Axe Compute Inc.

NOTE 1–** ORGANIZATION**

Nature of Operations

Axe Compute Inc. (“Axe Compute” or the “Company”) undertook a significant strategic shift in late 2025 when the Company adopted a digital asset treasury strategy (the “Treasury Strategy”) focused on the Aethir token (“ATH”), the native utility token of the Aethir network. Following the adoption of the Treasury Strategy, the Company began accumulating ATH in October 2025, and later in 2025, the Company expanded its business strategy to include a compute business under the Axe Compute brand, under which the Company seeks to provide customers with access to graphics processing unit (“GPU”) compute capacity for artificial intelligence (“AI”) and other high-performance computing workloads through a distributed network model, including infrastructure made available through the Aethir network. Collectively, these activities are referred to as the Compute Services and Treasury Management operating segment. Consistent with the evolution of the Company’s business strategy, the Company was renamed from Predictive Oncology Inc. to Axe Compute Inc. on December 11, 2025.

Axe Compute also continues to operate its legacy oncology drug discovery solutions business designed to support the discovery and development of optimal cancer therapies. In the legacy business, the Company uses AI and its proprietary biobank of 150,000+ tumor samples, categorized by tumor type, to provide actionable insights about drug compounds to improve the drug discovery process and increase the probability of drug compound success. The Company also creates and develops tumor-specific 3D cell culture models mimicking the physiological environment of human tissue, enabling better-informed decision-making during drug development. In February 2026, the Company announced that it is exploring strategic alternatives for this oncology drug discovery solutions business, but the Company’s Board of Directors has not committed to a specific course of action. Accordingly, the oncology drug discovery solutions business did not meet the criteria under Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 205-20,Discontinued Operationsto be classified as discontinued operations and held for sale, and therefore is reflected as continuing operations within these consolidated financial statements.

During the first quarter of 2025, the Company’s former Eagan operating segment, which produced the FDA-cleared STREAMWAY System and associated products for automated medical fluid waste management and patient-to-drain medical fluid disposal, met the criteria to be reported as discontinued operations. SeeNote 3–* Discontinued Operations* for further discussion.

For further discussion of the Company’s operating segments as of and for the year ended December 31, 2025, seeNote 17–* Segment Information*for further discussion.

Aethir Treasury Strategy

On September 29, 2025, the Company announced the launch of its Treasury Strategy focused on ATH. Aethir is a leading decentralized physical infrastructure network developed by DCI Foundation, a Panama foundation company (“DCI”), that provides a decentralized graphics processing unit (“GPU”) network, connecting producers and consumers of GPU compute power at enterprise scale, supporting applications such as artificial intelligence computation, gaming and cloud workloads. ATH, the native token of the Aethir network, is a utility token used for GPU rentals, staking, validation and the provision of network rewards on the Aethir network. ATH functions as a proxy for a unit of GPU compute power and serves as a medium of exchange and unit of incentives for participants in the Aethir network. Participants in the Aethir network can generate yield or other rewards by staking or lending ATH or by otherwise serving as a source of ATH liquidity.

Pursuant to the Treasury Strategy, the Company intends to continue acquiring additional ATH in the open market and intends to earn yield on its ATH treasury holdings by engaging in ATH staking and other activities, though the Company had not yet commenced any staking activities as of December 31, 2025. As a holder of ATH, the Company accrues unrealized gains or losses from any appreciation or depreciation, as applicable, in the value of ATH tokens, which trade on various cryptocurrency exchanges.

The Company’s management is focusing its resources on the Treasury Strategy and a significant portion of the Company’s balance sheet will be allocated to holding ATH pursuant to its Treasury Strategy.

Currently, the Treasury Strategy is primarily dedicated to ATH, and the Company does not intend to accumulate other digital assets in the near term. As a result, the Company’s assets will be highly concentrated in a single digital asset. Adverse developments specific to ATH, its protocol, or its network could have a disproportionate impact on the Company’s financial condition and results of operations.

Refer to the subheading “Risks and Uncertainties” below for further discussion regarding risks related to the Company’s Treasury Strategy.

Liquidity

Since the adoption of the Company’s Treasury Strategy, the Company has raised capital through private investment in public equity (“PIPE”) transactions and at-the-market (“ATM”) sales of shares of common stock. The Company has deployed the majority of the cash proceeds from these transactions to acquire ATH. Additional details regarding these equity offerings are included inNote 11–* Stockholders*’* Equity*. These capital raises have strengthened the Company’s liquidity position, and the $10.8 million of cash and cash equivalents remaining as of December 31, 2025, together with $24.4 million of digital assets, represent readily accessible sources of liquidity. The Company believes its sources of liquidity will be sufficient to allow the Company to fund its planned operations for at least the next twelve months from the date of this Annual Report on Form 10-K.

Reverse Stock Split

On September 19, 2025, the Company’s stockholders approved an amendment to the Company’s certificate of incorporation, as amended, to effect a one-for-fifteen reverse stock split of the Company’s common stock. On September 29, 2025, the Company completed a one-for-fifteen reverse stock split that was effective for trading purposes on September 30, 2025 (the “Reverse Stock Split”). All numbers of shares and per-share amounts in this report have been adjusted to reflect the Reverse Stock Split.

As a result of the Reverse Stock Split, every 15 shares of issued and outstanding common stock were combined into one issued and outstanding share of common stock, without any change in the par value per share. No fractional shares were issued as a result of the Reverse Stock Split and any fractional shares that would otherwise have resulted from the Reverse Stock Split were rounded up to the nearest whole share. The Reverse Stock Split did not change the total number of authorized shares of common stock or preferred stock.

NASDAQ

On November 20, 2024, the Company was notified by the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) that the Company was not in compliance with the minimum stockholders’ equity requirement for continued listing on The Nasdaq Capital Market as set forth in Nasdaq Listing Rule 5550(b)(1) (the “Stockholders’ Equity Requirement”), because the Company’s stockholders’ equity of $1,966,969, as reported in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024, was below the required minimum of $2.5 million. On June 9, 2025, the Company received a letter (the “Notice”) from the Staff of Nasdaq notifying the Company that because the Company had not regained compliance with the Stockholders’ Equity Requirement, the Staff had determined to delist the Company’s securities from The Nasdaq Capital Market. On June 11, 2025, the Company submitted a request for a hearing before Nasdaq’s Hearings Panel (the “Panel”), which stayed the suspension of the Company’s securities. A hearing before the Panel was held on July 17, 2025, where the Company presented plans for regaining and maintaining compliance with the continued listing standards and requested an exception from the continued listing standards through December 8, 2025, to provide the Company the ability to evidence compliance with the standards.

On July 8, 2025, the Company received a letter from the Staff indicating that the bid price for its common stock had closed below $1.00 per share for 30 consecutive business days, and that the Company was therefore not in compliance with the minimum bid price requirement for continued listing under Nasdaq Marketplace Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). The notification had no immediate effect on the listing of the Company’s common stock.

On July 23, 2025, the Company was notified by Nasdaq that the Panel had granted the Company’s request for continued listing on The Nasdaq Capital Market pursuant to an extension through December 8, 2025, to demonstrate compliance with all continued listing requirements, including the Stockholders’ Equity Requirement and Minimum Bid Price Requirement.

On September 29, 2025, the Company completed the Reverse Stock Split, which was effective for trading purposes on September 30, 2025. As a result, the Company’s stock price increased significantly, and the Company regained compliance with the Minimum Bid Price Requirement as confirmed by the Staff via a letter dated October 14, 2025.

On December 1, 2025, the Company received formal notice from the Panel notifying the Company that it was in compliance with the Stockholders’ Equity Requirement. Accordingly, the previously disclosed listing matter has been closed. Nasdaq’s notice further stated that pursuant to Listing Rule 5815(d)(4)(B), the Company will be subject to a mandatory panel monitor for a period of one year from December 1, 2025. If, within that one-year monitoring period, the Staff finds the Company again out of compliance with the Stockholders’ Equity Requirement, notwithstanding Rule 5810(c)(2), the Company will not be permitted to provide the Staff with a plan of compliance with respect to that deficiency and Staff will not be permitted to grant additional time for the Company to regain compliance with respect to that deficiency, nor will the Company be afforded an applicable cure or compliance period pursuant to Nasdaq Listing Rule 5810(c)(3). Instead, the Staff will issue a delist determination letter and the Company will have an opportunity to request a new hearing with the initial Panel or a newly convened hearings panel if the initial Panel is unavailable.

