LM FUNDING AMERICA, INC.

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Note 1. Summary of Significant Accounting Policies

Nature of Operations

LM Funding America, Inc. (“we”, “our”, “LMFA” or the “Company”) was formed as a Delaware corporation on April 20, 2015.

LMFA is the sole member of several entities including LM Funding, LLC, which was organized in January 2008; US Digital Mining and Hosting Co., LLC, which was formed on September 10, 2021 (“US Digital”); LMFA Financing LLC, formed on November 23, 2020, and LMFAO Sponsor LLC, created on October 29, 2020 (LMFA is a majority member of LMFAO Sponsor LLC). US Digital has created various 100% owned subsidiaries to engage in business in various states in connection with its Bitcoin mining business.

The Company also from time to time organizes other subsidiaries to serve a specific purpose or hold a specific asset.

Lines of Business

The Company currently maintains three distinct business operations: our Bitcoin treasury operations, Bitcoin mining business and our specialty finance business.

Our investment strategy with respect to our Bitcoin treasury operations involves retaining a majority of our currently held Bitcoin and acquiring new Bitcoin through our mining operations. We may sell or leverage our Bitcoin to support operational needs and strategic initiatives. Our Bitcoin mining operation deploys our computing power to mine Bitcoin on the Bitcoin network. We conduct this business through our wholly owned subsidiary, US Digital, a Florida limited liability company, which we formed in 2021 to develop and operate our Bitcoin mining business. With respect to our specialty finance business, the Company has historically engaged in the business of providing funding to nonprofit community associations primarily located in the state of Florida. We offer incorporated nonprofit community associations, which we refer to as “Associations,” a variety of financial products customized to each Association’s financial needs.

Bitcoin Treasury Operations and Strategy

During August 2025, we raised approximately $21.3 million in net proceeds from capital raises and we purchased 164 Bitcoins with substantially all of the proceeds from such offering. In December 2025, we raised approximately $5.9 million in net proceeds from a capital raise and we purchased 47 Bitcoins with substantially all of the proceeds from such offering. Our Bitcoin treasury strategy for the next twelve months includes acquiring and holding Bitcoin, using cash flows from operations that exceed working capital requirements, and from time to time, subject to market conditions, issuing equity or debt securities or engaging in other capital raising transactions with the objective of using the proceeds to purchase Bitcoin. We have not set any specific target for the amount of Bitcoin we seek to hold, and we will continue to monitor market conditions in determining whether to engage in additional Bitcoin purchases. This overall strategy also contemplates that we may periodically sell Bitcoin for general corporate purposes or in connection with strategies that generate tax benefits in accordance with applicable law, enter into additional capital raising transactions, including those that could be collateralized by its Bitcoin holdings, and consider pursuing strategies to create income streams or otherwise generate funds using our Bitcoin holdings. As of December 31, 2025, we controlled 211.4 Bitcoin and 145 Bitcoin were held as collateral and presented as a receivable.

We currently maintain a formal, documented strategy that governs circumstances under which we acquire or monetize our Bitcoin holdings. Decisions to purchase or sell Bitcoin are made on a case-by-case basis at management’s discretion, taking into account factors such as our liquidity, general market conditions, and anticipated cash requirements. As of December 31, 2025, Bitcoin represented 100% of our treasury holdings. We do have small holdings of Tether and USDC outside of our treasury holdings that value in the aggregate less than $10,000 and are used for purchases with merchants that accept such crypto assets as payment. We do not currently engage in hedging activities. We have not implemented derivative transactions, futures, options, swaps, or other financial instruments to reduce our exposure to Bitcoin price volatility other than the Galaxy loan collar derivative. Any future hedging activity, if undertaken, would be determined by management on a discretionary basis.

Bitcoin Mining Business

We obtain Bitcoin as a result of our mining operations, and we sell Bitcoin from time to time, to support our operations and strategic growth. We plan to convert our Bitcoin to U.S. dollars. We may engage in regular trading of Bitcoin or engage in hedging activities related to our holding of Bitcoin. However, our decisions to hold or sell Bitcoin at any given time may be impacted by the Bitcoin market, which has been historically characterized by significant volatility. Currently, we do not use a formula or specific methodology to determine whether or when we will sell Bitcoin that we hold, or the number of Bitcoins we will sell. Rather, decisions to hold or sell Bitcoins are currently determined by management by monitoring the market in real time. As of December 31, 2025 and December 31, 2024, the Company had approximately 7,200 and 5,840 machines respectively, which amounted to operating units capable of producing 812 petahash and 615 petahash, respectively, per second (“EH/s”) of computing power.

