~~price ~~the~~of ~~shares~~ETH ~~subject~~and tochanges in the ~~option~~quantity orof ~~warrant~~digital ~~will~~assets ~~remain~~held ~~approximately~~during the ~~same~~period. ~~as the~~There ~~aggregate~~were ~~exercise~~no ~~price~~digital assets ~~prior~~held toin the ~~Reverse~~prior ~~Stock Split, subject to the terms of such securities~~period.

~~On February~~Change ~~16,~~in ~~2024,~~Fair atValue ~~a Special Meeting~~ of the Stockholders of the Company, the stockholders of the Company approved an amendment to the Company’s Second Amended and Restated Certificate of Incorporation, as amended, to effect a reverse stock split of our issued and outstanding shares of our common stock, par value $0.0001 per share, by a ratio of between oneLong-~~for-four~~Term ~~to one-for-forty, inclusive,~~Receivable with the exact ratio to be set at a whole number to be determined by the Company’s Board of Directors or a duly authorized committee thereof in its discretion, at any time after approval of the amendment and prior to February 16, 2025.Derivative

~~On February~~The ~~16,~~change ~~2024,~~in ~~the~~fair ~~Company’s~~value of ~~Board~~the ~~approved~~long-term areceivable ~~reverse~~derivative ~~stock~~for ~~split of~~ the ~~Company’s~~three ~~common~~months ~~stock~~ended atMarch a31, ~~ratio~~2026 ofwas ~~1-for-19 (the~~$48.6 ~~“2024~~million, ~~Reverse~~primarily ~~Stock~~driven ~~Split”~~by ~~and~~changes ~~together~~in ~~with~~ the market ~~Reverse~~price ~~Stock~~of ~~Split~~ETH, the ~~“Reverse~~accrual ~~Stock~~of ~~Splits”). The~~staking ~~2024~~rewards ~~Reverse~~under ~~Stock~~liquid ~~Split~~staking ~~was~~arrangements, ~~effective~~and onchanges ~~February~~in ~~28,~~the ~~2024~~quantity ~~and~~of ~~the~~assets ~~shares~~deployed in ofsuch protocols during the ~~Company’s~~period. ~~common~~There ~~stock~~was ~~began~~no ~~trading~~comparable onactivity ~~Nasdaq on~~for athe ~~post-split~~three ~~basis~~months onended ~~February~~March 2831, ~~2024~~2025.

~~In addition,~~Loss ~~the~~on ~~number~~Make ofWhole shares of common stock issuable upon exercise of stock options and other equity awards (including shares reserved for issuance under the Company’s equity compensation plans), and the number of shares of common stock issuable upon exercise of warrants were proportionately adjusted, using the 1-for-19 ratio. In addition, the exercise price for each outstanding stock option and warrant was increased in inverse proportion to the 1-for-19 split ratio such that upon an exercise, the aggregate exercise price payable by the optionee or warrant holder to the Company for the shares subject to the option or warrant will remain approximately the same as the aggregate exercise price prior to the 2024 Reverse Stock Split, subject to the terms of such securities.Provision

~~The~~Loss on make whole provision ~~rights~~represents ~~and~~changes ~~privileges~~in ofthe estimated make-whole obligation associated with the ~~holders~~Company’s ofcost-method ~~shares~~investment ofin ~~common~~Zippy, ~~stock~~resulting in ~~are~~a ~~substantially~~$3.9 ~~unaffected~~million loss for the three months ended March 31, 2026, primarily driven by changes in the ~~Reverse~~Company’s ~~Stock~~stock ~~Splits~~price relative to the agreed valuation terms during the period. There was no comparable activity for the three months ended March 31, 2025.

~~All share~~Net ~~and~~Loss ~~per~~from ~~share~~Discontinued ~~data in the accompanying condensed consolidated financial statements and accompanying notes have been retroactively adjusted to reflect the effect of the Reverse Stock Splits.~~Operations

~~Shares~~During the year ended December 31, 2025, the Company made a strategic ~~issued~~decision to discontinue its pharmaceutical research operations and Gaming Technology Platform. Accordingly, the results of these operations are presented as discontinued operations for ~~Services~~all periods presented.

~~On March~~Net 7,income ~~2025,~~from ~~the Compensation Committee and the Board approved the grant of 6,500 shares of restricted common stock to each~~discontinued ofoperations ~~the~~for ~~current non-executive members of~~ the ~~Board~~three ofmonths ~~Directors~~ended asMarch ~~long-term compensation which shall vest to the holders thereof at the rate of ½ of such shares on each of July 1, 2025 and December~~ 31, ~~2025,~~2026 ~~subject~~was ~~to continued service with the Company on such vesting dates~~$1. ~~The Company also granted~~ 3~~,000 shares~~ ~~of restricted common stock to an attorney which shall vest to the holder thereof at the rate of ½ of such shares on each of July 1~~million, ~~2025~~primarily ~~and~~reflecting ~~December~~operating ~~31,~~losses ~~2025, subject to continued service with the Company on such vesting dates. Effective June 17, 2025, the Board~~ of ~~Directors~~approximately ~~of the Company, with the recommendation of the Compensation Committee of the Board of Directors, approved the accelerated vesting of 6,500 shares of Restricted Common Stock held by each of Stephen H~~$0.3 ~~Shoemaker,~~million ~~Dr.~~related ~~Lawrence Steinman and Ryan Smith, each non-executive members of the Board of Directors, which were~~ to ~~vest at~~ the ~~rate~~Company’s offormer ~~1/2~~pharmaceutical ~~of such~~research ~~shares~~operations ~~on each of July 1, 2025~~ and ~~December~~gain ~~31,~~on ~~2025,~~settlement ~~subject to such persons continued service to the Company, as well as 3,000 shares~~ of ~~restricted~~liabilities ~~common stock to an attorney which were to vest to the holder thereof at the rate~~ of ½approximately of$1.6 ~~such shares on each~~million ofrelated ~~July 1, 2025 and December 31, 2025, subject~~ to ~~continued~~a ~~service~~settlement with ~~the~~a ~~Company~~former ~~on such vesting dates, and provided instead for such shares to vest in full as of June 17, 2025~~consultant. ~~The Company recognized an aggregate of $577,584 of stock-based compensation related to these shares during the six months ended June 30, 2025.~~

~~Effective on~~The ~~June~~exits ~~17,~~were ~~2025,~~part ~~the Company issued, after recommendation by the Compensation Committee~~ of ~~the Company~~management’s ~~Board of Directors and~~ ~~approval~~strategic bydecision ~~the Board of Directors, (a) 16,758 shares of restricted common stock issue~~ to ~~Jordan~~discontinue ~~Consulting~~legacy ~~for~~operations ~~Blair~~and ~~Jordan,~~focus ~~Chief~~on ~~Executive Officer~~digital ofasset ~~the~~and ~~Company;~~tokenization ~~(b) 817 shares of restricted common stock issued to Eric R~~activities. ~~Van~~The ~~Lent, Chief Accounting Officer of the~~ Company~~; (c) 10,218~~ ~~shares~~does ofnot ~~restricted common stock issued to Ryan Smith, Lead Director; (d) 6,744 shares of restricted common stock~~expect ~~issued~~discontinued tooperations ~~Stephen H. Shoemaker, director; (e) 4,496 shares of common stock issued~~ to ~~Dr.~~have ~~Lawrence~~a ~~Steinman,~~material ~~director;~~impact ~~and (f) 1,839 shares of common stock issued to the Company’s outside legal counsel, which grants were approved by the Board of Directors effective~~ on ~~June~~ ~~17,~~future ~~2025.~~results ~~The Company recognized an aggregate~~ of ~~$31,641~~operations ofor ~~stock-based~~cash ~~compensation related to these shares during the six months ended June 30, 2025~~flows.

~~Shares cancelled~~29

~~On January~~Non-GAAP ~~30,~~Financial ~~2025, the Company cancelled 239 shares previously issued to Tyche Capital LLC.~~Measures

OnAlthough ~~June~~we 12believe that net income or loss, ~~2025~~as determined in accordance with GAAP, ~~under~~is the ~~terms~~ ofmost aappropriate ~~release~~earnings ~~agreement~~measure, Mrwe use EBITDA and Adjusted EBITDA as key profitability measures to assess the performance of our business. ~~Jay~~We ~~Goodman~~believe these measures help illustrate underlying trends in our business and we use these measures to establish budgets and operational goals, and communicate internally and externally, in managing our business and evaluating its performance. We also believe these measures help investors compare our operating performance with its results in prior periods in a ~~former~~way ~~director~~that ofis ~~the~~consistent ~~Company,~~with ~~confirmed~~how management evaluates such performance. EBITDA is a non-GAAP profitability measure that represents net income or loss for the 6period before the impact of the interest expense,~~500~~ ~~shares~~income tax expense (benefit) and depreciation and amortization of ~~common~~property, ~~stock~~plant ~~which~~and equipment and heintangible ~~held~~assets. ~~which~~EBITDA ~~were~~eliminates ~~subject~~potential todifferences ~~vesting~~in ~~and~~performance ~~forfeiture~~caused ~~were~~by ~~forfeited~~variations in ~~connection~~capital ~~with~~structures ~~his~~(affecting ~~resignation~~financing expenses), the cost and age of tangible assets (affecting relative depreciation expense) and the ~~Company~~extent ~~has~~to ~~since~~which ~~canceled~~intangible assets are ~~such~~identifiable ~~shares~~(affecting relative amortization expense).

30 Adjusted EBITDA is a non-GAAP profitability measure that represents EBITDA before certain items that are considered to hinder comparison of the performance of our businesses on a period-over-period basis or with other businesses. During the periods presented, we exclude from Adjusted EBITDA certain costs that are required to be expensed in accordance with GAAP, including non-cash stock-based compensation, business development and integration expenses, offering costs, non-cash adjustments to the fair value of earnout consideration, and non-cash adjustments to the fair value of outstanding warrants. Our management believes that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA is appropriate to provide additional information to investors about certain material non-cash items and about unusual items that we do not expect to continue at the same level in the future.

~~Shares~~Each of the profitability measures described below are not recognized ~~issued~~under GAAP and do not purport to be an alternative to net income or loss determined in accordance with GAAP as a measure of our performance. Such measures have limitations as analytical tools, and should not be considered in isolation or as substitutes for ~~settlement~~our results as reported under GAAP. EBITDA and Adjusted EBITDA exclude items that can have a significant effect on our profit or loss and should, therefore, be used only in conjunction with our GAAP profit or loss for the period. Our management compensates for the limitations of ~~liabilities~~using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. Because not all companies use identical calculations, these measures may not be comparable to other similarly titled measures of other companies.

~~During~~EBITDA and Adjusted EBITDA are unaudited, and have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are: EBITDA and Adjusted EBITDA do not reflect cash expenditures, or future or contractual commitments; EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, capital expenditures or working capital needs; EBITDA and Adjusted EBITDA do not reflect the ~~nine~~significant ~~months~~interest ~~ended~~expense, ~~September~~or 30the cash requirements necessary to service interest or principal payments, on ~~2025~~debt or cash income tax payments; although depreciation and amortization are noncash charges, the ~~Company~~assets ~~issued~~being 75depreciated and amortized will often have to be replaced in the future,~~287~~ ~~share~~and ofEBITDA ~~common~~and ~~stock~~Adjusted EBITDA do not reflect any cash requirements for such replacements. In addition, other companies in this industry may calculate EBITDA and Adjusted EBITDA differently than the ~~settlement~~Company does, limiting its usefulness as a comparative measure. The Company’s presentation of ~~liabilities~~these measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. ~~See~~We ~~Note~~compensate for these limitations by providing a reconciliation of each 12of –these ~~Commitments~~non-GAAP measures to the most comparable GAAP measure. We encourage investors and ~~Contingencies~~others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measure. For more information on these non-GAAP financial measures, please see the below reconciliation of these non-GAAP financial measures to their GAAP counterparts.

~~Conversion of Series B Convertible Preferred Stock~~30

~~On March~~The ~~27,~~reconciliation ~~2025,~~of ~~Elray~~Net loss ~~Resources,~~from ~~Inc.~~continuing operations, the ~~sole~~most ~~holder~~directly ofcomparable ~~the~~GAAP ~~Series B Convertible Preferred Stock of the Company converted all then 1~~measure,~~000,000 outstanding~~ ~~shares~~to ofEBITDA ~~Series~~and BAdjusted ~~Convertible~~EBITDA ~~Preferred~~(in ~~Stock~~thousands) offor the ~~Company into 131,800 shares of common stock.~~three ~~See~~months ~~Note~~ended 8March –31, ~~Series~~2026 Band ~~Convertible~~2025, ~~Preferred~~is ~~Stock.~~as follows:

Stock Options

	2026			2025
Net Loss From Continuing Operations	$	(77,534	)		(1,961	)

Interest		1,000			-
Taxes		-			-
Depreciation and Amortization		473			-
EBITDA		(76,061	)		(1,961	)

Stock-based compensation¹		104			578

Adjusted EBITDA	$	(75,957	)		(1,383	)

~~A summary~~(1) ofRepresents non-cash stock-based compensation expense associated with employee and non-employee equity awards, including the ~~option~~Initial ~~activity~~Strategic ~~during~~Advisor Warrants and the ~~nine~~Subsequent ~~months~~Strategic ~~ended~~Advisor ~~September~~Warrants, 30and employee stock options awarded in connection with closing the Private Placement, ~~2025~~included isin ~~presented~~“General ~~below:~~and administrative” expenses on the Condensed Consolidated Statements of Operations and Comprehensive Loss.

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Term (Years)		Intrinsic Value
Outstanding, January 1, 2025		2,164		$	289.34		2.2	$	-
Granted		1,201,195			29.96		-		-
Exercised		(8,000	)		9.29		-		-
Forfeited		(7	)		15,010.00		-		-
Outstanding, September 30, 2025		1,195,352		$	30.48		9.83	$	-
Exercisable, September 30, 2025		94,157		$	14.61		9.83	$	-

Liquidity and Capital Resources

ADuring the year ended December 31, 2025, the Company completed significant ~~summary~~equity and debt financing transactions, generating proceeds of ~~outstanding~~approximately $860.0 million, that materially improved its liquidity position and ~~exercisable~~extended ~~stock~~the ~~options~~maturity asprofile of ~~September~~its 30obligations. As of March 31, 2026 and December 31, 2025, isthe ~~presented~~Company ~~below:~~had $65.9 and $8.0 million of cash and cash equivalents on hand, respectively.

Stock Options Outstanding				Stock Options Exercisable
Exercise		Number of		Weighted Average		Number of
Price		Shares		Remaining Life in Years		Shares
$	1,501.00		7		8.9		7
$	5,168.00		71		7.9		71
$	127.30		79		6.6		79
$	32.20		919,764		9.8		-
$	30.00		181,431		9.9		-
$	19.50		2,000		6.2		2,000
$	9.29		92,000		10.0		92,000
			1,195,352		9.83		94,157

Management monitors liquidity based on expected operating cash requirements, capital commitments and near-term obligations relative to available liquid resources and planned financing activities. Our liquidity management strategy focuses on maintaining sufficient liquidity to fund operations and support the execution of our strategic initiatives. Management also considers known uncertainties, including changes in market conditions that could affect the value and liquidity of certain assets and the timing of access to restricted balances.

~~On September~~The ~~15,~~Company ~~2025,~~may ~~Stephen~~also H.pursue ~~Shoemaker~~additional ~~resigned~~offering transactions as aneeded to ~~member~~fund ofoperations ~~the~~and ~~Board~~financing ~~of Directors~~obligations. InFuture ~~connection~~offering ~~with~~transactions ~~his~~may ~~resignation,~~include Common Stock (including through at-the-market ~~Board,~~sales ~~with~~under the ~~recommendation~~Second ofAmended ~~the~~and ~~Compensation~~Restated ~~Committee~~Sales ofAgreement), ~~the~~warrant ~~Board,~~coverage ~~approved~~or another ~~extension~~convertible ofsecurities, ~~the~~subject ~~expiration~~to ~~date~~Board of ~~options to purchase~~Directors ~~165,000~~approval ~~shares~~and ofapplicable ~~common~~Nasdaq ~~stock~~stockholder atapproval anrequirements. ~~exercise~~As ~~price~~ of ~~$0.929~~the ~~per~~date ~~share~~of ~~(the~~this ~~“Options”)~~Report, ~~which~~the ~~were~~Company ~~previously~~has ~~granted~~not agreed to ~~Mr.~~ ~~Shoemaker,~~any ~~and~~definitive funding ~~which,~~terms ~~absent~~or ~~such~~finalized ~~extension,~~any ~~would~~offering ~~have~~structures. ~~expired~~Future ~~three~~capital ~~months~~requirements ~~after~~will ~~his~~depend ~~resignation,~~on tooperating ~~June 17~~performance, ~~2035,~~market ~~the ten year~~conditions, ~~anniversary~~and of the ~~grant~~execution ~~date~~ of ~~such~~our ~~Options.~~business ~~The~~strategy, ~~extension~~including ~~was~~potential ~~accounted~~periods ~~for as an option modification. The incremental value~~ of ~~the option~~digital ~~modification~~asset ofprice ~~$141,519 was recorded as an expense~~volatility.

~~The fair~~Principal ~~value of stock options granted during the nine months ended September 30, 2025 was estimated using the Black-Sholes option pricing model~~ and ~~the~~Potential ~~following~~Sources ~~key assumptions range: 1) volatility~~ of 172.04% - 176.85% ; 2) an expected term of 5.4 years using the plain-vanilla simplified method; 3) dividend yield of 0%; and 4) a risk-free rate of 3.90% - 3.99%. The options had an aggregate fair value of $34,945,873 at the grant date. The Company recognized stock-based compensation expense of $34,055,362 for the three months ended September 30, 2025 and $34,945,873 for the nine months ended September 30, 2025, related to the amortization of stock options; which is included within general and administrative expenses on the condensed consolidated statements of operations for the three and six-month periods. The Company recognized stock-based compensation expense of $16,456 and $274,826 for the three and nine months ended September 30, 2024, respectively, related to the amortization of stock options; expense of $15,156 and $269,627 is included within general and administrative expenses on the condensed consolidated statements of operations for the three and nine month period. As of September 30, 2025, there was $0 of unrecognized stock-based compensation expense related to stock options.Liquidity

31 Our principal and potential sources of liquidity consist primarily of cash and cash equivalents, cash flows from operating activities, and proceeds from financing activities. We believe that our existing sources of liquidity are, and will continue to be, sufficient to meet our working capital and capital expenditure requirements in both the short and long term.

~~Warrants~~31

AWe also hold ETH which is ~~summary~~accounted offor ~~the~~as ~~common~~a ~~stock~~digital ~~underlying~~asset. ~~the~~While ~~warrants~~ETH ~~activity~~is ~~(including~~not ~~both~~considered ~~liability~~a cash equivalent and ~~equity~~is ~~classified~~subject ~~instruments)~~to ~~during~~market ~~the~~volatility, these holdings may ~~nine~~be ~~months~~converted ~~ended~~into ~~September~~cash 30and used as a source of liquidity if needed, ~~2025~~subject isto ~~presented~~market ~~below:~~conditions and strategic considerations.

	Number of Shares of Common Stock Underlying Warrants			Weighted Average Exercise Price		Weighted Average Remaining Life in Years		Intrinsic Value
Outstanding, January 1, 2025		613,350		$	13.06		5.1	$	1,028,044
Granted		7,213,934			25.72		-		-
Exercised		(804,744	)		13.23		-		-
Expired		(17	)		2,006.40		-		-
Outstanding, September 30, 2025		7,022,523		$	32.30		-	$	3,733,378
Exercisable, September 30, 2025		7,022,523		$	32.30		-		3,733,378

We also maintain restricted cash equivalents, which are not available for general corporate purposes as they are subject to contractual restrictions (including being maintained as collateral under certain arrangements). These balances may become available for liquidity purposes upon the satisfaction of the applicable release conditions.

~~A summary~~Cash ~~of outstanding and exercisable common stock underlying the warrants as of September 30, 2025 is presented below:~~Flows

Common Stock Underlying Warrants Outstanding				Common Stock Underlying Warrants Exercisable
Exercise		Number of		Weighted Average		Number of
Price		Shares		Remaining Life in Years		Shares
$	43,700.00		1,581		0.0		1,581
$	34.45		907,115		0.0		907,115
$	32.30		405		0.0		405
$	27.50		4,557,233		4.8		4,557,233
$	26.50		540		0.7		540
$	22.80		75		0.0		75
$	0.01		1,555,574		0.0		1,555,574
			7,022,523		0.0		7,022,523

As of March 31, 2026 and March 31, 2025, we had cash balances of $65.9 million and $3.7 million, respectively, and working capital surplus of $69.2 million and $0.1 million, respectively.

~~On July~~Operating 27, 2025, Elray Resources, Inc., the holder of warrants to purchase 300,000 shares of Common Stock with an exercise price of $16.80 per share (the “Elray Warrants”), exercised all of such Elray Warrants on a cashless basis and was issued a net of 132,000 shares of Common Stock, after surrendering 168,000 warrant shares to the Company for cancellation in order to pay the aggregate exercise price in connection therewith, based on a fair market value of Common Stock on July 27, 2025, of $30.00 per share.Activities

~~Securities~~For the three months ended ~~Purchase~~March ~~Agreement~~31, 2026, cash used in operating activities from continuing operations totaled $20.3 million compared to cash provided by operating activities from continuing operations of $0.9 million for the three months ended March 31, 2025. Cash used in operating activities during the three months ended March 31, 2026 was primarily attributable to our net loss of $77.5 million, adjusted for non-cash expenses in the aggregate amount of $70.9 million (mainly due to $48.6 million of change in fair value of long term receivable derivative, $11.0 million related to the change in fair value of derivative liabilities, $6.3 million of digital asset gains and losses, and $3.9 million related to the loss on the make-whole provision, partially offset by other non-cash items including depreciation and amortization and stock-based compensation), as well as $13.6 million of net cash used to fund the changes in levels of operating assets and liabilities. These changes in operating assets and liabilities were primarily driven by an $12.3 million increase in prepaid expenses and other current assets and a $2.0 million decrease in accounts payable, partially offset by a $1.0 million increase in accrued expenses. Our cash used in operating activities for the three months ended March 31, 2025 was primarily attributable to our net loss of $2.0 million, adjusted for non-cash expenses of $0.6 million, as well as $0.5 million of net cash provided by changes in operating assets and liabilities.

OnInvesting July 29, 2025, the Company entered into a securities purchase agreement (the “SPA”) with certain accredited institutional investors (the “Purchasers”) pursuant to which the Company agreed to sell and issue to the Purchasers in a private placement an aggregate of (i) 14,288,217 shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”), at an offering price of $26.50 per share (the “Stock Purchase Price”), and (ii) $26.499 per pre-funded warrant (collectively, the “Pre-Funded Warrants”) to purchase up to an aggregate of 1,749,585 shares of Common Stock (the “Pre-Funded Warrant Shares”) (together, the “Private Placement”). The SPA provides that no Purchaser, together with its affiliates or anyone acting as a group with such purchaser, may beneficially own in excess of 19.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of the shares of Common Stock and/or Pre-Funded Warrants to such person on the Closing Date (as defined below). Pursuant to the SPA, the Purchasers could elect to pay the total purchase amount due for their Common Stock and Pre-Funded Warrants, in either cash, ETH (determined by dividing the aggregate purchase price payable, by the spot exchange rate for ETH on the business day immediately preceding the execution of the Purchase Agreement) or any combination thereof. The Company received aggregate ETH holdings of 41,685.60 ETH, with a value under the SPA of $171,287,512. The Company received gross cash proceeds of $253,712,496 and paid fees and commissions of $1,681,000 which were reflected as costs of capital. The Company also issued 322,643 shares of common stock to a the placement agent.Activities

32 For the three months ended March 31, 2026, cash provided by investing activities from continuing operations totaled $71.8 million compared to a de minimis amount of investing activity for the three months ended March 31, 2025. Cash provided by investing activities during the three months ended March 31, 2026 was primarily attributable to $128.1 million in proceeds from the sale of cryptocurrency, partially offset by $27.3 million of purchases of marketable securities, $0.8 million of purchases of digital assets, $16.8 million of purchases of property and equipment relating to aircraft engines, and $11.5 million of purchases of loans receivable. In addition, the Company had $0.1 million of cash inflows from repayments of loans receivable during the period.

~~The unfunded~~Financing exercise price of each Pre-Funded Warrant will equal $0.0001 per underlying Pre-Funded Warrant Share. The exercise price and the number of shares of Common Stock issuable upon exercise of each Pre-Funded Warrant is subject to appropriate adjustment in the event of certain stock dividends, stock splits, stock combinations, or similar events affecting the Common Stock. The Pre-Funded Warrants are exercisable in cash or by means of a cashless exercise and will not expire until the date the Pre-Funded Warrants are fully exercised. The Pre-Funded Warrants may not be exercised if the aggregate number of shares of Common Stock beneficially owned by the holder thereof (together with its affiliates or anyone acting as a group with such holder) immediately following such exercise would exceed a specified beneficial ownership limitation; provided, however, that a holder may increase or decrease the beneficial ownership limitation by giving prior written notice to the Company (61 days’ notice for increases), but not to any percentage in excess of 19.99%.Activities

~~Strategic~~For the three months ended ~~Advisor~~March ~~Agreements~~31, ~~and~~2026, ~~Warrants~~cash provided by financing activities from continuing operations totaled $5.5 million compared to a de minimis amount of financing activity for the three months ended March 31, 2025. Cash provided by financing activities during the three months ended March 31, 2026 was solely attributable to $5.5 million in net proceeds from shares issued for cash.

On July 29, 2025, and in connection with the launch of the Company’s digital asset treasury strategy, the Company entered into a Strategic Advisor Agreement with each of Pink Sands Group, LLC, Cyber, Moode LLC, Moon Cat, LLC, Zorba Investments LLC, Purple Poseidon LLC, Tentacle Holdings LLC, PCAO LLC, Johnny Foxtrot LLC and New Island Advisors LLC (collectively, the “Strategic Advisors” and the “Strategic Advisor Agreements”). Pursuant to the Strategic Advisor Agreements, the Strategic Advisors agreed to provide the Company advice from time to time regarding the ETH treasury strategy, including on ETH purchase and staking strategies and such other areas as may be mutually determined by the Strategic Advisor and the Company from time to time (the “Services”). In consideration for agreeing to provide the Services, the Company granted on the same day the Strategic Advisors warrants to purchase an aggregate of 4,557,233 shares of the Company’s Common Stock (the “Strategic Advisor Warrants”). In the event the Company consummates a debt offering within sixty (60) days of the closing of the August 4, 2025 private placement, the Company agreed to grant additional warrants to purchase shares of the Company’s Common Stock to the Strategic Advisors pursuant to the Strategic Advisor Agreements with an exercise price equal to the greater of (i) the conversion price of such Debt Offering and (ii) the minimum price required by Nasdaq at the time of execution of any such Debt Offering plus $1.25.32

~~The Strategic~~Capital ~~Advisor~~Requirements ~~Agreements include customary restrictions on the use of confidential information, limits of liability of each party,~~ and ~~customary~~Contractual representations and warranties of the parties. The Strategic Advisor Agreements have a term of 30 months, unless otherwise terminated with the mutual agreement of the parties, or by either party, upon the breach of the agreement by the other, and failure to cure within ten (10) days.Obligations

~~The~~Our ~~per~~capital ~~share~~requirements ~~exercise~~primarily ~~price~~relate ~~of each Strategic Advisor Warrant is equal~~ to ~~$27.75,~~supporting ~~which~~ongoing is $1.25 above the Stock Purchase Price. The exercise price and the number of shares of Common Stock issuable upon exercise of each of the Strategic Advisor Warrants is subject to appropriate adjustment in the event of certain stock dividendsoperations, ~~stock~~funding ~~splits,~~working ~~stock~~capital ~~combinations~~needs, orservicing ~~similar~~existing ~~events affecting the Common Stock. The~~obligations, ~~Strategic~~and ~~Advisor~~executing ~~Warrants~~our ~~are~~tokenization ~~exercisable any time after Closing in cash or by means of a cashless exercise~~ and ~~will~~investment ~~not expire until the date the Strategic Advisor Warrants are fully exercised~~strategy. ~~The~~We ~~Strategic~~expect ~~Advisor~~to ~~Warrants~~continue ~~may~~to ~~not~~incur beoperating ~~exercised~~losses ifin the ~~aggregate~~near ~~number of~~term ~~shares of Common Stock beneficially owned by the holder thereof (together with its affiliates or anyone acting~~ as awe ~~group with such~~execute ~~Strategic~~our Advisor) immediately following such exercise would exceed a specified beneficial ownership limitation; provided, however, that a holder may increase or decrease the beneficial ownership limitation by giving prior written notice to the Company (61 days’ notice for increases), but not to any percentage in excess of 19strategy.~~99%.~~

~~In connection with the September~~Our ~~2025~~contractual ~~Convertible~~obligations ~~Notes,~~are ~~the~~limited ~~Company~~in ~~granted~~nature ~~additional~~and ~~warrants~~consist toprimarily ~~purchase an aggregate~~ of ~~907,111~~operating ~~shares~~lease ofcommitments ~~the~~and ~~Company’s~~professional ~~Common Stock~~services ~~(the “Subsequent Strategic Advisor Warrants”). The per share exercise price of each Subsequent Strategic Advisor~~agreements ~~Warrant~~incurred isin ~~equal to $34.45, which is~~ the ~~Conversion~~ordinary ~~Price~~course of ~~the September 2025 Convertible Notes~~business. ~~The~~As ~~exercise price and the number~~ of ~~shares~~March ~~of Common Stock issuable upon exercise of each of the Subsequent Strategic Advisor Warrants is subject to appropriate adjustment in the event of certain stock dividends~~31, ~~stock splits~~2026, ~~stock~~operating ~~combinations,~~lease orcommitments ~~similar~~totaled ~~events~~approximately ~~affecting the Common Stock~~$0.9 ~~The~~million, ~~Subsequent~~primarily ~~Strategic~~related ~~Advisor~~to ~~Warrants~~office ~~are~~facilities. ~~exercisable~~In ~~any~~addition, ~~time~~the inCompany ~~cash~~incurs orongoing byprofessional ~~means~~services ofcosts aand ~~cashless~~custody, ~~exercise~~servicing, and ~~will~~asset ~~not expire until the date the~~management ~~Subsequent~~fees ~~Strategic~~related ~~Advisor~~to ~~Warrants~~its ~~are~~digital ~~fully~~asset ~~exercised.~~activities ~~The~~and ~~Strategic Advisor Warrants may not be exercised if the aggregate number of shares of Common Stock beneficially~~ owned byassets, ~~the~~which ~~holder~~are ~~thereof~~generally ~~(together~~short-term ~~with~~in ~~its~~nature ~~affiliates~~and orvariable ~~anyone~~based ~~acting~~on ~~as a group with such~~activity ~~Strategic Advisor)~~levels.