NOTE 2–** SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

Basis of Presentation and Principles of Consolidation

The Company has prepared the consolidated financial statements in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (“SEC”) for consolidated financial statements. Certain prior period amounts have been reclassified to conform to the current period presentation. The reclassified amounts had no impact on the Company’s previously reported financial position or results of operations.

The Company had two wholly owned subsidiaries, Helomics Corporation and Skyline Medical Inc. (“Skyline Medical”), as of and for the years ended December 31, 2025 and 2024. Skyline Medical remained a wholly owned subsidiary of Axe Compute following the March 14, 2025 asset purchase agreement between the Company and DeRoyal Industries, Inc., but the subsidiary’s ongoing activities are limited to wind down activities which were substantially completed as of December 31, 2025. The consolidated financial statements include the accounts of the Company and these wholly owned subsidiaries after elimination of intercompany transactions and balances as of and for the years ended December 31, 2025 and 2024.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and during the reporting period. Actual results could materially differ from those estimates. Estimates are used in the following areas, among others: stock-based compensation expense, fair value of derivatives including embedded derivatives, fair value of digital assets, fair value of long-lived assets for impairment analyses, the valuation allowance included in the deferred income tax calculation, and accrued expenses.

Discontinued Operations

The Company disposed of its former Eagan and Birmingham operating segments during the years ended December 31, 2025, and 2024, respectively. Disposal groups that meet the discontinued operations criteria provided in the FASB ASC 205-20-45 are classified as discontinued operations. Assets and liabilities of discontinued operations are presented separately in the Company’s consolidated balance sheets and results of discontinued operations are reported as a separate component of net loss in the Company’s consolidated statements of net loss for all periods presented, resulting in changes to the presentation of certain prior period amounts. Results of discontinued operations are excluded from segment results for all periods presented. Cash flows from discontinued operations are also reported separately in the Company’s consolidated statements of cash flows.

Refer toNote 3–* Discontinued Operations* for additional discussion of discontinued operations. All other notes to these consolidated financial statements present the results of continuing operations and exclude amounts related to discontinued operations for all periods presented.

Cash

The Company considers all highly liquid instruments with maturities when purchased of three months or less to be cash equivalents. The Company places its cash with high quality financial institutions and believes its risk of loss is limited to amounts in excess of that which is insured by the Federal Deposit Insurance Corporation.

Fair Value Measurements

As outlined in ASC 820,Fair Value Measurement, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standards ASC 820 establishes a three-level fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability as follows:

Level 1 – Observable inputs such as quoted prices in active markets;

Level 2 – Inputs other than quoted prices in active markets, that are observable either directly or indirectly; and

Level 3 – Unobservable inputs where there is little or no market data, which requires the reporting entity to develop its own assumptions.

The Company uses observable market data in making fair value measurements, when available. Fair value measurements are classified according to the lowest level input that is significant to the valuation.

The fair value measurements of the Company’s derivatives were determined based on Level 3 inputs. The Company uses the Monte Carlo method and other acceptable valuation methodologies when valuing embedded features classified as derivatives on a recurring basis. SeeNote 5–* Digital Assets andNote 6*–* Fair Value Measurements*.

Receivables

Receivables are reported at the amount the Company expects to collect on balances outstanding. The Company provides for probable uncollectible amounts through charges to earnings and credits to the valuation allowance based on management’s assessment of the status of individual accounts.

Amounts recorded in accounts receivable on the consolidated balance sheets include amounts billed and currently due from customers. The amounts due are stated at their net estimated realizable value. An allowance is maintained to provide for the estimated amount of receivables that will not be collected. The Company determines the allowance based on historical experience as well as external business factors expected to impact collectability such as economic factors. The Company reviews customers’ credit history before extending unsecured credit and establishes an allowance based upon factors surrounding the credit risk of specific customers, historical trends, and other information. Invoices are generally due 30 days after presentation. Accounts receivable over 30 days is generally considered past due. The Company does not accrue interest on past due accounts receivables. Receivables are written off once all collection attempts have failed and are based on individual credit evaluation and specific circumstances of the customer.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to credit risk primarily consist of cash and cash equivalents and accounts receivable. The Company maintains its cash and cash equivalent balances with high quality financial institutions and, consequently, the Company believes that such funds are subject to minimal credit risk. The Company is exposed to credit risk in the event of default by the financial institutions to the extent amounts recorded on the consolidated balance sheets are in excess of insured limits. The Company has not experienced any credit losses in such accounts and does not believe it is exposed to any significant credit risk on these funds.

Digital Assets

The Company’s digital assets primarily include holdings of ATH, which are measured at fair value in accordance with ASC 350-60,Intangibles–* Goodwill and Other, Crypto Assets*.

The Company reflects digital assets held at fair value on the consolidated balance sheets within the line item “Digital assets.” Changes in the fair value of digital assets are recognized in the consolidated statements of net loss within “Gains (losses) on digital assets.”

The Company uses OKX as its principal market for ATH and measures fair value in accordance with ASC 820,Fair Value Measurement, using quoted prices (Level 1 inputs) at 11:59PM EST each day. The Company applies a first-in, first-out methodology to assign cost for determining realized gains and losses.

Purchases and sales of ATH are reflected as cash flows from investing activities in the consolidated statements of cash flows. Contributions of ATH received in connection with the equity offering transactions are presented as non-cash financing activities in the consolidated statements of cash flows. Contributions of ATH received from DCI are presented within adjustments to reconcile net loss to net cash used in operating activities in the consolidated statements of cash flows.

Refer toNote 5–* Digital Assets *for additional information.

Digital Asset Receivable

Digital asset receivable represents the Company’s contractual right to receive ATH tokens in the future upon satisfaction of time-based vesting conditions. Because the Company does not control the underlying ATH tokens prior to vesting and claim, the locked ATH tokens are accounted for as a receivable rather than as a digital asset.

On the consolidated balance sheet, the host receivable component is presented as “Digital asset receivable.” The fair value of tokens that unlock within twelve months from December 31, 2025 is classified as a current asset, while the fair value of the remainder of locked tokens is classified as a noncurrent asset.

The embedded derivative associated with the digital asset receivable, reflecting the changes in fair value of the ATH to be received, is presented within the same line item as the host receivable and is measured at fair value at each reporting date. Changes in the fair value of the embedded derivative are recognized in the consolidated statements of net loss within “Gains (losses) on digital assets.”

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the respective assets. Estimated useful asset life by classification is as follows:

Upon retirement or sale of property and equipment, the cost and related accumulated depreciation are removed from the consolidated balance sheet and the resulting gain or loss is reflected in operations. Maintenance and repairs are charged to operations expense as incurred.

Long-lived Assets

The Company reviews long-lived assets for impairment in accordance with ASC 360,Property, Plant and Equipment, whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Events or changes in circumstances that indicate the carrying amount may not be recoverable include, but are not limited to, a significant change in the medical device marketplace and a significant adverse change in the business climate in which the Company operates.

The recoverability of an asset to be held and used is determined by comparing the carrying amount to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated undiscounted future cash flows, the Company records an impairment charge in the amount by which the carrying amount of the asset exceeds its fair value, which is determined by either a quoted market price, if any, or a value determined utilizing discounted cash flow techniques.

Leases

At inception of a contract a determination is made whether an arrangement meets the definition of a lease. A contract contains a lease if there is an identified asset, and the Company has the right to control the asset. Operating leases are recorded as right-of-use (“ROU”) assets with corresponding current and noncurrent operating lease liabilities on our consolidated balance sheets.

ROU assets represent our right to use an underlying asset for the duration of the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Recognition on the commencement date is based on the present value of lease payments over the lease term using an incremental borrowing rate. Leases with a term of 12 months or less at the commencement date are not recognized on the consolidated balance sheet and are expensed as incurred.

The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component for all asset classes. Variable lease payments generally represent the Company’s share of the landlord’s expenses and are recorded when incurred. Leases are accounted for at a portfolio level when similar in nature with identical or nearly identical provisions and similar effective dates and lease terms.

Revenue Recognition

The Company recognizes revenue when it satisfies a performance obligation by transferring control of the promised goods or services to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company recognizes revenue in accordance with the five-step process outlined in ASC 606,Revenue from Contracts with Customers (“ASC 606”): (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. Sales taxes are imposed on the Company’s sales to nonexempt customers. The Company collects the taxes from the customers and remits the entire amount to the governmental authorities. Sales taxes are excluded from revenue and expenses. Advertising costs incurred in the Company’s efforts to obtain new customers are expensed as incurred.

