Z Squared Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2026 (unaudited)

NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

General. On April 24, 2026 (the “Closing” or the “Closing Date”), Z Squared Inc. (the “Company”), formerly known as Coeptis Therapeutics Holdings, Inc., completed the business combination contemplated by the Agreement and Plan of Merger, dated as of April 25, 2025 (the “Merger Agreement”), by and among the Company, CP Merger Sub Inc., a Wyoming corporation and wholly owned subsidiary of the Company (“Merger Sub”), and Z Squared, Inc., a Wyoming corporation. At the effective time of the merger (the “Effective Time”), Merger Sub merged with and into Z Squared, Inc., which survived the merger as a wholly owned subsidiary of the Company and was renamed Z Squared OpCo Inc. (“OpCo”) (the “Merger”). In connection with the Closing, the Company changed its corporate name from “Coeptis Therapeutics Holdings, Inc.” to “Z Squared Inc.”

Nature of Business During the Period Covered. Following the Closing on April 24, 2026, the Company’s principal operations consist of crypto asset mining conducted through OpCo, focused on the generation of Dogecoin and Litecoin through merged mining using Scrypt-algorithm ASIC hardware across six facilities in North Carolina, South Carolina, and Iowa. The Company is also pursuing an expansion into artificial intelligence (“AI”) and high-density compute infrastructure and data center development, which activities were in a development stage during the period. Prior to the Closing, the Company’s operations consisted primarily of biopharmaceutical activities. The Company also continues to hold its interest in GEAR Therapeutics, Inc. (“GEAR”), which conducts the residual biopharmaceutical operations retained by the Company following the closing of the Merger.

Basis of Presentation – The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, they include all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations, and cash flows. The interim results are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules of the United States Securities and Exchange Commission (the “SEC”). Because the Merger was accounted for as a reverse acquisition, the accompanying condensed consolidated financial statements represent a continuation of the financial statements of OpCo. Accordingly, the assets and liabilities of the legal acquiree, Coeptis Therapeutics Holdings, Inc., were recognized at their acquisition-date fair values as of the Closing Date, while the historical assets, liabilities, and results of operations and cash flows prior to the Closing Date are those of OpCo. The historical equity of OpCo has been retroactively adjusted to reflect the shares of the Company’s common stock issued to the former securityholders of OpCo in the Merger, and share and per-share amounts for periods prior to the Closing have been restated accordingly. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of OpCo as of and for the years ended December 31, 2025 and the notes thereto included in the Company’s Current Report on Form 8-K/A filed with the SEC on June 1, 2026, rather than the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The condensed consolidated balance sheet as of December 31, 2025 was derived from OpCo’s audited financial statements.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation – The condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries, OpCo and GEAR. All material intercompany balances and transactions have been eliminated in consolidation. Noncontrolling interests represent the portion of the equity and results of GEAR not attributable to the Company and are presented separately within stockholders’ equity and in the condensed consolidated statements of operations.

Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. 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 could cause actual results to differ from those estimates.

Cash and Cash Equivalents – The Company considers all highly liquid, short-term investments with original maturities of three months or less when purchased to be cash equivalents. As of June 30, 2026 and December 31, 2025, the Company held $15,492,446 and $1,402 of cash and cash equivalents, respectively.

Crypto Assets– The Company’s crypto assets consist of Dogecoin and Litecoin received as consideration from its crypto asset mining operations and are accounted for in accordance with Accounting Standards Codification (“ASC”) 350-60,Crypto Assets. Crypto assets meet the criteria in ASC 350-60 for measurement at fair value, and accordingly are measured at fair value as of each reporting date, with changes in fair value recognized in the condensed consolidated statements of operations. Fair value is determined using the quoted closing price of the respective crypto asset in the Company’s principal market as of the reporting date and is classified as a Level 1 measurement under ASC 820,Fair Value Measurement.

*Revenue Recognition –*The Company recognizes revenue from crypto asset mining from the provision of transaction verification services within crypto asset networks, commonly termed “cryptocurrency mining.” As consideration for these services, the Company receives crypto assets from each specific network in which it participates (“coins”). In accordance with ASC 606, mining proceeds are recognized as revenue when the mining activity is complete and the associated crypto assets are added to the blockchain, as the Company has transferred control of the validated transactions to the network. Revenue from crypto asset mining is measured based on the fair value of the coins received. Fair value is determined using the quoted price of the respective crypto asset in the Company’s principal market at the time of recognition and is classified as a Level 1 measurement under ASC 820,Fair Value Measurement. The coins are recorded on the condensed consolidated balance sheets as crypto assets at their fair value and re-measured at each reporting date. Revaluation gains and losses are included in the condensed consolidated statements of operations.

Cost of Revenues – Cost of revenues include the direct costs associated with cryptocurrency mining operations, including electricity and power usage, hosting fees, depreciation of mining equipment, mining pool fees, and other costs directly attributable to the generation of cryptocurrency rewards.

Employee and Non-Employee Share-Based Compensation – The Company applies ASC 718-10,Share-Based Payment, which requires the measurement and recognition of compensation expenses for all share-based payment awards made to employees and directors including employee stock options, restricted stock units (“RSUs”), and other equity awards issued to employees and non-employees based on estimated fair values.

ASC 718-10 requires companies to estimate the fair value of equity-based option awards on the date of grant using an option-pricing model. The fair value of the award is recognized as an expense on a straight-line basis over the requisite service periods in the Company’s unaudited condensed consolidated statements of operations. The Company recognizes share-based award forfeitures as they occur.

The Company estimates the fair value of granted option equity awards using a Black-Scholes option pricing model or, for awards containing market-based vesting conditions, a Monte Carlo simulation model. The option-pricing model requires a number of assumptions, of which the most significant are share price, exercise price, expected volatility, the risk-free interest rate, and the expected term. For awards with market-based vesting conditions, a Monte Carlo simulation is used to estimate fair value by simulating potential future share-price paths to determine the probability and timing of the vesting condition being satisfied. Expected volatility is estimated based on volatility of the Company. The Company has historically not paid dividends and has no foreseeable plans to issue dividends. The risk-free interest rate is based on the yield from governmental zero-coupon bonds with an equivalent term. The expected option term is calculated for options granted to employees and directors using the “simplified” method. Changes in the determination of each of the inputs can affect the fair value of the options granted and the results of operations of the Company. The fair value of restricted stock units is determined based on the fair value of the Company’s common stock on the grant date.

Property and Equipment– Property and equipment are stated at cost, less accumulated depreciation. The mining equipment contributed by BSG Series CM LLC in the common control transfer described in Note 4 was recorded at the Transferor’s carrying amount as of the date of transfer, determined in accordance with U.S. GAAP, which represents its cost basis for purposes of subsequent depreciation.