~~The~~In connection ~~fair~~with ~~value~~certain ofinvestment ~~the~~and ~~Strategic Advisor~~financing ~~Warrants~~arrangements, ~~and~~ the ~~Subsequent~~Company ~~Strategic~~may ~~Advisor~~be ~~Warrants~~subject ~~granted~~to ~~during~~contingent ~~the~~or ~~nine~~conditional ~~months ended September 30~~obligations, ~~2025 was estimated~~including ~~using~~potential ~~the Black~~true-~~Sholes~~up ~~option~~or ~~pricing~~repurchase ~~model~~mechanisms, ~~and~~such ~~the~~as ~~following~~those ~~key~~related ~~assumptions~~to ~~range:~~the 1)Zippy ~~volatility~~investment. As of ~~194.3%~~March -31, ~~194.37%~~2026, ;management 2)does ~~an expected~~not ~~term~~believe ofthat 10any ~~years;~~such 3)contingent ~~dividend~~obligations ~~yield~~are ofreasonably ~~0%;~~likely ~~and~~to 4)have a ~~risk-free~~material ~~rate~~adverse ofeffect ~~4.27%~~on -the ~~4.34%.~~Company’s ~~The options had an aggregate fair value of $158,216,522~~liquidity ator ~~the~~capital ~~grant date which was recognized as stock-based compensation expense for the three months ended September 30, 2025~~resources.

33 The Company does not have any material long-term debt maturities, other than a collateralized loan totaling $25.9 million which is secured by 12,441 ETH, material purchase obligations, or other significant contractual commitments that are reasonably likely to have a material adverse effect on its liquidity or capital resources. In addition, the Company does not have any material off-balance-sheet arrangements that are reasonably likely to have a material effect on liquidity, capital resources, or results of operations.

~~In connection~~Critical ~~with~~Accounting the Private Placement and the Strategic Advisor Agreements, the Company, the Purchasers and the Strategic Advisors (collectively, the “Registration Rights Holders”) have entered into a Registration Rights Agreement (the “Registration Rights Agreement”), providing for the registration for resale of the shares of Common Stock sold pursuant to the SPA and upon exercise of the Pre-Funded Warrants, and the shares of Common Stock issuable upon exercise of the Strategic Advisor Warrants (provided that the Placement Shares (defined below), also have the same registration rights as those securities), pursuant to a registration statement to be filed with the SEC no later than thirty (30) calendar days after the closing date of the sale of the September 2025 Convertible Notes, provided that the Company has agreed to use commercially reasonable efforts to effect such filing within fifteen (15) calendar days after the closing date of the sale of the September 2025 Convertible Notes. The Company has agreed to use reasonable best efforts to cause the Registration Statement to be declared effective as promptly as possible, but in no event later than sixty (60) days after the Closing of the Private Placement (which shall be extended by fifteen (15) days if the SEC shall issue more than one comment letter on the Registration Statement), if the SEC shall review the Registration Statement, or within five (5) business days after the Company is notified that the SEC will not review the Registration Statement or has no further comments thereon. The Company has agreed to keep the Registration Statement continuously effective from the date on which the SEC declares the Registration Statement to be effective until (i) the date on which such Registration Rights Holders shall have resold all the registrable securities covered thereby; and (ii) the date on which the registrable securities may be resold by each Registration Rights Holder without registration and without regard to any volume, holding period or manner-of-sale limitations by reason of Rule 144 of the Securities Act, without the requirement for the Company to be in compliance with the current public information requirement under Rule 144 under the Securities Act or any other rule of similar effect.Estimates

~~Asset~~Our Condensed Consolidated Financial Statements are prepared in accordance ~~Management~~with ~~Agreement~~GAAP and require management to apply judgment in selecting accounting policies and in making estimates and assumptions. These judgments and estimates affect the reported amounts of assets and liabilities, the recognition and presentation of revenues and expenses, and the disclosures included in these financial statements. Certain estimates are sensitive to changes in assumptions, including estimates that depend on market data and valuations, as well as the interpretation of contractual terms in our arrangements. Actual results could differ from our estimates, and those differences could impact our results of operations and financial position in future periods. There have been no material changes to our critical accounting estimates as compared to those disclosed in our Annual Report.

~~In connection~~Significant ~~with the Private Placement, at the Closing (the “AMA Effective Date”), the Company entered into an Asset~~Accounting Management Agreement (the “Asset Management Agreement”) with Electric Treasury Edge, LLC (the “Asset Manager”). Pursuant to the Asset Management Agreement, the Asset Manager will provide discretionary investment management services with respect to, among other assets (including without limitation certain subsequently raised funds), the majority of the Company’s proceeds from the Private Placement (the “Account Assets”) in accordance with the terms of the Asset Management Agreement. The Asset Manager will pursue a long-bias strategy of digital assets primarily focused on Ethereum (the “ETH Strategy”). The custodians under the Asset Management Agreement will consist of cryptocurrency wallet providers mutually acceptable to the Company and the Asset Manager.Policies

~~The~~See ~~Company~~Note ~~shall pay the Asset Manager a monthly asset-based fee (the “Asset-based Fee”) equal to~~ 2% ~~per~~– Summary ~~annum~~ of ~~the average~~Significant ~~daily~~Accounting ~~net asset value of the Account Assets under management, payable in advance on the first business day of each calendar month; provided, however, that the minimum Asset-based Fee~~ Policies to beour ~~paid~~Condensed toConsolidated ~~the~~Financial ~~Asset Manager shall be $2,000,000 per year. Fees are prorated for~~Statements ~~partial~~included ~~periods.~~in ~~Staked~~this orReport ~~liquid-staked assets are not treated differently~~ for ~~fee~~a ~~purposes.~~discussion ~~The~~about ~~Asset~~significant ~~Manager~~accounting ~~will~~policies ~~invoice~~relevant ~~the Company monthly and deduct fees directly from the account. The Asset-based Fee shall be calculated and invoiced~~ to the Company. byAdditional ~~the Asset Manager~~information inregarding ~~a commercially reasonable manner and in good faith, by reference to relevant prices on Coinbase taken at 12:00 UTC for each relevant day (or if not available, determined by~~ the ~~Asset~~Company’s ~~Manager~~significant inaccounting apolicies ~~commercially~~is ~~reasonable~~included ~~manner and~~ in ~~good faith by reference to reputable industry sources). The Company also agreed to pay or reimburse~~ the ~~Asset Manager for all reasonable and documented expenses related to the operation of the account, which shall be paid or reimbursed by the~~ Company’s ~~out~~Annual ~~of the Account Assets~~Report.

~~The Asset~~Recently ~~Management~~Issued ~~Agreement will, unless terminated earlier in accordance with its terms, remain in effect until the fifth anniversary~~Accounting of the AMA Effective Date and shall thereafter automatically renew for successive one-year terms unless either party provides written notice at least thirty (30) days prior to renewal. Beginning on the first anniversary of the AMA Effective Date, the Company may terminate the Asset Management Agreement either (i) without cause upon at least 180 days’ prior written notice, subject to approval by at least eighty percent (80%) of the members of the Company’s board of directors and by at least 66-2/3% of the Company’s shareholders, or (ii) for cause (following an Asset Manager Cause Event) upon at least 60 days’ prior written notice. The Asset Manager may terminate the Agreement beginning on the first anniversary of the AMA Effective Date either (i) without cause upon at least 180 days’ prior written notice, or (ii) for cause (following a Company Cause Event) upon at least 30 days’ prior written notice. “Company Cause Events” include failure to pay fees (not cured within five business days), insolvency, or material breach (not cured within 30 business days, if curable). “Asset Manager Cause Events” include willful misconduct, gross negligence or fraud by the Asset Manager or material breaches that have a material adverse effect on the Company or the Account Assets (not cured within 30 business days, if curable), or insolvency.Pronouncements

34See Note 2 – Summary of Significant Accounting Policies—Recently Issued Accounting Pronouncements of our Consolidated Financial Statements included in this Report for a discussion about new accounting pronouncements issued and adopted as of the date of this Report.

If the Asset Management Agreement is terminated by the Company without an Asset Manager Cause Event, or by the Asset Manager for a Company Cause Event, prior to the fifth anniversary of the AMA Effective Date, the Asset Manager is entitled to liquidated damages in an amount equal to 85% of the fees and compensation that would have accrued through the fifth anniversary of the AMA Effective Date. In the event the Asset Management Agreement is terminated for an Asset Manager Cause Event by the Company, the Company shall be entitled to any and all damages and legal remedies arising from or in connection therewith including, but not limited to, direct, indirect, special, consequential, speculative and punitive damages, as well as lost future profits and business in the future.33

IfItem ~~the~~3. ~~Asset~~Quantitative ~~Manager becomes subject to a legal or regulatory order that prohibits it from carrying out its business as contemplated under the Asset Management Agreement, it must suspend performance~~ and ~~notify~~Qualitative ~~the Company. The parties have agreed to work together in good faith to amend the Asset Management~~Disclosures ~~Agreement~~About ~~or,~~Market ~~if amendment is not possible, the Asset Management Agreement may be terminated upon five (5) days’ prior written notice~~Risk. ~~In such case, the Asset Manager is entitled to receive 100% of all unpaid fees and compensation accrued through the termination date.~~

~~Beginning~~Pursuant ~~with~~to ~~the~~Item ~~AMA Effective~~305(e) ~~Date,~~of ~~the~~Regulation ~~Account~~S-K ~~Manager~~(§ ~~shall~~229.305(e)), ~~have~~ the Company ~~right~~is tonot ~~provide~~required ~~asset management services with respect~~ to ~~Account~~provide ~~Assets~~the ~~that~~information ~~consist of~~required atby ~~least~~this ~~50%~~Item ofas ~~the~~it ~~aggregate~~is ~~value~~a of“smaller ~~the~~reporting ~~Company’s~~company,” ~~assets~~as ~~until~~defined by ~~the~~Item ~~value~~10(f)(1) of ~~the~~Regulation ~~Company’s assets is $1,000,000,000~~S-K.

~~The~~Item ~~Company~~4. ~~and~~Controls ~~the Asset Manager have also agreed to negotiate in good faith either a separate~~ and distinct asset management agreement or an amended and restated Asset Management Agreement, which provides for separate services related to the management of investments in securities or commodities with a substantially similar fee schedule, provided that the Asset Manager has obtained all requisite regulatory licenses and approvals necessary to provide such services, and further provided that the parties endeavor to avoid investments that would require the registration of the Company as an investment company under the Investment Company Act of 1940, as amended, which was subsequently entered into between the parties as discussed belowProcedures.

~~The~~Evaluation ~~Asset Management Agreement includes customary confidentiality and indemnification provisions, representations, warranties and acknowledgements, for an agreement~~ of ~~the~~Disclosure ~~size~~Controls and ~~scope of the Asset Management Agreement.~~Procedures

OnWe ~~September~~maintain 5disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, ~~2025~~processed, summarized, and reported within the time periods ~~Company~~specified ~~entered~~in ~~into~~the anSEC’s ~~Amended~~rules and ~~Restated~~forms ~~Asset~~and ~~Management~~that ~~Agreement~~such ~~(the~~information ~~“A&R~~is ~~Asset~~accumulated ~~Management~~and ~~Agreement~~communicated to our management, including our CEO and Chief Financial Officer (“CFO”), ~~which~~as appropriate, to allow timely decisions regarding required disclosure. ~~amended~~Our management, with the participation of our CEO and ~~restated~~CFO, evaluated the ~~Asset~~effectiveness ~~Management~~of ~~Agreement~~our disclosure controls and procedures as of March 31, 2026. ~~The~~Based ~~A&R~~on ~~Asset~~the ~~Management~~evaluation, ~~Agreement~~our ~~makes~~management ~~certain~~concluded ~~changes~~that, as of March 31, 2026, the Company’s disclosure controls and procedures were not effective to provide assurance at a reasonable level that the ~~Asset~~information ~~Management~~we are required to disclose in reports ~~Agreement~~that we file or submit under the Exchange Act is recorded, ~~including~~processed, ~~among~~summarized ~~other~~and ~~things,~~reported within the ~~expansion~~time ofperiods ~~the~~specified ~~scope~~in ofSEC rules ~~account~~and ~~assets~~forms, and ~~advisory~~that ~~services~~such ~~provided~~information byis ~~the~~accumulated ~~Asset~~and ~~Manager~~communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures as of March 31, 2026.

~~Sales~~Inherent ~~Agreement~~Limitations on Effectiveness of Controls and Procedures

OnManagement ~~August~~is ~~13,~~responsible ~~2025,~~for ~~the Company~~establishing ~~entered~~and ~~into~~maintaining aadequate internal ~~Sales~~control ~~Agreement~~over ~~(the~~financial ~~“Original~~reporting, ~~Sales~~as ~~Agreement”)~~such toterm ~~sell~~is ~~shares~~defined ofin ~~the~~Rules ~~Company’s~~13a-15(f) ~~common stock~~and ~~from~~15d-15(f) ~~time~~under tothe ~~time~~Exchange ~~through~~Act. ~~Clear~~Internal ~~Street~~control over ~~LLC~~financial ~~(“Clear~~reporting ~~Street”),~~is ~~acting~~a asprocess ~~sales~~designed ~~agent~~by, ~~which~~or ~~was~~under ~~amended~~the ~~and~~supervision ~~restated on August 22~~of, ~~2025,~~our byCEO ~~the~~and ~~entry~~CFO, ~~into~~or ~~another~~persons ~~Sales~~performing ~~Agreement~~similar ~~between the Company~~ functions, and ~~Clear~~effected ~~Street~~by ~~(the~~our ~~“Sales~~Board ~~Agreement”). Sales~~ of ~~the~~Directors ~~common~~to ~~stock~~provide ~~made~~reasonable ~~pursuant~~assurance toregarding the ~~Sales~~reliability ~~Agreement,~~of iffinancial ~~any,~~reporting ~~will~~and bethe ~~made~~preparation of ~~under~~financial astatements ~~Registration~~in ~~Statement~~accordance onwith ~~Form S-3~~GAAP. ~~Subject to~~A ~~the~~company’s ~~terms~~internal ~~and~~control ~~conditions~~over offinancial ~~the~~reporting ~~Sales~~includes ~~Agreement,~~those ~~Clear~~policies ~~Street~~and procedures ~~may~~that: ~~sell~~(i) ~~the~~pertain ~~shares, if any, only by methods deemed~~ to ~~be an “at~~ the ~~market”~~maintenance ~~offering~~of asrecords ~~defined~~that, in ~~Rule~~reasonable ~~415 promulgated under the Securities Act~~detail, ~~including~~accurately ~~without~~and ~~limitation~~fairly ~~sales~~reflect ~~made~~the ~~directly~~transactions ~~through~~and ~~The~~dispositions ~~Nasdaq~~of ~~Capital~~the ~~Market,~~assets byof ~~means~~the ofcompany; ~~ordinary~~(ii) ~~brokers’~~provide ~~transactions,~~reasonable inassurance ~~negotiated~~that transactions, toare orrecorded ~~through~~as anecessary ~~market~~to permit ~~maker~~preparation ~~other~~of ~~than~~financial onstatements anin ~~exchange~~accordance orwith ~~otherwise,~~GAAP atand ~~market~~that ~~prices~~receipts ~~prevailing~~and atexpenditures ~~the time~~ of ~~sale,~~the atcompany ~~prices~~are ~~related~~being tomade ~~such~~only ~~prevailing~~in ~~market~~accordance ~~prices,~~with orauthorizations atof ~~negotiated~~management ~~prices~~ and~~/or~~ ~~any~~directors ~~other~~of ~~method~~the ~~permitted~~company; byand ~~law.~~(iii) ~~The~~provide ~~Company~~reasonable isassurance ~~not~~regarding ~~obligated~~prevention toor ~~sell,~~timely detection ~~and~~of ~~Clear~~unauthorized ~~Street~~acquisition, isuse ~~not obligated~~or todisposition ~~buy~~of orthe ~~sell,~~company’s ~~any~~assets ~~shares~~that ofcould ~~common~~have ~~stock~~a ~~under~~material ~~the~~effect ~~Sales~~on ~~Agreement~~the financial statements.

~~The~~Because ~~Sales~~of ~~Agreement~~its ~~provides~~inherent limitations, ~~that~~internal ~~Clear~~control ~~Street~~over ~~will~~financial bereporting ~~entitled~~may tonot ~~aggregate~~prevent ~~compensation~~or ~~for~~detect ~~its services of up to 3~~misstatements.0% ofTherefore, ~~the~~even ~~gross~~those ~~sales~~systems ~~price~~determined ~~per~~to ~~share~~be ~~of all~~effective ~~shares~~can ~~sold~~provide ~~through~~only ~~Clear~~reasonable ~~Street~~assurance ~~under~~with ~~the~~respect ~~Sales~~to ~~Agreement.~~financial ~~The~~statement ~~Company~~preparation ~~has~~and nopresentation, ~~obligation~~projections toof ~~sell~~ any ~~shares under the Sales Agreement.~~evaluation Inof ~~addition,~~effectiveness ~~the Company has agreed~~ to ~~reimburse~~future ~~certain~~periods ~~legal~~are ~~expenses~~subject ~~incurred~~to bythe ~~Clear~~risk ~~Street~~that incontrols ~~connection~~may ~~with~~become ~~execution~~inadequate because of ~~the Sales~~changes ~~Agreement~~ in anconditions ~~amount~~or upthat the todegree ~~$75,000,~~of incompliance ~~addition~~with tothe ~~certain~~policies ~~ongoing~~or ~~legal~~procedures ~~expenses~~may deteriorate. ~~Either~~Because ~~party~~of ~~can terminate~~ the ~~Sales~~inherent ~~Agreement under~~limitations ~~certain~~in ~~conditions,~~a ~~such~~cost-effective ~~as material adverse changes~~control system, ~~failure~~misstatements due to ~~perform~~error ~~obligations, trading suspensions,~~ or ~~other~~fraud ~~market~~may oroccur ~~regulatory events. Both the Company~~ and ~~Clear~~not ~~Street~~be ~~can also end the agreement at any time with 10 days’ notice~~detected.

35 A material weakness is a control deficiency or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. As a company with limited accounting resources, a significant amount of management’s time and attention has been and will be diverted from our business to ensure compliance with these regulatory requirements.

No assurance can be given that the Company will sell any shares of common stock under the Distribution Agreement, or, if it does, as to the price or amount of shares of common stock that it sells or the dates when such sales will take place.34

~~During~~We ~~the~~are ~~three~~a ~~months~~“smaller reporting ~~ended~~company” ~~September~~as ~~30,~~defined ~~2025,~~in Item 10(f)(1) of Regulation S-K. For as long as we ~~sold~~continue anto ~~aggregate~~be ofa ~~739~~smaller reporting company,~~050~~ ~~shares~~we may take advantage of ~~our~~exemptions ~~common~~from ~~stock~~various ~~under~~reporting ~~the~~requirements ~~Sales~~that ~~Agreement~~are ~~for~~applicable ~~net~~to ~~proceeds~~other ofpublic ~~approximately~~companies that are not smaller reporting ~~$39,459,338~~companies.

~~Stock~~As ~~Repurchase~~previously ~~Program~~reported, management, including our CEO and CFO, conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control - Integrated Framework” (2013). Management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2025, based on those criteria.

OnThe ~~August~~material ~~22,~~weakness ~~2025,~~in ~~the Board~~internal ofcontrol ~~Directors~~over offinancial ~~the~~reporting ~~Company~~identified ~~authorized~~was ~~and~~related ~~approved a stock repurchase program for up~~ to ~~$250.0~~controls ~~million~~over of the ~~currently~~classification ~~outstanding shares~~and oftechnical ~~the~~accounting ~~Company’s~~review ~~common stock. Subject to any future extension in the discretion~~ of ~~the Board of Directors of the Company~~significant, ~~the~~one-time ~~repurchase~~accounting ~~program is scheduled to expire upon the earliest of (i) June 30, 2026, (ii) when a maximum of $250~~transactions.~~0 million of the Company’s common stock has been repurchased, or (iii) when such program is discontinued by the Board of Directors.~~

~~Under~~Management ~~the~~continues ~~stock repurchase program, shares may be repurchased from time~~ to ~~time in the open market or through negotiated transactions at prevailing market rates,~~take orsteps ~~by other means in accordance with federal securities laws, including Rule 10b-18 of the Exchange Act. Repurchases will be made at management’s discretion at prices management considers~~ to beremediate ~~attractive and in~~ the ~~best~~material ~~interests~~weakness ofdescribed ~~both~~above ~~the Company~~ and ~~its~~has ~~stockholders, subject~~implemented to the ~~availability~~following ofcontrol shares, general market conditions, cost of capital, the trading price of the common stock, alternative uses for capital, and the Company’s financial performance. Repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws.enhancement:

~~The~~● ~~repurchase~~Implemented ~~program~~an ~~may be~~added ~~suspended,~~layer ~~terminated or modified at any time for any reason, including market conditions, the cost~~ of ~~repurchasing~~technical ~~shares,~~review ~~the~~by ~~availability of~~an ~~alternative~~internal ~~investment~~financial ~~opportunities,~~reporting ~~liquidity,~~director ~~and~~for ~~other~~one-time ~~factors~~significant ~~deemed~~entries ~~appropriate. These factors may also affect the timing and amount of share repurchases. The repurchase program does not obligate the Company~~ to ~~purchase~~ensure aappropriate ~~particular~~classification ~~number of, or any, shares. There~~ is ~~no guarantee as to the exact number or value of shares that will be repurchased by the Company, if any~~assessed.

~~The~~● ~~repurchase~~Hired ~~program~~additional ~~is expected~~third-party accounting consultants to beassist ~~funded~~with ~~using~~accounting ~~the~~treatment, ~~Company’s~~controls ~~working~~design, ~~capital~~reconciliation and ~~from~~close ~~funds~~procedures, ~~raised~~and infinancial ~~“at-the-market” offerings or other future financings~~disclosures.

~~During~~Management ~~the~~will ~~three~~consider ~~months ended~~the ~~September~~material ~~30,~~weakness ~~2025,~~to abe ~~total~~fully ofremediated ~~645,072~~once ~~shares~~the ofcontrols ~~common~~have ~~stock,~~been ~~for~~operating ~~aggregate~~effectively ~~proceeds~~for ofsufficient ~~$16,121,428~~contiguous ~~were~~reporting ~~repurchased by the Company~~periods, and ~~are~~after ~~presented~~management ashas ~~treasury~~validated ~~stock on~~ the ~~consolidated~~effective ~~balance~~operation ~~sheet.~~of ~~No shares were cancelled or reissued from treasury stock during~~ the ~~three~~controls ~~months~~through ~~ended September 30, 2025~~testing.

~~NOTE~~Changes 14in -Internal ~~RELATED~~Control ~~PARTIES~~over Financial Reporting

~~Accounts~~During ~~Payable~~the –quarter ~~Related~~ended ~~Parties~~March 31, 2026, management evaluated the Company’s internal control over financial reporting in connection with the Company’s strategic transition and concluded that there were several changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting, which are each described below.

~~Accounts~~Management ~~payable~~implemented -a ~~related parties~~new ~~were~~ERP ~~$20~~system,~~246 and~~ ~~$53~~NetSuite,~~380 as~~ ofin ~~September~~the ~~30,~~fourth quarter of 2025. ~~and~~Management ~~December~~also ~~31,~~integrated ~~2024,~~a ~~respectively,~~number ~~and consist~~ of ~~amounts~~automated ~~due~~systems ~~to certain~~into ~~officers~~the ~~and~~ERP ~~directors~~system ofto ~~the~~improve ~~Company,~~internal ascontrol ~~well~~over asfinancial ~~deferred~~reporting in ~~compensation~~Q1 ~~for certain executives~~2026.

~~Research and Development Expenses - Related Parties~~35

~~Research~~PART ~~and~~II ~~Development Expenses~~- –OTHER Related Parties of $141,043 and $151,138 and $416,870 and $455,345 during the three and nine months ended September 30, 2025 and 2024, respectively, is related to consulting and professional fees paid to current or former officers, directors or greater than 10% investors, or affiliates thereof, and is included in net loss from discontinued operations.INFORMATION

36 Item 1. Legal Proceedings.

~~NOTE~~From 15time –to ~~DISCONTINUED~~time, ~~OPERATIONS~~we may be a party to litigation that arises in the ordinary course of our business; however, we are not currently a party to any material legal proceeding. In addition, we are not aware of any material legal or governmental proceedings against us or contemplated to be brought against us.

~~During~~Prior ~~the~~litigation ~~three~~and ~~months~~other ~~ended September~~legal ~~30,~~proceedings ~~2025,~~which ~~the~~have ~~Company~~now ~~made~~been asettled are ~~strategic~~described ~~shift~~in, and incorporated by reference in, ~~its~~this ~~operations~~“Item to1. noLegal ~~longer~~Proceedings” ~~pursue~~of ~~its~~this ~~pharmaceutical~~Form ~~research~~10-Q ~~operations~~from, or“Part ~~the~~I ~~Gaming~~– ~~Technology~~Item ~~Platform~~1. AsFinancial ~~such,~~Statements” ~~these~~in ~~operations~~the ~~are~~Notes ~~presented~~to asCondensed ~~discontinued~~Consolidated ~~operations~~Financial Statements in ~~accordance~~“Note ~~with~~13 ~~ASC~~– Commitments ~~205~~and Contingences”, under the heading Legal Matters.

~~Summarized~~Item ~~balance~~1A. ~~sheet~~Risk ~~information of discontinued operations is below:~~Factors.

	September 30,		December 31,
	2025		2024
Cash and cash equivalents	$	35,847	$	17,890
Prepaid expenses and other current assets		47,997		78,723
Current assets of discontinued operations		83,844		96,613
Intangible assets (1)		—		7,622,041
Other assets of discontinued operations		—		7,622,041
Total assets of discontinued operations	$	83,844	$	7,718,654
Accounts payable	$	2,148,786	$	1,627,553
Accounts payable – related parties		1,016,262		630,801
Accrued expenses		534,978		735,446
Loan payable –current portion		10,544		147,305
Current liabilities of discontinued operations		3,710,570		3,141,105
Loan payable –noncurrent portion		—		6,616
Long term liabilities of discontinued operations		—		6,616
Total liabilities of discontinued operations	$	3,710,570	$	3,147,721

Except as discussed below, there have been no material changes from the risk factors previously disclosed in Part I, Item 1A of the Company’s Annual Report, under the heading “Risk Factors”, and investors should review the risks provided herein and in the Annual Report, prior to making an investment in the Company. The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in the Annual Report, under “Risk Factors”, any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial conditions and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price.