Revenues from Services

The Company generates revenues from Contract Research Organization (“CRO”) services related to the development of 3D tumor-specific in vitro models for oncology drug discovery and research. The organ-specific disease models provide 3D reconstruction of human tissues accurately representing each disease state and mimicking drug response.

The specific pattern of revenue recognition for CRO services is determined on a case-by-case basis according to the facts and circumstances applicable to a given contract. The Company may execute a master service agreement with a customer that provides terms and conditions for the relationship between the Company and the customer. Detailed Statements of Work (SOWs) are then prepared to outline the specific services to be provided. The SOW and master service agreement, if applicable, form the contract with the customer under ASC 606. The Company evaluates each product or service promised in a contract to determine whether it represents a distinct performance obligation. Determining whether services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Contracts for CRO services generally contain one performance obligation to perform research and deliver appropriate data or reporting. The Company typically requires partial payment for CRO services prior to performance of the research service with the remainder of the transaction price due 30 days after delivery of data or reporting. Revenues from CRO services are generally recognized at the point in time when data and reports are provided to customers.

Contract Balances

The Company records a receivable when it has an unconditional right to receive consideration after the performance obligations are satisfied. Advance payments received in excess of revenues recognized are classified as contract liabilities until such time as the revenue recognition criteria have been met.

Practical Expedients

The Company has elected not to determine whether contracts with customers contain significant financing components as contracts are generally for less than one year. The Company immediately expenses contract costs that would otherwise be capitalized and amortized over a period of less than one year. The Company recognizes shipping and handling costs at point of sale.

Stock-Based Compensation

The Company accounts for stock-based compensation expense in accordance with ASC 718,Compensation—Stock Compensation, which requires the Company to measure and recognize compensation expense in the financial statements based on the fair value at the date of grant for stock-based awards. The Company recognizes compensation expense for service-based equity-classified awards over their requisite service period and adjusts for forfeitures as they occur.

ASC 718 requires companies to estimate the fair value of stock-based payment awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option-pricing model which requires the input of significant assumptions including an estimate of the average period of time employees and directors will retain vested stock options before exercising them, the estimated volatility of the Company’s common stock price over the expected term, and the risk-free interest rate.

When an option or warrant is granted in place of cash compensation for services, the Company deems the value of the service rendered to be the value of the option or warrant. In most cases, however, an option or warrant is granted in addition to other forms of compensation and its separate value is difficult to determine without utilizing an option pricing model. For that reason, the Company also uses the Black-Scholes option-pricing model to value options and warrants granted to non-employees, which requires the input of significant assumptions including an estimate of the average period that investors or consultants will retain vested stock options and warrants before exercising them, the estimated volatility of the Company’s common stock price over the expected term, and the risk-free interest rate. In the case of options granted to employees, the Company estimates the life to be the legal term.

Changes in the assumptions can materially affect the estimate of fair value of stock-based compensation and, consequently, the related expense recognizes that. The Company’s common stock has been traded on the NASDAQ Capital Market exchange since 2015 and the Company has experienced significant volatility in its stock price. The assumptions used in calculating the fair value of stock-based payment awards represent the Company’s best estimates, which involve inherent uncertainties and the application of management's judgment. As a result, if factors change and the Company uses different assumptions, its stock-based compensation expense could be materially different in the future.

The Company has a sequencing policy under ASC 815-40-35 that will apply if reclassification of contracts from equity to liabilities is necessary. If the Company is unable to demonstrate it has sufficient authorized shares, shares will be allocated based on the earliest issuance date of potentially dilutive financial instruments, with the earliest financial instruments receiving the first allocation of shares. Pursuant to ASC 815, stock-based awards issued to the Company’s employees are not subject to the sequencing policy.

Research and Development

Research and development costs are charged to operations as incurred. These costs include employee compensation costs, facilities and overhead, cloud computing costs, and other expenses incurred related to the pursuit of new products and services or enhancements to existing products and services.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740,Income Taxes (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and net operating loss and credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to impact taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.

The Company reviews income tax positions expected to be taken in income tax returns to determine if there are any income tax uncertainties. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax positions will be sustained on examination by taxing authorities, based on technical merits of the positions. The Company has identified no income tax uncertainties.

Under Internal Revenue Code Section 382, certain stock transactions that significantly change ownership could limit the amount of net operating carryforwards that may be utilized on an annual basis to offset taxable income in future periods. Consequently, the Company performed a Section 382 analysis as of December 31, 2025, which resulted in the limitation and expiration of a substantial portion of the Company’s loss carryforwards. In addition, the current net operating loss (“NOL”) carryforwards might be further limited by future issuances of our common stock. SeeNote 14–* Income Taxes*.

Tax years after 2005 remain open to examination by federal and state tax authorities due to unexpired net operating loss carryforwards.

Loss per Share

Basic loss per share is calculated using the weighted average number of shares outstanding during the year. Pre-funded warrants are included in the computation of earnings per share because the exercise price of the pre-funded warrants is nominal and there are no conditions that must be satisfied prior to their exercise. Diluted loss per share reflects the potential dilution of common share equivalents, such as outstanding options and warrants, in the weighted average number of common shares outstanding during the period, if dilutive. The diluted loss per share calculation excludes any potential conversion of options and warrants that would be anti-dilutive.

Risks and Uncertainties

The Company is subject to various risks including market risk, liquidity risk and other risks related to its concentration in ATH.

The price of ATH has been, and will likely continue to be, highly volatile. Our financial results and the market price of our common stock could be materially adversely affected if the price of ATH decreases substantially, as it has in the past, including as a result of shifts in market sentiment, speculative trading, macroeconomic trends, technology-related disruptions and regulatory announcements.

The Company holds its digital assets with a custodian that safeguards the Company’s private keys. The Company’s digital assets are controllable only by the possessor of both the unique public key and private key(s). The custodial services contracts do not restrict the Company’s ability to reallocate its digital assets among custodians. The Company’s ability to access, transfer, or withdraw its digital assets is therefore not contractually restricted, and the Company is able to convert or reallocate digital assets as needed to meet operating requirements or settle obligations. Cybersecurity threats, including hacking, phishing and other malicious attacks, could result in the loss, theft or misappropriation of our digital assets. If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our private keys, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our digital assets and our financial condition and results of operations could be materially adversely affected.

The Company also remains subject to risks associated with the biopharmaceutical industry. Risks include, but are not limited to, development by the Company or its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, and compliance with regulations of the Food and Drug Administration, Clinical Laboratory Improvement Amendments, and other governmental agencies.

The Company is also subject to general economic and geopolitical uncertainties caused by inflation, rising interest rates, supply chain disruptions, tight labor markets, wage inflation, pricing volatility for certain goods and services, banking and financial sector disruptions, instability and volatility in the global markets, disruptions from a global pandemic, and geopolitical conflict. The impacts of economic and other global events could have a material adverse effect on our business, results of operations, liquidity or financial condition and heighten or exacerbate risks related to the Company.

The Company has evaluated all its activities and concluded that no other subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to the consolidated financial statements, except as described above and inNote 18–* Subsequent Events*.

Recent Accounting Pronouncements

The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”) issued by the FASB. Recently issued ASUs not listed below either were assessed and determined to be not applicable or are currently expected to have no impact on the consolidated financial statements of the Company.

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*. This ASU requires more detailed disclosures related to certain costs and expenses. The guidance requires entities to disclose amounts of certain expense categories included in expense captions presented on the face of the income statement, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The disclosure requirements may be applied either prospectively or retrospectively. Management is currently evaluating this ASU to determine its impact on the Company’s disclosures.

Recently Adopted Accounting Standards

Effective January 1, 2025, the Company adopted ASU 2023-08,Accounting for and Disclosure of Crypto Assets, which requires certain crypto assets that meet the scope criteria of ASC 350-60 to be measured at fair value, with changes recognized in net income each reporting period. Upon adoption, the Company began presenting in-scope digital assets separately from other intangible assets on the Consolidated Balance Sheets and recognizing unrealized gains and losses from remeasurement within “Gains (losses) on digital assets” in the Consolidated Statements of Net Loss. The Company also provides enhanced disclosures regarding the nature and amount of digital assets held, including the name of each significant digital asset, units held, cost basis, fair value, and the fair value of any digital assets subject to contractual sale restrictions. The adoption of ASU 2023-08 did not result in a cumulative-effect adjustment to opening retained earnings due to the commencement of the Company’s ATH Treasury Strategy in September 2025.