Goodwill and Intangible Assets – In accordance with ASC 350,Intangibles - Goodwill and Other, goodwill is not amortized and is tested for impairment annually and upon the occurrence of a triggering event. Finite-lived intangible assets are amortized over their estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. During the six months ended June 30, 2026, the Company identified a triggering event requiring an interim goodwill impairment test; see Note 4 for further discussion.

Investments – The Company classifies its investments in accordance with ASC 321,Investments – Equity Securities. Investments in equity securities with readily determinable fair values are measured at fair value, with unrealized gains and losses recognized in net income. For equity securities without readily determinable fair values, the Company applies the measurement alternative, recording these investments at cost, adjusted for impairments or observable price changes from transactions involving similar securities.

Fair Value Measurements – The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820,Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 - quoted prices in active markets for identical assets or liabilities

Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 - inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)

The carrying amounts of the Company’s financial instruments, such as cash, accounts payable and other current liabilities approximate fair values due to the short-term nature of these instruments.

Earnings Per Share – The Company follows ASC 260 when reporting Earnings Per Share (“EPS”) resulting in the presentation of basic and diluted earnings per share. Basic net (loss) income per common share is computed by dividing net (loss) income by the weighted average number of common shares outstanding during the period. Diluted net (loss) income per common share is computed by dividing net income by the weighted average number of common shares outstanding, plus the effect of potentially dilutive securities, if any, using the treasury stock method. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

Recently Adopted Accounting Pronouncements:

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose significant segment expenses and other segment items on an interim and annual basis, and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative threshold to determine its reportable segments. The new disclosure requirements are also applicable to entities that account and report as a single operating segment entity. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The Company adopted the guidance for the annual reporting period ended December 31, 2024. There was no impact on the Company’s reportable segments identified and additional required disclosures have been included in Note 18, Segment Reporting in the Notes to Financial Statements.

In December 2023, the FASB also issued ASU 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, which requires public entities to measure in-scope cryptocurrency assets at fair value in the statement of financial position, and to recognize gains and losses from changes in the fair value of cryptocurrency in net income each reporting period. ASU 2023-08 will also require entities to provide certain interim and annual disclosures with respect to their cryptocurrency holdings. The standard is effective for our interim and annual periods beginning January 1, 2025, with a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period in which the Company adopts the guidance. The Company adopted ASU 2023-08 on January 1, 2025. Because the Company did not acquire cryptocurrency assets until the 2nd quarter of 2025, there was no cumulative-effect adjustment upon adoption; however, the guidance changed the Company’s accounting for such assets on a prospective basis.

Recent Accounting Pronouncements Not Yet Adopted:

The following standards have been issued by the Financial Accounting Standards Board (“FASB”) but have not yet been adopted by the Company. The Company is evaluating each standard’s applicability to its operations and the potential impact, if any, on its consolidated financial statements.

ASU 2024-03 – Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses – In November 2024, the FASB issued ASU 2024-03, which requires public business entities to disclose, in a tabular presentation within the notes to the financial statements, disaggregated information about specified categories of expense - purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion - included within each relevant expense caption presented on the face of the income statement. The amendments also require disclosure of the total amount of selling expenses and, in annual reporting periods, the entity’s definition of selling expenses. Amounts not separately disaggregated must be described qualitatively. The effective date was subsequently clarified by ASU 2025-01. The amendments are applicable to all public business entities for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027, and the Company expects to adopt beginning with its annual period ending December 31, 2027 and its interim periods commencing in the first quarter of 2028.

*ASU 2025-04 – Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer –*In May 2025, the FASB issued ASU 2025-04, which clarifies the accounting for share-based payment awards granted by an entity as consideration payable to a customer in conjunction with the sale of goods or services. The amendments revise the definition of “performance condition” to explicitly address vesting conditions based on a customer’s volume or monetary amount of purchases, eliminate the policy election to account for forfeitures as they occur for service conditions, and clarify that the variable consideration constraint under Topic 606 does not apply to share-based consideration payable to a customer measured under Topic 718. The ASU is applicable for smaller reporting entities for fiscal years beginning after December 15, 2026 and should be adopted, if applicable, beginning the first quarter of 2027.

NOTE 3 – GOING CONCERN

In accordance with ASC 205-40,Presentation of Financial Statements-Going Concern, management evaluates at each reporting period whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the condensed consolidated financial statements are issued.

The Company has incurred net losses and has not achieved profitable operations. For the three and six months ended June 30, 2026, the Company incurred net losses attributable to common stockholders of $13,722,495 and $13,722,525, respectively, and as of June 30, 2026 had an accumulated deficit of $13,722,968. Following the Closing of the Merger on April 24, 2026, the Company commenced crypto asset mining operations through OpCo utilizing approximately 9,800 mining machines contributed by its controlling shareholder in a common-control transaction. The Company also continues to pursue its expansion into artificial intelligence and high-density compute infrastructure, which remained in a development stage during the period.

As of June 30, 2026, the Company had cash and cash equivalents of $15,492,446. Management has evaluated the Company’s liquidity and capital resources and concluded that its existing cash and cash equivalents are sufficient to fund the Company’s presently planned operating and capital requirements for at least twelve months from the date these condensed consolidated financial statements are issued. Accordingly, management concluded that the conditions described above do not raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s growth strategy includes the evaluation, and potential execution, of transactions to acquire powered land and data center capacity, and potential acquisitions of interests in businesses operating in this space, to support its artificial intelligence and high-density compute infrastructure initiatives (each, a “Powered Land Transaction”). This strategy will require substantial additional capital beyond the Company’s current cash resources. The amount and timing of such capital requirements will depend on the pace and scope of execution of this strategy, including the timing of site conversions, equipment procurement, and the closing of pending acquisitions. Management expects that it will need to raise additional capital through equity or debt financing, or a combination thereof, to fund the full execution of this strategy. There can be no assurance that such additional capital will be available on favorable terms, or at all. The Company’s inability to raise sufficient capital to fund this expansion could result in delaying, scaling back, or discontinuing aspects of its planned artificial intelligence and high-density compute infrastructure initiatives, but is not expected to affect the Company’s ability to fund its existing operations over the next twelve months as described above.

NOTE 4 – BUSINESS COMBINATION

On April 24, 2026, the Company completed the Merger. Immediately prior to the Merger, the Company completed a spin-off of substantially all of its legacy biopharmaceutical operations (the “Spin-Out”) to its stockholders of record, other than GEAR Therapeutics, Inc., which remained a subsidiary of the Company. In connection with GEAR Therapeutics remaining a subsidiary of the Company, the Spin-Out subsidiary received 1,000,000 shares of Company common stock and an option to acquire GEAR Therapeutics in the future at its then-fair market value.