~~(1)~~The ~~Consists~~risk offactors ~~Gaming~~below ~~Technology~~which we ~~Platform~~have ~~intangible~~marked ~~assets~~with ~~pursuant~~an toasterisk ~~the~~(*) ~~September~~reflect ~~2024~~substantive ~~Asset~~changes ~~Purchase~~from, ~~Agreement~~or ~~with~~additions ~~Elray~~to, ~~which~~the ~~were~~risks ~~impaired~~described in ~~full during~~ the ~~three~~Annual ~~months ended September 30, 2025~~Report.

~~The~~If ~~statements~~we ofmake ~~operations~~acquisitions, ofthey ~~discontinued~~may disrupt ~~operations~~or ~~are~~have ~~summarized~~a ~~below:~~negative impact on our business.*

	Three months ended						Nine months ended
	September 30,			September 30,			September 30,			September 30,
	2025			2024			2025			2024
Research and development	$	(174,542	)	$	(251,577	)	$	(597,833	)	$	(1,105,086	)
Research and development - related parties		(141,043	)		(151,138	)		(416,870	)		(455,345	)
General and administrative		(66,484	)		19,794			(120,802	)		114,097
Loss from operations		(382,069	)		(382,921	)		(1,135,505	)		(1,446,334	)
Other income		—			42,084			—			1,081,346
Interest expense		(66,981	)		(3,081	)		(72,308	)		(12,465	)
Loss on asset impairment		(7,622,041	)		—			(7,622,041	)		—
Gain on settlement of debt		—			39,587			—			141,516
Net loss from discontinued operations	$	(8,071,091	)	$	(304,331	)	$	(8,829,854	)	$	(235,937	)

If we make acquisitions in the future, funding permitting, which may not be available on favorable terms, if at all, we could have difficulty integrating the acquired company’s assets, personnel and operations with our own. In addition, the key personnel of the acquired business may not be willing to work for us. We cannot predict the effect expansion may have on our core business. Regardless of whether we are successful in making an acquisition, the negotiations could disrupt our ongoing business, distract our management and employees and increase our expenses. In addition to the risks described above, acquisitions are accompanied by a number of inherent risks, including, without limitation, the following:

~~NOTE~~● 16the -difficulty ~~SUBSEQUENT~~of ~~EVENTS~~integrating acquired products, services or operations;

~~Subsequent~~● tothe ~~September~~potential ~~30,~~disruption ~~2025,~~of the ~~Company sold~~ongoing ~~$40,000,000~~businesses and distraction of ~~ETH~~our ~~holdings~~management and the management of acquired companies;

~~Adoption~~● ofdifficulties ~~the~~in ~~2025~~maintaining ~~Omnibus~~uniform ~~Incentive~~standards, ~~Plan~~controls, procedures and policies;

On● ~~October 7, 2025,~~ the ~~shareholders of~~potential ~~ETHZilla~~impairment ~~voted for the adoption~~ of ~~the~~relationships ~~2025~~with Omnibus Incentive Plan. Pursuant to this plan, on November 12, 2025, the Company granted, after recommendation of the by the Compensation Committee of the Company’s Board of Directors, 4,816,685 shares of common stock to officers, directors, employees and acustomers ~~consultant~~ as ~~compensation.~~a ~~The~~result ~~shares vest half upon grant and half on January 2, 2026. The Company issued an aggregate~~ of ~~3,728,838~~any ~~shares~~integration of ~~restricted~~new ~~common~~management ~~stock, to reflect net vesting for tax withholding purposes which substantially reduces the grant award by the grantees’ effective tax rates as required by law.~~personnel;

~~Purchase~~● the potential inability or failure to achieve additional sales and ~~Subscription~~enhance ~~Agreement~~our customer base through cross-marketing of the products to new and existing customers;

On● ~~October 22, 2025, we entered into a Purchase and Subscription Agreement (~~the ~~“Satschel~~effect ~~Agreement”) with Satschel, Inc., a Delaware corporation (“Satschel”). Satschel owns Liquidity.io, a regulated broker-dealer and operator~~ of aany ~~Digital~~government ~~Alternative~~regulations ~~Trading System~~which ~~(ATS)~~relate ~~platform~~to (the ~~“Platform”).~~business acquired;

~~Pursuant~~● topotential ~~the~~unknown ~~Satschel Agreement,~~liabilities ~~Satschel~~associated ~~sold~~with usacquired ~~shares~~businesses ofor ~~its~~product ~~Class~~lines, Aor ~~Common~~the ~~Stock~~defense ~~representing 15%~~ of ~~its~~any ~~fully-diluted capitalization (the “Satschel Securities”)~~litigation, inwhether ~~consideration~~or ~~for~~not ~~(a) $5 million in cash; and (b) 556~~successful,~~174~~ ~~shares~~resulting offrom ~~our~~actions ~~common stock with an agreed value~~ of ~~$10~~the ~~million,~~acquired ~~which~~company ~~are~~prior ~~subject~~ to aour ~~six~~acquisition; ~~month lock-up (the “Satschel Shares”).~~and

37 ● potential expenses under the labor, environmental and other laws of various jurisdictions.

~~The~~Our ~~Satschel~~business ~~Agreement~~could ~~includes~~be severely ~~(i) customary~~impaired ~~representations~~if ofand ~~each~~to of the ~~parties;~~extent ~~(ii)~~that ~~positive~~we ~~and~~are ~~negative~~unable ~~covenants required~~ to besucceed ~~met~~in byaddressing ~~Satschel~~any ~~following the~~of ~~Closing~~these ~~(defined~~risks ~~below),~~or ~~relating~~other toproblems ~~required~~encountered ~~quarterly~~in ~~budgets,~~connection with ~~financial~~an ~~reporting~~acquisition, ~~minimum~~many ~~cash balances and notification~~ of ~~key personnel~~which ~~changes,~~cannot asbe ~~well~~presently asidentified. ~~budget~~These ~~compliance,~~risks and ~~restrictions~~problems oncould ~~new~~disrupt ~~business~~our ~~lines,~~ongoing ~~capital expenditures~~business, ~~compensation adjustments,~~distract ~~indebtedness,~~our ~~sales~~management ~~or dispositions of assets~~ and ~~operations~~employees, ~~public~~increase ~~listings~~our ~~and~~expenses ~~reverse mergers, issuances of securities,~~ and ~~amendments to~~adversely ~~Satschel’s~~affect ~~governing~~our ~~documents,~~results ~~without the prior written consent~~ of the Company, subject to certain exceptions; and (iii) customary indemnification requirements of the parties, subject to a $50,000 deductible and a $2 million cap, subject to certain customary exceptionsoperations.

The Satschel Agreement also provides certain additional rights to the Company following the Closing, including (a) the exclusive right in perpetuity to list any digital tokens or assets issued on Ethereum Layer 2 protocols on the Platform; (b) a right of first refusal until the earlier of (i) five years following the Closing Date; and (ii) the date that Satschel becomes publicly-traded, to acquire any equity securities of Satschel that it may offer or sell; and (c) the right to appoint one member of the Board of Directors of Satschel, for so long as the Company owns any equity interests of Satschel.36

~~The~~We ~~acquisition~~are ~~contemplated~~considering a number of strategic alternatives, which bycould ~~the~~have ~~Satschel~~an ~~Agreement~~adverse ~~closed~~impact on ~~October~~our ~~22,~~business ~~2025~~or the price of our Common Stock.

~~ATM~~We ~~Sales~~are ~~Agreement~~considering a number of strategic alternatives focused on maximizing shareholder value. These strategic alternatives include, but are not limited to, an acquisition, merger, sale of the Company or material assets of the Company, strategic partnership, capital raise and a distribution of the Company’s capital and assets. There can be no assurance that this process will result in the approval or completion of any particular strategic alternative or transaction in the future, or that any such strategic alternative or transaction, if approved or completed, will yield additional shareholder value. The process of exploring, reviewing, and pursuing strategic alternatives, could involve significant risks to our operations, financial results and the price of our Common Stock, whether or not any such transaction is ultimately consummated. These risks include, among others:

~~Since~~● ~~September~~diversion ~~30, 2025, we have sold an aggregate~~ of ~~410,403 shares of~~ our ~~common~~management's ~~stock~~attention ~~(of~~from ~~which 405,735 have been issued) under~~ the ~~Sales~~operation ~~Agreement for net proceeds~~ of ~~approximately~~our ~~$6,861,299, after deducting commissions.~~business;

~~Treasury~~● ~~Stock~~significant ~~Transactions~~transaction costs, including legal, financial advisor, accounting and other third-party fees and expenses, which may be incurred even if no transaction is consummated and which may not be recovered;

~~Subsequent~~● todilution ~~September 30, 2025, a total~~ of ~~1,454,400~~our ~~shares~~existing ofequity ~~common~~interests ~~stock,~~or ~~for~~a andecrease ~~aggregate~~in ~~cost~~the value of ~~$30,141,810~~our ~~after~~Common ~~fees were repurchased by the Company.~~Stock;

~~Exercise~~● a change in control or a third party's acquisition of ~~Options~~ a controlling stake in our business, which could trigger rights and remedies available to our contractual counterparties;

On● ~~October~~restrictions ~~28,~~on ~~2025,~~our ~~Jordan Consulting~~ability ~~for~~to ~~Blair~~raise ~~Jordan~~additional capital, ~~the~~incur ~~former~~indebtedness ~~Chief~~or ~~Executive~~otherwise ~~Officer~~control ofdecisions ~~the~~regarding ~~Company,~~our ~~exercised~~operations ~~options~~and ~~to purchase 41,000 shares of common stock.~~management;

~~Expiration~~● loss of, ~~Public~~or ~~Warrants~~inability to attract, retain or motivate, key management personnel and other employees, and deterioration of our relationships with our employees;

On● ~~November~~disruption 6of, ~~2025~~or adverse changes to, ~~the Company’s~~our ~~then~~relationships ~~outstanding~~with ~~public~~customers, ~~warrants~~suppliers, ~~expired~~contract ~~pursuant~~counterparties toand ~~their~~other ~~terms.~~stakeholders;

~~License~~● ~~Agreement~~negative ~~Termination~~publicity, market speculation, or harm to our reputation; and

On● ~~October~~shareholder ~~29,~~litigation ~~2025,~~and ~~the Kennedy~~other ~~Trust~~legal ~~for~~proceedings, ~~Rheumatology~~and ~~Research (“Kennedy Trust”) provided~~ the ~~Company~~substantial ~~notice~~costs ofassociated ~~the~~with ~~termination~~defending ofagainst asuch ~~patent license~~proceedings, ~~agreement~~that ~~between~~may ~~the~~arise ~~Company and the Kennedy Trust~~ in connection with ~~rheumatology~~the ~~research,~~strategic ~~which~~review ~~termination~~process ~~will~~or ~~become~~any ~~effective on~~resulting ~~December 29, 2025~~transaction.

~~Assignment~~Any ~~and~~one ~~Settlement~~or ~~Agreement~~more of these factors or other risks could have a material adverse effect on our business, results of operations, financial condition or the trading price of our Common Stock.

On November 6, 2025, the Company and CannBioRex Pharma Limited, a company incorporated under the laws of England and Wales and an indirect wholly-owned subsidiary of the Company (“CannBioRex”), entered into an Assignment and Settlement Agreement (the “Oxford Assignment Agreement”) dated November 5, 2025, with the Chancellor, Masters and Scholars of the University of Oxford (“Oxford”) and Oxford University Innovation Limited, a wholly-owned subsidiary of Oxford University (“OUI”). Pursuant to the Agreement, we have agreed to (i) terminate a 2013 license agreement between OUI and the Company (then known as 180 Life Sciences Corp.), pursuant to which we were granted certain rights under OUI’s patent related to the treatment of Dupuytrens’s Disease (the “OUI Patent”) and the use of clinical data generated by Oxford in clinical trials; (ii) assign all of our intellectual property rights relating primarily to the treatment of Dupuytrens’s Disease, including a patent relating to the Dupuytren’s Contracture indication (the “Company IP”), to OUI; and (iii) terminate a series of research sponsorship, research support, and studentship agreements between Oxford, the Company, and CannBioRex (collectively, the “Research Agreements”).37

~~The~~Item Oxford Assignment Agreement requires us to pay Oxford, within seven days after execution, an initial payment of $500,000 which has been paid, to be applied toward the repayment of $1,675,500 in unpaid research fees owed by CannBioRex to Oxford pursuant to the Research Agreements (the “Research Fees”)2. ~~Pursuant~~Unregistered toSales ~~the Oxford Assignment Agreement, OUI has agreed to use its commercially reasonable best endeavors to promptly negotiate and finalize (and will not intentionally delay or interfere with) the sale~~ of ~~the~~Equity ~~OUI Patent and Company IP. If any party acquires~~Securities ownership or exclusive rights in the Company IP within 36 months of the date of the Agreement, OUI will apply the amount received from such sale, first to the full repayment of the balance of the Research Fees to Oxford, and ~~thereafter~~Use ~~fifty percent~~ of ~~the remaining net revenues to the Company, up to a maximum net revenue share of $5 million.~~Proceeds

~~The~~Recent ~~Oxford~~Sales ~~Assignment Agreement includes a mutual release and settlement~~ of ~~claims,~~Unregistered customary representations of each of the parties, and mutual confidentiality provisions. In addition, we have agreed to indemnify OUI and Oxford against any third party claims against them by our shareholders or by Glenn Larsen (former chief executive officer of our subsidiary, 180 Therapeutics L.P.) arising from the Oxford Assignment Agreement, the termination of the License Agreement and Research Agreements, or the assignment of the Company IP to OUI.Securities

~~Termination~~There have been no sales of ~~Research~~unregistered ~~and~~securities ~~License~~during ~~Agreement~~the quarter ended March 31, 2026 which have not previously been reported in a Current Report on Form 8-K.

OnPurchases November 11, 2025, Yissum and the Company terminated the Research and License Agreement dated May 13, 2018 between the Company (formerly 180 Life Sciences Corp./Cannbiorex Pharmaceuticals Corp.). Pursuant to the agreement, Yissum confirmed that it agreed to the discontinuation of ~~all~~Equity ofSecurities ~~the~~by ~~Company’s obligations to fund~~ the ~~ongoing patent expenses with respect to the licensed patents~~ Issuer and toAffiliated ~~the return of the licensed technology.~~Purchasers

38The Company did not repurchase any shares of its Common Stock during the three months ended March 31, 2026.

Item 23. ~~Management’s Discussion~~Defaults ~~and~~upon ~~Analysis~~Senior ~~of Financial Condition and Results of Operations~~Securities.

~~CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS~~None.

~~This~~Item Quarterly Report on Form 10-Q (“Report”), including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements, within the federal securities laws, including the Private Securities Litigation Reform Act of 1995, regarding future events and the future results of the Company that are based on current expectations, estimates, forecasts, and projections about the industry in which the Company operates and the beliefs and assumptions of the management of the Company4. ~~Words~~Mine ~~such~~Safety as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words, and similar expressions are intended to identify such forward-looking statementsDisclosures. These forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed elsewhere in this Report, including under “Risk Factors”, and in other reports the Company files with the Securities and Exchange Commission (“SEC”), including the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 31, 2025 (under the heading “Risk Factors” and in other parts of that report), and include, but are not limited to, statements about:

●Not ~~The need for additional capital, dilution caused by future offerings, the availability of such offerings and the terms thereof;~~applicable.

●Item ~~our~~5. Other ~~success in retaining or recruiting, or changes required in, our officers, key employees or directors;~~Information.

●(c) Rule 10b5-1 Trading Plans. Our directors and executive officers may from time to time enter into plans or other arrangements for the purchase or sale of our shares that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or may represent a non-Rule 10b5-1 trading arrangement under the Exchange Act. During the quarter ended March 31, 2026, none of the Company’s ~~ability~~directors toor ~~fully~~officers ~~comply~~(as ~~with~~defined ~~numerous~~in ~~federal~~Rule 16a-1(f)) adopted, ~~state~~modified ~~and~~or ~~local~~terminated ~~laws~~any ~~and~~contract, ~~regulatory~~instruction ~~requirements;~~or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

● changing rates of inflation and interest rates, and economic downturns, including potential recessions, as well as macroeconomic, geopolitical, health and industry trends, pandemics, acts of war (including the ongoing Ukraine/Russian conflict, and Israel/Hamas conflict) and other large-scale crises;38

●Item ~~our~~6. ~~ability to maintain our listing of our common stock on the Nasdaq Capital Market;~~Exhibits.

●The ~~the~~following ~~Company’s~~exhibits ~~reliance~~are onfiled ~~its~~herewith ~~management;~~or incorporated by reference herein:

● the potential effect of economic downturns, recessions, tariffs, changes in interest rates and inflation, and market conditions, including recessions on the Company’s operations and prospects as a result of increased inflation, tariffs, increasing interest rates, global conflicts and other events;

Exhibit No.		Description
2.1£#		Engine Sale and Purchase Agreement dated January 12, 2026, by and between Avean Engine Solutions, LLC, as seller, and ETHZilla Aerospace LLC, as buyer (filed as Exhibit 2.1 to the registrant’s Current Report on Form 8-K filed on January 23, 2026 and incorporated by reference herein).
2.2£		Loan Purchase Agreement dated January 30, 2026, by and between ETHZilla Modular Mortgage LLC and Zippy Manufactured Home Credit Fund I L.P. (filed as Exhibit 2.1 to the registrant’s Current Report on Form 8-K filed on February 5, 2026 and incorporated by reference herein).
2.3£#		Engine Sale and Purchase Agreement dated March 27, 2026, between Aero Engine Solutions, Inc., as seller, and Eurus Aerospace Token 1 LLC, as buyer (filed as Exhibit 2.6 to the registrant’s Annual Report on Form 10-K filed on April 1, 2026 and incorporated by reference herein)..
3.1		Second Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on November 12, 2020 and incorporated by reference herein).
3.2		Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of the Company, filed with the Secretary of State of Delaware on December 15, 2022 (filed as Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on December 16, 2022 and incorporated by reference herein).
3.3		Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of the Company, filed with the Secretary of State of Delaware on February 26, 2024 (filed as Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on February 28, 2024 and incorporated by reference herein).
3.4		Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of the Company, filed with the Secretary of State of Delaware on July 24, 2025 (filed as Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on July 24, 2025 and incorporated by reference herein).
3.5		Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of the Company, filed with the Secretary of State of Delaware on August 12, 2025 (filed as Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on August 13, 2025 and incorporated by reference herein).
3.6		Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of the Company, as filed with the Secretary of State of Delaware on October 8, 2025 (filed as Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on October 8, 2025 and incorporated by reference herein).
3.7		Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of the Company, filed with the Secretary of State of Delaware on October 14, 2025 (filed as Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on October 15, 2025 and incorporated by reference herein).
3.8		Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of the Company, as filed with the Secretary of State of Delaware on February 24, 2026 (filed as Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on February 26, 2026 and incorporated by reference herein).
3.9		Fourth Amended and Restated Bylaws of the Company, effective as of February 11, 2026 (filed as Exhibit 3.9 to the registrant’s Annual Report on Form 10-K filed on April 1, 2026 and incorporated by reference herein).
3.10		Certificate of Designations of the Company Establishing the Designations, Preferences, Limitations and Relative Rights of Its Series B Convertible Preferred Stock (filed as Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on October 3, 2024 and incorporated by reference herein).
4.6		Form of Convertible Debenture dated September 23, 2025 (filed as Exhibit 4.1 to the registrant’s Current Report on Form 8-K/A filed on September 25, 2025 and incorporated by reference herein).
10.1£#		Warehouse Facility Agreement dated March 3, 2026, by and between ETHZilla Auto Loans LLC and Anchored Finance, LLC (filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on March 13, 2026 and incorporated by reference herein).
10.2£#		Master Loan Purchase Agreement dated March 23, 2026, by and between ETHZilla Modular Mortgage LLC and Zippy Loans, LLC (filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on March 27, 2026 and incorporated by reference herein).
10.3£		Master Loan Servicing Agreement dated March 23, 2026, by and between ETHZilla Modular Mortgage LLC and Zippy Loans, LLC (filed as Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed on March 27, 2026 and incorporated by reference herein).

~~● the Company’s ability to protect its proprietary information and intellectual property (IP);~~39

● the effect of current and future regulation, the Company’s ability to comply with regulations (both current and future) and potential penalties in the event it fails to comply with such regulations and changes in the enforcement and interpretation of existing laws and regulations and the adoption of new laws and regulations that may unfavorably impact our business;

10.4£#		Purchase Commitment effective March 23, 2026, by and between Zippy Loans, LLC and ETHZilla Modular Mortgage LLC (filed as Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed on March 27, 2026 and incorporated by reference herein).
10.5		Side Letter Amendment to Series B-3 Preferred Stock Purchase Agreement dated March 25, 2026, by and between the Company and Zippy, Inc. (filed as Exhibit 10.66 to the registrant’s Annual Report on Form 10-K filed on April 1, 2026 and incorporated by reference herein).
10.6+		Form of Performance Stock Unit Award Agreement (filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on April 3, 2026 and incorporated by reference herein).
10.7+		Form of Restricted Stock Unit Award Agreement (filed as Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed on April 3, 2026 and incorporated by reference herein).
10.8		Second Amended and Restated Sales Agreement, dated April 8, 2026 by and among Forum Markets, Incorporated, Clear Street LLC, and TCBI Securities, Inc. d/b/a Texas Capital Securities (filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on April 8, 2026 and incorporated by reference herein).
31.1*		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
31.2*		Certification of Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
32.1**		Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
32.2**		Certification of Principal Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
101.INS*		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set

●* ~~other~~Filed ~~risks and uncertainties, including those described under “Risk Factors”, herein~~herewith.

39 ** Furnished herewith.

All forward-looking statements speak only as of the date of the filing of this Report. The reader should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this Report are reasonable, we provide no assurance that these plans, intentions or expectations will be achieved. We disclose important factors that could cause our actual results to differ materially from our expectations under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Report and our Annual Report on Form 10-K for the year ended December 31, 2024, as amended by Amendments No. 1 and 2 thereof, filed with the Securities and Exchange Commission on April 25, 2025 and May 8, 2025, respectively. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.


+	Management contract or compensatory plans or arrangements.

£	Certain schedules and exhibits (or similar attachments) have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally copies of any omitted exhibits and schedules to the SEC upon its request.

#	Certain portions of this exhibit have been redacted in accordance with Item 601(b)(2)(ii) or Item 601(b)(10)(iv) of Regulation S-K, as applicable. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the SEC upon its request.

~~Reverse Stock Split~~40

Effective on October 20, 2025 at 12:01 a.m. Eastern Time (the “Effective Time”), we affected a 1-for-10 reverse stock split of our then outstanding common stock (the “Reverse Stock Split”). No fractional shares were issued in connection with the Reverse Stock Split, and stockholders who would otherwise be entitled to receive a fractional share instead received cash in lieu of such fractional share, based upon the closing sale price of the common stock on the trading day immediately prior to the effective time of the Reverse Stock Split, as reported on the Nasdaq Capital Market.SIGNATURES

InPursuant ~~connection~~to ~~with~~ the ~~Reverse~~requirements ~~Stock~~of ~~Split~~Section ~~discussed~~13 ~~above,~~or ~~all~~15(d) of ~~outstanding~~the ~~options,~~Securities ~~warrants,~~Exchange ~~and~~Act ~~other securities entitling their holders to purchase or otherwise receive shares~~ of ~~common stock were adjusted~~1934, ~~as required by~~ the ~~terms~~registrant ofhas ~~each~~duly ~~security.~~caused ~~The~~this ~~number~~report ~~of shares available~~ to be ~~awarded under~~signed ~~the~~on ~~Company’s~~its ~~equity~~behalf by ~~incentive plans were also appropriately adjusted. Following~~ the ~~Reverse Stock Split~~undersigned, ~~the~~thereunto ~~par~~duly ~~value of the common stock remained unchanged at $0.0001 par value per share. The Reverse Stock Split did not change the~~ authorized ~~number of shares of common stock or preferred stock~~.

The effects of the Reverse Stock Split have been retroactively reflected throughout this Report.

	FORUM MARKETS, INCORPORATED

Date: May 15, 2026	By:	/s/ McAndrew Rudisill
		McAndrew Rudisill
		Chief Executive Officer
		(Principal Executive Officer)

General Information

Date: May 15, 2026	By:	/s/ John Saunders
		John Saunders
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

The following discussion is based upon our unaudited Condensed Consolidated Financial Statements included elsewhere in this Report, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Report, and in other reports we file with the SEC, and in our most recent Annual Report on Form 10-K. All references to years relate to the calendar year ended December 31st of the particular year.41

This information should be read in conjunction with the interim unaudited condensed consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the audited financial statements and notes thereto and “Part II. Other Information – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”, contained in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on March 31, 2025, as amended by Amendments No. 1 and 2 thereof, filed with the Securities and Exchange Commission on April 25, 2025 and May 8, 2025, respectively (the “Annual Report”).

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Certain capitalized terms used below and otherwise defined below, have the meanings given to such terms in the footnotes to our unaudited condensed consolidated financial statements included above under “Part I – Financial Information” – “Item 1. Financial Statements”.

Unless the context requires otherwise, references to the “Company,” “we,” “us,” “our,” “ETHZilla”, and “ETHZilla Corporation” refer specifically to ETHZilla Corporation, formerly 180 Life Sciences Corp. and its consolidated subsidiaries. References to “KBL” refer to the Company prior to the November 6, 2020 Business Combination.

In addition, unless the context otherwise requires and for the purposes of this Report only:

“CAD” refers to Canadian dollars;

“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

“£” or “GBP” refers to British pounds sterling;

“SEC” or the “Commission” refers to the United States Securities and Exchange Commission; and

“Securities Act” refers to the Securities Act of 1933, as amended.

Additional Information

We file annual, quarterly, and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s website at www.sec.gov and are available for download, free of charge, soon after such reports are filed with or furnished to the SEC, on the “Investors”—“SEC Filings” page of our website at https://ethzilla.com. Copies of documents filed by us with the SEC are also available from us without charge, upon oral or written request to our Secretary, who can be contacted at the address and telephone number set forth on the cover page of this Report. Our website address is https://ethzilla.com. The information on, or that may be accessed through, our website is not incorporated by reference into this Report and should not be considered a part of this Report.

The Company uses, and will continue to use, its website (https://ethzilla.com), press releases, and various social media channels, including its X account (x.com/ETHZilla_ETHZ) and its LinkedIn account (https://www.linkedin.com/company/ethzilla/), as additional means of disclosing public information to investors, the media and others interested in the Company. It is possible that certain information that the Company posts on its website, disseminated in press releases and on social media could be deemed to be material information, and the Company encourages investors, the media and others interested in the Company to review the business and financial information that the Company posts on its website, disseminates in press releases and on the social media channels identified above, as such information could be deemed to be material information. The contents on the Company’s website and its social media channels are not incorporated by reference in this Current Report on Form 8-K.

Going Concern and Management Liquidity Plans

In the consolidated financial statements as of and for the three months ended June 30, 2025 and prior periods, management disclosed substantial doubt about the Company’s ability to continue as a going concern. Due to the significant fundraising events undertaken by the Company during the three months ended September 30, 2025, as disclosed under “Part I – Item 1. Financial Statements” in the Notes to Condensed Consolidated Financial Statements in “Note 8 - Debt” and “Note 13 – Stockholders’ (Deficit) Equity”, above, management determined that the Company will have sufficient cash flows to meet its obligations over the next 12 months, and as such the substantial doubt about the Company’s ability to continue as a going concern has been alleviated.

Organization of MD&A

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) is provided in addition to the accompanying condensed consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. MD&A is organized as follows:

● Business Overview and Recent Events. A summary of the Company’s business and certain material recent events.

● Significant Financial Statement Components. A summary of the Company’s significant financial statement components.

● Results of Operations. An analysis of our financial results comparing the three and nine months ended September 30, 2025 and 2024.

● Liquidity and Capital Resources. An analysis of changes in our balance sheets and cash flows and discussion of our financial condition.

● Critical Accounting Estimates. Accounting estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts.