Effective January 1, 2025, the Company adopted ASU 2023-09,Improvements to Income Tax Disclosures, which requires expanded disaggregation of income tax information to enhance transparency and comparability. As a result, the Company now presents a more detailed reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate, including separate disclosure of state and local income taxes, foreign tax effects, tax credits, valuation allowance changes, nondeductible items, and changes in unrecognized tax benefits. The Company also discloses income taxes paid (net of refunds) disaggregated by federal, state, and significant foreign jurisdictions, including any individual jurisdiction that represents 5% or more of total income taxes paid. In addition, the Company now presents pretax income (loss) and income tax expense (benefit) disaggregated between domestic and foreign operations, with separate disclosure for any significant individual foreign jurisdictions. The Company adopted ASU 2023-09 on a retrospective basis.

NOTE 3–** DISCONTINUED OPERATIONS**

In July 2024, the Company’s Board of Directors approved a plan to implement a strategic cost savings initiative, primarily related to the Company’s Birmingham laboratory. In September 2024, the Company transferred certain pieces of computer hardware with alternative use to the Pittsburgh laboratory, which conducts the Company’s oncology drug discovery business, while the rest of the laboratory equipment and inventories from the Birmingham laboratory were marketed for sale and the related product and service lines were discontinued. The Company executed a sales agreement for all remaining laboratory equipment and inventories from the Birmingham laboratory and all items were removed from the laboratory premises as of September 30, 2024. As of September 30, 2024, the Company vacated and ceased use of the Birmingham laboratory and office space. The Company’s lease continued through August 2025. The Company concluded that, in aggregate, the disposal of the assets comprising the former Birmingham operating segment met the criteria for discontinued operations presentation in the third quarter of 2024.

On March 14, 2025, the Company entered into an asset purchase agreement (the “APA”) and closed the transactions contemplated therein with DeRoyal Industries, Inc., a Tennessee corporation (“DeRoyal”), to sell and assign to DeRoyal assets and liabilities exclusively related to the business of providing products for automated, direct-to-drain medical fluid disposal, including the Company’s STREAMWAY® product line (the “Eagan Business”). These assets were operated by the Company’s wholly owned subsidiary, Skyline Medical, and were previously reported in the Company’s Eagan operating segment. The purchased assets exclusively related to the Eagan Business included but were not limited to cash, certain accounts receivable, inventories, patents, fixed assets, and real property leased by the Company and exclusively used in connection with the Eagan Business. The total purchase price for the purchased assets was $625,000, plus the assumption of certain liabilities related to the Eagan Business including the lease for the office and warehouse space located at 2915 Commers Drive Suite 900 Eagan, MN 55121, certain accounts payable, and contract liabilities associated with the Eagan Business.

As a result of these developments, the former Birmingham and Eagan operating segments have been reclassified to discontinued operations in these condensed consolidated financial statements for all periods presented.

The following table presents a reconciliation of the carrying amounts of the major classes of assets and liabilities to the current assets and liabilities of discontinued operations as presented in the Company’s condensed consolidated balance sheets:

The following table provides details about the major classes of line items constituting the loss from discontinued operations presented in the Company’s consolidated statements of net loss:

The gain on disposal of discontinued operations for the year ended December 31, 2025 represents the gain on assets sold and liabilities assumed by DeRoyal related to the former Eagan operating segment. The loss on disposal of discontinued operations for the year ended December 31, 2024 represents the loss on impairment of assets sold, including laboratory equipment and inventories, and impairment of other non-current assets related to the former Birmingham operating segment.

NOTE 4–** CONTRACTS WITH CUSTOMERS**

The Company records a receivable when it has an unconditional right to receive consideration after the performance obligations are satisfied. As of December 31, 2025, and 2024, accounts receivable totaled $32,120 and $34,154, respectively. The allowance for accounts receivable balance was $0 as of both December 31, 2025, and 2024.

Advance payments received in excess of revenues recognized are classified as contract liabilities until such time as the revenue recognition criteria have been met. The Company’s contract liabilities, related primarily to development of 3D models, were $144,076 and $224,076 as of December 31, 2025, and 2024, respectively. During the year ended December 31, 2025, the Company recognized revenue of $80,000 from contract liabilities recorded as of December 31, 2024, primarily related to deposits for development of 3D models. The Company’s contract liabilities as of December 31, 2025, represent its remaining performance obligations.

NOTE 5–** **DIGITAL ASSETS

The Company’s digital assets, as shown on the consolidated balance sheet as of December 31, 2025, were primarily comprised of ATH. The following table sets forth the units held, cost basis, and fair value of ATH held as of December 31, 2025:

Cost basis is equal to the cost (purchase price) of the digital assets, including 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 measurement time (11:59 EST).

The following table represents a reconciliation of digital assets held, for ATH specific activity:

Side Letter

In connection with the private placements completed in October 2025 to support the Treasury Strategy, the Company entered into a side letter agreement (the “Side Letter”) with DCI, effective as of October 7, 2025. The Side Letter provides, in addition to other rights afforded to the Company, that for each ATH token purchased by the Company on the open market, whether through a centralized exchange or a decentralized exchange operating on the Ethereum Network, DCI will grant to the Company an additional number of ATH tokens equal to 20% of the number of ATH tokens purchased on the open market to be delivered within 30 days of the open market purchase (the “Bonus ATH”). There are no restrictions on the Company’s use of the Bonus ATH once received. The Company accounts for the Side Letter as a derivative instrument. As of December 31, 2025, no derivative asset was recorded because the Company had received from DCI all Bonus ATH due under the Side Letter for open market purchases made during the period.

During the year ended December 31, 2025, the Company received approximately 236 million ATH with a cost basis of $2.2 million pursuant to the Side Letter as a result of open market purchases totaling approximately 1.18 billion ATH. The cost basis of the ATH received pursuant to the Side Letter and subsequent fair value adjustments thereto are recorded within “Gains (losses) on digital assets” on the Consolidated Statements of Net Loss.

Digital asset receivable

A portion of the Company’s ATH holdings consists of contractual rights to receive ATH tokens that are subject to time-based vesting and transfer restrictions (“Locked ATH”). Locked ATH was obtained pursuant to Simple Agreements for Future Tokens (“SAFTs”) and is administered through an on-chain smart contract deployed on the Ethereum mainnet. Prior to vesting and claim, the Company does not have control of the underlying ATH tokens and is not able to transfer, sell, stake, pledge, or otherwise deploy such tokens.

The smart contract enforces the applicable vesting schedules and restricts access to the ATH tokens until the vesting conditions are satisfied. Upon satisfaction of the vesting conditions, the Company must affirmatively claim the unlocked ATH tokens through the smart contract interface, at which point the tokens are released from restriction and transferred to a Company-controlled wallet. Until such claim occurs, the Locked ATH represents a contractual right to receive ATH in the future rather than a digital asset held by the Company.

As of December 31, 2025, the Company held rights to receive ATH tokens that remain subject to vesting and claim requirements. The vesting period for these ATH tokens ranges from less than one month to approximately 3 years. These restrictions are specific to the underlying ATH tokens. Upon vesting and claim, the restrictions lapse and the Company obtains control of the ATH tokens, which may then be held, transferred to custodial accounts, staked, or otherwise deployed in accordance with the Company’s Treasury Strategy.

As of December 31, 2025, the Company had a digital asset receivable $15.5 million related to the Locked ATH comprised of the host receivable recorded at $93.4 million, net of the embedded derivative measured at fair value of $77.9 million. The change in fair value of the embedded derivative of $77.9 million during the year ended December 31, 2025 is recorded in the consolidated statements of net loss within “Gains (losses) on digital assets.”

NOTE 6–** FAIR VALUE MEASUREMENTS**

The following table summarizes the Company’s fair value hierarchy for its assets measured at fair value on a recurring basis:

The embedded derivative related to the digital asset receivable must be remeasured at fair value each reporting period in accordance with ASC 815,Derivatives and Hedging. Because there is no directly observable market for illiquid, contractually restricted ATH tokens subject to a time-based vesting schedule, the embedded derivative is classified as Level 3. The key unobservable input is the discount applied to reflect the lack of transferability and control during the restriction period. The discount is determined based on the remaining vesting period from each reporting period to the date on which the tokens become fully vested and available to claim, and is reduced ratably at each subsequent measurement date until it reaches zero at full vesting. As of December 31, 2025, applied discounts ranged from approximately 30% to 55%. Changes in fair value of the embedded derivative are recognized in the consolidated statements of net loss within "Gains (losses) on digital assets." There wereno transfers into or out of Level 3 of the fair value hierarchy during the year ended December 31, 2025.