Specialty Finance Company

In our specialty finance business, we purchase an Association’s right to receive a portion of the Association’s collected proceeds from owners that are not paying their assessments. After taking assignment of an Association’s right to receive a portion of the Association’s proceeds from the collection of delinquent assessments, we engage law firms to perform collection work on a deferred billing basis wherein the law firms receive payment upon collection from the account debtors or a predetermined contracted amount if payment from account debtors is less than legal fees and costs owed. Under this business model, we typically fund an amount equal to or less than the statutory minimum an Association could recover on a delinquent account for each Account, which we refer to as the “Super Lien Amount”. Upon collection of an Account, the law firm working on the Account, on behalf of the Association, generally distributes to us the funded amount, interest, and administrative late fees, with the law firm retaining legal fees and costs collected, and the Association retaining the balance of the collection. In connection with this line of business, we have developed proprietary software for servicing Accounts, which we believe enables law firms to service Accounts efficiently and profitably. Our original product offering consists of providing funding to Associations by purchasing their rights under delinquent accounts that are selected by the Associations arising from unpaid Association assessments. Historically, we provided funding against such delinquent accounts, which we refer to as “Accounts,” in exchange for a portion of the proceeds collected by the Associations from the account debtors on the Accounts. In addition to our original product offering, we also purchase Accounts on varying terms tailored to suit each Association’s financial needs, including under our New Neighbor Guaranty™ program.

Principles of Consolidation

The consolidated financial statements include the accounts of LMFA and its wholly-owned subsidiaries: LM Funding, LLC; REO Management Holdings, LLC (including all 100% owned subsidiary limited liability companies); LM Funding of Colorado, LLC; LM Funding of Washington, LLC; LM Funding of Illinois, LLC; US Digital (includes all 100% owned subsidiary limited liability companies) and various single purpose limited liability corporations owned by REO Management Holdings, LLC which own various properties. It also includes LMFA Sponsor LLC (a 69.5% owned subsidiary). All significant intercompany balances and transactions have been eliminated in consolidation.

Basis of Presentation

The consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). The Company prepares its consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”).

Reclassification

Certain prior period immaterial amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on the reported results of operations.

Liquidity

The accompanying consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The evaluation of going concern under the accounting guidance requires significant judgment which involves the Company to consider that it has historically incurred losses in recent years as it has prepared to grow its business through expansion and acquisition opportunities. The Company must also consider its current liquidity as well as future market and economic conditions that may be deemed outside the control of the Company as it relates to obtaining financing and generating future profits. As of December 31, 2025, the Company had $1.4 million available cash on-hand and Bitcoin with a fair market value of $18.5 million (of which $7.7 million is pledged as collateral against outstanding borrowings and classified within “Digital assets - collateral” on the consolidated balance sheets). Bitcoin classified as “Digital assets - long term” could be utilized for operational purposes if necessary. After considering its current liquidity and future market and economic conditions, the Company has concluded there is no substantial doubt about the Company’s ability to continue as a going concern.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates include long-lived asset impairment, the evaluation of probable losses on balances due from a related party, the realization of deferred tax assets, the evaluation of contingent losses related to litigation and reserves on notes receivables. Our estimates may change, however, as new events occur and additional information is obtained, and any such changes will be recognized in the consolidated financial statements.

Segment and Reporting Unit Information

Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Chief Executive Officer and Chief Financial Officer of the Company are determined to comprise the CODM, as a group. The Company hastwo operating segments as of December 31, 2025, which we refer to as Specialty Finance and Mining and Treasury Operations. Our corporate oversight function and other components that may earn revenues that are only incidental to the activities of the Company are aggregated and included in the “All Other” category. See Note 13, “Segment Information”.