Business Overview

Our Company

ETHZilla is a technology company in the decentralized finance industry (“DeFi”) seeking to connect financial institutions, businesses and organizations worldwide by enabling secure, accessible blockchain transactions through Ethereum network protocol implementations. In August 2025, we adopted an Ethereum-focused treasury management strategy and have since continued our strategic shift towards implementation of our business plans designed to generate recurring revenues through various DeFi protocols that improve Ethereum network integrity and security. Through our proprietary protocol implementations, we facilitate DeFi transactions and asset digitization across multiple Layer 2 Ethereum networks. In the future, we plan to offer tokenization solutions, DeFi protocol integration, blockchain analytics, traditional-to-digital asset conversion gateways, and other DeFi services.

In addition, (i) we own certain source code and intellectual property relating to an online blockchain casino, our “back-end” gaming platform, which incorporates blockchain technology and cryptocurrency operability (the “Gaming Technology Platform”), and (ii) have two legacy biotechnology programs that are focused on different diseases or medical conditions, and that target different factors, molecules or proteins. These operations are classified as discontinued operations under ASC 205, as discussed in greater detail under “Part I – Item 1. Financial Statements” in the Notes to Condensed Consolidated Financial Statements in “Note 1 - Business Organization and Nature of Operations”, “Note 3 - Summary of Significant Accounting Policies” and “Note 15 – Discontinued Operations”.

Our Ethereum Treasury Strategy

In August 2025, our Board of Directors implemented an Ethereum-focused treasury strategy, with Ether (“ETH”) serving as the primary treasury reserve asset on an ongoing basis, subject to market conditions and anticipated needs of the business. Our goal is to acquire and grow our overall ETH position and utilize professional treasury strategies to significantly increase our ETH holdings. We have not set a specific target for the maximum amount of ETH we seek to hold.

Our treasury strategy focuses on increasing the amount of ETH through a combination of capital raising activities and treasury activities including staking, restaking, liquid staking and other DeFi activities. We expect that ETH will serve as our primary treasury reserve asset in the future. We aim to maximize ETH accumulation and value accretion, while maintaining robust controls and oversight over these digital assets.

ETHZilla’s decision to accumulate ETH as a core treasury asset is grounded in a forward-looking view of the evolving global financial ecosystem. We believe Ethereum’s unparalleled programmability, security and developer momentum will make it a foundational layer for the next generation of decentralized financial applications. Ethereum’s transition to a Proof-of-Stake (“PoS”) consensus mechanism and the rise of Layer 2 blockchain networks with high scalability have transformed ETH into a yield-bearing, productive digital asset with increasing institutional adoption and intrinsic network value. We believe that ETH’s value proposition at its core is a digital trust commodity and that an investment in ETH represents an asymmetric long-term growth opportunity as more stablecoins and other tokenized real-world assets are secured by the Ethereum ecosystem.

Our treasury is designed with the goal of bringing value to our stockholders in a variety of ways. We plan to raise capital to be used to increase our ETH position in a manner which is accretive to shareholders. This can come in the form of equity, equity-linked debt or other forms of offerings designed to maximize shareholder exposure to ETH within a prudent risk management framework. We plan to continue to deploy the majority of the ETH in our treasury across staking, lending, and advanced DeFi protocols to generate yields and turn the treasury into a productive asset. As of September 30, 2025, over 70% of our ETH treasury has been deployed, and we intend to maintain a similar or higher percentage going forward. We do not hedge our ETH and do not currently have plans to hedge our ETH in the future. In addition, if the price of ETH increases in the future, the value of our ETH treasury will rise, which would also benefit our stockholders.

WE ARE NOT REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, AND STOCKHOLDERS DO NOT HAVE THE PROTECTIONS ASSOCIATED WITH OWNERSHIP OF SHARES IN A REGISTERED INVESTMENT COMPANY NOR THE PROTECTIONS AFFORDED BY THE COMMODITIES EXCHANGE ACT OF 1936, AS AMENDED.

How We Purchase or Sell Digital Assets

Our management team reviews the Company’s short term obligations and excess cash available to dedicate to the ETH treasury strategy. When it is determined that the Company has excess cash available to dedicate to the treasury strategy, we deploy that capital into one of our custodians and through acquisition strategies with the custodians and our asset manager, and we acquire the ETH over several days or weeks to maximize the number of ETH that is acquired with the deployed capital. If it is determined that the treasury needs to liquidate part of its ETH, the same process of selling the ETH into the market would be used. The Company has not reduced its treasury or sold any of its ETH staking rewards to date.

Our ETH Deployment Strategy

Pursuant to our treasury strategy, we actively deploy our ETH in the treasury across staking, lending, and advanced DeFi protocols to generate yields. Through our proprietary protocol implementations, we facilitate DeFi transactions and asset digitization across multiple Layer 2 Ethereum networks. We have partnered with innovators such as Electric Capital and liquid restaking leaders like Puffer and etherFi, which enable us to better optimize returns on our ETH reserves while providing security and capital efficiency to stakeholders.

Our staking revenues are derived from the rewards we earn by actively participating in the Ethereum network’s PoS consensus mechanism. Specifically, ETHZilla delegates its ETH holdings to validators that process and verify transactions on the blockchain. In return, the Company receives protocol-level rewards in ETH, typically proportional to the amount staked and the network’s overall activity and performance.

Our ETH staking activities may include native staking, as well as liquid staking. In native staking, the Company, through its agreements with custodians and asset managers, stakes assets with third-party validators. Participants stake ETH through these validator nodes and, when chosen as validators by the network, earn staking rewards and transaction fees proportional to their staked amount. Liquid staking is similar to native staking, however, one key difference and intended benefit of this method is the ability to provide the Company with tokens representing digital assets in exchange for its ETH. Additionally, as part of the “activating” and “exiting” processes of ETH staking, any staked ETH may be inaccessible for a period of time determined by a range of factors, resulting in certain liquidity risks that we manage.

We view our staking operations and activities as a core strategic pillar of its broader alignment with the Ethereum ecosystem. Our participation is expected to yield economic return while also contributing directly to Ethereum’s decentralization, scalability, and security. Moreover, we believe staking is foundational to a new generation of blockchain-native capital structures that enable corporations to earn yield without relying on traditional debt instruments, equities, or centralized intermediaries. Our staking efforts are focused on maximizing yield, managing risk and ensuring that the Company’s operations meet institutional standards for transparency and efficiency.

Deployment Process

If it is determined to reduce the amount of the ETH deployed or it is determine to change the allocation of ETH, we will initiate an unstaking process, which effectively reverses the delegation or deployment of the ETH from the applicable validator, protocol or network.

Native ETH staking has a cooldown period known as the “deactivation period,” which is the time it takes for the unstaked ETH to become unbonded and fully liquid. During this period, the tokens are not actively earning rewards, but they are also not yet available for transfer or use. The length of this period can vary based on network conditions, which is generally expected to be 10 days or less, but has been over 45 days recently. Once the cooldown period is complete, the Company will have complete control over the ETH, including the ability to hold, sell, transfer, restake or otherwise deploy the ETH as determined by management.

Liquidity Management

The Company’s native staking program involves the temporary loss of the ability to transfer, assign a new validator or otherwise dispose of the ETH. We maintain a certain amount of liquid ETH in the treasury and a certain amount of cash to ensure that the Company is able to satisfy its current obligations.

ETH and the Ethereum Network

ETH is a digital asset, also referred to as a digital currency or cryptocurrency, which serves as the unit of account on the open-source, decentralized, peer-to-peer Ethereum network. Ethereum launched in 2015 to expand blockchain’s potential beyond simple payments—enabling permissionless platforms for finance, gaming, social media, digital identity, and more. The Ethereum network represents one of the world’s most prominent blockchain ecosystems, distinguished by its ability to run decentralized applications and smart contracts on an open, distributed ledger. Ethereum is the foundation of digital finance and settlement layer for the majority of stablecoins, DeFi, and tokenized assets.

ETH

ETH is the network’s native cryptocurrency, used for transaction fees (known as “gas”), validator incentives, and diverse digital activities. ETH can be transferred in direct peer-to-peer transactions through the direct sending of ETH over the Ethereum blockchain from one ETH address to another. Among end-users, ETH can be used to pay other members of the Ethereum network for goods and services under what resembles a barter system. Consumers can also pay merchants and other commercial businesses for goods or services through direct peer-to-peer transactions on the Ethereum blockchain or through third-party service providers.

In addition to using ETH to engage in transactions, investors may purchase and sell ETH to speculate as to the value of ETH in the ETH market, or as a long-term investment to diversify their portfolio. The value of ETH within the market is determined, in part, by the supply of and demand for ETH in the global ETH market, market expectations for the adoption of ETH as a store of value, the number of merchants that accept ETH as a form of payment, and the volume of peer-to-peer transactions, among other factors. As of September 30, 2025, with a total market capitalization of approximately $495 billion, ETH is the second largest cryptocurrency by market capitalization behind bitcoin.

The Ethereum network has no formal cap on the total supply of ETH. The Ethereum network does, however, feature several mechanisms that, individually and in aggregate, have the effect of limiting the total supply of ETH outstanding.

New ETH is issued through the PoS process, where validators who help secure the network by locking up their ETH earn newly created ETH as rewards for validating transactions. The rate of new ETH issuance has dropped significantly since Ethereum switched from Proof-of-Work (“PoW”) to PoS in September 2022 (the “Merge”). The issuance rate varies based on the number of validators on the network and other factors.

At the same time, Ethereum features a burning mechanism introduced in connection with the Merge, which destroys a portion of transaction fees (known as the “base fee”), permanently removing that ETH from circulation. When network activity is high, this burn rate can sometimes exceed the rate of new issuance, causing the total supply of ETH to decrease temporarily (deflationary periods). The actual net supply growth is determined by the balance between new issuance to validators and ETH burned from transaction fees.

During the nine months ended September 30, 2025, the total ETH supply fluctuated between approximately 120.3 million and 120.7 million, with annual net supply changes expected to typically be at around 0% to 1%. There is no annual hard cap on the total supply of ETH, but the protocol’s economic design makes runaway inflation unlikely under normal circumstances.

The change from PoW to PoS also limits the total supply of ETH in circulation by effectively locking staked ETH for certain period of time, making the staked ETH temporarily unavailable for trading or selling.

Ethereum Network

No single entity owns or operates the Ethereum network. The Ethereum network is accessed through software and governs ETH’s creation and movement. The source code for the Ethereum network is open-source, and anyone can contribute to its development. The Ethereum network is governed by a set of rules that are commonly referred to as the “Ethereum protocol.”

As part of the Merge, Ethereum transitioned from PoW to PoS, a consensus mechanism where validators stake ETH to secure the network, process transactions, and propose new blocks. The Merge was designed to dramatically reduce Ethereum’s energy use while maintaining security and decentralization. Developers can write smart contracts in programming languages ensuring that agreement terms are enforced transparently and without third-party oversight. Ethereum’s architecture allows for rapid iteration, robust interoperability with other chains, and widespread deployment of programmable digital assets—such as stablecoins, non-fungible tokens, and tokenized real-world assets.

We believe the potential of Ethereum is substantial: it has become the backbone of modern DeFi, facilitating lending, borrowing, trading, and earning yields without traditional intermediaries. Its programmable smart contracts are used for everything from automated insurance payouts to decentralized autonomous organizations and global capital markets. Ongoing upgrades (like sharding and Layer 2 scaling) are anticipated to continue to improve its scalability, versatility, and affordability, making Ethereum a foundation for the next generation of internet and financial infrastructure worldwide.

Although there are many alternatives, the Ethereum network is the oldest and largest smart contract platform in terms of market capitalization, availability of decentralized applications, and development activity. Smart contracts can be utilized across several different applications ranging from art to finance. Currently, one of the most popular applications is the use of smart contracts for underpinning the operability of DeFi, which consists of numerous highly interoperable protocols and applications. DeFi offers many opportunities for innovation and has the potential to create an open, transparent, and immutable financial infrastructure, with democratized access.

Staking

Staking on the Ethereum network is the process by which ETH holders participate in the blockchain’s PoS system by locking up their ETH to both secure the network and earn rewards. Validators are chosen to propose and attest to new blocks, facilitated by the ETH they have staked as collateral, which is designed to ensure the integrity of transactions and the overall security of the protocol. To operate a validator node directly, a minimum of 32 ETH is required, though smaller holders may participate through staking pools or via centralized platforms that aggregate deposits.

Rewards earned by ETH stakers depend on several factors, including the total amount of ETH staked on the network, validator uptime, overall network activity, and whether advanced reward mechanisms are used. The average annual percentage yield for ETH staking generally ranges from approximately 2% to 5%, depending on the staking method and platform. Rewards are distributed in ETH, compounding over time as new blocks are validated and transactions processed. Stakers who fail to maintain proper uptime or act maliciously may face penalties or even lose portions of their deposited ETH through “slashing,” a process designed to disincentivize bad behavior and maintain network trust.

Traditional staking involves locking ETH directly on the Ethereum protocol, where coins become temporarily inaccessible until unstaking or withdrawal periods are completed. Solo validators hold complete control but are responsible for technical maintenance, security, and managing the risks of downtime and slashing. Participating through trusted staking pools or custodial exchanges allow holders to stake without the technical burden or heavy capital requirements, though these options often involve trusting third-party operators and may introduce additional risks.

Liquid staking of ETH differs fundamentally from traditional staking methods by allowing stakers to retain liquidity and access their capital while still earning validation rewards. The process begins when the holder deposits their ETH into a liquid staking protocol, which then stakes those tokens with trusted network validators on their behalf. In exchange, the holder receives liquid staking tockets that represent both their staked position and accrued staking rewards. These LSTs can be freely moved, traded, and deployed across various DeFi applications, enabling broader utility than traditional staking where assets are locked and inaccessible until unbonding.

The primary benefits of liquid staking include uninterrupted access to the underlying asset’s value and the ability to earn additional yields without forgoing staking rewards. Holders can use LSTs as collateral in lending protocols, participate in yield farming, or trade them on decentralized exchanges, all while accumulating rewards from the underlying stake. This flexibility enables increased capital efficiency and opens up opportunities for portfolio diversification, as holders can simultaneously secure the protocol’s network and enhance returns through multifaceted DeFi strategies. Moreover, liquid staking often lowers staking minimums, making network participation more accessible. However, liquid staking introduces new risks, such as reliance on smart contracts, potential “depegging” of LSTs from the underlying value of ETH, and higher systemic dependence on protocol integrity. While traditional staking mainly carries validator or slashing risks, liquid staking compounds this with additional protocol and market risks.

The timeline for liquid staking is highly streamlined and user-oriented. After connecting a crypto wallet and depositing tokens, the platform rapidly issues LSTs (often within minutes) that incrementally accrue rewards. Holders may withdraw their ETH stake at any time by returning the LSTs, with most platforms offering near-instant or short processing windows compared to traditional staking’s lengthy deactivation periods.

Use of Custodians and Storage of ETH Tokens

We do not self-custody and only utilize third-party qualified custodians to hold our Ethereum (the “Custodians”) that utilize risk management and operational best practices around items like hot vs. cold storage, access controls, custody technology and insurance.

We maintain multiple Custodians to reduce the risk of a single failure and we may expand to additional custodians as our treasury grows. Our accounts with a Custodian are all opened by the Company, this segregates our assets into an individual account owned by the Company and access is monitored and controlled by the Company. Our asset manager is given access to the Custodian accounts with established controls to ensure transactions require consensus of a minimum of two individuals when assets are being transferred between wallets and additional controls if an asset of the treasury is moved out of the Custodians’ control. The assets go through the Custodians’ trust company, which maintains its own insurance and is regulated by their respective state where the trust is incorporated in.

Management reviews the account balances and the total value held with a Custodian to allocate the Company’s holdings between multiple accounts and Custodians as part of our risk management process.

Hot storage and cold storage refer to different methods of storing ETH (and other cryptocurrencies) based on their internet connectivity and security profiles. Hot storage are software wallets connected to the internet, making them convenient for frequent transactions, sending, and receiving ETH. Cold storage maintain ETH private keys completely offline, offering significantly more protection from online threats. The Custodians hold a majority of ETH in cold storage and provide a user interface for the Company to manage the allocation of ETH between cold and hot storage for the wallets. The Company maintains more than 90% of its ETH treasury in cold wallets.

The Custodians have multiple, redundant cold storage sites, which are geographically distributed, including sites within the United States. The Custodians’ cold storage locations are monitored by 24x7 on-site security, video surveillance and alarms, hardened room structures, and access to these facilities is controlled by multi-person controls, multi-team access rules, and multi-factor authentication. The locations of the cold storage sites may change at the discretion of the Custodian and are kept confidential by the Custodian for security purposes.

The Custodians also maintain geographically dispersed backups of private keys, which are cryptographically generated into shards and stored in separate locations; multiple locations must be accessed to reconstruct a single key. The storage facilities are highly secured, and include 24x7 on-premises security presence, video surveillance, and alarms for unexpected entry. Access to facilities is controlled by multi-person controls, multi-team access rules, and multi-factor authentication.

All of our Custodians have SOC type 2 reports that the Company has reviewed and we get regular bridge reports from our Custodians to help ensure the controls are being maintained. Our Custodians maintain their own insurance policies to cover our loss, which is in addition to the policies that we maintain ourselves. We currently have two qualified Custodians that we have approved for our treasury use and we are in the process of onboarding a third as part of our risk management process.

The Company is charged for storage fees, staking fees and transaction fees for services specifically requested by the Company or its Asset Manager. The contract terms of the agreements are typically for one to three years and can be terminated upon 30 days’ notice and payment of all fees due and one month of additional fees.

Government Regulation

The laws and regulations applicable to ETH and other digital assets are evolving and subject to interpretation and change.

Governments around the world have reacted differently to digital assets. Certain governments have deemed them illegal, and others have allowed their use and trade without restriction, while in some jurisdictions, such as the U.S., digital assets are subject to overlapping, uncertain and evolving regulatory requirements.

As digital assets have grown in both popularity and market size, the U.S. Executive Branch, Congress and a number of U.S. federal and state agencies, including the Financial Crimes Enforcement Network, the Commodity Futures Trading Commission (“CFTC”), the SEC, the Financial Industry Regulatory Authority, the Consumer Financial Protection Bureau, the Department of Justice, the Department of Homeland Security, the Federal Bureau of Investigation, the IRS, and state financial regulators, have been examining the operations of digital asset networks, digital asset users and digital asset exchanges, with particular focus on the extent to which digital assets can be used to violate state or federal laws, including to facilitate the laundering of proceeds of illegal activities or the funding of criminal or terrorist enterprises, and the safety and soundness and consumer-protective safeguards of exchanges or other service-providers that hold, transfer, trade or exchange digital assets for users. Many of these state and federal agencies have issued consumer advisories regarding the risks posed by digital assets to investors. In addition, federal and state agencies, and other countries have issued rules or guidance regarding the treatment of digital asset transactions and requirements for businesses engaged in activities related to digital assets.

Depending on the regulatory characterization of ETH, the markets for ETH and cryptocurrency in general, and our activities in particular, our business and our Ethereum strategy may be subject to regulation by one or more regulators in the United States and globally. Ongoing and future regulatory actions may alter, to a materially adverse extent, the nature of digital assets markets, the participation of industry participants, including service providers and financial institutions in these markets, and our ability to pursue our Ethereum strategy. Additionally, U.S. state and federal and foreign regulators and legislatures have taken action against industry participants, including digital assets businesses, and enacted restrictive regimes in response to adverse publicity arising from hacks, consumer harm, or criminal activity stemming from digital assets activity.

The CFTC takes the position that some digital assets fall within the definition of a “commodity” under the Commodities Exchange Act of 1936, as amended (the “CEA”). Under the CEA, the CFTC has broad enforcement authority to police market manipulation and fraud in spot digital assets markets in which we may transact. Beyond instances of fraud or manipulation, the CFTC generally does not oversee cash or spot market exchanges or transactions involving digital asset commodities that do not utilize margin, leverage, or financing. In addition, CFTC regulations and CFTC oversight and enforcement authority apply with respect to futures, swaps, other derivative products and certain retail leveraged commodity transactions involving digital asset commodities, including the markets on which these products trade.

The SEC and its staff have taken the position that certain other digital assets fall within the definition of a “security” under the U.S. federal securities laws. Public statements made by senior officials and senior members of the staff at the SEC indicate that the SEC does not consider specific digital assets, like Bitcoin, to be a security under the federal securities laws. However, such statements are not official policy statements by the SEC and reflect only the speakers’ views, which are not binding on the SEC or any other agency or court and cannot be generalized to any other digital assets.

In addition, because transactions in ETH provide a degree of anonymity, they are susceptible to misuse for criminal activities, such as money laundering. This misuse, or the perception of such misuse, could lead to greater regulatory oversight of ETH and Ethereum platforms, and there is the possibility that law enforcement agencies could close or blacklist such Ethereum platforms or other Ethereum-related infrastructure with little or no notice and prevent users from accessing or retrieving ETH held via such platforms or infrastructure. For example, the U.S. Treasury Department’s Office of Foreign Assets Control has issued updated advisories regarding the use of virtual currencies, added a number of digital asset exchanges and service providers to the Specially Designated Nationals and Blocked Persons list and engaged in several enforcement actions, including a series of enforcement actions that have either shut down or significantly curtailed the operations of several smaller digital asset exchanges associated with Russian and/or North Korean nationals. Additionally, in January 2025, the Consumer Financial Protection Bureau announced that it is seeking public input on privacy protections and surveillance in digital payments, particularly those offered through large technology platforms.

As noted above, activities involving ETH and other digital assets may fall within the jurisdiction of more than one financial regulator and various courts and such laws and regulations are rapidly evolving and increasing in scope. In the U.S., regulation on stablecoins was recently signed into U.S. federal law through the GENIUS Act which established the first comprehensive regulatory framework specifically for “payment stablecoins” — digital assets designed to maintain a stable value pegged to a fiat currency (typically the U.S. dollar) and intended for use in payments or transfers. The GENIUS Act aims to foster innovation in the stablecoin sector while ensuring financial stability, consumer protection, and compliance with anti-money laundering standards.

The regulatory landscape for digital assets continues to evolve rapidly across different jurisdictions, and we may become subject to new laws and regulations that could materially affect our business operations, compliance obligations, and financial performance. For a comprehensive discussion of the risks that existing and future regulations pose to our business, including specific regulatory developments that may materially affect our operations, see the section entitled “Risk Factors” in this Report.

Recent Events

Increases in Authorized Shares and Name Change

On July 24, 2025, at the 2025 Annual Meeting of the Company, the stockholders of the Company approved, among other things, an amendment to the Company’s Second Amended and Restated Certificate of Incorporation to increase the Company’s authorized number of shares of common stock from one hundred million (100,000,000) shares to one billion (1,000,000,000) shares.

On July 24, 2025, immediately following the Annual Meeting, the Company filed a Certificate of Amendment to the Company’s Second Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware, which became effective on the same date, immediately upon filing. As a result of such filing, the Company’s authorized shares of common stock increased from 100,000,000 shares to 1,000,000,000 shares.

The Board of Directors (the “Board”) of the Company, approved an amendment to the Company’s Second Amended Restated Certificate of Incorporation, to change the Company’s name to ETHZilla Corporation (the “Name Change”). On August 12, 2025, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation, which went at 12:01 a.m. on August 18, 2025. Pursuant to Section 242(d)(1) of the General Corporation Law of the State of Delaware (“DGCL”), the Name Change did not require approval of the Company’s stockholders and did not affect the rights of the Company’s security holders.

At a special meeting of stockholders held on October 7, 2025, the stockholders of the Company approved an amendment to the Company’s Second Amended and Restated Certificate of Incorporation, to increase the Company’s authorized number of shares of common stock, par value $0.0001 per share from one billion (1,000,000,000) shares to five billion (5,000,000,000) shares.

On October 8, 2025, we filed a Certificate of Amendment to our Second Amended and Restated Certificate of Incorporation, as amended with the Secretary of State of the State of Delaware to increase the Company’s authorized number of shares of common stock, par value $0.0001 per share from one billion (1,000,000,000) shares to five billion (5,000,000,000) shares, which became effective when filed on October 8, 2025.

Securities Purchase Agreement

As discussed in greater above under “Part I – Item 1. Financial Statements” in the Notes to Condensed Consolidated Financial Statements in “Note 13 - Stockholders’ (Deficit) Equity”, under “Securities Purchase Agreement”, on July 29, 2025, we entered into a securities purchase agreement (the “SPA”) with certain accredited institutional investors (the “Purchasers”) pursuant to which the Company agreed to sell and issue to the Purchasers in a private placement an aggregate of (i) 14,393,417 shares of common stock of the Company, par value $0.0001 per share, at an offering price of $26.50 per share (the “Stock Purchase Price”), and (ii) $26.499 per pre-funded warrant (collectively, the “Pre-Funded Warrants”) to purchase up to an aggregate of 1,749,585 shares of common stock (the “Pre-Funded Warrant Shares”) (together, the “Private Placement”).

Strategic Advisor Agreements and Warrants

As discussed in greater above under “Part I – Item 1. Financial Statements” in the Notes to Condensed Consolidated Financial Statements in “Note 13 - Stockholders’ (Deficit) Equity”, under “Securities Purchase Agreement”, on July 29, 2025, and in connection with the launch of the Company’s digital asset treasury strategy, the Company entered into a Strategic Advisor Agreement with each of Pink Sands Group, LLC, Cyber, Moode LLC, Moon Cat, LLC, Zorba Investments LLC, Purple Poseidon LLC, Tentacle Holdings LLC, PCAO LLC, Johnny Foxtrot LLC and New Island Advisors LLC (collectively, the “Strategic Advisors” and the “Strategic Advisor Agreements”). Pursuant to the Strategic Advisor Agreements, the Strategic Advisors agreed to provide the Company advice from time to time regarding the ETH treasury strategy, including on ETH purchase and staking strategies and such other areas as may be mutually determined by the Strategic Advisor and the Company from time to time (the “Services”). In consideration for agreeing to provide the Services, the Company granted on the same day the Strategic Advisors warrants to purchase an aggregate of 4,557,225 shares of the Company’s common stock (the “Initial Strategic Advisor Warrants”). Additionally, in the event the Company consummated a debt offering within sixty (60) days of the closing of the Private Placement, the Company agreed to grant additional warrants to purchase shares of the Company’s common stock to the Strategic Advisors pursuant to the Strategic Advisor Agreements, which debt funding occurred and which additional warrants were granted, as discussed in greater detail below.

The per share exercise price of each Strategic Advisor Warrant is equal to $27.75, which is $1.25 above the Stock Purchase Price.

Asset Management Agreement

As discussed in greater above under “Part I – Item 1. Financial Statements” in the Notes to Condensed Consolidated Financial Statements in “Note 13 - Stockholders’ (Deficit) Equity”, under “Securities Purchase Agreement”, in connection with the Private Placement, at the Closing (the “AMA Effective Date”), the Company entered into an Asset Management Agreement (the “Asset Management Agreement”) with Electric Treasury Edge, LLC (the “Asset Manager”). Pursuant to the Asset Management Agreement, the Asset Manager will provide discretionary investment management services with respect to, among other assets (including without limitation certain subsequently raised funds), the majority of the Company’s proceeds from the Private Placement (the “Account Assets”) in accordance with the terms of the Asset Management Agreement. The Asset Manager will pursue a long-bias strategy of digital assets primarily focused on Ethereum (the “ETH Strategy”). The custodians under the Asset Management Agreement will consist of cryptocurrency wallet providers mutually acceptable to the Company and the Asset Manager.

The Company shall pay the Asset Manager a monthly asset-based fee (the “Asset-based Fee”) equal to 2% per annum of the average daily net asset value of the Account Assets under management, payable in advance on the first business day of each calendar month; provided, however, that the minimum Asset-based Fee to be paid to the Asset Manager shall be $2,000,000 per year. Fees are prorated for partial periods. Staked or liquid-staked assets are not treated differently for fee purposes.

Amendment to Securities Purchase Agreements and Warrants

On July 28, 2025, the Company entered into an amendment to (i) the Securities Purchase Agreement, dated February 19, 2021, by and among the Company and the investors party thereto and (ii) the Securities Purchase Agreement, dated August 19, 2021, by and among the Company and the investors party thereto, by which the investors purchased at least a 50.1% interest in the shares of common stock based on the subscription amounts thereto, to remove a prohibition on variable rate transactions and reduce the exercise price of warrants (the “Existing Warrants”) to $26.50 (collectively, the “Amendments”).