Accounting Treatment

The Merger was accounted for as a business combination under ASC 805,Business Combinations, with OpCo treated as the accounting acquirer and the Company treated as the legal acquirer and accounting acquiree for financial reporting purposes. This determination was based on the following facts, each of which was confirmed as of the Closing:

Because the assets retained by the Company following the Spin-Out met the definition of a business under ASC 805-10, the Merger was accounted for as a business combination, with the assets acquired and liabilities assumed recorded at fair value and any excess of consideration over net identifiable assets acquired recorded as goodwill. The contribution of cryptocurrency mining machines by BSG Series CM LLC, which occurred contemporaneously with the Merger, was evaluated separately from the business combination and accounted for in accordance with ASC 805-50, as described below.

Merger Consideration

At Closing, in exchange for their OpCo securities, OpCo securityholders received, in the aggregate,43,877,497 shares of Company common stock, representing approximately 85% of the Company’s issued and outstanding common stock (the “Merger Consideration”).

The Merger Consideration is measured as the fair value of the Company’s common stock retained by the Company’s stockholders of record immediately prior to the Merger. Because OpCo was determined to be the accounting acquirer and the Company was determined to be the legal acquirer, the consideration transferred is measured based on the number of shares of Company common stock held by the Company’s pre-Merger stockholders, multiplied by the fair value per share of Company common stock as of the Closing date. This approach was used because the fair value of the Company’s publicly quoted stock is more reliably measurable than the fair value of OpCo’s privately held stock. On this basis, the consolidated financial statements reflect total consideration transferred of $107,485,534.

Because the Merger was accounted for as a reverse acquisition under ASC 805, the accounting consideration transferred differs from the legal form of the transaction. Although the Company legally issued shares to the former OpCo stockholders, for accounting purposes the consideration transferred is measured based on the fair value of the equity interests that OpCo is deemed to have issued to obtain control of the Company. Because the Company’s publicly traded common stock provided a more reliable measure of fair value than OpCo’s privately held equity, the Company used the quoted market price of its common stock on the Closing Date to measure the consideration transferred, which totaled $107,485,534.

Substantially all of the Company’s legacy operating assets and liabilities were distributed in the Spin-Out immediately prior to the Merger. Accordingly, the identifiable assets acquired and liabilities assumed in the business combination primarily consisted of the assets and liabilities presented below.

The following table summarizes the acquisition-date fair values of the identifiable assets acquired, liabilities assumed and noncontrolling interest recognized in the business combination. The excess of the consideration transferred over the fair value of the identifiable net assets acquired was recognized as goodwill.

Goodwill Impairment Assessment

During the three months ended June 30, 2026, the Company identified a triggering event with respect to its goodwill resulting from a decline in the Company’s stock price and market capitalization following the Merger. In accordance with ASC 350, management evaluated the relevant qualitative and quantitative factors and determined that a quantitative goodwill impairment test was necessary.

Consistent with the impairment testing sequence prescribed by U.S. GAAP, the Company assessed the recoverability of the long-lived assets prior to performing the goodwill impairment test (see Note 6).

The Company estimated the fair value using the Company’s market capitalization as of June 30, 2026, based on a closing stock price of $10.58 per share. The resulting estimated fair value of approximately $560.7 million exceeded the reporting unit’s carrying amount of approximately $134.5 million by approximately $426.2 million, or 317%. Accordingly, no goodwill impairment was recognized as of June 30, 2026.

Mining Machines

On April 25, 2025, the Company entered into an Asset-for-Share Exchange Agreement (the “Exchange Agreement”) with BSG Series CM LLC (“Transferor”), a South Carolina limited liability company. Pursuant to the terms of the Exchange Agreement, Transferor agreed to contribute certain computer equipment consisting of cryptocurrency mining machines (the “Assets”) to the Company upon the Closing of the Merger.

The Assets consisted of approximately 9,800 cryptocurrency mining machines. The mining machines did not constitute a business under ASC 805-10 and, accordingly, the transfer was accounted for separately from the Merger. Because the Transferor was controlled by the same controlling shareholder before and after the transfer, the transaction was accounted for as a transfer of assets between entities under common control in accordance with ASC 805-50.

Accordingly, the Company recognized the mining machines at the Transferor’s historical carrying amount on the date of transfer as contributed capital.

1,000,0000 shares issued (Spin – Out)

In connection with the Spin-Out, GEAR Therapeutics, Inc., in which the Company holds an 83% ownership interest, remained a subsidiary of the Company rather than being distributed with the Company’s other legacy biopharmaceutical operations. GEAR Therapeutics’ sole asset consists of certain co-development rights, which were independently fair valued at $425,000 in the aggregate. The remaining 17% non-controlling interest in GEAR Therapeutics was initially recorded at $72,250. GEAR Therapeutics recognized a loss of $425,000 during the period, of which $72,250 was attributed to the non-controlling interest, reducing its carrying value to $- in the accompanying consolidated financial statements.

As consideration for Spin-Out subsidiary’s foregone interest in GEAR Therapeutics, the Company issued 1,000,000 shares of Company common stock to Spin-Out subsidiary and granted Spin-Out subsidiary an option to acquire GEAR Therapeutics in the future for its fair market value at the time of exercise (the “GEAR Option”). The 1,000,000 shares were measured at fair value of $16,400,000, based on the Company’s closing stock price of $16.40 per share on the Closing date.

Because the shares were issued to Spin-Out subsidiary as part of the overall Spin-Out distribution to the Company’s pre-Merger stockholders, the issuance was accounted for as a distribution to owners rather than as consideration for the retained ownership interest in GEAR Therapeutics. Accordingly, the Company recorded the issuance as a reduction of additional paid-in capital (after giving effect to the par value of the common stock issued).

The fair value of the shares issued was determined based on the Company’s closing market price on the Closing Date. However, because the issuance represented a distribution to owners in connection with the Spin-Out, the fair value of the shares issued was not required to equal, and does not correspond to, the fair value of GEAR Therapeutics’ underlying net assets or co-development rights.