Cash

The Company maintains cash balances at several financial institutions that are insured under the Federal Deposit Insurance Corporation’s (“FDIC”) Transition Account Guarantee Program. Balances with the financial institutions may exceed federally insured limits. As of December 31, 2025 and 2024 we have approximately $0.4 million and $2.3 millionof cash in various institutions that exceed the FDIC or SIPC insurance coverage limit of $250,000.

Digital Assets

Bitcoin held under our treasury strategy are included in long term assets in the consolidated balance sheets due to the Company's intention to hold the Bitcoin for long term investment. The remaining Bitcoin expected to be used for general working capital purposes are included in current assets in the consolidated balance sheets due to the Company’s ability to sell Bitcoin in a highly liquid marketplace and such Bitcoin holdings are expected to be realized in cash or sold or consumed during the normal operating cycle of the Company. As a result of adopting ASC 350-60 on January 1, 2024, Bitcoin is measured at fair value as of each reporting period. The fair value of Bitcoin is measured using the period-end closing Bitcoin price from its principal market in accordance with ASC 820, Fair Value Measurement. Since Bitcoin is traded on a 24-hour period, the Company utilizes the price as of at fair value at 23:59:59 UTC time, which aligns with the Company's revenue recognition cut-off. The decrease (increase) in fair value from each reporting period is reflected on the consolidated statements of operations as “Loss (gain) on fair value of Bitcoin, net”. The Company sells Bitcoin and such gains and losses from such transactions are measured as the difference between the cash proceeds and the carrying basis of Bitcoin as determined on a First In-First Out basis and are recorded within “Loss (gain) on fair value of Bitcoin, net”.

Bitcoin, which is non-cash consideration earned by the Company through its mining activities, are included as a reconciling item as a cash outflow within operating activities on the accompanying consolidated statements of cash flows. The cash proceeds from the sales of Bitcoin are classified based on the holding period in which the Bitcoin are held. ASC 350-60 specifies that Bitcoin converted nearly immediately into cash would qualify as cash flows from operating activities and all other sales would qualify as investing activities. The Company evaluates its sales of Bitcoin and will record Bitcoin sold nearly immediately as operating cash flows and the remainder will be recorded as investing activities. During the year ended December 31, 2025 and 2024, all proceeds from Bitcoin sales were classified as investing activities.

Digital Assets Receivable, net

The Company has pledged Bitcoin as collateral for a draw under its loan facility (the “Galaxy Loan Facility”) with Galaxy Digital LLC (“Galaxy”). While the loan is outstanding, Galaxy has the right and the ability to use the digital assets at its discretion, including the ability to sell or pledge the borrowed digital assets to third parties. Following the Company's full payment of the loan, Galaxy is obligated to return the same type and quantity of digital assets as those pledged by the Company.

The digital assets receivable are initially measured upon transfer at fair value and subsequently remeasured at fair value at each reporting period. The changes in fair value are recognized on the consolidated statements of operations, in accordance with ASC 350-60.

The digital assets receivable balance is evaluated for possible credit losses, in accordance with ASC 326 - Financial Instruments - Credit Losses. The allowance for credit losses on digital assets receivable under the current expected credit loss (“CECL”) model is determined by utilizing the profitability of default (“PD”) loss given default (“LGD”) approach. In order to apply the PD LGD approach, management considers the remaining expected life of the loans and forecasts of future economic conditions. Allowance for credit losses are included in “Credit loss on digital assets receivable” on the consolidated statements of operations. Refer to Note 4.

Derivatives

The Company evaluates its financing and service arrangements to determine whether certain arrangements contain features that qualify as embedded derivatives requiring bifurcation in accordance with ASC 815, Derivatives and Hedging. Embedded derivatives that are required to be bifurcated from the host instrument or arrangement are accounted for and valued as separate financial instruments. As of December 31, 2025 there was an embedded derivative recognized related to the Galaxy loan facility (refer to Note 8). There were no embedded derivatives requiring separation from the host instrument as of December 31, 2024.

The Company does not elect to designate derivative instruments as hedges for accounting purposes. As such, our derivative instruments are recorded at fair value each reporting period as “Galaxy loan derivative” on the consolidated balance sheets, with subsequent changes in fair value recognized in “Changes in fair value of Galaxy loan derivative” on the consolidated statements of operations. The Company classifies derivative assets or liabilities as current or non-current based on whether settlement of the instrument could be required within 12 months of the balance sheet date.