Initial Senior Convertible Note Sales

As discussed in greater above under “Part I – Item 1. Financial Statements” in the Notes to Condensed Consolidated Financial Statements in “Note 8 - Debt”, under “Initial Senior Convertible Note Sales”, on August 8, 2025, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with investment funds managed by an institutional investor (the “Investor”), under which the Company agreed to sell and issue to the Investor senior secured convertible notes (the “August 2025 Convertible Notes”) in an aggregate principal amount of $156,250,000 (the “Principal Amount”) in exchange for cash equal to 96.0% of the Principal Amount (the “Debt Financing”). The Company closed the Debt Financing simultaneously with the signing of the Securities Purchase Agreement (the “August 2025 Note Funding Date”). The August 2025 Convertible Notes were issued in a private placement in reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act.

The August 2025 Convertible Notes bear interest at a rate of 0.00% per annum for the first six months, and 4.00% per annum for the following six months through the maturity date, which is the third year anniversary of the issuance date of the August 2025 Convertible Notes or earlier conversion or redemption date. The interest rate will increase to a rate of 18.0% per annum upon the occurrence and during the continuance of an event of default under the August 2025 Convertible Notes. The August 2025 Convertible Notes are secured by $44.5 million of Ether (ETH) (the “August 2025 ETH Collateral”) and approximately $156.25 million in cash (the “August 2025 Cash Collateral”) which is included in restricted cash equivalents on our consolidated balance sheet.

At any time following the nine-month anniversary of the August 2025 Note Funding Date, the Investor has the right to require that the Company redeem all or any part of the outstanding August 2025 Convertible Notes. If at any time after the August 2025 Note Funding Date, (i) the loan to value ratio of the August 2025 Convertible Notes is greater than 85%, or (ii) upon the occurrence of any Trigger Event (as defined in the August 2025 Convertible Notes), the Investor has the right to require that the Company redeem all or any part of the outstanding note in cash at a price equal to 100% of the amount of such Convertible Note being redeemed.

The August 2025 Convertible Notes provide that the Investor may convert all or any portion of the principal amount of such Convertible Note, together with any accrued and unpaid interest thereon, at an initial conversion price of $34.45 (the “August 2025 Conversion Price”), which is subject to a one-time, downward only reset after the nine-month anniversary of the issuance date (the “One-Time Reset Date”) equal to the closing bid price of the common stock on the One-Time Reset Date to the extent such price is less than the August 2025 Conversion Price. The Investor is not permitted to convert the August 2025 Convertible Notes to the extent that the shares of common stock deliverable upon conversion thereof would exceed 19.99% of the Company’s outstanding shares immediately prior to executing the Securities Purchase Agreement (the “August 2025 Exchange Cap”) without prior stockholder approval. We were also required to seek stockholder approval for the issuance of the shares of common stock upon conversion of the August 2025 Convertible Notes in accordance with the Securities Purchase Agreement. On October 7, 2025, the stockholders of the Company approved the issuance of shares of common stock in excess of the August 2025 Exchange Cap.

The August 2025 Convertible Notes provide for certain covenants, including that the Company shall maintain, at all times, (i) a balance of $5 million or more held in accounts other than the controlled securities account entered into at the consummation of this transaction and (ii) a loan-to-value ratio of no more than 100%, in addition to other customary covenants and events of default that are typical for transactions of this type and certain affirmative and negative covenants.

Pursuant to the Securities Purchase Agreement, the Company has agreed to certain obligations to register and maintain the registration of the shares of common stock underlying the August 2025 Convertible Notes, including filing within 15 calendar days of the Closing Date, a resale registration statement to register for resale the shares underlying the August 2025 Convertible Notes, which was timely filed and has been declared effective to date.

The security documents consist of (i) a Pledge and Security Agreement entered into by the Company, certain subsidiaries of the Company and the collateral agent, which is an affiliate of the Investor (the “Collateral Agent”); (ii) a control agreement in respect of the August 2025 ETH Collateral entered into by the Company, the Collateral Agent and the custodian of such account, (iii) a control agreement in respect of the August 2025 Cash Collateral entered into by the Company, the Collateral Agent and the custodian of such account, and (iv) a guaranty agreement entered into by certain subsidiaries of the Company in favor of the Investor. The control agreement requires the Company to maintain cash and cash equivalents in an aggregate amount of approximately $504,000,000, which the Company is not allowed to withdraw without consent of the Collateral Agent. The Collateral Agent also has the right to direct activities related to any staking of the August 2025 ETH Collateral. In addition, the Company paid $150,000 in legal fees of the Investor’s counsel.

New Senior Convertible Note Sales

As discussed in greater above under “Part I – Item 1. Financial Statements” in the Notes to Condensed Consolidated Financial Statements in “Note 8 - Debt”, under “New Senior Convertible Note Sales”, on September 22, 2025, the Company entered into an Amendment and Waiver Agreement with the Investor (the “Amendment Agreement”), pursuant to which, among other things (a) the Company agreed to sell a new series of senior secured convertible notes to the Investor (the “September 2025 Convertible Notes”, and together with the August 2025 Convertible Notes, the “Convertible Notes”); (b) the Company and the Investor agreed to partially waive and modify certain terms of the August 2025 Convertible Notes and the Securities Purchase Agreement, including: (i) to reduce the interest rate from 4% to 2% (ii) excluding the September 2025 Convertible Notes from the anti-dilutive provisions of the August 2025 Convertible Notes, except in connection with the Existing Note Conversion Price Adjustment (defined and described below), (iii) permitting the Company to Stake (as defined in the Security Purchase Agreement) the collateral held in the Company’s crypto control accounts, (iv) allowing the Company to use the yield of any cash held in the controlled accounts (less the accrued and unpaid interest on the Convertible Notes and any other amounts then due and payable to the Investor), in the ordinary course of business, and (v) to permit during the 90 day period following the August 22, 2025 effective date of a resale registration statement filed to register the resale of shares of common stock issuable upon conversion of the August 2025 Convertible Notes, pursuant to which the Company was previously restricted from taking certain actions, one or more additional subsequent placements (not including any variable rate transaction) solely consisting of the sale of common stock (x) with gross proceeds not in excess of an aggregate of $1 billion, subject to certain pre-requisites, or (y) at any time if such applicable purchase price exceeds $40.00 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events).

The September 2025 Convertible Notes were sold to the Investor on September 23, 2025, in the aggregate principal amount of $360 million (the “New Principal Amount”) in exchange for cash equal to 97.25% of the New Principal Amount (the “New Debt Financing”).

The Company closed the New Debt Financing on September 23, 2025 (the “New Debt Funding Date”). The September 2025 Convertible Notes were issued in a private placement in reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act.

The September 2025 Convertible Notes bear interest at a rate of 2.00% per annum through the maturity date, which is August 8, 2028 or earlier conversion or redemption date. The interest rate will increase to a rate of 18.0% per annum upon the occurrence and during the continuance of an event of default under the September 2025 Convertible Notes. The September 2025 Convertible Notes are secured by $50 million of Ether (ETH) (the “September 2025 ETH Collateral”) and approximately $348,180,800 in cash (the “September 2025 Cash Collateral”) which is included in restricted cash equivalents on our consolidated balance sheet.

The September 2025 Convertible Notes provide that the Investor may convert all or any portion of the principal amount of such September 2025 Convertible Notes, together with any accrued and unpaid interest thereon, at an initial conversion price of $30.50 (the “Conversion Price”), which is subject to a downward only reset on May 8, 2026, and each three month anniversary thereafter (each a “Reset Date”) equal to the closing bid price of the common stock on each such Reset Date, to the extent such price is less than the Conversion Price. The Investor is not permitted to convert the September 2025 Convertible Notes to the extent that the shares of common stock deliverable upon conversion thereof would exceed 19.99% of the Company’s outstanding shares immediately prior to executing the Amendment Agreement (the “September 2025 Exchange Cap”) without prior stockholder approval. We are also required to seek stockholder approval for the issuance of the shares of common stock upon conversion of the September 2025 Convertible Notes in accordance with the Amendment Agreement.

As a result of the Conversion Price of the September 2025 Convertible Notes being less than the conversion price of the August 2025 Convertible Notes, the conversion price of the August 2025 Convertible Notes automatically adjusted to the Conversion Price on the New Debt Funding Date (the “Existing Note Conversion Price Adjustment”).

The September 2025 Convertible Notes also provide that, at any time after March 22, 2026, the Company may require holders to convert all or a portion of the outstanding principal into shares of common stock (a “Mandatory Conversion”) if certain conditions are satisfied. Specifically, the volume-weighted average price (“VWAP”) of the Company’s common stock on its principal trading market must exceed $44.785 (as adjusted for stock splits and similar events) for 30 consecutive trading days and no Equity Conditions (defined below) failure may exist. The Company may not effect more than one Mandatory Conversion during any 20-trading-day period and may not exercise its right if an event of default has occurred and is continuing. A Mandatory Conversion is subject to cancellation if the stock price falls below the minimum conversion price or if an Equity Conditions failure occurs prior to the conversion date, unless waived by the holder. In lieu of conversion of any portion of the notes that cannot be converted due to an Equity Conditions Failure, the Company may instead require the holder to exchange such portion into the right to receive the same number of shares issuable upon conversion, pursuant to Section 3(a)(9) of the Securities Act, on mutually agreeable terms. The “Equity Conditions” generally require, among other things, that the Company’s registration statement registering the resale of the common stock issuable upon conversion of the September 2025 Convertible Notes is effective or the shares are otherwise eligible for resale, that the common stock remains listed and tradable on an eligible market, that no event of default or material breach exists, that certain specific volume requirements have been met, that sufficient authorized shares are available, that no material, non-public information or unresolved disputes exist, and that the stockholders of the Company have approved the issuance of shares of common stock in excess of the September 2025 Exchange Cap.

Additionally, the Convertible Notes provide that, if at any time and from time to time on or after the issuance date thereof, there occurs any stock split, stock dividend, stock combination recapitalization or other similar transaction involving the Company’s common stock, other than the 1-for-10 reverse stock split effective October 20, 2025 (each, a “Stock Combination Event”, and such date thereof, the “Stock Combination Event Date”) and the Event Market Price (as defined below) is less than the Conversion Price then in effect (after giving effect to certain adjustments), then on the 16th Trading Day (as defined in Convertible Notes) immediately following such Stock Combination Event Date, the Conversion Price then in effect on such sixteenth (16th) Trading Day (after giving effect to certain adjustments) shall be reduced (but in no event increased) to the Event Market Price. “Event Market Price” means, with respect to any Stock Combination Event Date, the quotient determined by dividing (x) the sum of the volume weighted average prices (VWAP) of the Company’s common stock for each of the five Trading Days with the lowest VWAP of the Company’s common stock during the 15 consecutive Trading Day period ending and including the Trading Day immediately preceding the 16th Trading Day after such Stock Combination Event Date, divided by (y) five.

Additionally, if the Company issues or sells shares of common stock after the New Debt Funding Date, at a price lower than the then-current conversion price of the September 2025 Convertible Notes, subject to certain excepted issuances, the conversion price of the September 2025 Convertible Notes will be adjusted downward to match the price of such newly issued shares.

The September 2025 Convertible Notes provide for certain covenants, including that the Company shall maintain, at all times, (i) a balance of $5 million or more held in accounts other than the controlled securities account entered into at the consummation of the transaction and (ii) a loan-to-value ratio of no more than 100%, in addition to other customary covenants and events of default that are typical for transactions of this type and certain affirmative and negative covenants.

Subsequent Strategic Advisor Warrants

As discussed in greater above under “Part I – Item 1. Financial Statements” in the Notes to Condensed Consolidated Financial Statements in “Note 8 - Debt”, under “Initial Senior Convertible Note Sales”, on September 22, 2025, the Company granted on the same day the Strategic Advisors warrants to purchase an aggregate of 4,557,225 shares of the Company’s common stock. We also agreed that in the event the Company consummated a debt offering within sixty (60) days of the closing of the transactions contemplated by that certain Securities Purchase Agreement entered into on July 29, 2025, which transactions closed on August 4, 2025, to grant additional warrants to purchase shares of the Company’s common stock to the Strategic Advisors pursuant to the Strategic Advisor Agreements with an exercise price equal to the greater of (i) the conversion price of such debt offering and (ii) the minimum price required by Nasdaq at the time of execution of any such debt offering plus $1.25.

Effective with the closing of the Debt Financing, we granted additional warrants to purchase an aggregate of 907,111 shares of the Company’s common stock to the Strategic Advisors (the “Subsequent Strategic Advisor Warrants”).

The per share exercise price of each Subsequent Strategic Advisor Warrant is equal to $34.45, which was the August 2025 Conversion Price of the August 2025 Convertible Notes.

Subsequent Strategic Advisor Warrants to purchase 95,700 shares of common stock were granted to PCAO, of which Mr. McAndrew Rudisill, the then Executive Chairman of the Company (current Executive Chairman and Chief Executive Officer), is the founder and managing partner, and therefore deemed to beneficially own the securities held by such entity.

ATM Sales Agreement

On August 13, 2025, the Company entered into a Sales Agreement (the “Sales Agreement”) to sell shares of the Company’s common stock, par value $0.0001 per share from time to time through Clear Street, acting as sales agent. Pursuant to the prospectus supplement dated August 13, 2025 (the “Prospectus Supplement”) filed by the Company with the SEC, which supplements the base prospectus included in the Company’s shelf registration statement on Form S-3 (File No. 333-288194), initially filed with the SEC on June 20, 2025 and declared effective on June 26, 2025, the Company was able to offer and sell up to $500,000,000 of its shares of common stock through Clear Street pursuant to the Sales Agreement.

Upon delivery of a placement notice and subject to the terms and conditions of the Sales Agreement, Clear Street could sell the common stock in negotiated transactions or transactions that are deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act, including sales made directly on the principal market on which the common stock is listed or any other existing trading market for the common stock.

The Company will designate the maximum amount of common stock to be sold through Clear Street in any placement under the Sales Agreement. Subject to the terms and conditions of the Sales Agreement, Clear Street has agreed to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations, to sell on the Company’s behalf all of the shares of common stock requested to be sold by the Company. The Company may instruct Clear Street not to sell common stock if the sales cannot be effected at or above a price designated by the Company in a placement notice. The Company or Clear Street may suspend the offering of common stock pursuant to the Sales Agreement upon proper notice to the other party. The Company and Clear Street each have the right, by giving 10 days’ notice as specified in the Sales Agreement, to terminate the Sales Agreement in each party’s sole discretion at any time. Clear Street, subject to mutual agreement between Clear Street and the Company, may also sell shares of common stock sold to it as principal by any other method permitted by law, including, but not limited to, privately negotiated transactions and block trades. The Company also may sell shares of common stock to Clear Street as principal for its own account, at a price agreed upon at the time of sale. If the Company sells common stock to Clear Street as principal, it will enter into a separate terms agreement setting forth the terms of such transaction.

The Sales Agreement provides that Clear Street will be entitled to aggregate compensation for its services of up to 3.0% of the gross sales price per share of all shares sold through Clear Street under the Sales Agreement. The Company has no obligation to sell any shares under the Sales Agreement. In addition, the Company has agreed to reimburse certain legal expenses incurred by Clear Street in connection with execution of the Sales Agreement in an amount up to $75,000, in addition to certain ongoing legal expenses.

Stock Repurchase Program

On August 22, 2025, the Board of Directors of the Company authorized and approved a stock repurchase program for up to $250.0 million of the currently outstanding shares of the Company’s common stock. Subject to any future extension in the discretion of the Board of Directors of the Company, the repurchase program is scheduled to expire upon the earliest of (i) June 30, 2026, (ii) when a maximum of $250.0 million of the Company’s common stock has been repurchased, or (iii) when such program is discontinued by the Board of Directors.

Under the stock repurchase program, shares may be repurchased from time to time in the open market or through negotiated transactions at prevailing market rates, or by other means in accordance with federal securities laws, including Rule 10b-18 of the Exchange Act. Repurchases will be made at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject to the availability of shares, general market conditions, cost of capital, the trading price of the common stock, alternative uses for capital, and the Company’s financial performance. Repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws.

The repurchase program may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. These factors may also affect the timing and amount of share repurchases. The repurchase program does not obligate the Company to purchase a particular number of, or any, shares. There is no guarantee as to the exact number or value of shares that will be repurchased by the Company, if any.

The repurchase program is expected to be funded using the Company’s working capital and from funds raised in “at-the-market” offerings or other future financings.

During the three months ended September 30, 2025, a total of 645,072 shares of common stock, for aggregate cost of $16,069,448 were repurchased by the Company. Subsequent to September 30, 2025, a total of 1,454,400 shares of common stock for an aggregate cost of $30,141,810 were repurchased by the Company.

Amended and Restated ATM Sales Agreement

As discussed above, on August 13, 2025, the Company entered into the Sales Agreement with Clear Street, acting as sales agent for the Company’s “at the market offering” program. On August 22, 2025, the Company entered into an Amended and Restated Sales Agreement (the “A&R Sales Agreement”) to sell from time to time through Clear Street, acting as sales agent, shares of the Company’s common stock, par value $0.0001 per share, having an aggregate offering price of up to $10.0 billion. The shares of common stock will be issued pursuant to the Company’s automatic shelf registration statement on Form S-3 (File No. 333-289811), filed with the SEC on August 22, 2025, a base prospectus dated August 22, 2025, included as part of the registration statement, and a prospectus supplement dated August 22, 2025, filed by the Company with the SEC pursuant to Rule 424(b) under the Securities Act.

Upon delivery of a placement notice and subject to the terms and conditions of the A&R Sales Agreement, Clear Street may sell the common stock in negotiated transactions or transactions that are deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act, including sales made directly on the principal market on which the common stock is listed or any other existing trading market for the common stock.

The Company will designate the maximum amount of common stock to be sold through Clear Street in any placement under the A&R Sales Agreement. Subject to the terms and conditions of the A&R Sales Agreement, Clear Street has agreed to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations, to sell on the Company’s behalf all of the shares of common stock requested to be sold by the Company. The Company may instruct Clear Street not to sell common stock if the sales cannot be effected at or above a price designated by the Company in a placement notice. The Company or Clear Street may suspend the offering of common stock pursuant to the A&R Sales Agreement upon proper notice to the other party. The Company and Clear Street each have the right, by giving 10 days’ notice as specified in the A&R Sales Agreement, to terminate the A&R Sales Agreement in each party’s sole discretion at any time. Clear Street, subject to mutual agreement between Clear Street and the Company, may also sell shares of common stock sold to it as principal by any other method permitted by law, including, but not limited to, privately negotiated transactions and block trades. The Company also may sell shares of common stock to Clear Street as principal for its own account, at a price agreed upon at the time of sale. If the Company sells common stock to Clear Street as principal, it will enter into a separate terms agreement setting forth the terms of such transaction.

The A&R Sales Agreement provides that Clear Street will be entitled to aggregate compensation for its services of up to 3.0% of the gross sales price per share of all shares sold through Clear Street under the A&R Sales Agreement. The Company has no obligation to sell any shares under the A&R Sales Agreement. In addition, the Company has agreed to reimburse certain legal expenses incurred by Clear Street in connection with execution of the A&R Sales Agreement in an amount up to $75,000, in addition to certain ongoing legal expenses.

The A&R Sales Agreement contains customary representations, warranties and covenants by the Company. The Company also agreed to provide indemnification and contribution to Clear Street against certain liabilities, including under the Securities Act and the Exchange Act. From time to time, in the ordinary course of business, Clear Street has provided, and in the future may provide, various financial advisory and investment banking services to the Company, for which they have received or will receive customary fees and reimbursement of expenses.

Either party can terminate the Sales Agreement under certain conditions, such as material adverse changes, failure to perform obligations, trading suspensions, or other market or regulatory events. Both the Company and Clear Street can also end the agreement at any time with 10 days’ notice.

During the three months ended September 30, 2025, we sold an aggregate of 739,050 shares of our common stock under the Sales Agreement for gross proceeds of approximately $40,990,338. The Company also paid a $1,513,000 fee to Clear Street related to the A&R Sales Agreement which is reflected as cost of capital.

Since September 30, 2025, we have sold an aggregate of 410,403 shares of our common stock (of which 405,735 have been issued) under the Sales Agreement for net proceeds of approximately $6,861,299, after deducting commissions.

Separation and Release Agreement with Blair Jordan and Jordan Consulting

On September 4, 2025, Mr. Blair Jordan, the then Chief Executive Officer of the Company, and Blair Jordan Strategy and Finance Consulting Inc. (an entity owned by Mr. Jordan)(”Jordan Consulting”) entered into a Separation and Release Agreement with the Company (the “Jordan Separation Agreement”).

Pursuant to the Jordan Separation Agreement, the Company agreed to (a) pay Jordan Consulting $1,350,000 in cash, which would be the amount payable to Jordan Consulting pursuant to the terms of an Executive Consulting Agreement between the Company, Mr. Jordan and Jordan Consulting (the “Jordan Consulting Agreement”), in the event the Board of Directors of the Company decided that Mr. Jordan should step down from the role of Chief Executive Officer of the Company, and such departure was not considered a termination for just cause by the Company or a resignation for good reason by Mr. Jordan under the Jordan Consulting Agreement; (b) execute an assignment in order to transfer any and all rights and ownership to the design or domain of “Volaro” to Jordan Consulting; and (c) confirm that certain of Jordan Consulting’s options that have been granted were fully vested subject to stockholder approval.

Transaction Agreement

On September 8, 2025, 180 SPV Treasury Vehicle I LLC, a wholly-owned subsidiary of the Company (“180 SPV”), entered into A Physically-Settled Spot and Forward Transaction Agreement (the “Transaction Agreement”) with Cumberland DRW LLC (“Counterparty”), to obtain up to $50.0 million from a Counterparty pursuant to the terms of the Transaction Agreement. The Transaction Agreement has a forward rate of 9.90% per annum through the settlement date, which is December 8, 2025 (the “Settlement Date”). The transaction was collateralized by approximately $80.8 million of ETH.

The proceeds from the Transaction Agreement have been used, and are expected to continue to be used by the Company to fund repurchases under the Company’s previously announced $250.0 million stock repurchase program. The Company has obtained a waiver from the holders of certain convertible notes issued by the Company on August 8, 2025 of certain of such holders’ rights such that the execution of the Transaction Agreement by 180 SPV will not result in the redemption of, or an event of default under, such convertible notes.

Resignation of Stephen H. Shoemaker

On September 15, 2025, Stephen H. Shoemaker resigned as a member of the Board, which resignation was not the result of a disagreement with the Company on any matter relating to the registrant’s operations, policies or practices.

In connection with his resignation, the Board, with the recommendation of the Compensation Committee of the Board (the “Compensation Committee”), approved an extension of the expiration date of options to purchase 16,500 shares of common stock at an exercise price of $9.29 per share (the “Options”), which were previously granted to Mr. Shoemaker, and which, absent such extension, would have expired three months after his resignation, to June 17, 2035, the ten year anniversary of the grant date of such Options.

The Company also entered into a consulting agreement with Mr. Shoemaker on September 15, 2025 (the “Consulting Agreement”). Pursuant to the Consulting Agreement, Mr. Shoemaker agreed to provide consulting services as reasonably requested by the Company during the term of the Consulting Agreement, which is for three months, unless extended by the mutual agreement of the parties. In consideration for providing the services under the Consulting Agreement, the Company agreed to pay Mr. Shoemaker $29,166.66 per month, which is payable by way of the issuance of (a) shares of common stock of the Company equal to $14,583.33, divided by the closing sales price of the Company’s common stock on each monthly anniversary of the effective date of the Consulting Agreement during the term of the Consulting Agreement (or if such date is not a trading day, the last trading day prior to each such applicable date) (collectively, the “Consulting Shares”); and (b) $14,583.33 in cash. The Consulting Agreement contains customary confidentiality and other representations of Mr. Shoemaker.

Executive Employment Agreement with McAndrew Rudisill

On September 15, 2025, the Company entered into an Executive Employment Agreement with Mr. McAndrew Rudisill, the Company’s Chief Executive Officer and Executive Chairman (the “Rudisill Employment Agreement”).

Pursuant to the Rudisill Employment Agreement, the Company agreed to continue to engage Mr. Rudisill as Chairman of the Board and Chief Executive Officer of the Company, during the term of the agreement, which continues until the earlier of (i) Mr. Rudisill providing the Company 30 days written notice of his termination of the Rudisill Employment Agreement, or (ii) December 31, 2028; subject to up to two additional years of automatic renewals, if neither party provides the other intent of its non-renewal prior to December 31, 2028 or if automatically renewed, December 31, 2029.

In consideration for agreeing to provide services under the Rudisill Employment Agreement, we agreed: (a) to pay Mr. Rudisill a base salary of $450,000 per year, with such amount to be reviewed by the Board with the recommendation of the Compensation Committee, at least annually, and may be increased if the Board deems appropriate; (b) that Mr. Rudisill would be eligible to earn an annual discretionary bonus as established by the Board or Compensation Committee, which may consist of restricted stock units (RSUs) and/or cash payments; and (c) that Mr. Rudisill would be entitled to a change of control payment, equal to two percent (2%) of the greater of (i) the market capitalization of the Company on the closing date of a Change in Control (as defined below) or (ii) the total enterprise value (defined by the Company’s market capitalization on the closing date of a Change of Control, plus all outstanding debt, less cash). This Change in Control payment may consist of both RSU’s and/or cash, as determined by the Board or Compensation Committee. For the purposes of the Rudisill Employment Agreement, a “Change in Control” means either (i) a merger or consolidation involving the Company (or one of its subsidiaries where the Company issues shares), unless the transaction is solely for changing the Company’s domicile or results in the Company’s stockholders retaining more than 50% of the voting power in the surviving or parent corporation immediately after the transaction, or (ii) the sale, lease, transfer, exclusive license, or other disposition of all or substantially all of the Company’s or its subsidiaries’ assets or equity, including through the sale or disposition of subsidiaries holding substantially all such assets, except where the transfer is to a wholly-owned subsidiary, provided that transactions carried out principally for bona fide equity financing purposes, where the Company receives cash or debt is cancelled or converted (or a combination thereof), will not constitute a Change in Control.

Separately, upon termination of the Rudisill Employment Agreement for any reason, the Company must promptly, and no later than 30 days after termination (or sooner if required by law), pay Mr. Rudisill (or his surviving spouse or estate) a lump sum covering any portion of his then current salary due through the termination date and reimbursement of eligible expenses incurred. Additionally, if Mr. Rudisill has been employed for more than 12 months, he will also receive severance payment equal to two times his base salary at the time of termination. In addition, if his employment ends within 36 months of the start date (September 15, 2025), he will receive a payment, payable in stock and/or cash as determined by the Board, equal to the greater of (a) 1% of the Company’s market capitalization; or (b) 1% of the total enterprise value (market capitalization plus debt, less cash) of the Company, at the time of termination. Payment of these severance benefits are conditioned on Mr. Rudisill executing a general release of claims against the Board relating to his employment or service with the Company.

The Rudisill Employment Agreement also contains customary confidentiality obligations and work made for hire language. In addition, Mr. Rudisill is eligible to receive certain employee benefits, including profit sharing, medical, disability and life insurance plans and programs, that are established and made generally available by the Company from time to time to its employees, subject, however, to the applicable eligibility requirements and other provisions of such plans and programs (including, without limitation, requirements as to position, tenure, location, salary, age and health).

The Rudisill Employment Agreement superseded the offer letter previously provided to Mr. Rudisill to serve on the Company’s Board.

Purchase and Subscription Agreement

On October 22, 2025, we entered into a Purchase and Subscription Agreement (the “Satschel Agreement”) with Satschel, Inc., a Delaware corporation (“Satschel”). Satschel owns Liquidity.io, a regulated broker-dealer and operator of a Digital Alternative Trading System (ATS) platform (the “Platform”).

Pursuant to the Satschel Agreement, Satschel sold us shares of its Class A Common Stock representing 15% of its fully-diluted capitalization (the “Satschel Securities”), in consideration for (a) $5 million in cash; and (b) 556,174 shares of our common stock with an agreed value of $10 million, which are subject to a six month lock-up (the “Satschel Shares”).

The Satschel Agreement includes (i) customary representations of each of the parties; (ii) positive and negative covenants required to be met by Satschel following the Closing (defined below), relating to required quarterly budgets, financial reporting, minimum cash balances and notification of key personnel changes, as well as budget compliance, and restrictions on new business lines, capital expenditures, compensation adjustments, indebtedness, sales or dispositions of assets and operations, public listings and reverse mergers, issuances of securities, and amendments to Satschel’s governing documents, without the prior written consent of the Company, subject to certain exceptions; and (iii) customary indemnification requirements of the parties, subject to a $50,000 deductible and a $2 million cap, subject to certain customary exceptions.