NOTE 7–** PROPERTY AND EQUIPMENT, NET**

The Company’s property and equipment, net consisted of the following:

Depreciation expense, recorded within general and administrative expenses of continuing operations, was $124,460 and $127,354 for the years ended December 31, 2025, and 2024, respectively.

No impairment charges related to property and equipment held and used in continuing operations were incurred during the years ended December 31, 2025, and 2024.

NOTE 8–** LEASES**

The Company’s corporate offices and other offices are located in Pittsburgh, Pennsylvania. The leases are effective through February 29, 2028.

Lease expense under operating lease arrangements, recorded within general and administrative expenses of continuing operations, was $784,674 and $784,873 for the years ended December 31, 2025, and 2024, respectively.

The following table summarizes other information related to the Company’s operating leases used in continuing operations:

The Company’s operating lease obligations as of December 31, 2025, which include expected lease extensions that are reasonably certain of renewal, were as follows:

NOTE 9–** CONTINGENCIES**

In the ordinary course of business, the Company may be subject from time to time to various proceedings, lawsuits, disputes, or claims. In accordance with FASB ASC Topic 450, Contingencies (“ASC 450”), the Company accrues a liability for legal contingencies when it is probable that a liability has been incurred, and the amount of the loss can be reasonably estimated. If there is at least a reasonable possibility that a loss may be incurred, ASC 450 requires disclosure of a loss contingency.

On January 1, 2025, the Company entered into a binding letter of intent (the “LOI”) with Lunai Bioworks (formerly Renovaro, Inc.) (NASDAQ: LNAI, formerly RENB) (“Renovaro”) for Axe Compute to be acquired by Renovaro (the “Renovaro Merger”). Under the terms of the LOI, Axe Compute would be merged into Renovaro in exchange for a newly created series of preferred stock of Renovaro. On February 28, 2025, Axe Compute entered into an extension agreement with Renovaro (the “Extension Agreement”), pursuant to which the parties amended certain terms of the LOI, including to extend the outside termination date of the LOI from February 28, 2025 to March 31, 2025. No definitive purchase agreement was executed as of March 31, 2025 and the LOI terminated on that date, pursuant to its terms. Axe Compute had no further obligations with respect to the Renovaro Merger, including under the LOI or the Extension Agreement. On April 3, 2025, Axe Compute’s Board of Directors notified Renovaro of the Company’s decision to discontinue discussions regarding the proposed merger between the two companies.

On May 8, 2025, Renovaro filed a lawsuit in Delaware Chancery Court claiming breaches by the Company of the LOI and the Extension Agreement and seeking to compel the Company to enter into a merger agreement with Renovaro. The Company does not believe the lawsuit has merit and continues to contest it vigorously. It is not possible to estimate the amount of any loss or range of possible loss that might result from this lawsuit. However, because the final outcome cannot be predicted with certainty, unfavorable or unexpected developments or outcomes could result in a material impact to the Company’s financial condition and results of operations.

NOTE 10–** NOTE PAYABLE**

In June 2025, the Company purchased director and officer insurance policies with a policy period ending June 2026 and financed $264,048 of its total premium by entering into a note payable with a finance provider that requiresten monthly installment payments through April 2026. The note is secured by a first priority lien on the financed policies. The short-term note bears interest at an annual percentage rate of 6.6% over the life of the note. As of December 31, 2025, the outstanding balance of the note was $107,951 including interest.

In June 2024, the Company purchased director and officer insurance policies with a policy period ending June 2025 and financed $275,098 of its total premium by entering into a note payable with a finance provider that requiredten monthly installment payments through April 2025. The note was secured by a first priority lien on the financed policies. The short-term note bore interest at an annual percentage rate of 8.0% over the life of the note. As of December 31, 2024, there wasno outstanding balance on the note.

NOTE 11–** STOCKHOLDERS**’** EQUITY**

Registered Direct Offering

On February 18, 2025, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with several institutional and accredited investors for the sale by the Company of 24,223 shares (the “Registered Direct Offering Shares”) of the Company’s common stock, par value $0.01 per share, at a purchase price of $22.50 per share, in a registered direct offering. The offering closed on February 19, 2025. The gross proceeds to the Company from the offering were approximately $545,000, before deducting the placement agent’s fees and other offering expenses. The Registered Direct Offering Shares were offered and sold by the Company pursuant to an effective shelf registration statement on Form S-3 (File No. 333-279123).

The Company agreed to pay H.C. Wainwright & Co., LLC (“Wainwright”), as placement agent, an aggregate fee equal to 7.0% of the gross proceeds received by the Company from the sale of the securities in the offering as well as a management fee equal to 1.0% of such gross proceeds, and $15,000 for fees and expenses of legal counsel. The Company also issued to Wainwright, or its designees, warrants to purchase up to 7.0% of the aggregate number of shares of the Company’s common stock sold in the transactions, or warrants to purchase up to an aggregate of 1,698 shares of the Company’s common stock (the “Registered Direct Offering Placement Agent Warrants”). The Registered Direct Offering Placement Agent Warrants are exercisable forfive years from the commencement of sales in the offering and have an exercise price equal to 125% of the purchase price of shares of the Company’s common stock sold in the offering, or $28.13 per share. The Registered Direct Offering Placement Agent Warrants and the shares issuable upon exercise of the Registered Direct Offering Placement Agent Warrants were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering and in reliance on similar exemptions under applicable state laws.

Renovaro Subscription Agreement

On March 13, 2025, the Company executed a share subscription agreement with Renovaro, pursuant to the Extension Agreement dated February 28, 2025, that amended the previous LOI between the parties. Pursuant to the share subscription agreement, Renovaro subscribed to purchase and the Company sold to Renovaro 31,153 unregistered shares of the Company’s common stock at a price of $16.05 per share for a total purchase price of $500,000. The closing of this share issuance occurred on March 17, 2025.

May 2025 Private Placement

On May 13, 2025, the Company executed a share subscription agreement with an institutional and accredited investor for the sale, in a private placement, by the Company of 18,692 shares of the Company’s common stock at a price of $16.05 per share for a total purchase price of $300,000. The closing of this share issuance occurred on June 3, 2025.

At The Market Offering

On May 3, 2024, the Company entered into an ATM Sales Agreement (the “Sales Agreement”) with Wainwright, pursuant to which the Company may offer and sell, from time to time, through Wainwright, shares of its common stock through an “at the market offering” program pursuant to which Wainwright will act as sales agent. Subject to the terms and conditions of the Sales Agreement, Wainwright is permitted to sell the shares by methods deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. The Sales Agreement provides that Wainwright will be entitled to compensation for its services of 3.0% of the gross sales price of all shares sold through Wainwright under the Sales Agreement. The Company is subject to certain restrictions on its ability to offer and sell shares of its common stock under the Sales Agreement.

On May 6, 2024, following execution of the Sales Agreement, the Company filed with the SEC a shelf registration statement on Form S-3 (the “May 2024 Shelf Registration Statement”). The May 2024 Shelf Registration Statement, as amended, was declared effective by the SEC on May 21, 2024 and included a prospectus supplement (the “Initial ATM Prospectus Supplement”) to the base prospectus related to the offering of up to $3,696,000 of shares of the Company’s common stock under the Sales Agreement. As of May 31, 2024, the Company had offered and sold 107,140 shares of common stock under the Initial ATM Prospectus Supplement for gross proceeds of approximately $3,696,000. The net proceeds from the shares offered and sold in May 2024, after deducting commissions and offering expenses, were approximately $3,122,000.

On April 18, 2025, in accordance with the terms of the Sales Agreement, the Company filed a prospectus supplement to the May 2024 Shelf Registration Statement relating to the offer and sale of up to an additional $1,491,000 of shares of the Company’s common stock.

On June 2, 2025, in accordance with the terms of the Sales Agreement, the Company determined to further increase the number of shares it may sell under the Sales Agreement, from the approximately $1,352,000 remaining as of May 31, 2025 up to an aggregate of $3,398,000, and the Company filed an additional prospectus supplement with the SEC on June 2, 2025.

On October 29, 2025, in accordance with the terms of the Sales Agreement, the Company determined to further increase the number of shares it may sell under the Sales Agreement, from the approximately $2,292,000 remaining as of September 30, 2025 up to an aggregate of $18,330,000, and the Company filed an additional prospectus supplement with the SEC on October 29, 2025.

As of December 31, 2025, approximately $18,330,000 remained available to the Company for sales under the Sales Agreement.

During the year ended December 31, 2025, the Company issued and sold 139,680 shares of common stock under the Sales Agreement resulting in net proceeds to the Company of approximately $1,530,000 after deducting approximately $342,000 in issuance costs.