Investments in Securities

Investment in Securities includes investments in common stocks which are reported at fair value with changes in unrecognized gains or losses included in other income on the consolidated statements of operations.

Investments in Unconsolidated Entities

We account for investments in less than 50% owned and more than 20% owned entities using the equity method of accounting. Because we have elected the fair value option for these securities, unrealized holding gains and losses during the period are included in other income within the consolidated statements of operations.

Fair Value of Financial Instruments

FASB ASC 825-10, Financial Instruments, requires disclosure of fair value information about financial instruments, whether or not recognized in the consolidated balance sheets.

Fixed Assets

The Company capitalizes all acquisitions of fixed assets in excess of $500. Fixed assets are stated at cost, net of accumulated depreciation. State and local use tax for equipment shipped from overseas is generally accrued on a quarterly basis at the time equipment is placed in service and is paid to the state in which the equipment is being utilized. Depreciation is computed using the straight-line method over the estimated useful lives of the assets and commences once the assets are ready for their intended use. Fixed assets are comprised of furniture, computer, office equipment, buildings and mining machines with assigned useful lives ofthree tothirty years.

The Company classifies mining machine deposit payments within “Deposits on mining equipment" in the consolidated balance sheets. As mining machines are received, the respective cost of the mining machines plus the related shipping and customs fees are reclassified from “Deposits on mining equipment" to “Fixed assets, net” in the consolidated balance sheets.

The Company operates in an emerging industry for which limited data is available to make estimates of the useful economic lives of mining machines. To the extent that any of the assumptions underlying management’s estimate of useful life of its mining machines are subject to revision in a future reporting period, either as a result of changes in circumstances or through the availability of greater quantities of data, then the estimated useful life could change and have a prospective impact on depreciation expense and the carrying amounts of these assets.

Right to Use Assets

The Company capitalizes all leased assets pursuant to ASU 2016-02, “Leases (Topic 842)”, which requires lessees to recognize right-of-use assets and lease liability, initially measured at present value of the lease payments, on its balance sheets for leases with terms longer than 12 months and classified as either financing or operating leases. As of December 31, 2025 and 2024, right to use assets, net of accumulated amortization, was approximately $0.7 million and $0.9 million.

Impairment of Long-Lived Assets

Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment amount is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. There was $5.4 million andnil impairment of long-lived assets for the years ended December 31, 2025 and 2024. Refer to Note 5.

Revenue Recognition - Bitcoin Mining

Our accounting policy on revenue recognition for our Bitcoin mining segment is provided below.

Step 1: The Company enters into a contract with a Bitcoin mining pool operator (i.e., the customer) to provide hash calculations to the mining pools. The contract is terminable at any time by either party and thus the contract term is shorter than a 24-hour period and the contracts are continuously renewed. The Company provides services solely for Bitcoin mining and the fees charged during the year ended December 31, 2025 by the customer were approximately 0.5% of the total daily Bitcoin mined.

Applying the criteria per ASC 606-10-25-1, the contract arises at the point that the Company provides hash calculations to the customer, which is considered at contract inception, because customer consumption is in tandem with daily earnings of delivery of the computing power.

Step 2: In order to identify the performance obligations in a contract with a customer, the Company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met:

• The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct); and

• The entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

Based on these criteria, the Company has a single performance obligation in providing hash calculations to the customer. The continuous renewal options do not represent material rights because they do not provide the customer with the right to purchase additional goods or services at a discount. Specifically, the contract is renewed at the same terms, conditions, and rate as the current contract which is consistent with market rates, and there are no upfront or incremental fees in the initial contract. The Company has full control of the mining equipment utilized in the mining pool and if the Company determines it will increase or decrease the processing power of its machines and/or fleet (i.e., for repairs or when power costs are excessive) the computing power provided to the customer will be reduced.