The acquisition contemplated by the Satschel Agreement closed on October 22, 2025.

Liquidity.io delivers a fully regulated marketplace for trading private assets, combining Securities and Exchange Commission (SEC)-licensed exchange infrastructure with Ethereum L2 tokenization. The Platform enables institutional and accredited investors to access private secondaries, structured credit, and real-world assets (RWAs) through a single compliant marketplace with instant settlement and liquidity.

We believe this relationship with Satschel establishes a foundation for our anticipated future growth and delivers several key strategic benefits, including:

● Expanded liquidity and market access: Enables the Company to leverage Liquidity.io’s ATS to convert future Company-issued tokenized RWAs into compliant, tradable instruments with both primary and secondary market liquidity.

● Regulatory integration: Supports end-to-end regulatory oversight, investor onboarding, and settlement, aligning the Company’s on-chain products with institutional compliance requirements.

● Strategic alignment: As part of the transaction, and as discussed above, the Company has invested $15 million (of cash and stock) to acquire a 15% interest in Satschel, with a right of first refusal to acquire additional equity in future funding rounds. In addition, we secured the exclusive right to list Ethereum L2 tokens on the Platform.

Assignment and Settlement Agreement

The Oxford Assignment Agreement requires us to pay Oxford, within seven days after execution, an initial payment of $500,000 which has been paid, to be applied toward the repayment of $1,675,500 in unpaid research fees owed by CannBioRex to Oxford pursuant to the Research Agreements (the “Research Fees”). Pursuant to the Oxford Assignment Agreement, OUI has agreed to use its commercially reasonable best endeavors to promptly negotiate and finalize (and will not intentionally delay or interfere with) the sale of the OUI Patent and Company IP. If any party acquires ownership or exclusive rights in the Company IP within 36 months of the date of the Agreement, OUI will apply the amount received from such sale, first to the full repayment of the balance of the Research Fees to Oxford, and thereafter fifty percent of the remaining net revenues to the Company, up to a maximum net revenue share of $5 million.

The Oxford Assignment Agreement includes a mutual release and settlement of claims, customary representations of each of the parties, and mutual confidentiality provisions. In addition, we have agreed to indemnify OUI and Oxford against any third party claims against them by our shareholders or by Glenn Larsen (former chief executive officer of our subsidiary, 180 Therapeutics L.P.) arising from the Oxford Assignment Agreement, the termination of the License Agreement and Research Agreements, or the assignment of the Company IP to OUI.

Significant Financial Statement Components

General and Administrative

General and administrative expenses consist primarily of salaries and other staff-related costs, including stock-based compensation for shares of common stock issued and options granted to founders, directors, and personnel in executive, commercial, finance, accounting, legal, investor relations, facilities, business development, and human resources functions that include vesting conditions.

Other significant general and administrative costs include costs relating to overhead costs, legal fees relating to corporate and patent matters, litigation, SEC filings, insurance, investor relations costs, fees for accounting and consulting services, stock-based compensation and other general and administrative costs. General and administrative costs are expensed as incurred, and we accrue amounts for services provided by third parties related to the above expenses by monitoring the status of services provided and receiving estimates from our service providers and adjusting our accruals as actual costs become known.

It is expected that the general and administrative expenses will increase over the next several years to support our continued research and development activities related to the iGaming business (as described above), the launch of commercial iGaming operations and the increased costs of operating as a public company. These increases are anticipated to include increased costs related to the hiring of additional personnel, developing commercial infrastructure, fees to outside consultants, lawyers and accountants, and increased costs associated with being a public company, as well as expenses related to services associated with maintaining compliance with Nasdaq listing rules and SEC requirements, insurance and investor relations costs.

Other Income

Other income primarily represents fees earned for research and development work performed for other companies, some of which are related parties.

Interest Expense

Interest expense consists primarily of interest expense related to debt instruments.

Digital Asset Gains and Losses

Digital Asset Gains and losses represent unrealized and realized gains and losses from our digital asset holdings.

CONSOLIDATED RESULTS OF OPERATIONS

For the Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024

	For the Three Months Ended September 30,
	2025			2024
Revenue:
Revenue	$	4,110,169		$	-
Total Revenue		4,110,169			-
Operating Expenses:
General and administrative		224,604,532			596,172
Total Operating Expenses		224,604,532			596,172
Loss From Operations		(220,494,363	)		(596,172	)
Other (Expense) Income:
Dividend income		616,725			-
Interest income		327,211			-
Other income		-			76,639
Interest expense		(319,909	)		(10,552	)
Change in fair value of convertible debt		3,724,344			-
Change in fair value of available for sale securities		(74,788	)		-
Digital asset gains and losses		7,549,815			-
Loss on settlement of liabilities		-			(2,304	)
Total other income, net		11,823,398			63,783
Loss Before Income Taxes		(208,670,965	)		(532,389	)
Income tax benefit		-			-
Net Loss From Continuing Operations		(208,670,965	)		(532,389	)
Net Loss From Discontinued Operations		(8,071,091	)		(304,331	)
Net Loss	$	(216,742,056	)	$	(836,720	)

During the three months ended September 30, 2025, the Company made a strategic shift in its operations to no longer pursue its pharmaceutical research operations or the Gaming Technology Platform. As such, these operations are presented as discontinued operations in the Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024, the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 and the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024.

General and Administrative

We incurred general and administrative expenses of $224,604,532 and $596,172 for the three months ended September 30, 2025 and 2024, respectively, representing an increase of $224,008,360 for the 2025 period, compared to the 2024 period. The increase in general and administrative expense was mainly due to an approximately $208,000,000 increase in stock compensation related to the issuance of options and warrants during the period. Additionally, the increase comprised of $9,000,000 due to adjustment in fair value for the Convertible Notes, $1,700,000 in bonus payment to prior management, $1,600,000 increase in director fees, a $900,000 increase in legal fees, a $900,000 increase in rent and lease expense, and a $596,000 increase in insurance expenses.

Other Income (Expense), Net

We incurred other income, net of $11,823,398 during the three months ended September 30, 2025, as compared to other income, net of $63,783 for the three months ended September 30, 2024, representing an increase in other income, net of $11,759,615. The increase is primarily attributable to a $7,549,815 change in value of digital assets, a $3,724,344 change in fair value of convertible debt, $616,725 in dividend income, and $327,211 in interest income which were offset by interest expense of $319,909 and change in available for sale securities of $74,788.

Net Loss

We had a net loss from continuing operations of $208,670,965 for the three months ended September 30, 2025, compared to a net loss of $532,389 for the three months ended September 30, 2024, representing an increase in net loss of $208,138,576, for the reasons discussed above.

For the Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024

	For the Nine Months Ended September 30,
	2025			2024
Revenue:
Revenue	$	4,110,169		$	-
Total Revenue		4,110,169			-
Operating Expenses:
General and administrative		227,954,479			3,471,965
Total Operating Expenses		227,954,479			3,471,965
Loss From Operations		(223,844,310	)		(3,471,965	)
Other (Expense) Income:
Dividend income		616,725			-
Interest income		340,085			-
Other income		-			1,789,443
Interest expense		(319,909	)		(28,977	)
Change in fair value of convertible debt		3,724,344			-
Change in fair value of available for sale securities		(74,788	)		-
Digital asset gains and losses		7,549,815			-
Change in fair value of derivative liabilities		-			58
Gain on settlement of liabilities		-			52,695
Total other income, net		11,836,272			1,813,219
Income (Loss) Before Income Taxes		(212,008,038	)		(1,658,746	)
Income tax benefit		-			-
Net Loss From Continuing Operations		(212,008,038	)		(1,658,746	)
Net Loss From Discontinued Operations		(8,829,854	)		(235,937	)
Net Loss	$	(220,837,892	)	$	(1,894,683	)

General and Administrative

We incurred general and administrative expenses of $227,954,479 and $3,471,965 for the nine months ended September 30, 2025 and 2024, respectively, representing an increase of $224,482,514 for the 2025 period, compared to the 2024 period. The increase in general and administrative expense was mainly due to an approximately $209,000,000 increase in stock compensation related to the issuance of options and warrants during the period. Additionally, the increase included $9,000,000 due to the adjustment in fair value of our Convertible Notes, $1,700,000 in bonus payment to prior management, $1,800,000 of increase in director fees, $1,100,000 in legal fees, and a $900,000 increase in rent and lease expense.

Other Income (Expense), Net

We incurred other income, net of $11,836,272 during the nine months ended September 30, 2025, as compared to other income, net of $1,813,219 for the nine months ended September 30, 2024, representing an increase in other income, net of $10,023,053. The increase is primarily attributable to $7,549,815 change in value of digital assets, a $3,724,344 change in fair value of Convertible Notes, $616,725 in dividend income, and $340,085 in interest income which were offset by a decrease in other income of $1,789,443 related to proceeds received from AmTrust International Underwriters DAC (“AmTrust”), which was our premerger directors’ and officers’ insurance policy, in the prior year, interest expense of $319,909 and change in available for sale securities of $74,788.

Net Loss From Continuing Operations

We had a net loss from continuing operations of $212,008,038 for the nine months ended September 30, 2025, compared to a net loss of $1,658,746 for the nine months ended September 30, 2024, representing an increase in net loss of $210,349,292, for the reasons discussed above.

Non-GAAP Financial Measures

Although we believe that net income or loss, as determined in accordance with U.S. GAAP, is the most appropriate earnings measure, we use EBITDA and Adjusted EBITDA as key profitability measures to assess the performance of our business. We believe these measures help illustrate underlying trends in our business and we use these measures to establish budgets and operational goals, and communicate internally and externally, in managing our business and evaluating its performance. We also believe these measures help investors compare our operating performance with its results in prior periods in a way that is consistent with how management evaluates such performance. EBITDA is a non-GAAP profitability measure that represents net income or loss for the period before the impact of the interest expense, income tax expense (benefit) and depreciation and amortization of property, plant and equipment and intangible assets. EBITDA eliminates potential differences in performance caused by variations in capital structures (affecting financing expenses), the cost and age of tangible assets (affecting relative depreciation expense) and the extent to which intangible assets are identifiable (affecting relative amortization expense).

Adjusted EBITDA is a non-GAAP profitability measure that represents EBITDA before certain items that are considered to hinder comparison of the performance of our businesses on a period-over-period basis or with other businesses. During the periods presented, we exclude from Adjusted EBITDA certain costs that are required to be expensed in accordance with GAAP, including non-cash stock-based compensation, business development and integration expenses, offering costs, non-cash adjustments to the fair value of earnout consideration, and non-cash adjustments to the fair value of outstanding warrants. Our management believes that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA are appropriate to provide additional information to investors about certain material non-cash items and about unusual items that we do not expect to continue at the same level in the future.

Each of the profitability measures described below are not recognized under GAAP and do not purport to be an alternative to net income or loss determined in accordance with GAAP as a measure of our performance. Such measures have limitations as analytical tools, and should not be considered in isolation or as substitutes for our results as reported under U.S. GAAP. EBITDA and Adjusted EBITDA exclude items that can have a significant effect on our profit or loss and should, therefore, be used only in conjunction with our GAAP profit or loss for the period. Our management compensates for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. Because not all companies use identical calculations, these measures may not be comparable to other similarly titled measures of other companies.

EBITDA and Adjusted EBITDA are unaudited, and have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our operating results as reported under U.S. GAAP. Some of these limitations are: EBITDA and Adjusted EBITDA do not reflect cash expenditures, or future or contractual commitments; EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, capital expenditures or working capital needs; EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments; although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. In addition, other companies in this industry may calculate EBITDA and Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure. The Company’s presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. We compensate for these limitations by providing a reconciliation of each of these non-GAAP measures to the most comparable U.S. GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable U.S. GAAP financial measure. For more information on these non-GAAP financial measures, please see the below reconciliation of these non-GAAP financial measures to their GAAP counterparts.

The reconciliation of Net loss from continuing operations, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024 is as follows:

Net Loss From Continuing Operations	$	(208,670,965	)	$	(532,389	)	$	(212,008,038	)	$	(1,658,746	)
Interest		319,909			10,552			319,909			28,977
Taxes		-			-			-			-
Depreciation and amortization
EBITDA		(208,351,056	)		(521,837	)		(211,688,129	)		(1,629,769	)
Stock-based compensation (1)		208,241,459			16,456			208,922,667			274,826
Convertible debt offering costs (2)		8,575,412			-			8,575,412			-
Adjusted EBITDA	$	8,465,815		$	(505,381	)	$	5,809,950		$	(1,354,943	)

(1) Represents non-cash stock-based compensation expense associated with employee and non-employee equity awards, including Strategic Advisor Warrants and Additional Strategic Advisor Warrants, and employee stock options awarded in connection with closing the Private Placement, included in general and administrative expenses on the consolidation statements of operations and comprehensive income.

(2) Represents professional fees incurred in connection with the Convertible Notes which are included in general and administrative expenses on the consolidation statements of operations and comprehensive income.

Liquidity and Capital Resources

As of September 30, 2025 and December 31, 2024, we had cash, cash equivalents and restricted cash equivalents balances of $558,901,384 and $4,567,251, respectively, and a working capital of $506,159,940 and $1,636,486, respectively.

For the nine months ended September 30, 2025, cash used in operating activities from continuing operations totaled $18,286,323 compared to cash used in operating activities from continuing operations of $531,565 for the nine months ended September 30, 2024. Cash used in operating activities was $18,418,600 and cash used in operating activities was $546,177 for the nine months ended September 30, 2025 and 2024, respectively. Our cash used in operations for the nine months ended September 30, 2025 was primarily attributable to our net loss from continuing operations of $212,008,038, adjusted for non-cash expenses in the aggregate amount of $193,613,127 (mainly due to $208,922,667 of stock based compensation), as well as $108,588 of net cash used to fund changes in the levels of operating assets and liabilities. Our cash provided by operations for the nine months ended September 30, 2024 was primarily attributable to our net loss from continuing operation of $1,658,746, adjusted for non-cash expenses in the aggregate amount of $222,073 as well as $905,108 of net cash used to fund changes in the levels of operating assets and liabilities.

For the nine months ended September 30, 2025, cash used in investing activities from continuing operations totaled $252,370,414 compared to cash used in investing activities from continuing operations of $0 for the nine months ended September 30, 2024. Cash used in investing activities related to the purchase of marketable securities of $8,890,596 and $243,479,818 for the purchase of cryptocurrency.

For the nine months ended September 30, 2025, cash provided by financing activities from continuing operations totaled $825,274,591 compared to cash used in financing activities from continuing operations of $996,005 for the nine months ended September 30, 2024. Cash used in financing activities from discontinued operations was $151,444, compared to cash used in financing activities of $13,973 from discontinued operations for the nine months ended September 30, 2024. Cash provided by financing activities was $825,123,147 and cash used in financing activities was $1,009,978 for the nine months ended September 30, 2025 and 2024, respectively. Cash provided by financing activities primarily related to cash proceeds from shares issued for cash and warrants, net of $286,843,926 (mainly due to the Private Placement), proceeds from convertible debt, net of $500,000,000 (in connection with the sale of the Convertible Notes), proceeds from collateralized loan of $50,000,000 and cash proceeds from the exercise of warrants of $5,605,706, which were offset by treasury stock purchases of $16,121,428 and repayment of loan payable – related party of $1,000,000 for the nine months ended September 30, 2025. Cash used in financing activities primarily related to the repayment of loan payable of $996,494 for the nine months ended September 30, 2024.

See also the Notes to Consolidated Financial Statements in “Part I – Item 1. Financial Statements”, for a more detailed discussion of our debt and obligations, including “Note 8 – Debt”.

In August 2025, our Board of Directors implemented an Ethereum-focused treasury strategy, with ETH serving as the primary treasury reserve asset on an ongoing basis, subject to market conditions and anticipated needs of the business. Our goal is to acquire and grow our overall ETH position and utilize professional treasury strategies to significantly increase our ETH holdings. We have not set a specific target for the maximum amount of ETH we seek to hold. Our treasury strategy focuses on increasing the amount of ETH through a combination of capital raising activities and treasury activities including staking, restaking, liquid staking and other DeFi activities. We expect that ETH will serve as our primary treasury reserve asset in the future. We aim to maximize ETH accumulation and value accretion, while maintaining robust controls and oversight over these digital assets. While our new strategy is expected to generate significant revenue and operating cash flow, there are no assurances that we will be successful with this strategy

We may also pursue additional offering transactions as needed to fund our operations and financing obligations. Future offering transactions may include common stock, warrant coverage, or other convertible securities, with such terms as approved by the Board of Directors of the Company, again, subject in all cases to applicable Nasdaq stockholder approval rules and guidance where applicable. Notwithstanding the above, as of the date of this Report, the Company has not agreed to any definitive funding terms or finalized any offering structures.

Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

Recent Financing Transactions

Warrant Inducement Agreement and Related Transactions

On October 16, 2024, we entered into a warrant inducement agreement (the “Inducement Agreement”) with a holder (the “Holder”) of warrants to purchase up to 47,706 shares of common stock and (i) warrants to purchase up to 1,614 shares of common stock issued in July 2022; (ii) warrants to purchase up to 13,534 shares of common stock issued in December 2022; (iii) warrants to purchase up to 8,267 shares of common stock issued in April 2023; and (iv) warrants to purchase up to 24,292 shares of common stock issued in August 2023, each with an exercise price of $32.30 per share (collectively, the “Exercised Warrants”), pursuant to which the Holder agreed to exercise for cash the Exercised Warrants to purchase an aggregate of 95,007 shares of common stock at an exercise price of $34.80 per share ($2.50 greater than the $32.30 per share exercise price of such Exercised Warrants) during the period from the date of the Inducement Agreement until 1:15 p.m., Eastern Time, on October 16, 2024. On October 16 and 17, 2024, the Exercised Warrants were exercised in full for cash by the Holder and the Company received $3,306,240 before deducting financial advisory fees and other expenses payable by us.

In consideration of the Holder’s agreement to exercise the Exercised Warrants in accordance with the Inducement Agreement, the Company agreed to issue new unregistered Warrants to Purchase Shares of Common Stock (the “New Warrants”) to purchase a number of shares of common stock equal to 200% of the number of shares of common stock issued upon exercise of the Exercised Warrants, i.e., warrants to purchase up to 190,014 shares of common stock (the “New Warrant Shares”). The New Warrants were immediately exercisable and had a term of exercise of five years.

The New Warrants had an exercise price of $15.00 per share. The exercise price and the number of shares of common stock issuable upon exercise of each New Warrant are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. In addition, in certain circumstances, upon a fundamental transaction, a holder of New Warrants will be entitled to receive, upon exercise of the New Warrants, the kind and amount of securities, cash or other property that such holder would have received had they exercised the New Warrants immediately prior to the fundamental transaction.

The Company may not affect the exercise of New Warrants, and the applicable Holder will not be entitled to exercise any portion of any such New Warrant, which, upon giving effect to such exercise, would cause the aggregate number of shares of common stock beneficially owned by the holder of such New Warrant (together with its affiliates) to exceed 4.99% or 9.99%, as applicable, of the number of shares of common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of such New Warrants.

The Company engaged A.G.P./Alliance Global Partners (“A.G.P.”) to provide exclusive financial services in connection with the transactions summarized above and, pursuant to a Financial Advisory Agreement between the Company and A.G.P., paid A.G.P. a financial advisory fee of $232,000, and an alternative transaction fee of $100,000. In addition, we reimbursed A.G.P. for its accountable legal expenses in connection with the exercise of the Exercised Warrants and the issuance of the Inducement Warrants of $65,000 and $10,000 non-accountable expenses. In addition, we paid A.G.P. $29,923, half of the financial advisory fees due in connection with a December 2023 warrant inducement. As of October 31, 2024, a total of $436,923 related to the aforementioned transaction has been paid to A.G.P and there is no balance outstanding.

December 2024 Offering

On December 27, 2024, we entered into a Securities Purchase Agreement with certain accredited investors, including the Holder (the “SPA”). Pursuant to the terms of the SPA, the Company agreed to sell, in a registered direct offering, an aggregate of 120,000 shares of the Company’s common stock (the “December 2024 Shares”) and, in a concurrent private placement, warrants to purchase up to 120,000 shares of common stock (the “December 2024 Warrants”). The combined purchase price per December 2024 Share and December 2024 Warrant was $24.10. The offerings closed on December 30, 2024.

The December 2024 Warrants were immediately exercisable on their grant date at an exercise price of $22.80 per share and expire five and a half years following the initial exercise date.

Pursuant to a placement agency agreement dated as of December 27, 2024, between the Company and Maxim Group LLC (the “Placement Agent”), the Company engaged the Placement Agent to act as the Company’s sole placement agent in connection with the registered direct offering. Pursuant to the placement agency agreement, the Company agreed to pay the Placement Agent a cash fee equal to seven percent (7.0%) of the gross proceeds received by the Company from the sale of the December 2024 Shares and December 2024 Warrants and to reimburse the Placement Agent for certain of its expenses in an aggregate amount of $50,000.

The net proceeds to the Company from the registered direct offering and concurrent private placement, after deducting the placement agent’s fees and expenses and the Company’s offering expenses were approximately $2.6 million. The Company intends to use the net proceeds from the transactions for working capital and general corporate purposes, which may include operationalizing and developing the Gaming Technology Platform and capital expenditures.

July 2025 Securities Purchase Agreement

As discussed in greater detail above under “Recent Events—Securities Purchase Agreement”, on August 4, 2025, we sold the Purchasers (i) 14,393,417 shares of common stock of the Company at an offering price of $26.50 per share, and (ii) $26.499 per pre-funded warrant to purchase up to an aggregate of 1,749,585 shares of common stock in the Private Placement.

After paying the cash expenses of Clear Street and Maxim in connection with the Private Placement, we raised net proceeds of $245,035,447 in cash and $171,287,512 in contributed ETH, which we used to fund our digital asset purchases.

Amendment to Securities Purchase Agreements and Warrants

On July 28, 2025, the Company entered into an amendment to (i) the Securities Purchase Agreement, dated February 19, 2021, by and among the Company and the investors party thereto and (ii) the Securities Purchase Agreement, dated August 19, 2021, by and among the Company and the investors party thereto, by which the investors purchased at least 50.1% in interest of the shares of common stock based on the subscription amounts thereto, to remove a prohibition on variable rate transactions and reduce the exercise price of warrants to $26.50.

Convertible Note Sales

As discussed in greater detail above under “Recent Events —Initial Senior Convertible Note Sales and “—New Senior Convertible Note Sales” on August 8, 2025 and September 23, 2025, we sold $156.25 million and $360 million of Convertible Notes.

ATM Sales Agreement

As discussed in greater detail above under “Recent Events—ATM Sales Agreement” and “—Amended and Restated ATM Sales Agreement”, on August 13, 2025 we entered into a Sales Agreement with Clear Street, which was amended and restated on August 22, 2025.

During the three and nine months ended September 30, 2025, we sold an aggregate of 739,050 and 739,050 shares of our common stock under the Sales Agreement for gross proceeds of approximately $40,990,338 and $40,990,338, after deducting commissions. Of this amount, $0 is expected to be received in October 2025.

Since September 30, 2025, we have sold an aggregate of 410,403 shares of our common stock under the Sales Agreement for net proceeds of approximately $6,943,380, after deducting commissions.

Transaction Agreement

As discussed in greater detail above under “Recent Events—Transaction Agreement”, on September 8, 2025, we entered into the Transaction Agreement and borrowed $50 million from the Counterparty.

Critical Accounting Estimates

The Company’s condensed consolidated financial statements are prepared in accordance with accounting principles that are generally accepted in the United States. The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of its assets, liabilities, revenue and expenses. The Company has identified certain estimates as critical to its business operations and the understanding of its past or present results of operations related to intangible assets. These estimates are considered critical because they had a material impact, or they have the potential to have a material impact, on the Company’s condensed consolidated financial statements and because they require management to make significant judgments, assumptions or estimates. The Company believes that the estimates, judgments and assumptions made when accounting for the items described below were reasonable, based on information available at the time they were made. However, actual results may differ from those estimates, and these differences may be material.

Digital Assets

The Company’s digital assets include Ether, the native cryptocurrency of the Ethereum blockchain (“ETH”), liquid staking tokens(“LST”), and liquid staking incentive tokens.

Crypto assets within the scope of ASC 350-60 Intangibles—Goodwill and Other—Crypto Assets(“ASC 350-60):

ETH and liquid staking incentive tokens have been determined to fall within the scope of ASC 350-60. The company reflects crypto assets held at fair value on the consolidated balance sheets within the Digital Assets line item. Changes in the fair value of crypto assets are recognized in income, reflected within the Digital asset gains and losses within the consolidated statement of operations.

In determining the fair value of digital assets in accordance with ASC 820, Fair Value Measurement (“ASC 820”). The Company utilizes Coinbase as the principal market. The Company uses a first-in, first-out methodology to assign costs to digital assets.

Non-monetary receivable with an embedded derivative within the scope of ASC 310, Receivables (“ASC 310”) and ASC 815-15, Derivatives and Hedging – Embedded Derivatives (“815-15”):

The Company’s LST, comprised of weETH and pufETH, has been determined to fall within the scope of ASC 310 and ASC 815-15 and is accounted for as a non-monetary receivable with an embedded derivative. The host contract represents the holder’s right to receive ETH denominated in USD and is carried at cost.

The embedded derivative component is measured at fair value at each reporting date, using observable prices in the principal market in accordance with ASC 815-15 and ASC 820, Fair Value Measurement (“ASC 820”). Where quoted prices are directly available in active markets, the embedded derivatives are classified as Level 1 within the fair value hierarchy; if observable market prices are not available, management utilizes other relevant inputs and valuation techniques, which may result in Level 2 or Level 3 classification.

Upon redemption of liquid staking tokens for ETH, the Company derecognizes both the receivable and the embedded derivative, recognizing ETH at fair value. Any difference between the carrying amount and the fair value of ETH received is recognized as a gain or loss, which amounted to $24,199,453 for the period.

Management has exercised judgment in determining the principal market, fair value hierarchy, and bifurcation of embedded derivatives. There is diversity in industry practice regarding the measurement and recognition of liquid staking tokens and related rewards. The Company continually evaluates the principal market and the reliability of inputs to ensure that fair value measurements reflect current market conditions.

ETH Staking

Beginning in August 2025, the Company used the proceeds from its capital raising activities to acquire and deploy ETH in staking activities, which can include native staking, liquid staking and restaking. The Company has entered into separate contractual agreements with various third-party entities to facilitate its ETH staking activities. The Company commenced both native staking in August of 2025 and commenced liquid staking in September 2025. The Company intends for staking to become a primary yield generation strategy of the Company within the current fiscal year.

Native Staking

Liquid Staking

The Company participates in liquid staking arrangements, whereby ETH is deposited into third-party protocols (such as ether.fi or Puffer) in exchange for liquid staking tokens (e.g., weETH, pufETH). These tokens represent the right to redeem underlying ETH and accrued rewards, and may be transferred, traded, or used in other decentralized finance (DeFi) transactions, providing ongoing liquidity and access to additional yield opportunities. In certain arrangements, liquid staking tokens may also be restaked into additional protocols to earn incremental rewards.

Upon deposit, the Company derecognizes the ETH and recognizes a non-financial receivable with an embedded derivative, reflecting the right to receive ETH and protocol rewards. The host contract is measured at cost (the value of ETH deposited), while the embedded derivative is bifurcated and measured at fair value through earnings, reflecting exposure to ETH price and protocol yield variability, in accordance with ASC 310 and ASC 815-15. Subsequent changes in the fair value of liquid staking tokens and embedded derivatives after initial recognition are not included in revenue but are recognized separately in earnings as unrealized gains or losses. Gains or losses realized upon redemption or sale of liquid staking tokens are recognized in accordance with ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”).

Revenue from liquid staking is recognized at the end of each daily period, when the Company’s right to staking rewards and incentive tokens (e.g., PUFFER, ETHFI) becomes determinable (i.e., when the constraint is lifted). The amount of revenue recognized is measured at the fair value of rewards and incentive tokens at contract inception for that day, net of validator commissions, in accordance with ASC 606 and ASC 820. Rewards represent noncash consideration and are measured using quoted prices in the principal market at contract inception. Fair value for liquid staking tokens is determined based on the underlying ETH and accrued rewards to which the Company is entitled, rather than the quoted token price, because the redemption ratio between ETH and liquid staking tokens (e.g., weETH, pufETH) fluctuates over time as rewards accrue and protocol fees apply.