NOTE 5 – CRYPTO ASSETS

The Company receives Dogecoin (“DOGE”) and Litecoin (“LTC”) as revenue from its crypto asset mining operations, which commenced on the Closing Date. The Company’s crypto assets are accounted for in accordance with ASC 350-60,Crypto Assets, and are measured at fair value as of each reporting date, with changes in fair value recognized within cost of operations as unrealized loss on crypto assets. The fair value of the Company’s crypto assets is measured using the period-end closing price from the Company’s pricing source, CryptoCompare, in accordance with ASC 820,Fair Value Measurement, based on quoted prices in active markets (Level 1 inputs). The Company’s realized gains and losses on sales or exchanges are measured as the difference between the value of consideration received and the cost basis of the crypto assets sold or exchanged. The Company maintains custody of its crypto assets with Anchorage Digital, which also serves as the Company’s principal market and brokerage for crypto asset transactions.

The Company’s crypto asset holdings as of June 30, 2026 were as follows:

The following table summarizes the activity in the Company’s crypto assets from the Closing Date through June 30, 2026:

For the three and six months ended June 30, 2026, the Company recognized realized losses of $74,611 on dispositions of crypto assets and unrealized losses of $45 from changes in fair value.

NOTE 6 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

On the Closing Date, the Company acquired approximately 9,800 cryptocurrency mining machines from BSG Series CM LLC in the asset exchange described in Note 4. The mining equipment was recorded at the Transferor’s carrying amount as of the date of transfer, determined in accordance with U.S. GAAP, which represents its cost basis for purposes of subsequent depreciation. Depreciation commences when the assets are placed in service and is computed on a straight-line basis over the estimated useful lives of the assets, which the Company has determined to betwo years for mining equipment.

The determination of the useful life of computing equipment requires assumptions about a range of computing industry market and economic factors, including required hashrates, technological changes, the availability of hardware and other inputs, and production costs. The Company reassesses the estimated useful lives of its mining equipment when indicators suggest that the productive life of the assets is longer or shorter than previously estimated.

For the three and six months ended June 30, 2026, depreciation expense was $1,157,509, which is included in cost of revenue in the condensed consolidated statements of operations. The Company held no property and equipment as of December 31, 2025.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment exists when the carrying value of an asset exceeds the related estimated undiscounted future cash flows expected to be derived from the asset, in which case the carrying value is adjusted to fair value. During the three months ended June 30, 2026, the Company identified a triggering event with respect to its mining equipment asset group, resulting from the temporary curtailment of mining operations in response to unfavorable cryptocurrency market conditions. In accordance with ASC 360-10-35, the Company first performed a recoverability test comparing the carrying value of the asset group to the sum of estimated future undiscounted cash flows. The Company then measured the fair value of the asset group using secondary market pricing data for comparable mining equipment. Because the estimated fair value exceeded the carrying value, no impairment loss was recognized for the period

NOTE 7 – INVESTMENTS

The Company holds equity investments in five privately held biotechnology companies that do not have readily determinable fair values. The Company has elected to measure these investments using the measurement alternative under ASC 321, under which the investments are carried at cost, less impairment, if any, and adjusted for changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. These investments were initially recorded at their acquisition-date fair values in connection with the Merger (see Note 4).

As of June 30, 2026, the aggregate carrying amount of these investments was $320,543. During the period from the Closing Date through June 30, 2026, the Company recognizedno observable price changes requiring adjustment and no impairment with respect to these investments.

NOTE 8 – CO-DEVELOPMENT RIGHTS

The Company holds co-development rights relating to the GEAR™ Cell Therapy Platform and two associated product candidates, pursuant to an arrangement with Vy-Gen-Bio, Inc. (“Vy-Gen”). The platform and related product candidates are being developed for the treatment and diagnosis of certain hematologic cancers, including multiple myeloma, chronic lymphocytic leukemia, and acute myeloid leukemia. Vy-Gen is responsible for development activities under the direction of a joint steering committee, and the arrangement provides for a profit share between the parties upon commercialization.

In March 2025, the Company licensed the exclusive worldwide development and commercialization rights to the GEAR platform from Vy-Gen, having previously held limited co-development rights. Under the license agreement, the Company is obligated to pay performance-based fees, milestone payments, and royalties in future periods. During the second quarter 2026, the Company capitalized a milestone fee in the amount of $450,000 in connection with the transfer of the license. The milestone fee is included in the carrying amount of the Company's rights relating to the GEAR platform and is amortized over the estimated remaining useful life of those rights.

The co-development rights were acquired in the Merger and, in accordance with ASC 805, were recorded at their acquisition-date fair value of $425,000 as of the Closing Date. The carrying amounts and accumulated amortization recognized by the accounting acquiree, Coeptis Therapeutics Holdings, Inc., prior to the Closing Date are not reflected in the accompanying condensed consolidated financial statements. The co-development rights are amortized on a straight-line basis over their estimated useful life of two years.

Co-development rights consisted of the following as of June 30, 2026:

For the period from the Closing Date through June 30, 2026, amortization expense related to the co-development rights was $118,664. In June 2026, the Company determined that continued investment in development activities related to the co-development rights was not warranted at that time. This determination constituted a triggering event under ASC 360-10-35,Property, Plant, and Equipment – Subsequent Measurement, requiring the Company to test the co-development rights for recoverability. Management determined that the carrying amount of the GEAR-related rights was not fully recoverable and estimated the fair value of the rights to be approximately $450,000 based on the amount management expects to recover through a sale or licensing transaction. Accordingly, the Company recognized an impairment loss of $306,336 during the three and six months ended June 30, 2026, reducing the aggregate carrying amount of the GEAR-related rights to $450,000 as of June 30, 2026.

NOTE 9 – DERIVATIVE LIABILITY WARRANTS

At June 30, 2026, there were (i)375,000 warrants (the “former Public Warrants”) outstanding that were issued as part of Bull Horn Holdings Corp.’s November 2020 initial public offering, exercisable in the aggregate to acquire 187,500 shares of the Company’s common stock at an exercise price of $230.00 per share, and (ii)187,500 private placement warrants (the “Private Placement Warrants,” and together with the former Public Warrants, the “Warrants”) outstanding that were issued to the sponsor and underwriters in that initial public offering, exercisable in the aggregate to acquire 187,500 shares of the Company’s common stock at an exercise price of $230.00 per share. The number of Warrants and the related exercise price were adjusted for the Company’s 20-1 reverse stock split effective December 31, 2024. The Warrants were assumed in connection with the Merger and are accounted for as a continuation of the accounting acquiree’s instruments from the Closing Date. The Warrants expire on October 31, 2027.