Standby Equity Purchase Agreement

On July 1, 2025, the Company entered into a standby equity purchase agreement (the “SEPA”) with YA II PN, LTD., a Cayman Islands exempt limited company (“Yorkville”). Pursuant to the SEPA, the Company has the right to sell to Yorkville up to $10 million in shares of its common stock, subject to certain limitations and conditions set forth in the SEPA, from time to time during the term of the SEPA. Sales of the shares of common stock to Yorkville under the SEPA, and the timing of any such sales, are at the Company’s option, and the Company is under no obligation to sell any shares of common stock to Yorkville under the SEPA. In connection with the execution of the SEPA, the Company issued 8,033 shares of its common stock to Yorkville as consideration for its commitment to purchase the Company’s common stock pursuant to the SEPA.

The Company has the right, but not the obligation, from time to time at its discretion until the first day of the month following the 36-month period after the date of the SEPA, to direct Yorkville to purchase a specified number of shares of the Company’s common stock (each such sale, an “Advance”) by delivering written notice to Yorkville (each, an “Advance Notice”). The per share purchase price for the shares of common stock, if any, that the Company elects to sell to Yorkville in an Advance pursuant to the SEPA will be determined by reference to the volume weighted average price of the Company’s common stock (the “VWAP”) and calculated in accordance with the SEPA, less a discount of 4.0%. The Company filed a registration statement on Form S-1 for the resale of up to 128,114 shares by Yorkville on July 18, 2025, which was declared effective by the SEC on July 28, 2025.

On September 19, 2025, the Company received approval from its stockholders to issue shares of its common stock to Yorkville under the SEPA in excess of 19.99% of the number of shares of common stock outstanding as of the date of the SEPA (the “Exchange Cap”). Yorkville is not obligated to purchase or acquire, and shall not purchase or acquire, any shares of common stock under the SEPA which, when aggregated with all other shares of the Company’s common stock then beneficially owned by Yorkville and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the beneficial ownership by Yorkville and its affiliates exceeding 4.99% of the then outstanding voting power or number of shares of the Company’s common stock.

As of December 31, 2025, the Company had sold no shares pursuant to the SEPA.

August 2025 Private Placement

On August 26, 2025, the Company entered into a securities purchase agreement with an accredited investor pursuant to which it sold and issued 36,237 shares of its common stock, at a purchase price of $11.40 per share, in a private placement transaction. This offering closed on August 26, 2025 and the Company received gross proceeds of $413,093.

September 2025 Private Placements and Related Agreements

On September 29, 2025, the Company entered into a securities purchase agreement (the “Crypto SPA”) with certain accredited investors pursuant to which the Company agreed to sell and issue to such investors in a private placement (the “Crypto PIPE Offering”) pre-funded warrants (the “Crypto PIPE Warrants”). Also on September 29, 2025, the Company entered into a securities purchase agreement (the “Cash SPA,” and together with the Crypto SPA, the “September SPAs”), pursuant to which it agreed to sell and issue to certain accredited investors, in exchange for cash (the “Cash PIPE Offering,” and together with the Crypto PIPE Offering, the “PIPE Offerings”), the Company’s common stock and warrants (the “Cash PIPE Warrants”). The PIPE Offerings closed October 7, 2025 (the “Closing Date”).

Cash PIPE and Crypto PIPE

In the Cash PIPE Offering, the Company sold an aggregate of 4,366,703 shares of common stock (or pre-funded warrants at a nominal $0.01 exercise price per share to purchase shares of common stock, in lieu thereof) to certain accredited investors for $11.6265 per share. Aggregate Cash PIPE Offering proceeds were $50.8 million before issuance fees and expenses.

In the Crypto PIPE, the Company issued, to certain accredited investors, Crypto PIPE Warrants to purchase up to 14,903,393 shares of its common stock at a nominal $0.01 exercise price per share. As consideration for the Crypto PIPE Warrants, the Company received ATH from purchasers, including tokens with certain restrictions (see “Locked ATH” as defined below), with an aggregate notional value and discounted value of $292.7 million and $173.3 million, respectively.

The Crypto SPA was determined to meet the definition of a derivative in accordance with ASC 815. The settlement amount of the derivative was affected by changes in the USD value of ATH contributed by investors between the effective date of the Crypto SPA on September 29, 2025, and the Closing Date. Because the Crypto SPA obligated the Company to issue a fixed number of shares while the settlement value of those shares was indexed to the price of ATH, the Crypto SPA was classified as a derivative liability and the Company recorded a liability as of September 29, 2025, at its then-fair value with the offsetting entry to earnings. The derivative liability was remeasured as of October 7, 2025 immediately prior to settlement, resulting in a $52.7 million loss recognized within earnings and presented on the consolidated statement of net loss for the year ended December 31, 2025 within “Gain (loss) on derivative instruments.” The derivative liability was fully settled when the Crypto PIPE Offering closed on October 7, 2025, on which date the purchasers in the Crypto PIPE Offering tendered ATH to the Company and the Company issued the Crypto PIPE Warrants to purchasers.

There were 639,449 pre-funded warrants exercised during the year ended December 31, 2025, and the total number of pre-funded warrants outstanding was 16,119,095 as of December 31, 2025, all of which were vested and exercisable and have no expiration date.

Wainwright Engagement Agreement

In connection with the PIPE Offerings, on October 7, 2025, the Company issued five-year warrants (the “Placement Agent Warrants”) to Wainwright, which was the exclusive placement agent for the transactions. The Placement Agent Warrants entitle Wainwright or its designees to purchase up to 218,335 shares of the Company’s common stock (the “Placement Agent Warrant Shares”), which number of Placement Agent Warrant Shares is equal to 5% of the shares of common stock and Cash Pre-Funded Warrants issued in the Cash PIPE, at an exercise price of $11.6265 per share. The Placement Agent Warrants had a grant date fair value of approximately $2.5 million, which were accounted for as an incremental offering cost and netted against the proceeds from the Cash PIPE. The Company also paid to Wainwright a cash fee of approximately $2.5 million, or 5% of gross cash proceeds of the PIPE Offerings.

Strategic Advisor Agreement and Asset Management Agreement

In connection with the Treasury Strategy, on October 7, 2025, the Company entered into a strategic advisor agreement (the “Strategic Advisor Agreement”) under which it engaged DNA as a strategic advisor to provide financial advisory services related to digital asset strategies and business development initiatives. As compensation for DNA’s services, the Company issued five-year warrants (the “Strategic Advisor Warrants”) to DNA to purchase up to 1,348,906 shares of its common stock at an exercise price of $11.6265 per share. The Company further engaged DNA under a 10-year asset management agreement (the “Asset Management Agreement”), pursuant to which DNA will act as the Company’s asset manager with respect to its digital assets. As compensation for its services under the Asset Management Agreement, DNA is entitled to a 1.00% per annum asset-based management fee, plus an incentive fee equal to 25% of profits earned on managed assets over 7%. SeeNote 13–* Related Parties* for further discussion.

Warrant Inducement Transaction

On July 25, 2024, the Company entered into definitive agreements with certain of its existing warrant holders for the exercise of warrants to purchase an aggregate of 63,874 shares of its common stock having a current exercise price of $210.00 originally issued in February 2021, June 2021 and May 2022, at a reduced exercise price of $19.80 per share. The gross proceeds to the Company from the exercise of the existing warrants were approximately $1,265,000, prior to deducting placement agent fees and transaction expenses payable by the Company. The reduction of the exercise price represented a modification to the existing warrants, which was recognized as an equity issuance cost of $594,033 charged against the proceeds of the offering.

In consideration for the immediate cash exercise of the warrants, the Company concurrently issued to the warrant holders new unregistered Series A warrants to purchase up to 63,874 shares of common stock (the “Series A Warrants”) and new Series B warrants to purchase up to 63,874 shares of common stock (the “Series B Warrants”). The Series A Warrants and the Series B Warrants have an exercise price of $16.05 per share and are exercisable immediately upon issuance. The Series A Warrants have a term equal tofive years from the date of issuance, and the Series B Warrants have a term equal to 18 months from the date of issuance.