Because the Company is not the principal to the block validation service, but rather provides staking capacity to third parties, it does not control the full output of the reward-generating activity and instead receives net staking rewards after validator commissions are deducted. Asset manager or protocol fees are presented as separate operating expenses.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606.

To determine revenue recognition for contracts with customers, the Company performs the following five steps:

1. identify the contract with the customer,

2. identify the performance obligations in the contract,

3. determine the transaction price, including variable consideration to the extent it is probable a significant future reversal will not occur,

4. allocate the transaction price to the respective performance obligations in the contract, and

5. recognize revenue when (or as) the Company satisfies the performance obligation.

The Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange.

Native Staking Revenue

Liquid Staking Revenue

The protocol or platform (e.g., ether.fi or Puffer) is considered the customer, as it receives the Company’s staking capacity (the performance obligation). The Company acts as an agent in liquid staking transactions, delegating ETH to third-party protocols or platforms who perform the technical validation responsibilities.

The contract duration for liquid staking is based on the ability of either party to terminate the contract with 30 days’ notice without cause. The Company has determined that a new 30-day contract is effectively renewed each day, such that contract inception changes daily. Revenue from staking rewards and incentive tokens is recognized over time and at the end of each day when the Company’s proportional share of rewards is determinable, measured at fair value at contract inception for that day, net of validator commissions. Fair value is based on the underlying ETH and accrued rewards, not the market price of the liquid staking tokens. The ratio between ETH and liquid staking tokens changes over time as rewards accrue and protocol economics adjust; this variability does not affect the timing of revenue recognition but is considered in determining fair value at contract inception. Rewards represent noncash consideration and are measured using quoted prices in the principal market at contract inception.

Recently Issued Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Pursuant 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).

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We have established and maintain a system of disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports filed with the SEC pursuant to the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Commission and that such information is accumulated and communicated to our management, including our Chief Executive Officer (CEO) (principal executive officer) and Chief Accounting Officer (CAO) (principal financial and accounting officer), as appropriate, to allow timely decisions regarding required disclosures.

The Company’s management evaluated, with the participation of our principal executive officer and principal financial and accounting officer, the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of the end of the period covered by this Report (September 30, 2025). Based on their evaluation, our principal executive officer and principal financial and accounting officer concluded that, as of September 30, 2025, our disclosure controls and procedures were not effective to provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer, as appropriate, to allow timely decisions regarding required disclosures as of September 30, 2025.

In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

A material weakness is a control deficiency or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. As a company with limited accounting resources, a significant amount of management’s time and attention has been and will be diverted from our business to ensure compliance with these regulatory requirements.

Remediation Plan

Management continues to take steps to develop and enhance its internal controls over financial reporting, and has implemented the following controls to remediate the above material weakness:

● Implement an added layer of technical review by an internal financial reporting director for one time significant entries to ensure appropriate classification is assessed.

Management will consider the material weakness to be fully remediated once the controls have been operating effectively for sufficient contiguous reporting periods, and after Management has validated the effective operation of the controls through testing.

Inherent Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may be a party to litigation that arises in the ordinary course of our business; however, we are not currently a party to any material legal proceeding. In addition, we are not aware of any material legal or governmental proceedings against us or contemplated to be brought against us.

Prior litigation and other legal proceedings which have now been settled are described in, and incorporated by reference in, this “Item 1. Legal Proceedings” of this Form 10-Q from, “Part I – Item 1. Financial Statements” in the Notes to Condensed Consolidated Financial Statements in “Note 12 – Commitments and Contingences”, under the heading Legal Matters.

Item 1A. Risk Factors.

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of the Company’s Form 10-K for the year ended December 31, 2024, filed with the Commission on March 31, 2025 (the “Form 10-K”), under the heading “Risk Factors”, except as discussed below, and investors should review the risks provided in the Form 10-K, and below, prior to making an investment in the Company. The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in the Form 10-K, under “Risk Factors” and below, any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial conditions and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price.

Risks Relating to Our Transaction Agreement and Convertible Notes

The Transaction Agreement is collateralized by a significant amount of our ETH.

While the Transaction Agreement provides for an aggregate amount of up to $80 million, it is collateralized by approximately $125 million of ETH. Upon an event of default under the Transaction Agreement, the Counterparty may enforce its security interest over such ETH and take ownership thereof in an amount sufficient to repay all obligations under the Transaction Agreement. If that were to occur, any investment in the Company (including, but not limited to, any investment in our common stock) could lose value or become worthless.

Our stockholders may experience significant dilution as a result of conversion of our Convertible Notes.

As of the date of this Report we have outstanding Convertible Notes in the principal amount of approximately $516 million. The Convertible Notes currently have a Conversion Price of $30.10 per share of common stock. The Convertible Notes provide that, if at any time and from time to time on or after the issuance date thereof, there occurs any stock split, stock dividend, stock combination recapitalization or other similar transaction involving the Company’s common stock, other than the 1-for-10 reverse stock split effective October 20, 2025 and the Event Market Price is less than the Conversion Price then in effect (after giving effect to certain adjustments), then on the 16th Trading Day (as defined in Convertible Notes) immediately following such Stock Combination Event Date, the Conversion Price then in effect on such sixteenth (16th) Trading Day (after giving effect to certain adjustments) shall be reduced (but in no event increased) to the Event Market Price. Event Market Price means, with respect to any Stock Combination Event Date, the quotient determined by dividing (x) the sum of the volume weighted average prices (VWAP) of the Company’s common stock for each of the five Trading Days with the lowest VWAP of the Company’s common stock during the 15 consecutive Trading Day period ending and including the Trading Day immediately preceding the 16th Trading Day after such Stock Combination Event Date, divided by (y) five.

Additionally, if the Company issues or sells shares of common stock at a price lower than the then-current conversion price of the Convertible Notes, subject to certain excepted issuances, the conversion price of the Convertible Notes will be adjusted downward to match the price of such newly issued shares. Finally, if the Company issues or enters into an agreement to issue common stock, options, or convertible securities with a price that varies or may vary with the market price of the common stock (excluding certain at-the-market offerings and customary anti-dilution adjustments), subject to certain customary exceptions, the holders of the Convertible Notes have the right, but not the obligation, to elect to use such “Variable Price” for purposes of converting the Convertible Notes. The holder may make this election on a per-conversion basis and is not required to rely on the Variable Price for any future conversions.

Our stockholders may experience significant dilution as a result of the conversion of the Convertible Notes.

The Convertible Notes contain covenants that limit our flexibility.

The Convertible Notes rank senior to all other indebtedness and are secured by a first priority security interest, and contain certain participation rights and covenants that impose certain restrictions on us, including covenants that limit our ability to issue additional securities that would dilute or conflict with the Convertible Notes during specified periods. These restrictions could limit our ability to raise additional capital or pursue strategic opportunities, potentially impacting our operating and financial flexibility. These restrictions may limit our ability to obtain additional financing on favorable terms, which could adversely affect our operating and financial flexibility.

The Convertible Notes are secured by a significant portion of our assets.

The Convertible Notes are secured by $80.8 million of Ether (ETH) and approximately $500 million in cash. As a result of the above, the holders of the Convertible Notes, in the event of the occurrence of a default under the Convertible Notes, may enforce their security interests over our assets which secure such obligations, may take control of our assets and operations, and/or force us to curtail or abandon certain of our current business plans and operations. If that were to happen, any investment in the Company (including, but not limited to, any investment in our common stock) could lose value or become worthless.

The Investor may require we repay the Convertible Notes after May 8, 2026.

At any time after May 8, 2026, the Investor shall have the right to require that the Company redeem all or any part of the outstanding Convertible Notes. Additionally, if at any time (i) the loan to value ratio of the Convertible Notes is greater than 85%, or (ii) upon the occurrence of any Trigger Event (as defined in the Convertible Notes), the Investor has the right to require that the Company redeem all or any part of the outstanding Convertible Notes in cash at a price equal to 100% of the amount of such Convertible Note being redeemed. We may not have available cash to pay the redemption price of the Convertible Notes, may be forced to borrow additional funds to repay such redemption price, which may not be available on favorable terms, if at all, or may be forced to sell equity to pay such redemption price, which sales may cause significant dilution to existing stockholders. In the event we are unable to pay the redemption price of such Convertible Notes, if called for redemption, we could face penalties and such requirement to redeem such convertible notes or our failure to redeem such convertible notes, could have a material adverse effect on our operations and/or cash flow, and cause the value of our securities to decline in value or become worthless. In addition, the Convertible Notes are secured by $656.25 million in cash and $94.5 million of ETH and our failure to redeem the Convertible Notes could enable the Investor to take ownership of such cash and ETH, which could in turn have a material adverse effect on the Company and cause the value of our securities to decline in value or become worthless.

We will need to raise additional funding in the future to repay the Convertible Notes and amounts owed under the Transaction Agreement.

As of the date of this Report, we owe approximately $50 million under the Transaction Agreement and $516 million in Convertible Notes. We will need to raise additional funding to repay those amounts when due, December 8, 2025 and September 23, 2028, respectively. Since our inception, we have funded our operations mainly with the proceeds from equity and debt financing. We have experienced liquidity issues due to, among other reasons, our limited ability to raise adequate capital on acceptable terms. We have historically relied upon the sale of equity and debt funding that is convertible into shares of our common stock to fund our operations and have devoted significant efforts to reduce that exposure.

We expect that, wherever possible, the Board of Directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of restricted shares of our common stock, preferred stock or warrants to purchase shares of our common stock. The Board of Directors has authority, without action or vote of the stockholders, but subject to Nasdaq rules and regulations (which generally require stockholder approval for any transactions which would result in the issuance of more than 20% of our then outstanding shares of common stock or voting rights representing over 20% of our then outstanding shares of stock, subject to certain exceptions), to issue all or part of the authorized but unissued shares of common stock, preferred stock or warrants to purchase such shares of common stock. In addition, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market in the future. These actions will result in dilution of the ownership interests of existing stockholders, may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management’s ability to maintain control of us, because the shares may be issued to parties or entities committed to supporting existing management.

Such potential dilution may be exacerbated by increases in our authorized shares of common stock and/or decreases in our outstanding shares of common stock.

Risks Related to our Ethereum Treasury Strategy and ETH Holdings

ETH is a highly volatile asset, and fluctuations in the price of ETH are likely to influence our financial results and the market price of our ETH.

Ethereum is a highly volatile asset, and fluctuations in the price of ETH are likely to influence our financial results and the market price of our common stock. ETH is the native digital asset and unit of account on the Ethereum network. The market value of ETH is not related to any specific company, government or asset. The valuation of ETH depends on a number of factors, including future expectations for the value of the Ethereum network, the number of ETH transactions, and the overall usage of ETH as an asset. This means that a significant amount of the value of ETH is speculative, which could lead to increased volatility. Our financial results and the market price of our common stock would be adversely affected, and our business and financial condition would be negatively impacted if the price of ETH decreased substantially (as it has in the past, such as during 2022), including as a result of:

● decreased user and investor confidence in ETH, including due to the various factors described in this risk factor section;

● investment and trading activities, such as (i) trading activities of highly active retail and institutional users, speculators, miners and investors; (ii) actual or expected significant dispositions of ETH by large holders, including the expected liquidation of digital assets associated with entities that have filed for bankruptcy protection and the transfer and sale of ETH associated with significant hacks, seizures, or forfeitures; and (iii) actual or perceived manipulation of the spot or derivative markets for ETH or spot ETH exchange-traded products, or ETPs;

● negative publicity, media or social media coverage, or sentiment due to events in or relating to, or perception of, ETH or the broader digital assets industry, for example, (i) public perception that ETH can be used as a vehicle to circumvent sanctions, including sanctions imposed on Russia or certain regions related to the ongoing conflict between Russia and Ukraine, or to fund criminal or terrorist activities, such as the purported use of digital assets by Hamas to fund its terrorist attack against Israel in October 2023; (ii) expected or pending civil, criminal, regulatory enforcement or other high profile actions against major participants in the Ethereum ecosystem; (iii) additional filings for bankruptcy protection or bankruptcy proceedings of major digital asset industry participants, such as the bankruptcy proceeding of FTX Trading and its affiliates; (iv) the actual or perceived environmental impact of ETH and related activities, including environmental concerns raised by private individuals, governmental and non-governmental organizations, and other actors related to the energy resources consumed in the ETH related processes; and (v) changes in government regulations;

● changes in consumer preferences and the perceived value or prospects of ETH;

● competition from other digital assets (including Bitcoin) that are more well known, exhibit better speed, security, scalability, or energy efficiency, that feature other more favored characteristics, that are backed by governments, including the U.S. government, or reserves of fiat currencies, or that represent ownership or security interests in physical assets;

● a decrease in the price of other digital assets, including stablecoins, or the crash or unavailability of stablecoins that are used as a medium of exchange for ETH purchase and sale transactions, such as the crash of the stablecoin Terra USD in 2022, to the extent the decrease in the price of such other digital assets or the unavailability of such stablecoins may cause a decrease in the price of ETH or adversely affect investor confidence in digital assets generally;

● developments relating to the ETH protocol that may impact (i) its security, speed, scalability, usability, or value, (ii) failures to upgrade the protocol to adapt to security, technological, legal or other challenges, and (iii) changes to the ETH protocol that introduce software bugs, security risks or other elements that adversely affect ETH;

● disruptions, failures, unavailability, or interruptions in service of trading venues for ETH, such as, for example, the announcement by the digital asset exchange FTX Trading that it would freeze withdrawals and transfers from its accounts and subsequent filing for bankruptcy protection and the recent SEC enforcement action brought against Binance Holdings Ltd., which initially sought to freeze all of its assets during the pendency of the enforcement action;

● the filing for bankruptcy protection by, liquidation of, or market concerns about the financial viability of digital asset custodians, trading venues, lending platforms, investment funds, or other digital asset industry participants, such as the filing for bankruptcy protection by digital asset trading venues FTX Trading and BlockFi and digital asset lending platforms Celsius Network and Voyager Digital Holdings in 2022, the ordered liquidation of the digital asset investment fund Three Arrows Capital in 2022, the announced liquidation of Silvergate Bank in 2023, the government-mandated closure and sale of Signature Bank in 2023, the placement of Prime Trust, LLC into receivership following a cease-and-desist order issued by the Nevada Department of Business and Industry in 2023, and the exit of Binance Holdings Ltd. from the U.S. market as part of its settlement with the Department of Justice and other federal regulatory agencies;

● regulatory, legislative, enforcement and judicial actions that adversely affect the price, ownership, transferability, trading volumes, legality or public perception of ETH, or that adversely affect the operations of or otherwise prevent digital asset custodians, trading venues, lending platforms or other digital assets industry participants from operating in a manner that allows them to continue to deliver services to the digital assets industry;

● reductions in staking rewards of ETH, or increases in the costs associated with ETH staking, including increases in electricity costs and hardware and software used in staking, which could further increase the costs associated with ETH staking, any of which may cause a decline in support for the Ethereum protocol;

● ETH staking exposes us to slashing risks, defined as a punitive mechanism built into the Ethereum network, designed to penalize validators and their delegators for misbehavior or failing to follow network rules, which could result in the loss of our staked ETH;

● transaction congestion and fees associated with processing transactions of ETH or lengthened periods to exit ETH staking or other delays to unstaking or withdrawing ETH from staking protocols;

● macroeconomic changes, such as changes in the level of interest rates and inflation, fiscal and monetary policies of governments, trade restrictions, and fiat currency devaluations;

● developments in mathematics or technology, including in digital computing, algebraic geometry and quantum computing, that could result in the cryptography used by the Ethereum blockchain becoming insecure, ineffective or obsolete; and

● changes in national and international economic and political conditions, including, without limitation, federal government policies, trade tariffs and trade disputes, the adverse impacts attributable to the current conflict between Russia and Ukraine and the economic sanctions adopted in response to the conflict, and the broadening of the Israel-Hamas conflict to other countries in the Middle East.

Our ETH strategy has not been tested over an extended period of time or under different market conditions.

ETH has a relatively limited history of existence and operations compared to traditional commodities. There is a limited established performance record for the price of ETH and, in turn, a limited basis for evaluating an investment in ETH. Although past performance is not necessarily indicative of future results, if ETH had a more established history, such history might (or might not) provide information on which to evaluate our ETH strategy.

We are continually examining the risks and rewards of our strategy to acquire and hold ETH and to stake such ETH to generate staking rewards. This strategy has not been tested over an extended period of time or under different market conditions. For example, although we believe ETH has the potential to serve as a hedge against inflation in the long term, the short-term price of ETH has declined in recent periods during which the inflation rate increased. If ETH prices were to decrease or our ETH strategy otherwise proves unsuccessful, our financial condition, results of operations, and the market price of our listed securities would be materially adversely impacted.

Our ability to achieve the growth objectives of our ETH strategy depends in significant part on our ability to continue raising capital to purchase ETH. If we are unable to obtain equity, equity-linked or debt financing on favorable terms or at all, we may not be able to successfully execute on our ETH strategy.

Staking introduces a risk of loss of ETH, which could adversely affect the value of our common stock.

We stake a portion of our ETH through one or more trusted staking providers. Staking introduces a risk of loss of ETH. None of our ETH, including staked ETH, are subject to the protections enjoyed by depositors or customers of institutions with Federal Deposit Insurance Corporation (FDIC) or Securities Investor Protection Corporation (SIPC) membership. The Ethereum network imposes three types of sanctions for validator misbehavior or inactivity, which would result in a portion of staked ETH being destroyed or “burned”: penalties, slashing and inactivity leaks.

A validator may face penalties if it fails to take certain actions, such as providing a timely attestation to a block proposed by another validator. Under this scenario, a validator’s staked ETH could be burned in an amount equal to the reward to which it would have been entitled for performing the actions.

A more severe sanction (i.e., “slashing”) is imposed if a validator commits malicious acts related to the proposal or attestation of blocks with invalid transactions. Slashing can result in the validator having a portion of its staked ETH immediately burned. After this initial slashing, the validator is queued for forceful removal from the Ethereum network’s validator “pool,” and more of the validator’s stake is burned over a period regardless of whether the validator makes any further slashable errors, at which point the validator is automatically removed from the validator pool.

Staked ETH may also be burned through a process known as an “inactivity leak,” which is triggered if the Ethereum protocol has gone too long without finalizing a new block. For a new block to be successfully added to the blockchain, validators that account for at least two-thirds of all staked ETH must agree on the validity of a proposed block. This means that if validators representing more than one-third of the total staked ETH are offline, no new blocks can be finalized. To prevent this, an inactivity leak causes the ETH staked by the inactive validators to gradually “bleed away” until these inactive validators represent less than one-third of the total stake, thereby allowing the remaining active validators to finalize proposed blocks. This provides a further incentive for validators to remain online and continue performing validation activities.

There can be no guarantee that penalties, slashing or inactivity leaks and resulting losses will not occur as a result of activities that employ any portion of our assets in actions where any portion of our ETH becomes subject to the Ethereum proof-of-stake validation or is used to earn additional ETH or generate income or other earnings (“Staking Activities”). Furthermore, a staking provider’s liability to us is limited, and a staking provider may lack the assets or insurance in order to support the recovery of any losses incurred. There can be no guarantee that we would recover any of our staked assets, or the value thereof, if it is subject to sanctions imposed by the Ethereum network.

Staked ETH tokens will be inaccessible for a variable period of time, determined by a range of factors, which could result in certain liquidity risk to us.

Under current Ethereum network protocols, staked ETH tokens are permitted to be un-staked by the holder of such ETH tokens. However, as part of the “activating” and “exiting” processes of staking, staked ETH tokens will be inaccessible for a variable period of time determined by a range of factors, including agreements we may enter into or network congestion, resulting in certain liquidity risks to us.

“Activation” is the funding of a validator to be included in the active set, thereby allowing the validator to participate in the Ethereum network’s proof-of-stake consensus protocol. “Exit” is the request to exit from the active set and no longer participate in the Ethereum Network’s proof-of-stake consensus protocol. As part of these “activating” and “exiting” processes of staking on the Ethereum network, any staked ETH will be inaccessible for a period of time. The duration of activating and exiting periods are dependent on a range of factors, including agreements we may enter into or network conditions. However, depending on demand, un-staking can take between hours, days or weeks to complete. This can result in certain liquidity risk to us.

We are dependent on third parties to effectively execute our staking activities.

Staking may be carried out by our custodians, their affiliates, or third-party staking providers, the amount of staking rewards that our staking activity will generate will be dependent on the performance of the staking provider, including the adequacy and reliability of the hardware and software utilized by the staking provider. If the staking providers experience service outages or otherwise are unable to optimally execute the staking of our ETH, our staking rewards may be adversely affected.

Liquid staking applications pose risks associated with concentration of control.

Validators must deposit 32 ETH to activate a unique validator key pair that is used to sign block proposals and attestations on behalf of its stake (i.e., vote on its view of the chain). For every 32 ETH deposit that is staked, a unique validator key pair is generated. An application built on the Ethereum network, or a single node operator, can manage many validator key pairs. For example, Lido, an application that provides a so-called “liquid staking” solution which permits holders of ETH to deposit them with Lido, which stakes the ETH while issuing the holder a transferrable token, is reported by some sources to have or have had up to 275,000 validator key pairs (each representing 32 staked ETH) divided across over 30 node operators. At times, Lido has reportedly controlled around or in excess of 33% of the total staked ETH on the Ethereum network. While it is widely believed that Lido has little incentive to attempt to interfere with transaction finality or block confirmations using its reported 33% stake, since doing so would likely cause its entire stake to be slashed and thus lost (assuming good actors unaffiliated with Lido controlled the remainder), and also because Lido is believed to not control most of the third party node operators where its ETH is staked, and finally since the occurrence of such manipulation of the Ethereum network’s consensus processed by Lido or any other actor would likely cause ETH to lose substantial value (which would obviously hurt Lido economically), it nevertheless poses risks associated with such a concentration of control (including centralization concerns). If Lido, or a bad actor with a similar sized stake, were to attempt to interfere with transaction finality or block confirmations, it could negatively affect the use and adoption of the Ethereum network, the value of ETH, and thus the value of our ETH treasury.

ETH and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty.

ETH and other digital assets are relatively novel and are subject to significant uncertainty, which could adversely impact their price. The application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, and it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of ETH or the ability of individuals or institutions such as us to own or transfer ETH.

The U.S. federal government, states, regulatory agencies and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of ETH or the ability of individuals or institutions such as us to own or transfer ETH.

It is not possible to predict whether, or when, new laws will be enacted that change the legal framework governing digital assets or provide additional authorities to the SEC or other regulators, or whether, or when, any other federal, state or foreign legislative bodies will take any similar actions. It is also not possible to predict the nature of any such additional laws or authorities, how additional legislation or regulatory oversight might impact the ability of digital asset markets to function, the willingness of financial and other institutions to continue to provide services to the digital assets industry, or how any new laws or regulations, or changes to existing laws or regulations, might impact the value of digital assets generally and ETH specifically. The consequences of any new law or regulation relating to digital assets and digital asset activities could adversely affect the market price of ETH, as well as our ability to hold or transact in ETH, and in turn adversely affect listed securities.

Moreover, the risks of engaging in an ETH strategy are relatively novel and have created and could continue to create complications due to the lack of experience that third parties have with companies engaging in such a strategy, such as increased costs of director and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.

The growth of the digital assets industry in general, and the use and acceptance of ETH in particular, may also impact the price of ETH and is subject to a high degree of uncertainty. The pace of worldwide growth in the adoption and use of ETH may depend, for instance, on public familiarity with digital assets, ease of buying, accessing or gaining exposure to ETH, institutional demand for ETH as an investment asset, the participation of traditional financial institutions in the digital assets industry, consumer demand for ETH as a store of value or means of payment, and the availability and popularity of alternatives to ETH. Even if growth in ETH adoption occurs in the near or medium-term, there is no assurance that ETH usage will continue to grow over the long-term.

Because ETH has no physical existence beyond the record of transactions on the Ethereum blockchain, a variety of technical factors related to the Ethereum blockchain could also impact the price of ETH. For example, malicious attacks, inadequate staking fees to incentivize validating of ETH transactions, and advances in digital computing, algebraic geometry, and quantum computing could undercut the integrity of the Ethereum blockchain and negatively affect the price of ETH. The liquidity of ETH may also be reduced and damage to the public perception of ETH may occur if financial institutions were to deny or limit banking services to businesses that hold ETH, provide ETH-related services or accept ETH as payment, which could also decrease the price of ETH.

The market price of ETH is highly volatile and may be adversely affected by factors beyond our control, including competition from other crypto assets and relative-adoption trends, any of which could negatively affect the value of our ETH holdings and our common stock price.

The price of ETH depends on supply-and-demand dynamics in global, largely unregulated or differently regulated markets and is subject to extreme volatility. ETH competes for users, developers, capital and transaction “blockspace” with other crypto assets and networks (including Bitcoin and alternative Layer-1 and Layer-2 protocols), with stablecoins and their underlying settlement rails, and with non-blockchain payment and computing systems. If users, developers, liquidity providers, applications, or institutions favor other networks or assets—whether due to perceived performance, scalability, fees, user experience, security, programmability, available applications, token incentives, or business/regulatory considerations—the relative demand for ETH could decline. Adoption metrics relevant to ETH’s value (e.g., active addresses, developer activity, validator participation and staking yields, Layer-2 usage, stablecoin and DeFi activity on Ethereum, and enterprise or government use) may increase or decrease over time and may do so at different rates than comparable metrics on other networks. ETH’s price may also be adversely affected by protocol-level changes (including Ethereum Improvement Proposals that alter issuance, burn, fees or economics), hard forks or chain splits, software bugs or vulnerabilities, validator/slashing events, material disruptions or exploits in applications or Layer-2 systems that depend on Ethereum, changes in MEV (maximal extractable value) dynamics, changes in transaction fees or demand for blockspace, actions by large holders or market makers, market manipulation, exchange or stablecoin failures, changes in interest rates or macroeconomic conditions, regulatory or enforcement developments (including with respect to staking, custody, market structure or the legal classification of ETH), tax treatment, and changes in access to banking or payment services for crypto market participants. Any of these factors—especially if they lead to faster growth or improved economics for competing crypto assets relative to ETH—could cause the price of ETH to decline or underperform other crypto assets. A decline in the price of ETH, or underperformance relative to other assets, would reduce the value of our ETH holdings and could adversely affect the market price of our common stock.

The further development and acceptance of cryptocurrency networks, including the ETH network, which represent a relatively new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of cryptocurrency networks, including the ETH network, may adversely affect an investment in the Company.

Cryptocurrency such as ETH may be used, among other things, to buy and sell goods and services or to transfer and store value by users. The cryptocurrency networks are a new and rapidly evolving industry of which the ETH network is a prominent, but not unique, part. The growth of the cryptocurrency industry in general, and the ETH network in particular, is subject to a high degree of uncertainty. The factors affecting the further development of the cryptocurrency industry, as well as the ETH network, include:

● continued worldwide growth in the adoption and use of ETH and other cryptocurrencies, including those competitive with ETH;

● government and quasi-government regulation of ETH and other cryptocurrencies and their use, or restrictions on or regulation of access to and operation of the ETH network or similar cryptocurrency systems;

● the maintenance and development of the open-source software protocol of the ETH network;

● changes in consumer demographics and public tastes and preferences; ● the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; and;

● general economic conditions and the regulatory environment relating to cryptocurrencies and cryptocurrency service providers.

A decline in the popularity or acceptance of the ETH network and other cryptocurrency networks may harm the price of our common stock. There is no assurance that the ETH network, or the service providers necessary to accommodate it, will continue in existence or grow. Furthermore, there is no assurance that the availability of and access to cryptocurrency service providers will not be negatively affected by government regulation or supply and demand of ETH.

Due to the unregulated nature and lack of transparency surrounding the operations of many digital asset trading venues, digital asset trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in digital asset trading venues and adversely affect the value of digital assets, and the Company’s financial position, operations and prospects.

Cryptocurrency markets, including the spot market for ETH, are growing rapidly. Digital asset trading venues are relatively new and largely unregulated or may not be complying with existing regulations. These markets are local, national and international and include a broadening range of cryptocurrencies and participants. Significant trading may occur on systems and platforms with minimum predictability. Spot markets may impose daily, weekly, monthly or customer-specific transactions or withdrawal limits or suspend withdrawals entirely, rendering the exchange of ETH for fiat currency difficult or impossible. Participation in spot markets requires users to take on credit risk by transferring ETH or another cryptocurrency from a personal account to a third-party’s account.