Within ASC 815,Derivatives and Hedging, Section 815-40 addresses equity versus liability classification of equity-linked financial instruments and provides that such an instrument may be classified as a component of equity only if, among other criteria, it is indexed to the issuer’s own stock and the settlement amount does not vary based on the characteristics of the holder. The Private Placement Warrants are non-redeemable and are exercisable on a cashless basis for so long as they are held by the Sponsor, the Underwriters, or their permitted transferees; however, if a Private Placement Warrant is transferred to a holder other than the Sponsor, the Underwriters, or their permitted transferees, it becomes redeemable by the Company and exercisable only on the same basis as the former Public Warrants. Because the redemption and exercise terms of the instrument therefore differ depending on the identity of the holder, notwithstanding that the Warrants themselves are freely transferable, the Company concluded that the Warrants are not indexed to the Company’s common stock in the manner contemplated by ASC 815-40, and are accordingly precluded from equity classification and required to be classified as liabilities in accordance with ASC 815-40.

The Warrants were assumed by the Company on the Closing Date and were measured at their acquisition-date fair value. As a result of the exercise price of the Warrants substantially exceeding the price of the Company’s common stock, the Warrants were valued at $- as of the Closing Date. During the period, the former Public Warrants ceased to meet the requirements for continued listing and are no longer publicly traded. As a result, a quoted market price for the former Public Warrants is no longer available, and their fair value was determined using a Black-Scholes valuation model. The former Public Warrants are valued using a Black-Scholes model that incorporates the $330.00 issuer call provision, and the Private Placement Warrants are valued using a Black-Scholes model that excludes the call provision, as the Private Placement Warrants are not subject to the call provision while held by their initial holders. Because the fair value of the former Public Warrants is determined using unobservable inputs, they were transferred from Level 1 to Level 3 of the fair value hierarchy during the period. The Private Placement Warrants were classified within Level 3 in all periods presented.

The following table provides quantitative information regarding the significant unobservable inputs used in the fair value measurement of the Warrants as of June 30, 2026:

The following table presents the changes in the fair value of the Warrants for the period from the Closing Date through June 30, 2026:

As a result of the exercise price of the Warrants substantially exceeding the price of the Company’s common stock at both the Closing Date and June 30, 2026, the Warrants were fair valued at $- at each date. Accordingly, the Company recognized no gain or loss in respect of the change in fair value of the Warrants for the three and six months ended June 30, 2026.

NOTE 10 – CONVERTIBLE NOTE PAYABLE

On June 1, 2026, the Company issued a convertible promissory note (the “Note”) in the original principal amount of $275,000 to an unrelated third party. The Note bore interest at 1.0% per annum, calculated on the basis of a 365-day year and the actual number of days elapsed, and was scheduled to mature on July 1, 2026. The Company was permitted to prepay the Note in whole or in part at any time without premium or penalty.

At any time prior to payment in full, the holder could elect to convert all or any portion of the outstanding principal balance, together with all accrued and unpaid interest (the “Conversion Amount”), into shares of the Company’s common stock, and the Company could elect to convert the entire outstanding balance into shares of common stock upon written notice to the holder. The conversion price was equal to the lowest Nasdaq Official Closing Price of the Company’s common stock on any of the three trading days immediately preceding the conversion date. The number of shares issuable upon conversion equaled the Conversion Amount divided by the conversion price, with no fractional shares issued and the value of any fractional share paid in cash. Shares issuable upon conversion were not registered under the Securities Act and were issued as restricted securities.

The Company evaluated the conversion feature under ASC 815,Derivatives and Hedging. Because the Note required physical settlement of the conversion feature through the issuance of unregistered, restricted shares of the Company's common stock and did not provide for cash or net settlement, the Company concluded that the conversion feature did not meet the definition of a derivative and was not required to be bifurcated from the Note.

On June 30, 2026, the holder converted the entire outstanding balance of the Note. The Conversion Amount consisted of $275,000 of principal and $226 of accrued and unpaid interest, totaling $275,226, which converted at a conversion price of $11.67 per share into 23,584 shares of the Company’s common stock. Upon conversion, the Note was deemed satisfied and discharged in full, and no amounts remained outstanding under the Note as of June 30, 2026.

For the three and six months ended June 30, 2026, the Company recognized interest expense of $226 with respect to the Note. The conversion of the Note into common stock was a non-cash financing activity and is presented as a supplemental non-cash disclosure in the condensed consolidated statements of cash flows.

NOTE 11 – STOCKHOLDERS’ EQUITY

Authorized Capital. The Company is authorized to issue 160,000,000 shares of capital stock, consisting of 150,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share. As of June 30, 2026 and December 31, 2025, the Company had 53,000,397 and 43,877,497 shares of common stock issued and outstanding, respectively, andno shares of preferred stock issued or outstanding. As described in Note 1, the number of shares of common stock outstanding for periods prior to the Closing Date has been retroactively adjusted to reflect the shares of the Company’s common stock issued to the former securityholders of OpCo in the Merger.

Common Stock Issued in Connection with the Merger. At the Closing Date, the shares of the Company’s common stock held by the Company’s pre-Merger stockholders (representing the equity interests deemed acquired by OpCo for accounting purposes in the reverse acquisition), totaling 6,553,996 shares, were recognized in stockholders’ equity at their acquisition-date fair value of $107,485,534, representing the consideration deemed transferred in the reverse acquisition described in Note 4.

Spin-Out Share Distribution. In connection with the Spin-Out, the Company issued 1,000,000 shares of common stock to the Spin-Out subsidiary as consideration for its foregone interest in GEAR. Because the shares were issued as part of the overall Spin-Out distribution to the Company’s pre-Merger stockholders, the issuance was recorded as a distribution, resulting in a reduction to additional paid-in capital equal to the par value of the shares issued and no net effect on total stockholders’ equity. See Note 4.

Capital Contribution – Mining Equipment. In connection with the transfer of assets between entities under common control described in Note 4, the Company recognized the cryptocurrency mining machines contributed by BSG Series CM LLC at the Transferor’s carrying amount of $12,438,900, with a corresponding increase to additional paid-in capital. No shares of common stock were issued on the date of contribution.

Standby Equity Purchase Agreement. In connection with the Merger, the Company assumed the Standby Equity Purchase Agreement (the “SEPA”) originally entered into on November 1, 2024 with YA II PN, Ltd. (“Yorkville”), pursuant to which the Company had the right to sell to Yorkville up to $20,000,000 of shares of its common stock, subject to the terms and conditions set forth therein. During the period from the Closing Date through June 30, 2026, the Company issued 1,302,806 shares of common stock under the SEPA for aggregate gross proceeds of $15,418,839. Following such issuance, the SEPA was terminated, and no shares remained issuable and no amounts were outstanding thereunder as of June 30, 2026.