Step 3: The transaction consideration the Company earns is non-cash consideration in the form of Bitcoin, which the Company measures at fair value at 23:59:59 UTC on the date of contract inception using the Company's principal market for Bitcoin. Although the contract renews continuously throughout the day, and thus the value of the consideration should be assessed continuously throughout the day, the Company has concluded that using the 23:59:59 UTC Bitcoin price each day does not result in a materially different outcome. According to the Customer contract, daily settlements are made to the Company by the Customer based on the hash calculations provided over contract periods and the payout is made the following day. When participating in ratable share pools, in exchange for providing hash calculations the Company is entitled to a fractional share of the Bitcoin award the Customer receives for successfully adding a block to the blockchain, plus a fractional share of the transaction fees attached to that blockchain. The Company’s fractional share is based on the proportion of hash calculations the Company contributed to the Customer compared to the total hash calculations contributed by all mining pool participants in solving the current algorithm. When participating in a Full Pay Per Share (“FPPS”) mining pool, in exchange for providing hash calculations to the pool the Company is entitled to compensation, calculated on a daily basis, at an amount that approximates the total Bitcoin that could have been mined using the Company’s hash calculations, calculated on a look-back basis across previous blocks using the pools hash rate index. The transaction consideration the

Company earns is variable since it is dependent on the daily computing power provided by the Company under the FPPS model and total Bitcoin earned by the under the ratable share model. There are no other forms of variable considerations, such as discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties, or other similar items. The sum of the block reward and transaction fees earned by the Company is reduced by mining pool fees charged by the Customer for operating the mining pool based on a rate schedule per the mining pool contract. The mining pool fee is only incurred to the extent we perform hash calculations and generate revenue in accordance with the customer’s payout formula during the continuously renewed contract periods beginning mid-night UTC and ending 23:59:59 UTC daily. This amount represents consideration paid to the customer and is thus reported as a reduction in revenue.

Step 4: The transaction price is allocated to the single performance obligation upon verification for the provision of hash calculations to the customer, and total Bitcoin rewards earned by the pool, when applicable under a ratable share model. There is a single performance obligation (i.e., hashrate) for the contract; therefore, all consideration from the customer is allocated to this single performance obligation.

Step 5: The Company’s performance is complete in transferring the hash calculations over-time to the customer and the customer obtains control of the contributed hashrate. The performance obligation of hash calculations is fulfilled over time, as opposed to a point in time, because the Company provides the hash calculations throughout the contract period and the customer simultaneously obtains control of it and uses the asset to produce Bitcoin. There are no deferred revenues or other liability obligations recorded by the Company since there are no payments in advance of the performance. Bitcoin earned by the Company through its mining activities are included within operating activities on the accompanying consolidated statements of cash flows.

Cost of Revenues - Digital Assets

The Company includes energy costs and external co-location mining hosting fees in cost of revenues. Depreciation of mining machines is included within “Depreciation and amortization” in the consolidated statements of operations.

Curtailment and Energy Sales

Forour Oklahoma mining site, the energy costs are incurred at market price with no power purchase agreements for a fixed future rate. The Company has a “Will Serve agreement” with the local energy company that provides credits based on amount of electricity provided and based on reducing power consumption upon peak demand times. The Company utilizes a third-party broker to facilitate ourparticipation in demand response programs offered by the Southwest Power Pool (“SPP”), a regional transmission organization that manages the electric grid and wholesale power for the central United States. The broker analyzes our forecasted power consumption, market value of Bitcoin and day-ahead energy prices to determine whether our estimated mining revenues will exceed the energy cost incurred by the Company to operate our mining equipment (“breakeven price”) for each hour of the following day. If our estimated revenues are predicted to fall below the breakeven price, our power will be curtailed, and we will receive compensation from the SPP in exchange for supplying our power to the grid (“Energy Sales”). If estimated revenue is above the breakeven price, the Company receives compensation for pledging our estimated power usage as available for curtailment in the event SPP needs to adjust load for grid balancing (“Curtailment”). We received $0.7 million of compensation related to curtailment and energy sales during the year ended December 31, 2025 which is recorded as “Curtailment and energy sales” in the consolidated statements of operations. There wereno curtailment and energy sales in the year ended December 31, 2024.

Utility Deposit Bonds

In lieu of maintaining a cash utility deposit with the energy provider for our Oklahoma mining site, we purchased a utility deposit bond which guarantees that the energy provider would receive payment from the third party surety up to an amount of $717 thousand in the event the Company defaults on utility charges. The Company pays an annual premium of $14 thousand for the utility deposit bond and the cost of the bond is amortized ratably over thetwelve month coverage period.