Digital asset trading platforms do not appear to be subject to, or may not comply with, regulation in a manner similar to other regulated trading platforms, such as national securities exchanges or designated contract markets. Many digital asset trading platforms are unlicensed, are unregulated, operate without extensive supervision by governmental authorities, and do not provide the public with significant information regarding their ownership structure, management team, corporate practices, cybersecurity, and regulatory compliance. In particular, those located outside the United States may be subject to significantly less stringent regulatory and compliance requirements in their local jurisdictions. Digital asset trading platforms may be out of compliance with existing regulations.

Digital asset trading venues are relatively new and, in many cases, unregulated. Furthermore, there are many digital asset trading venues that do not provide the public with significant information regarding their ownership structure, management teams, corporate practices and regulatory compliance. As a result, the marketplace may lose confidence in digital asset trading venues, including prominent exchanges that handle a significant volume of such trading and/or are subject to regulatory oversight, in the event one or more digital asset trading venues cease or pause for a prolonged period the trading of digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational problems.

Negative perception, a lack of stability in the broader digital asset markets and the closure, temporary shutdown or operational disruption of digital asset trading venues, lending institutions, institutional investors, institutional miners, custodians, or other major participants in the digital asset ecosystem, due to fraud, business failure, cybersecurity events, government-mandated regulation, bankruptcy, or for any other reason, may result in a decline in confidence in digital assets and the broader digital asset ecosystem and greater volatility in the price of digital assets. The price of our listed securities may be affected by the value of our future digital asset holdings, and the failure of a major participant in the ecosystem could have a material adverse effect on the market price of our listed securities.

Our common stock may trade at a substantial premium or discount to the value of the ETH we hold, and our stock price may be more volatile than the price of ETH.

The market price of our common stock reflects many factors that do not affect the spot price of ETH and may therefore diverge materially—positively or negatively—from the per-share value of our ETH holdings (net of cash, other assets and liabilities). These factors include, among others: our corporate-level expenses; taxes; the timing, size and pricing of equity or debt financings (including at-the-market offerings or convertible securities), equity awards and other sources of dilution; expectations about our future purchases or sales of ETH, staking activity, or special distributions; our liquidity, public float, short interest and securities lending/borrow dynamics; the availability and pricing of exchange-listed alternatives (such as exchange-traded products holding ETH) and differences between those vehicles and a corporate issuer (including the absence in our case of an in-kind creation/redemption mechanism that can reduce premiums/discounts); differences in trading hours and market microstructure between our common stock and spot markets for ETH; changes in index inclusion, analyst coverage or investor sentiment toward us as an operating company; our corporate governance, financial reporting, and any actual or perceived operational, custody, technology or regulatory risks specific to us; and broader equity-market conditions independent of crypto-asset markets. As a result, our stock may trade at a premium or discount to the value of our ETH holdings for extended periods, and may be more volatile than the price of ETH. Accordingly, investors could lose all or a substantial part of their investment even if the market price of ETH does not decline, and may not benefit commensurately from increases in the market price of ETH.

The availability of spot ETPs for ETH and other digital assets may adversely affect the market price of ETH and, consequently, the trading price of our common stock.

Although ETH and other digital assets have experienced a surge of investor attention since ETH was invented in 2015, until recently investors in the United States had limited means to gain direct exposure to ETH through traditional investment channels, and instead generally were only able to hold ETH through “hosted” wallets provided by digital asset service providers or through “unhosted” wallets that expose the investor to risks associated with loss or hacking of their private keys. Given the relative novelty of digital assets, general lack of familiarity with the processes needed to hold ETH directly, as well as the potential reluctance of financial planners and advisers to recommend direct ETH holdings to their retail customers because of the manner in which such holdings are custodied, some investors have sought exposure to ETH through investment vehicles that hold ETH and issue shares representing fractional undivided interests in their underlying ETH holdings. These vehicles, which were previously offered only to “accredited investors” on a private placement basis, have in the past traded at substantial premiums to net asset value, possibly due to the relative scarcity of traditional investment vehicles providing investment exposure to ETH.

Although we are an operating company, and we believe we offer a different value proposition than an ETH investment vehicle such as a spot ETH ETP, investors may nevertheless view our common stock as an alternative to an investment in an ETP, and choose to purchase shares of a spot ETP instead of our common stock. They may do so for a variety of reasons, including if they believe that ETPs offer a “pure play” exposure to ETH that is generally not subject to federal income tax at the entity level as we are, or the other risk factors applicable to an operating business, such as ours.

As a result of the foregoing factors, availability of spot ETPs for ETH and other digital assets could have a material adverse effect on the market price of our common stock.

The value of ETH may also be subject to momentum pricing due to speculation regarding future appreciation in value, leading to greater volatility that could adversely affect the value of our common stock.

Momentum pricing typically is associated with growth stocks and other assets whose valuation, as determined by the investing public, is impacted by appreciation in value. Momentum pricing may result in speculation regarding future appreciation in the value of digital assets, which inflates prices and leads to increased volatility. As a result, ETH may be more likely to fluctuate in value due to changing investor confidence in future appreciation or depreciation in prices, which could adversely affect the price of ETH, and, in turn, our stock price.

We have recently shifted a portion of our business strategy towards a focus on ETH, and we may be unable to successfully implement this new strategy.

We have shifted a portion of our business strategy towards ETH, including potential investments in ETH, including through, currently, only staking, but potentially in the future, restaking, liquid staking and other decentralized finance activities. There is no assurance that we will be able to successfully implement this new strategy or operate ETH-related activities at the scale or profitability currently anticipated. The ETH network operates with a Proof-of-Stake consensus mechanism, which differs significantly from Bitcoin’s Proof-of-Work mining mechanism. This strategic shift requires specialized employee skillsets and operational, technical and compliance infrastructure to support ETH and related staking activities. This also requires that we implement different security protocols, and treasury management practices. There is no assurance that we will be able to execute this strategy by building out the needed infrastructure within the timeframe that we currently anticipate. Errors in key management could result in significant loss of funds and reduced rewards. As a result, our shift towards ETH could have a material adverse effect on our business and financial condition.

Our shift towards an ETH-focused strategy requires substantial changes in our day-to-day operations and exposes us to significant operational risks.

Our shift towards an ETH-focused strategy, including currently, through staking, but potentially in the future, through restaking, liquid staking, and other decentralized finance activities, exposes us to significant operational risks. ETH’s Proof-of-Stake consensus mechanism requires that we operate validator nodes, employ secure key management and implement slashing protection. It also requires that we maintain constant up time to ensure that we are eligible for staking rewards and to avoid penalties. In addition, the ETH ecosystem rapidly evolves, with frequent upgrades and protocol changes that may require significant adjustments to our operational setup. The upgrades and protocol changes may require that we incur unanticipated costs and it could cause temporary service disruptions. We may also need to employ third-party service providers in our operations, which may introduce risks outside of our control, including significant cybersecurity risks. Any of these operational risks could materially and adversely affect our ability to execute our ETH strategy and may prevent us from realizing positive returns and could severely hurt our financial condition.

Our Ethereum treasury strategy may subject us to enhanced regulatory oversight.

As noted above, several spot ETH ETPs have received approval from the SEC to list their shares on a U.S. national securities exchange with continuous share creation and redemption at net asset value (NAV). Even though we are not, and do not function in the manner of, a spot ETH ETP, it is possible that we nevertheless could face regulatory scrutiny from the SEC or other federal or state agencies due to our ETH holdings.

In addition, there has been increasing focus on the extent to which digital assets can be used to launder the proceeds of illegal activities, fund criminal or terrorist activities, or circumvent sanctions regimes, including those sanctions imposed in response to the ongoing conflict between Russia and Ukraine. While we have implemented and maintain policies and procedures reasonably designed to promote compliance with applicable anti-money laundering and sanctions laws and regulations and take care to only acquire our ETH through entities subject to anti-money laundering regulation and related compliance rules in the United States, if we are found to have purchased any of our ETH from bad actors that have used ETH to launder money or persons subject to sanctions, we may be subject to regulatory proceedings and any further transactions or dealings in ETH by us may be restricted or prohibited.

We have issued, and may in the future issue additional, convertible debentures, which are and are expected to be collateralized by some or all of our ETH holdings, and we may utilize other financial instruments, such as OTC swaps, that may be so collateralized. We may also consider pursuing strategies to create income streams or otherwise generate funds using our ETH holdings. These types of ETH-related transactions are the subject of enhanced regulatory oversight. These and any other ETH-related transactions we may enter into, beyond simply acquiring and holding ETH, may subject us to additional regulatory compliance requirements and scrutiny, including under federal and state money services regulations, money transmitter licensing requirements and various commodity and securities laws and regulations.

Additional laws, guidance and policies may be issued by domestic and foreign regulators following the filing for Chapter 11 bankruptcy protection by FTX Trading, one of the world’s largest cryptocurrency exchanges, in November 2022. U.S. and foreign regulators have also increased, and are highly likely to continue to increase, enforcement activity, and are likely to adopt new regulatory requirements in response to FTX Trading’s collapse. Increased enforcement activity and changes in the regulatory environment, including changing interpretations and the implementation of new or varying regulatory requirements by the government or any new legislation affecting ETH, as well as enforcement actions involving or impacting our trading venues, counterparties and custodians, may impose significant costs or significantly limit our ability to hold and transact in ETH.

In addition, private actors that are wary of ETH or the regulatory concerns associated with ETH may in the future take further actions that may have an adverse effect on our business or the market price of our common stock.

The concentration of our ETH holdings enhances the risks inherent in our ETH treasury strategy.

The vast majority of our assets are concentrated in our ETH holdings or result from funds received from the liquid staking of ETH. The concentration of our assets in ETH limits our ability to mitigate risk that could otherwise be achieved by holding a more diversified portfolio of treasury assets. If there is a significant decrease in the price of ETH, we may experience a more pronounced impact on our financial condition than if we invested our cash in a more diverse portfolio of treasury assets.

Our ETH holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.

Historically, the ETH market has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. During times of market instability, we may not be able to sell our ETH at favorable prices or at all. For example, a number of ETH trading venues temporarily halted deposits and withdrawals in 2022. As a result, our ETH holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents. Further, ETH we hold with our custodians and transact with our trade execution partners does not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the FDIC or the SIPC. Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered ETH or otherwise generate funds using our ETH holdings, including in particular during times of market instability or when the price of ETH has declined significantly. If we are unable to sell our ETH, enter into additional capital raising transactions, including capital raising transactions, using ETH as collateral, or otherwise generate funds using our ETH holdings, or if we are forced to sell our ETH at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.

A “fork” in the Ethereum protocol could adversely affect the value of our ETH holdings.

The Ethereum network operates using open-source protocols, meaning that any user can become a node by downloading the Ethereum Client and participating in the Ethereum network, and no permission of a central authority or body is needed to do so. In addition, anyone can propose a modification to the Ethereum network’s source code and then propose that the Ethereum network community support the modification. These proposed modifications to the Ethereum network’s source code, if adopted, can lead to forks.

Forks in the Ethereum protocol may lead to disruptions, security risks or declines in ETH value. A “fork” occurs when a change to the Ethereum network’s source code creates two incompatible versions of the blockchain, resulting in separate networks. Forks may be planned (e.g., upgrades to the Ethereum protocol like the Merge or Dencun) or unplanned (e.g., due to software bugs or validator disagreement). Planned forks are designed to improve performance or introduce new features, but they may introduce bugs, security vulnerabilities, or unexpected economic consequences. Unplanned forks can arise from client software inconsistencies or protocol failures, causing network instability or fragmentation. In either case, forks may result in operational outages, user confusion, replay attacks and reduced validator participation, all of which could undermine confidence in the Ethereum network and adversely affect the price of ETH. Our ETH holdings, staking activities and related treasury strategy could be materially negatively impacted in the event of such a fork.

A disruption of the Internet may affect the operation of the cryptocurrency networks, which may adversely affect the cryptocurrency industry and an investment in the Company.

The cryptocurrency networks rely on the Internet. A significant disruption of Internet connectivity could disrupt the cryptocurrency networks’ functionality until such disruption is resolved. A disruption in the Internet could adversely affect an investment in the Company. In particular, some variants of cryptocurrencies have experienced a number of denial-of-service attacks, which have led to temporary delays in block creation and cryptocurrency transfers.

Cryptocurrencies are also susceptible to border gateway protocol hijacking, or BGP hijacking. Such an attack can be a very effective way for an attacker to intercept traffic en route to a legitimate destination. BGP hijacking impacts the way different nodes and miners are connected to one another to isolate portions of them from the remainder of the network, which could lead to a risk of the network allowing double-spending and other security issues. If BGP hijacking occurs on any cryptocurrency network, participants may lose faith in the security of cryptocurrency, which could affect cryptocurrency’s value and consequently the value of our common stock.

Any Internet failures or Internet connectivity-related attacks that impact the ability to transfer cryptocurrency could have a material adverse effect on the price of cryptocurrency and the value of an investment in the Company.

If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our ETH, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our ETH and our financial condition and results of operations could be materially adversely affected.

Substantially all of the ETH and ETH equivalents we own are held in custody accounts at institutional-grade digital asset custodians. Security breaches and cyberattacks are of particular concern with respect to our ETH. ETH and other blockchain-based cryptocurrencies and the entities that provide services to participants in the ETH ecosystem have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities. For example, in October 2021 it was reported that hackers exploited a flaw in the account recovery process and stole from the accounts of at least 6,000 customers of the Coinbase exchange, although the flaw was subsequently fixed and Coinbase reimbursed affected customers. Similarly, in November 2022, hackers exploited weaknesses in the security architecture of the FTX Trading digital asset exchange and reportedly stole over $400 million in digital assets from customers. A successful security breach or cyberattack could result in:

● a partial or total loss of our ETH in a manner that may not be covered by insurance or the liability provisions of the custody agreements with the custodians who hold our ETH;

● harm to our reputation and brand;

● improper disclosure of data and violations of applicable data privacy and other laws; or

● significant regulatory scrutiny, investigations, fines, penalties, and other legal, regulatory, contractual and financial exposure.

Further, any actual or perceived data security breach or cybersecurity attack directed at other companies with digital assets or companies that operate digital asset networks, regardless of whether we are directly impacted, could lead to a general loss of confidence in the broader Ethereum blockchain ecosystem or in the use of the ETH network to conduct financial transactions, which could negatively impact us.

Attacks upon systems across a variety of industries, including industries related to ETH, are increasing in frequency, persistence, and sophistication, and, in many cases, are being conducted by sophisticated, well-funded and organized groups and individuals, including state actors. The techniques used to obtain unauthorized, improper or illegal access to systems and information (including personal data and digital assets), disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target. These attacks may occur on our systems or those of our third-party service providers or partners. We may experience breaches of our security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities or other irregularities. In particular, we expect that unauthorized parties will attempt to gain access to our systems and facilities, as well as those of our partners and third-party service providers, through various means, such as hacking, social engineering, phishing and fraud. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders. In addition, certain types of attacks could harm us even if our systems are left undisturbed. For example, certain threats are designed to remain dormant or undetectable, sometimes for extended periods of time, or until launched against a target and we may not be able to implement adequate preventative measures. Further, there has been an increase in such activities due to the increase in work-from-home arrangements. The risk of cyberattacks could also be increased by cyberwarfare in connection with the ongoing Russia-Ukraine and Israel-Hamas conflicts, or other future conflicts, including potential proliferation of malware into systems unrelated to such conflicts. Any future breach of our operations or those of others in the ETH industry, including third-party services on which we rely, could materially and adversely affect our financial condition and results of operations.

The launch of central bank digital currencies (“CBDCs”) may adversely impact our business.

The introduction of a government-issued digital currency could eliminate or reduce the need or demand for private-sector issued crypto currencies or significantly limit their utility. Certain national governments around the world have announced plans to introduce, and in the future could introduce, CBDCs, which could in turn limit the size of the market opportunity for cryptocurrencies, including ETH.

Intellectual property disputes related to the open-source structure of digital asset networks expose us to risks related to software development, security vulnerabilities and potential disruptions to digital asset technology could threaten our ability to operate.

Digital asset networks are open-source projects and, although there may be an influential group of leaders in the network community, generally there is no official developer or group of developers that formally controls the digital asset network. Without guaranteed financial incentives, there may be insufficient resources to address emerging issues, upgrade security or implement necessary improvements to the network in a timely manner. If the digital asset network’s software is not properly maintained or developed, it could become vulnerable to security threats, operational inefficiencies and reduced trust, all of which could negatively impact the digital assets’ long-term viability and our business.

The irreversibility of digital asset transactions exposes us to risks of theft, loss and human error, which could negatively impact our business.

Digital asset transactions are not, from an administrative perspective, reversible without the consent and active participation of the recipient of the transaction or, in theory, control or consent of a majority of the processing power on that digital asset network. Once a transaction has been verified and recorded in a block that is added to the blockchain, an incorrect transfer of digital assets or a theft of digital assets generally will not be reversible, and we may not be capable of seeking compensation for any such transfer or theft.

We plan to regularly transfer digital assets, and it is possible that, through computer or human error, or through theft or criminal action, such assets could be transferred in incorrect amounts or to unauthorized third parties.

To the extent we are unable to seek a corrective transaction to identify the third party which has received our digital assets through error or theft, we will be unable to revert or otherwise recover the impacted digital assets, and any such loss could adversely affect our business, results of operations and financial condition.

We face significant competition in the growing digital asset industry and our business, operating results, and financial condition may be adversely affected if we are unable to compete effectively.

We operate in a competitive environment and compete against other companies and other entities with similar strategies, including companies with significant holdings in Bitcoin, ETH and other digital assets, and our business, operating results, and financial condition may be adversely affected if the Company is unable to compete effectively.

The emergence or growth of other digital assets, including those with significant private or public sector backing, could have a negative impact on the price of ETH and adversely affect our business.

As a result of our ETH strategy, our assets are concentrated in our ETH holdings. Accordingly, the emergence or growth of digital assets other than ETH may have a material adverse effect on our financial condition. There are numerous alternative digital assets and many entities, including consortiums and financial institutions, are researching and investing resources into private or permissioned blockchain platforms or digital assets. Additionally, the Ethereum network has completed multiple major upgrades and may undertake additional upgrades in the future. If the mechanisms for validating transactions in other alternative digital assets are perceived as superior to the Ethereum network, those digital assets could gain market share relative to ETH.

Other alternative digital assets that compete with ETH in certain ways include “stablecoins,” which are designed to maintain a constant price because of, for instance, their issuers’ promise to hold high-quality liquid assets (such as U.S. dollar deposits and short-term U.S. treasury securities) equal to the total value of stablecoins in circulation. Stablecoins have grown rapidly as an alternative to ETH and other digital assets as a medium of exchange and store of value, particularly on digital asset trading platforms.

Additionally, central banks in some countries have started to introduce digital forms of legal tender. For example, China’s CBDC project was made available to consumers in January 2022, and governments including the United States, the United Kingdom, the European Union, and Israel have been discussing the potential creation of new CBDCs. Whether or not they incorporate blockchain or similar technology, CBDCs, as legal tender in the issuing jurisdiction, could also compete with, or replace, ETH and other digital assets as a medium of exchange or store of value. As a result, the emergence or growth of these or other digital assets could cause the market price of ETH to decrease, which could have a material adverse effect on our business, prospects, financial condition, and operating results.

Changes in the accounting treatment of our ETH holdings or digital asset holdings could have significant accounting impacts, including increasing the volatility of our results.

We have adopted Accounting Standards Update (ASU) 2023-08 as of January 1, 2025, which requires us to measure our ETH holdings at fair value in our statement of financial position, and to recognize gains and losses from changes in the fair value of our ETH in net income each reporting period beginning January 1, 2025. ASU 2023-08 also requires us to provide certain interim and annual disclosures with respect to our ETH holdings. Due in particular to the volatility in the price of ETH, we expect the measurement at fair value to have a material impact on our financial results in future periods, increase the volatility of our financial results, and affect the carrying value of our ETH on our balance sheet. ASU 2023-08 could also have adverse tax consequences. These impacts could in turn have a material adverse effect on our financial results and listed securities.

Our historical financial statements do not reflect the potential variability in earnings that we may experience in the future relating to our ETH holdings.

Our historical financial statements do not reflect the potential variability in earnings that we may experience in the future from holding or selling significant amounts of ETH, particularly because we only began our ETH treasury strategy in the Second Quarter of 2025.

The price of ETH has historically been subject to dramatic price fluctuations and is highly volatile. We determine the fair value of our ETH based on quoted (unadjusted) prices on the Coinbase exchange, and are required to measure our ETH holdings at fair value in our statement of financial position, and to recognize gains and losses from changes in the fair value of our ETH in net income each reporting period, which may create significant volatility in our reported earnings and decrease the carrying value of our digital assets, which in turn could have a material adverse effect on the market price of our common stock. Conversely, any sale of ETH at prices above our carrying value for such assets creates a gain for financial reporting purposes even if we would otherwise incur an economic or tax loss with respect to such transaction, which also may result in significant volatility in our reported earnings.

Due in particular to the volatility in the price of ETH, we expect our early adoption of ASU 2023-08 to increase the volatility of our financial results and it could significantly affect the carrying value of our ETH on our balance sheet. Because we intend to purchase additional ETH in future periods and increase our overall holdings of ETH, we expect that the proportion of our total assets represented by our ETH holdings will increase in the future. As a result, and in particular due to our adoption of ASU 2023-08, volatility in our earnings may be significantly more than what we experienced in prior periods.

Absent federal regulations, there is a possibility that ETH may be classified as a “security.” Any classification of ETH as a “security” would subject us to additional regulation and could materially impact the operation of our business.

Neither the SEC nor any other U.S. federal or state regulator has publicly stated whether they agree that ETH is a “security.” Despite the Executive Order titled “Strengthening American Leadership in Digital Financial Technology” which includes as an objective, “protecting and promoting the ability of individual citizens and private sector entities alike to access and … to maintain self-custody of digital assets,” ETH has not yet been classified with respect to U.S. federal securities laws. Therefore, while (for the reasons discussed below) we believe that ETH is not a “security” within the meaning of the U.S. federal securities laws, and registration of the Company under The Investment Company Act of 1940, as amended (the “Investment Company Act”), is therefore not required under the applicable securities laws, we acknowledge that a regulatory body or federal court may determine otherwise. Our belief, even if reasonable under the circumstances, would not preclude legal or regulatory action based on such a finding that ETH is a “security” which would require us to register as an investment company under the Investment Company Act.

We have also adapted our process for analyzing the U.S. federal securities law status of ETH and other cryptocurrencies over time, as guidance and case law have evolved. As part of our U.S. federal securities law analytical process, we take into account a number of factors, including the various definitions of “security” under U.S. federal securities laws and federal court decisions interpreting the elements of these definitions, such as the U.S. Supreme Court’s decisions in the Howey and Reves cases, as well as court rulings, reports, orders, press releases, public statements, and speeches by the SEC Commissioners and SEC Staff providing guidance on when a digital asset or a transaction to which a digital asset may relate may be a security for purposes of U.S. federal securities laws. Our position that ETH is not a “security” is premised, among other reasons, on our conclusion ETH does not meet the elements of the Howey test. Among the reasons for our conclusion that ETH is not a security is that holders of ETH do not have a reasonable expectation of profits from our efforts in respect of their holding of ETH. Also, ETH ownership does not convey the right to receive any interest, rewards, or other returns.

We acknowledge, however, that the SEC, a federal court or another relevant entity could take a different view. The regulatory treatment of ETH is such that it has drawn significant attention from legislative and regulatory bodies, in particular the SEC which has previously stated it deemed ETH a security. Application of securities laws to the specific facts and circumstances of digital assets is complex and subject to change. Our conclusion, even if reasonable under the circumstances, would not preclude legal or regulatory action based on a finding that ETH, or any other digital asset we might hold is a “security.” As such, we are at risk of enforcement proceedings against us, which could result in potential injunctions, cease-and-desist orders, fines, and penalties if ETH was determined to be a security by a regulatory body or a court. Such developments could subject us to fines, penalties, and other damages, and adversely affect our business, results of operations, financial condition and prospects.

The classification of digital assets that we will hold as a commodity could subject us to additional Commodity Futures Trading Commission (CFTC) regulation, resulting in significant compliance costs or the cessation of certain operations.

Under current interpretations, ETH is classified as a commodity under the Commodity Exchange Act and is subject to regulation by the CFTC. If our activities require CFTC registration, we may be required to comply with extensive regulatory obligations, which could result in significant costs and operational disruptions. Additionally, current and future legislative or regulatory developments, including new CFTC interpretations, could further impact how ETH and ETH derivatives are classified and traded.

If ETH is further regulated as a commodity, we may be required to register as a commodity pool operator and register the Company as a commodity pool with the CFTC through the National Futures Association. Compliance with these additional regulatory requirements could result in substantial, non-recurring expenses, adversely affecting an investment in our securities. If we determine not to comply with such regulations, we may be forced to cease certain operations, which could negatively impact our investors.

Changes in regulatory interpretations could require us to register as a money services business or money transmitter, leading to increased compliance costs or operational shutdowns.

The regulatory regime for digital assets in the U.S. and elsewhere is uncertain. The Company may be unable to effectively react to proposed legislation and regulation of digital assets, which could adversely affect its business.

If regulatory changes or interpretations require us to register as a money services business with FinCEN under the U.S. Bank Secrecy Act, or as a money transmitter under state laws, we may be subject to extensive regulatory requirements, resulting in significant compliance costs and operational burdens. In such a case, we may incur extraordinary expenses to meet these requirements or, alternatively, may determine that continued operations are not viable. If we decide to cease certain operations in response to new regulatory obligations, such actions could occur at a time that is unfavorable to investors.

Multiple states have implemented or proposed regulatory frameworks for digital asset businesses. Compliance with such state-specific regulations may increase costs or impact our business operations. Further, if we or our service providers are unable to comply with evolving federal or state regulations, we may be forced to dissolve or liquidate certain operations, which could materially impact our investors.

We are not subject to legal and regulatory obligations that apply to investment companies such as mutual funds and exchange-traded funds, or to obligations applicable to investment advisers.

Mutual funds, ETFs and their directors and management are subject to extensive regulation as “investment companies” and “investment advisers” under U.S. federal and state law; this regulation is intended for the benefit and protection of investors. We are not subject to, and do not otherwise voluntarily comply with, these laws and regulations. This means, among other things, that the execution of, or changes to, our ETH treasury strategy, the manner in which our ETH is custodied, our ability to engage in transactions with affiliated parties, and our operating and investment activities generally, are not subject to the extensive legal and regulatory requirements and prohibitions that apply to investment companies and investment advisers. Our board of directors has broad discretion over the investment, leverage and cash management policies it authorizes, whether in respect of our ETH holdings or other activities we may pursue, and has the power to change our current policies, including our strategy of acquiring and holding ETH.

If we were deemed to be an investment company under the Investment Company Act, applicable restrictions likely would make it impractical for us to continue our business as currently conducted.

Under Sections 3(a)(1)(A) and (C) of the Investment Company Act, a company generally will be deemed to be an “investment company” if (i) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities or (ii) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding, or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities, shares of registered money market funds under Rule 2a-7 of the Investment Company Act, and cash items) on an unconsolidated basis. Rule 3a-1 under the Investment Company Act generally provides that notwithstanding the Section 3(a)(1)(C) test described in clause (ii) above, an entity will not be deemed to be an “investment company” for purposes of the Investment Company Act if no more than 45% of the value of its assets (exclusive of U.S. government securities, shares of registered money market funds under Rule 2a-7 of the Investment Company Act, and cash items) consists of, and no more than 45% of its net income after taxes (for the past four fiscal quarters combined) is derived from, securities other than U.S. government securities, shares of registered money market funds under Rule 2a-7 of the Investment Company Act, securities issued by employees’ securities companies, securities issued by qualifying majority owned subsidiaries of such entity, and securities issued by qualifying companies that are controlled primarily by such entity. We do not believe that we are an “investment company” as such term is defined in either Section 3(a)(1)(A) or Section 3(a)(1)(C) of the Investment Company Act.

Recently, we have begun focusing on pursuing opportunities to expand our portfolio into digital assets and the value of our ETH holdings is an amount in excess of 40% of our total assets. Since we believe ETH is not an investment security, we do not hold ourselves out as being engaged primarily, or propose to engage primarily, in the business of investing, reinvesting, or trading in securities within the meaning of Section 3(a)(1)(A) of the Investment Company Act.

With respect to Section 3(a)(1)(C), we believe we satisfy the elements of Rule 3a-1 and therefore are deemed not to be an investment company under, and we intend to conduct our operations su

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