Committed Equity Forward Purchase Agreement. On May 29, 2026, the Company entered into a Committed Equity Forward Purchase Agreement (the “Forward Purchase Agreement”) with LucentHash / Data Part Capital, a trading name of Translucent Matter Inc. (“Translucent Matter”), pursuant to which the Company had the right, but not the obligation, to require Translucent Matter to purchase up to $50,000,000 of shares of the Company’s common stock from time to time over an 18-month commitment period. The purchase price for each draw was 95% of the volume-weighted average price of the Company’s common stock over a five-trading-day pricing period, subject to a floor price of $5.00 per share, and aggregate issuances would have been limited by an exchange cap of 19.99% of the shares of common stock outstanding immediately prior to execution, unless stockholder approval was obtained under the applicable Nasdaq listing rules. The Company agreed to pay a commitment fee of $500,000, payable in shares of common stock in five equal installments at the closing of each of the first five draws, and was required to reserve 10,000,000 shares of common stock for issuance under the Forward Purchase Agreement. No draw notices were delivered and no shares of common stock were issued under the Forward Purchase Agreement, and no amounts were outstanding thereunder, as of June 30, 2026. Subsequent to June 30, 2026, the Company delivered written notice terminating the Forward Purchase Agreement. See Note 19.

Common Stock Warrants. The following table summarizes the Company’s common stock warrants outstanding, exclusive of the derivative liability warrants discussed in Note 9:

At June 30, 2026, the Company had 543,619 equity-classified warrants outstanding. The exercise prices of these warrants range from $12.00 to $59.40, with expiration dates ranging from July 2026 to January 2030.

Shares Issued for Services. During the period from the Closing Date through June 30, 2026, the Company issued 242,514 shares of common stock to non-employees in exchange for services rendered. The shares were measured at their fair value on the respective issuance dates, totaling $3,552,213, which was recognized in professional services expense in the condensed consolidated statements of operations.

Shares Issued Upon Conversion of Convertible Note. On June 30, 2026, the Company issued 23,584 shares of common stock upon the conversion of the outstanding principal balance of, and accrued interest on, a convertible promissory note, in the aggregate amount of $275,226. See Note 10.

Stock-Based Compensation. During the period from the Closing Date through June 30, 2026, the Company recognized $7,033,939 of stock-based compensation expense, which was credited to additional paid-in capital. See Note 12.

Preferred Stock. As of June 30, 2026 and December 31, 2025, no shares of preferred stock were issued or outstanding, and no dividends were declared or paid on any class of the Company’s capital stock during the periods presented.

Noncontrolling Interests. Changes in noncontrolling interests during the period are described in Note 13.

NOTE 12 – STOCK BASED COMPENSATION

2025 Incentive Compensation Plan.

The 2025 Plan was approved by the stockholders of the Company at the special meeting of stockholders held on January 30, 2026, and became effective on April 27, 2026. The 2025 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance stock units, deferred stock awards, dividend equivalents, performance bonus awards, and other stock-based awards to employees, directors, non-employee directors, and consultants of the Company and its affiliates and subsidiaries. The 2025 Plan is administered by the Compensation Committee of the Board. The aggregate number of shares of Common Stock that may be issued or transferred pursuant to awards under the 2025 Plan may not exceed 15% of the number of shares of Common Stock issued and outstanding from time to time; the maximum number of shares deliverable upon exercise of incentive stock options is 300,000, subject to adjustment as provided in the 2025 Plan.

In connection with the adoption of the 2025 Plan, the Board approved forms of Stock Option Award Agreement, Restricted Stock Unit Award Agreement, and Restricted Stock Award Agreement to be used in connection with awards granted under the 2025 Plan.

RSUs:

For the three and six months ended June 30, 2026, the Company recognized $576,671 of expense related to restricted stock units. As of June 30, 2026, unrecognized compensation cost related to unvested service-based restricted stock units was $2,428,328, expected to be recognized over a weighted-average period of 1.23 years. Unrecognized compensation cost related to performance-based restricted stock units for which achievement of the performance condition was not considered probable as of June 30, 2026 was $1,199,994. As of June 30, 2026, non-vested restricted stock units consisted of 185,806 service-based RSUs and 78,947 performance-based RSUs.

Options:

For the three and six months ended June 30, 2026, the Company recognized $6,457,268 of expense related to stock options. As of June 30, 2026, unrecognized compensation cost related to unvested stock options was $3,661,733, expected to be recognized over a weighted-average period of 0.12 years.

NOTE 13 – NONCONTROLLING INTERESTS

The Company holds an 83% controlling interest in GEAR Therapeutics, Inc., and the remaining 17% is held by noncontrolling interests. The Company acquired its interest in GEAR on the Closing Date in connection with the Merger; accordingly, GEAR’s results are included in the condensed consolidated financial statements as of April 24, 2026. GEAR is consolidated, and the portion of GEAR’s net loss and equity attributable to the noncontrolling interests is presented separately in the condensed consolidated statements of operations and within stockholders’ equity.

In connection with the Merger, the noncontrolling interest in GEAR was measured at its acquisition-date fair value of $72,250. See Note 4.

From the Closing Date through June 30, 2026, net loss attributable to the noncontrolling interests was $72,250, representing the noncontrolling interests’17% share of GEAR’s net loss for that period. The following table summarizes the changes in the noncontrolling interests for the period from the Closing Date to June 30, 2026:

NOTE 14 – LOSS PER SHARE

Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, plus common stock equivalents outstanding during the period. Because the Company reported a net loss for the periods presented, the computation of diluted loss per share excludes the effect of common stock equivalents, as their effect would be anti-dilutive. Accordingly, diluted loss per share is equal to basic loss per share for all periods presented.

As described in Note 1, the Merger was accounted for as a reverse acquisition, and the weighted-average number of shares outstanding for periods prior to the Closing Date has been retroactively adjusted to reflect the share-exchange ratio established in the Merger Agreement.

The following table sets forth the computation of basic and diluted loss per share attributable to common stockholders:

In periods with a reported net loss, the effect of stock options, warrants, unvested restricted stock units, and other potentially dilutive securities is excluded from the computation of diluted loss per share. There were no potentially dilutive securities outstanding as of June 30, 2025. Accordingly, only potentially dilutive securities outstanding as of June 30, 2026 are presented below. The following potentially dilutive securities were outstanding as of June 30, 2026 and were excluded from the computation of diluted loss per share because their effect would have been anti-dilutive:

NOTE 15 – INCOME TAXES

The Company computes its interim income tax provision using an estimated annual effective tax rate applied to year-to-date pre-tax results, adjusted for discrete items recognized in the period. For the three and six months ended June 30, 2026 and 2025, the Company recognizedno income tax expense or benefit, primarily due to the full valuation allowance maintained against its deferred tax assets.