Revenue Recognition - Specialty Finance

Accounting Standards Codification (“ASC”) 606 of the Financial Accounting Standards Board (“FASB”) states an entity needs to conclude at the inception of the contract that collectability of the consideration to which it will be entitled in exchange for the goods and services that will be transferred to the customer is probable. That is, in some circumstances, an entity may not need to assess its ability to collect all of the consideration in the contract. The Company provides funding to Associations by purchasing their rights under delinquent accounts from unpaid assessments due from property owners. Collections on the Accounts may vary greatly in both the timing and amount ultimately recovered compared with the total revenues earned on the Accounts because of a variety of economic and social factors affecting the real estate environment in general.

The Company’s contracts with its specialty finance customers have very specific performance obligations. The Company has determined that the known amount of cash to be realized or realizable on its revenue generating activities cannot be reasonably estimate and as such, classifies its finance receivables as nonaccrual and recognizes revenues in the accompanying statements of income on the cash basis or cost recovery method in accordance with ASC 310-10, Receivables. The Company’s operations also consist of rental revenue earned from tenants under leasing arrangements which provide for rent income. The leases have been accounted for as operating leases. For operating leases, revenue is recorded based on cash rental payments was collected during the period. The Company analyzed its remaining revenue streams and concluded there were no changes in revenue recognition with the adoption of the new standard.

Under ASC 606, the Company applies the cash basis method to its original product and the cost recovery method to its special product as follows:

Finance Receivables—Original Product: Under the Company’s original product, delinquent assessments are funded only up to the Super Lien Amount as discussed above. Recoverability of funded amounts is generally assured because of the protection of the Super Lien Amount. As such, payments by unit owners on the Company’s original product are recorded to income when received in accordance with the provisions of the Florida Statute (718.116(3)) and the provisions of the purchase agreements entered into between the Company and Associations. Those provisions require that all payments be applied in the following order: first to interest, then to late fees, then to costs of collection, then to legal fees expended by the Company and then to assessments owed. In accordance with the cash basis method of recognizing revenue and the provisions of the statute, the Company records revenues for interest and late fees when cash is received. In the event the Company determines the ultimate collectability of amounts funded under its original product are in doubt, payments are applied to first reduce the funded or principal amount.

Finance Receivables—Special Product (New Neighbor Guaranty program): During 2012, the Company began offering associations an alternative product under the New Neighbor Guaranty program whereby the Company will fund amounts in excess of the Super Lien Amount. Under this special product, the Company purchases substantially all of the delinquent assessments owed to the association, in addition to all accrued interest and late fees, in exchange for payment by the Company of (i) a negotiated amount or (ii) on a going forward basis, all monthly assessments due for a period up to 48 months. Under these arrangements, the Company considers the collection of amounts funded is not assured and under the cost recovery method, cash collected is applied to first reduce the carrying value of the funded or principal amount with any remaining proceeds applied next to interest, late fees, legal fees, collection costs and any amounts due to the Association. Any excess proceeds still remaining are recognized as revenues. If the future proceeds collected are lower than the Company’s funded or principal amount, then a loss is recognized.

Net Commission Revenue: The Company acts as an agent in providing health travel insurance policies. As a result, the Company revenue is recorded at net. The Company has determined that the known amount of cash to be realized or realizable on its revenue generating activities can be reasonably estimated and as such, classifies its receivables as accrual and recognizes revenues in the accompanying statements of income on the accrual basis. If a policy is not effective as of the end of a period, then the associated revenue and underwriting costs are deferred until the effective date. The majority of the commission revenue is underwritten by two policy underwriters who pays the Company commissions.

Hosting Contracts

On May 6, 2024, the Company entered into a hosting agreement (the “Arthur Hosting Agreement”) with Tech Infrastructure JV I LLC (“Tech Infrastructure”) pursuant to which Tech Infrastructure agreed to host approximately 3,000 of the Company's Bitcoin Miner S19J Pro machines at a secure location and provide power, maintenance and other services specified in the contract with a term of nine months. On December 6, 2024, US Digital completed the previously announced acquisition (the “Acquisition”) of the hosting facility located in Oklahoma, and the Arthur Hosting Agreement was subsequently terminated. Following the completion of the Acquisition, the Company continues to operate the hosting site under its own management. Refer to Note 3.