The transactions described above closed on July 26, 2024. Wainwright acted as the exclusive placement agent for the above-mentioned transactions. The Company paid Wainwright as consideration (i) an aggregate cash fee equal to 7.0% of the gross proceeds from the exercise of the existing warrants, (ii) a management fee equal to 1.0% of the aggregate gross proceeds from the exercise of the existing warrants, (iii) $35,000 for expenses, and (iv) $15,950 for clearing fees. Additionally, the Company issued to Wainwright (or its designees) as compensation, warrants to purchase up to 4,473 shares of common stock of the Company (equal to 7.0% of the aggregate number of existing warrants exercised in the offering) (the “Warrant Inducement Placement Agent Warrants”). The Warrant Inducement Placement Agent Warrants have a term offive years from the closing of the offering and an exercise price of $24.75 per share.

Stock Warrants

The following summarizes transactions for warrants for the period indicated, excluding pre-funded warrants:

During the year ended December 31, 2025, warrant holders exercised warrants for an aggregate of 100,059 shares of the Company’s common stock at an average exercise price of $16.05 for approximately $1,606,000 of gross proceeds. The shares issued upon exercise of the warrants were registered on a registration statement on Form S-3, which was declared effective on August 23, 2024.

The Company determines the grant date fair value of warrants using a Black-Scholes option valuation model based upon assumptions regarding risk-free interest rate, expected dividend rate, volatility, and estimated term.

The fair value of each warrant grant during the year ended December 31, 2025 and 2024 was estimated on the grant date using the Black-Scholes option valuation model with the following assumptions, excluding pre-funded warrants:

The following summarizes the status of warrants outstanding as of December 31, 2025, excluding pre-funded warrants:

Warrants expire on various dates from January 2026 to October 2030.

The following table is the listing of outstanding warrants as of December 31, 2025, by year of grant, excluding pre-funded warrants:

NOTE 12–** STOCK-BASED COMPENSATION**

Equity Incentive Plan

On December 30, 2024, the Company’s stockholders approved the 2024 Equity Incentive Plan (the “2024 Plan”). The 2024 Plan allows for the issuance of non-statutory stock options and incentive stock options, stock appreciation rights, stock awards, restricted stock, restricted stock units, and performance awards to employees, directors, and consultants of the Company, where permitted under the plan. Due to the approval of the 2024 Plan, no new awards will be granted under the Company’s Amended and Restated 2012 Stock Incentive Plan. The exercise price for each stock option is determined by the market price on the date of issuance. Vesting requirements are determined by the Board of Directors when granted and currently range from immediate tothree years. Options outstanding under this plan have a contractual life often years.

ASC 718,Compensation–* Stock Compensation*(“ASC 718”), requires that a company that issues equity as compensation record compensation expense that corresponds to the estimated cost of those equity grants. ASC 718 requires companies to estimate the fair value of stock-based payment awards on the date of grant using an option-pricing model or other acceptable means.

Restricted Stock Units

On September 9, 2025, the Board of Directors, upon the recommendation of the Compensation Committee of the Board of Directors, determined that it was appropriate to award restricted stock units (“RSUs”) as a form of compensation for employees, consultants and directors and approved a form of Restricted Stock Unit Award Agreement, with such awards to be granted under the Company’s 2024 Plan. Consistent with that determination, the Board of Directors approved the grant of 60,101 RSUs on September 9, 2025, including 8,331 RSUs to Raymond F. Vennare, the Company’s former Chief Executive Officer,6,467 RSUs to Josh Blacher, the Company’s Chief Financial Officer, and 25,872 RSUs in the aggregate to the Company’s non-executive directors. Each RSU represented the right to receive one share of the Company’s common stock upon vesting. The RSUs contained a service-based vesting condition requiring continued service through October 31, 2025, at which point the RSUs vested in full. The RSUs were settled on November 28, 2025.

On December 10, 2025, the Company entered into an amendment to the employment agreement with Raymond F. Vennare dated as of November 1, 2022. Pursuant to the amendment and following approval by the Compensation Committee, Mr. Vennare was awarded 20,000 RSUs. The RSUs contained a service-based vesting condition requiring continued service through January 1, 2026, at which point the RSUs vest in full.

The following table summarizes the Company’s RSU activity for the period indicated:

The Company has $5,381 of unrecognized stock-based compensation expense related to RSUs that is expected to be recognized in January 2026.

Stock Options

The Company determines the grant date fair value of options and warrants using a Black-Scholes option valuation model based upon assumptions regarding risk-free interest rate, expected dividend rate, volatility, and estimated term. There were no stock options granted during the years ended December 31, 2025 and 2024.

The following table summarizes the Company’s stock option activity for the period indicated:

The Company has no unrecognized stock-based compensation expense related to stock options that is expected to be recognized in future months.

Stock Compensation to Non-Employees

During the year ended December 31, 2025, the Company issued shares of common stock to certain non-employees as compensation for services provided.

Shares of common stock with a grant date fair value of $100,000 were issued to non-employees in exchange for digital marketing services rendered through August 2025.

Stock warrants with a grant date fair value of $15.4 million were also granted to DNA in exchange for strategic advisory services. The Strategic Advisor Warrants have afive-year term and may be used to purchase up to 1,348,906 shares of the Company’s common stock at an exercise price of $11.6265 per share. SeeNote 13–* Related Parties* for further discussion.

Stock-Based Compensation Expense, Net

Stock-based compensation expense, net of forfeitures, recognized for the years ended December 31, 2025 and 2024 was $16,482,661 and $906, respectively. $15.4 million was recognized as stock-based compensation expense related to the Strategic Advisor Warrants, which were immediately vested and exercisable at the grant date, contained no substantive future service requirement and for which services were substantially rendered in full during the year ended December 31, 2025.

Stock-based compensation expense for the years ended December 31, 2025 and 2024 is recorded within each of the captions comprising Operating expenses. $15.4 million of stock-based compensation expense related to the Strategic Advisor Warrants is recorded within General and administrative expense on the Statement of Net Loss for the year ended December 31, 2025.

The following summarizes the status of options and outstanding as of December 31, 2025:

Stock options expire on various dates from March 2026 to April 2033.

The following table is the listing of outstanding stock options as of December 31, 2025, by year of grant:

Stock Options:

NOTE 13–** RELATED PARTIES**

Agreements with DNA Holdings Venture, Inc. and its Representatives

In connection with the Company’s Treasury Strategy, and the Cash and Crypto PIPEs closed October 7, 2025, Shawn Matthews was appointed to the Company’s Board of Directors. Mr. Matthews served as Chief Executive Officer of DNA, at the time of his appointment to the Company’s Board of Directors. Additionally, the Company engaged Thomas McLaughlin, who at the time served as Chief Investment Officer of DNA, to serve as the Company’s Chief Investment Officer.

In connection with the Treasury Strategy, on October 7, 2025, the Company entered into the Strategic Advisor Agreement under which it engaged DNA as a strategic advisor to provide financial advisory services related to digital asset strategies and business development initiatives. As compensation for DNA’s services, the Company issued the Strategic Advisor Warrants with afive-year term to DNA to purchase up to 1,348,906 shares of its common stock at an exercise price of $11.6265 per share. The Strategic Advisor Warrants had a grant date fair value of $15.4 million.

The Company further engaged DNA under the Asset Management Agreement with a 10-year term, pursuant to which DNA will act as the Company’s asset manager with respect to its digital assets. As compensation for its services under the Asset Management Agreement, DNA is entitled to a 1.00% per annum asset-based management fee, plus an incentive fee equal to 25% of profits earned on managed assets over 7%. Total fees paid to DNA under the Asset Management Agreement were $722,390 during the year ended December 31, 2025.

NOTE 14–** INCOME TAXES**

Income taxes paid, net of refunds, disaggregated by jurisdiction are as follows:

Pretax income is entirely related to domestic activities. The Company did not have any foreign operations.

The provision for income taxes consists of an amount for taxes currently payable and a provision for tax consequences deferred to future periods. Deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The Company incurred zero income tax expense from continuing operations during the years ended December 31, 2025, and 2024, due to losses in both years.

Actual income tax benefit from continuing operations differs from statutory federal income tax expense (benefit) as follows*:

*Certain prior-period amounts have been recast to reflect the classification of the Company's Eagan business as discontinued operations in 2025. Accordingly, amounts presented, including the effective tax rate reconciliation, reflect continuing operations only.

Deferred taxes consist of the following:

The Company evaluates the realizability of deferred tax assets and considers all available evidence, both positive and negative, including historical operating results, projections of future taxable income, reversing taxable temporary differences, and tax planning strategies. The Company has determined based on available evidence, particularly its history of losses, that it is not more likely than not that its net deferred tax asset will be realizable. Accordingly, the Company maintains a full valuation allowance against its net deferred tax asset.

Pursuant to the Internal Revenue Code of 1986, as amended (the “Code”) Sections 382 and 383, annual use of a company’s NOL and research and development credit carryforwards may be limited if there is a cumulative change in ownership of greater than 50% within a three-year period. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years.