The Company’s deferred tax assets consist primarily of net operating loss carryforwards. The Company maintains a full valuation allowance against its deferred tax assets because, based on available evidence, it is more likely than not that those assets will not be realized in light of the Company’s history of losses and lack of sustained profitable operations. As a result, no income tax benefit has been recognized for the periods presented.

NOTE 16 – COMMITMENTS AND CONTINGENCIES

Paradox Data LLC Letter of Intent. On June 18, 2026, the Company entered into a binding letter of intent (the “Paradox LOI”) to acquire a 51% majority membership interest in Paradox Data LLC, a Florida limited liability company, for consideration consisting of shares of a newly designated series of Series A Convertible Preferred Stock with an aggregate initial liquidation preference of $5,000,000. Closing is conditioned on Paradox Data LLC holding specified technology, data, and intellectual property rights, land, and power capacity. The Paradox LOI also provides for the Company to receive up to an additional 25% membership interest, at no additional cost, if Paradox Data LLC does not timely satisfy a specified utility power interconnection milestone within three years of closing. The Paradox LOI is terminable by either party if definitive documentation is not executed by July 31, 2026, and provides for no break-up or termination fee. See Note 19, Subsequent Events, for further discussion.

Skycore Digital LLC. On April 28, 2026, the Company entered into a binding letter of intent to acquire 100% of the membership interests of Skycore Digital LLC, a North Carolina limited liability company, with the Skycore Sellers, an entity affiliated with Michelle Burke, the Company’s former Co-Chief Executive Officer. Subsequent to June 30, 2026, on July 9, 2026, the parties amended the letter of intent, effective as of June 30, 2026, to convert it to a non-binding expression of the parties’ present intentions, eliminate the Company’s $500,000 break-up fee exposure, and extend the drop-dead date to January 15, 2027; see Note 19, Subsequent Events. As of June 30, 2026, prior to the amendment, the Company’s obligations under the letter of intent, including the break-up fee, remained in effect. This matter is disclosed for transparency regarding a potential future related party transaction. See Note 17 for further related party disclosure.

GEAR Therapeutics Option. In connection with the Spin-Out described in Note 4, and in exchange for the Company retaining its subsidiary GEAR Therapeutics, Inc. on a post-Merger basis, the Company issued to Coeptis Holdings, Inc. (“CHI”), the entity to which the Company’s other biopharmaceutical operations were contributed in the Spin-Out and the equity of which was distributed to the Company’s pre-Merger stockholders,1,000,000 shares of the Company’s common stock and executed and delivered to CHI an option agreement granting CHI a limited-time option, exercisable in its discretion, to acquire GEAR for the fair market value of GEAR at the time of exercise. The option becomes exercisable on October 24, 2026 and remains exercisable for a period of twenty-four months from that date. If CHI exercises the option, CHI is required to pay the Company the fair market value of GEAR determined at the time of exercise. Accordingly, the option does not provide CHI with the right to acquire GEAR at a discount to its fair market value. The Company concluded that no liability was required to be recognized for the option as of June 30, 2026.

Legal Matters. The Company is currently not a defendant in any litigation or threatened litigation that could have a material effect on the Company’s condensed consolidated financial statements.

NOTE 17 – RELATED PARTY TRANSACTIONS

The Company’s related parties during the six months ended June 30, 2026 and the year ended December 31, 2025 are described below.

*BSG Series CM, LLC - Asset-for-Share Exchange Agreement.*In connection with the Business Combination that closed on April 24, 2026, BSG Series CM, LLC (“BSG”), a South Carolina limited liability company, contributed a fleet of 9,800 ASIC miners to OpCo pursuant to the Second Amendment to the Amended and Restated Asset-for-Share Exchange Agreement, dated April 23, 2026.

BSG Distribution - Termination of Related Party Status. Immediately following the Closing, BSG held approximately 80% of the Company’s outstanding common stock. On April 30, 2026, BSG completed a pro rata distribution of 41,521,276 shares of the Company’s common stock to its members, for no monetary consideration. As a result of this distribution, BSG ceased to beneficially own any shares of the Company’s common stock and, based on the Company’s evaluation, ceased to be a related party of the Company effective April 30, 2026.

Accordingly, the Company’s related party disclosures for the six months ended June 30, 2026 reflect BSG as a related party only for the period from April 24, 2026 (Closing) through April 30, 2026.

SMSC Capital Holdings LLC - Chief Executive Officer’s Pre-Merger Equity Holding. David Halabu, the Company’s Chief Executive Officer, holds an interest in the Company’s common stock through SMSC Capital Holdings LLC (“SMSC”), an entity affiliated with Mr. Halabu. SMSC was a stockholder of OpCo prior to the Merger and, upon the Closing, received shares of the Company’s common stock in exchange for its OpCo shares on the same pro rata terms applicable to all other OpCo stockholders. The Company discloses this holding because of Mr. Halabu’s status as an executive officer and director.

*Minting Dome, Inc. - Master Services Agreement.*The Company’s ASIC mining fleet is hosted exclusively by Minting Dome Inc. pursuant to a Master Services Agreement (the “MSA”), under which Minting Dome provides hosting, electrical power (at $0.088 per kWh), internet connectivity, and on-site operational and maintenance services for the Company’s mining operations. The Company incurred $2,191,454 of hosting, maintenance, and other service fees related to the MSA during the period from the Closing Date to June 30, 2026.

Michelle Burke served as Co-Chief Executive Officer and a director of the Company from the Closing (April 24, 2026) through her resignation effective May 22, 2026. Prior to that period, Ms. Burke served as Chief Executive Officer of Minting Dome (July 2024 to April 2026). Ms. Burke’s overlapping executive roles with the Company and MDI cause MDI to be evaluated as a related party of the Company under ASC 850 for the periods during which that overlap existed. Following Ms. Burke’s resignation, the MSA remained in effect in accordance with its existing terms, and the Company continues to disclose the relationship given MDI’s role as the Company’s sole hosting provider and Ms. Burke’s history with both organizations.

Paradox Data, LLC. Jeffery Harris, the Company’s Chief Technology Officer, holds an indirect minority membership interest in Paradox Infrastructure LLC and a 24% membership interest in Paradox Energy, LLC, an affiliate entitled to receive a portion of the milestone consideration payable in connection with the proposed acquisition of Paradox Data, LLC. As a result, Mr. Harris has an indirect interest in the transaction of approximately $3.6 million if all milestones are achieved in full. The transaction was reviewed and approved as a related person transaction by the Audit Committee and the Board of Directors in accordance with the Company’s related person transaction policy. See Note 16, Commitments and Contingencies, and Note 19, Subsequent Events, for a description of the proposed transaction and its terms.

Skycore Digital LLC. MN Data Centers JV LLC, a party to the proposed acquisition of Skycore Digital LLC, is indirectly wholly owned by Minting Dome, Inc. (“MDI”), a related party of the Company as described above. Accordingly, the Skycore Sellers are being evaluated as related parties of the Company in connection with the proposed transaction. See Note 16, Commitments and Contingencies, and Note 19, Subsequent Events, for a description of the proposed transaction and its terms.

NOTE 18 – SEGMENT REPORTING

Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the “CODM”) in assessing performance and deciding how to allocate resources. The Company has identified its Chief Executive Officer as the CODM.

The Company operates as a single operating segment and a single reportable segment: Computing Infrastructure. Through this segment, the Company generates Dogecoin and Litecoin through merged mining using Scrypt-algorithm ASIC hardware across six facilities in North Carolina, South Carolina, and Iowa. Following the Merger, the Company continues to conduct residual biopharmaceutical operations through its majority-owned subsidiary, GEAR Therapeutics, Inc., which the Company does not intend to advance further, and has commenced expansion into artificial intelligence and high-density compute infrastructure, data center development, and power generation, which remained in a development stage during the period. Discrete financial information regarding these activities is not regularly reviewed by the CODM in assessing performance or allocating resources, and accordingly they do not constitute separate operating segments under ASC 280-10-50-1.

The CODM reviews financial information presented on a consolidated basis for purposes of assessing performance and allocating resources. The measure of segment profit or loss regularly reviewed by the CODM is consolidated net loss, as presented in the accompanying condensed consolidated statements of operations. The significant expense categories regularly provided to the CODM are the expense line items presented on the face of the condensed consolidated statements of operations, and no additional categories of segment expense are regularly provided to or reviewed by the CODM. Accordingly, there are no other segment items to report. Segment assets are equal to the Company’s consolidated total assets and were $134,509,962 and $1,402 as of June 30, 2026 and December 31, 2025.

The Company operated as a single operating segment and asingle reportable segment for each of the three and six months ended June 30, 2026 and 2025.

NOTE 19 – SUBSEQUENT EVENTS

First Amendment to Skycore Digital LLC Letter of Intent

On July 9, 2026, the Company and the sellers of Skycore Digital LLC entered into a First Amendment to the binding letter of intent originally entered into on April 28, 2026, effective as of June 30, 2026. Pursuant to the First Amendment, the drop-dead date under the LOI was extended from June 30, 2026 to January 15, 2027, and may be further extended by mutual written agreement of the parties; the $500,000 break-up fee previously payable by the Company under the LOI was eliminated in its entirety; the exclusivity provisions of the LOI were terminated, and discussions between the parties are now non-exclusive; and the LOI, as amended, is non-binding except for certain surviving provisions relating to confidentiality, governing law, and dispute resolution, such that no party has any obligation to negotiate, execute definitive documentation, or consummate the Skycore Acquisition, and any party may terminate discussions at any time without liability. There can be no assurance that definitive documentation will be executed or that the Skycore Acquisition will be consummated on the terms set forth in the LOI, as amended, on different terms, or at all.

Termination of ATM Sales Agreement and Forward Purchase Agreement

On July 6, 2026, the Company entered into a Sales Agreement (the “ATM Sales Agreement”) with Roth Capital Partners, LLC, as sales agent, under which the Company could offer and sell, from time to time, shares of common stock having an aggregate offering price of up to $300,000,000. On July 17, 2026, the Company terminated the ATM Sales Agreement, effective July 21, 2026, along with its Committed Equity Forward Purchase Agreement, dated May 29, 2026, with Translucent Matter Inc., under which the Company had the right, but not the obligation, to require the purchaser to purchase up to $50,000,000 of common stock. The termination of the Forward Purchase Agreement is effective August 17, 2026. No shares were sold and no proceeds were received under the ATM Sales Agreement, no draws were made or shares issued under the Forward Purchase Agreement, and no termination fee or penalty is payable under either agreement.

Paradox Data, LLC Membership Interest Purchase Agreement

On July 31, 2026, the Company entered into a Membership Interest Purchase Agreement (the “MIPA”) with Paradox Infrastructure LLC (“Seller”) and Paradox Data, LLC (“Paradox Data”), pursuant to which the Company will acquire 100% of the outstanding membership interests of Paradox Data (the “Transaction”). This Transaction supersedes the binding letter of intent entered into on June 18, 2026 for the acquisition of a majority membership interest in Paradox Data, which the parties agreed to restructure as a full acquisition. At closing, Paradox Data’s assets will include a data center development site in El Dorado, Union County, Arkansas (the “Union County Campus”), together with the existing building, an electric service arrangement with Entergy Arkansas, LLC, and rights to acquire up toten additional acres under an existing land contract.

At the closing of the Transaction, the Company will issue to Seller 5,000 shares of a newly designated series of preferred stock, the Series A Convertible Preferred Stock (the “Series A Preferred Stock”), with a stated value of $1,000 per share ($5,000,000 in the aggregate). Following closing, the Company will make additional milestone payments of up to $20,000,000 in the aggregate, payable in shares of Series A Preferred Stock to Seller and to Paradox Energy, LLC, an affiliate of Seller, upon the achievement of specified request-for-service and energization milestones of up to 150 MW of capacity. If all milestones are achieved, aggregate consideration under the MIPA would total $25,000,000 in stated value. No cash consideration is payable and no debt is being incurred in connection with the Transaction.

The Series A Preferred Stock accrues dividends at 8.0% per annum, payable quarterly in cash or in kind at the holder’s election, and is convertible into the Company’s common stock at a conversion price of $7.45 per share for shares issued at closing (with milestone shares convertible at a formula-based price), subject to customary adjustments and a mandatory conversion feature if the Company’s common stock trades at or above 250% of the applicable conversion price for 20 consecutive trading days. Shares issuable upon conversion are subject to a beneficial ownership cap of 19.99% of the Company’s outstanding common stock absent stockholder approval under Nasdaq Listing Rule 5635.

Closing of the Transaction is subject to customary conditions, including specified pre-closing asset and real property transfers to Paradox Data, and is expected to occur within 30 days of signing, with an outside date of September 30, 2026 (extendable to December 31, 2026 under specified circumstances). As of the date these condensed consolidated financial statements were issued, the Transaction had not closed, and there can be no assurance that it will be consummated on the terms described above, on different terms, or at all. See Note 17 for a description of Mr. Harris’s related party interest in the Transaction, which was reviewed and approved by the Audit Committee.