As of December 31, 2025, the Company had $110,759,174 of NOLs to reduce future federal taxable income, the majority of which are expected to be available for use in 2026, subject to the Section 382 limitations described above. The federal NOLs of $14,857 begin to expire in 2026 if unused and $110,744,317 will carry forward indefinitely. The Company also had $57,161,699 of NOLs to reduce future state taxable income as of December 31, 2025. The state NOLs will begin to expire in 2026 if unused. The Company's net deferred tax assets, which include the NOLs, are subject to a full valuation allowance. As of December 31, 2025, the federal and state valuation allowances were $55,645,772 and $12,916,650, respectively.

During the year-ended December 31, 2023, the Company completed an assessment of the available NOL and tax credit carryforwards under Section 382 and 383 and determined that the Company underwent several ownership changes during the period from 2008 to 2022. The Company adjusted its NOL and tax credit carryforwards to reflect the limitations resulting from the identified ownership changes. The Company reduced its available gross federal and state NOL carryforwards and the federal and state deferred tax asset, each of which related to losses generated for the years ended December 31, 2022, and prior.

During the year-ended December 31, 2025, the Company underwent a Section 382 analysis for the periods presented in the consolidated financial statements and determined that the Company experienced an ownership change (as defined in Section 382) related to its Cash PIPE equity issuance on October 7, 2025. The Company has calculated a preliminary Section 382 base limitation of approximately $435,000 with an aggregate limitation of approximately $4,600,000 over the applicable five-year recognition period after consideration of deemed realized built in gains (RBIG).

Tax years after 2005 remain open to examination by federal and state tax authorities due to unexpired NOL carryforwards.

The Company reviews income tax positions expected to be taken in income tax returns to determine if there are any income tax uncertainties. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax positions will be sustained on examination by taxing authorities, based on technical merits of the positions. The Company has identifiedno income tax uncertainties.

The Company recognizes interest and penalties on unrecognized tax benefits as well as interest received from favorable tax settlements within income tax expense. As of December 31, 2025, and 2024, the Company recorded no accrued interest or penalties related to uncertain tax positions.

NOTE 15–** RETIREMENT SAVINGS PLAN**

The Company has a pre-tax salary reduction/profit-sharing plan under the provisions of Section 401(k) of the Internal Revenue Code, which covers employees meeting certain eligibility requirements. During 2025 and 2024, the Company matched 100% of the employee’s contribution up to 4.0% of their earnings. Employer contributions were $76,858 and $125,328 in 2025 and 2024, respectively, and are recorded within each of the captions comprising Operating expenses. There wereno discretionary contributions to the plan in 2025 and 2024.

NOTE 16–** LOSS PER SHARE**

The Company calculates basic loss per share based upon the weighted average number of common shares outstanding during the period, while the calculation of diluted earnings per share includes the dilutive effect of potential common shares outstanding during the period. The calculation of diluted earnings per share excludes all potential common shares, with the exception of pre-funded warrants, if their inclusion would have an anti-dilutive effect. A total of 16,119,095 pre-funded warrants are included in the computation of earnings per share because the exercise price of the pre-funded warrants is nominal and there are no conditions that must be satisfied prior to their exercise.

The following table presents the shares used in the basic and diluted loss per common share computations:

NOTE 17–** SEGMENT INFORMATION**

The Company has determined its operating segments in accordance with ASC 280,Segment Reporting. Factors used to determine the Company’s reportable segments include the availability of separate financial statements, the existence of separate leadership across business lines, the economic factors affecting each segment, and the evaluation of operating results at the segment level. The Company’s Chief Operating Decision Maker (“CODM”), its chief executive officer, allocates the Company’s resources for each of the operating segments and evaluates their relative performance based on gross profit, operating loss, and net loss. Operating expenses are disaggregated by department for purposes of evaluating each segment’s performance. Each operating segment listed below has separate financial statements and locally based leadership that are evaluated based on the results of their respective segments. It should be noted that the operating segments below have different products and services.

The Company hastwo reportable segments, which have been delineated by business area:

As described inNote 3–* Discontinued Operations*, the Company’s former Birmingham and Eagan operating segments met the criteria to be reported as discontinued operations during the third quarter of 2024 and first quarter of 2025, respectively. As such, the former Birmingham and Eagan operating segments are excluded from the tables below, which only reflect continuing operations for all periods presented.

See discussion of revenue recognition inNote 2–* Summary of Significant Accounting Policies*for a description of the products and services recognized in each segment. All revenues are earned from external customers.

The tables below summarize the Company’s segment reporting as of and for the years ended December 31, 2025, and 2024.

Other segment items is comprised of other income and other expenses. Other income primarily consists of aged accounts payable and accrued expenses written off in the year ended December 31, 2025, and interest income in the year ended December 31, 2024. Other expenses primarily consist of interest expense.

In each of the years ended December 31, 2025, and 2024, substantially all the Company revenues were located or derived from operations in the United States. As of December 31, 2025, all the Company’s long-lived assets were located within the United States.

NOTE 18–** SUBSEQUENT EVENTS**

Departure of DNA Director and Chief Investment Officer

On January 15, 2026, Shawn Matthews resigned as a director of the Company, effective as of January 15, 2026. On January 19, 2026, Thomas McLaughlin resigned as the Chief Investment Officer of the Company, effective as of January 19, 2026.

Departure of Chief Executive Officer

On February 6, 2026, the Board of Directors of Axe Compute Inc. voted to terminate, without cause, the employment of Raymond F. Vennare with the Company, effective as of February 9, 2026. In connection with his termination, Mr. Vennare entered into a separation agreement dated February 9, 2026 (the “Separation Agreement”), pursuant to which Mr. Vennare will receive certain separation benefits, contingent upon Mr. Vennare signing, delivering and not rescinding or revoking a general release of claims in favor of the Company. The Separation agreement provides for, among other things, (i) the payment of $575,000 in severance pay, which amount is equal to one year of Mr. Vennare’s base salary, (ii) a bonus for 2025 in the amount of $287,500, and (iii) a lump sum payment to assist with the cost of continued healthcare coverage. The foregoing description of the material terms of the Separation Agreement is not complete and is qualified in its entirety by reference to the full text thereof, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Appointment of Chief Executive Officer

On February 6, 2026, the Board appointed Christopher Miglino as Chief Executive Officer to succeed Mr. Vennare, and as a member of the Board to fill the vacancy created by Mr. Vennare’s resignation, effective as of February 9, 2026.

In connection with Mr. Miglino’s appointment as Chief Executive Officer of the Company, the Company and Mr. Miglino entered into an employment agreement, dated February 9, 2026 (the “Employment Agreement”), which provides for, among other things, payment to Mr. Miglino of an annual base salary equal to $575,000, and at the discretion of the Board’s Compensation Committee (the “Committee”), to receive grants of stock options or other equity awards. Mr. Miglino will also be eligible to participate in the Company’s (i) bonus program with annual cash bonus equal up to 50% of his salary or at the discretion of the Committee, a higher percentage based on his and the Company’s performance, (ii) long-term incentive plan to be adopted and maintained by the Compensation Committee, and (iii) standard employee benefit plans generally available to executive employees of the Company.

In addition, as a material inducement to Mr. Miglino’s appointment as Chief Executive Officer, on February 9, 2026 (the “Grant Date”) the Company granted Mr. Miglino stock options (the “Options”) to purchase 500,000 shares of the Company’s common stock at an exercise price equal to the closing price of the Company’s common stock on the Grant Date, pursuant to a Stock Option Inducement Award Agreement (the “Option Agreement”) between Mr. Miglino and the Company. One-third of the Options will vest on the first anniversary of the Grant Date with the remaining two-thirds of the Options vesting in equal monthly installments over the following twenty-four months, in each case subject to Mr. Miglino’s continued employment with or service to the Company through each applicable vesting date.

Compute Contracts

In March 2026, the Company further executed on its strategic transition by executing contracts with several enterprise customers to provide access to remote GPU compute capacity on an hourly basis. The service periods of such contracts range in length from one month to approximately two years. In exchange for the services provided, the Company will collect various fees from customers, including monthly service fees, denominated in US dollars and payable in US dollars or stablecoins. The Company is in the process of analyzing the terms and conditions of such agreements to determine the appropriate accounting treatment under US GAAP, including application of ASC 606 to identify performance obligations, allocate the transaction price, and more. As a result, an estimate of the financial effect on the Company’s financial statements cannot be made at this time.