On September 5, 2022, the Company, through its wholly-owned subsidiary US Digital, entered into a hosting agreement (the “Core Hosting Agreement”) with Core Scientific Inc. (“Core”) pursuant to which Core, under various additional orders, agreed to host approximately 3,000 of the Company's Bitcoin miner machines at a secure location and provide power, maintenance and other services specified in the contract with a term of one year, with automatic renewals unless either party notifies the other party in writing not less than ninety (90) calendar days before such renewal of its desire for the order not to renew unless terminated sooner pursuant to the terms of the Core Hosting Agreement. The Company entered into a number of amendments in 2023 and 2024 that resulted in Core hosting a total of approximately 4,870 miners as of March 31, 2024. Pursuant to the terms of the amended Core Hosting Agreement, the terms of the hosting agreement expired with respect to approximately 4,000 miners on May 31, 2024 while the terms of the hosting arrangement continued with respect to approximately 800 miners through December 31, 2024. Beginning January 1, 2025, the Core Hosting Agreement was renewed on a month-to-month basis through April 30, 2025 after which the agreement was terminated and the machines were moved to our Oklahoma site.

Coupon Sales

From time to time the Company receives coupons from Bitmain to incentivize purchases of equipment. Coupons have a stated face value in dollars and can be applied against future invoices for purchased machines. Coupons are transferable and there are not restrictions on the sale to third parties. Occasionally, the Company sells coupons to third parties in exchange for cash consideration or digital assets. As there is currently no active market for the buying and selling of Bitmain coupons, the Company has determined that the fair value of coupons received is nil at the time of receipt therefore revenue associated with the sale of such coupons is not recognized until the sale transaction has been completed and consideration has been received from the third party. During the year ended December 31, 2025 and December 31, 2024, the Company sold Bitmain coupons fornil and $4 thousand, respectively, which was recognized as other income within "Other income - coupon sales" in the consolidated statements of operations.

Stock-Based Compensation

The Company records all equity-based incentive grants to employees and non-employee members of the Company’s Board of Directors in operating expenses in the Company’s consolidated statements of operations based on their fair values determined on the date of grant. Stock-based compensation expense, reduced for estimated forfeitures, is recognized over the requisite service period of the award, which is generally the vesting term of the outstanding equity awards. The expense attribution method is straight-line or accelerated graded-vesting depending on the nature of the award.

Income Taxes

Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due plus deferred taxes resulting primarily from the tax effects of temporary differences between financial and income tax reporting. Deferred 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.

Under ASC 740-10-30-5, Income Taxes, deferred tax assets should be reduced by a valuation allowance if, based on the weight of available evidence, it is more-likely-than-not (i.e., a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. The Company considers all positive and negative evidence available in determining the potential realization of deferred tax assets including, primarily, the recent history of taxable earnings or losses. Based on operating losses reported by the Company in prior years, the Company concluded there was not sufficient positive evidence to overcome this recent operating history. As a result, the Company believes that a valuation allowance is necessary based on the more-likely-than-not threshold noted above. During the year ended December 31, 2025, the Company increased the valuation allowance to approximately $21.7 million to reflect a change in deferred tax assets. During the year ended December 31, 2024, the Company increased the valuation allowance to $16.2 million to reflect a change in deferred tax assets.

On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act ("OBBBA”) of 2025 which includes, among other provisions, changes to the U.S. corporate income tax system, including the allowance of 100% expensing of qualified asset expenditures, immediate expensing of qualifying domestic research and development expenses and permanent extensions of certain other provisions within the Tax Cuts and Jobs Act. Certain provisions are effective for 2025, beginning January 19, 2025. We do not expect that this guidance will have a material impact on our financial position and our results of operations.

Prior to the Company’s initial public offering in October 2015, the taxable earnings of the Company's predecessor were included in the tax returns of its members (separate limited liability companies) and taxed depending on personal tax situations. In connection with the Company’s initial public offering, the members contributed ownership interests to the Company (a newly form C-Corporation) and all earnings subsequent to that date (October 23, 2015) are subject to taxes and reflected in the Company’s consolidated financial statements.

Loss Per Share

Basic loss per share is calculated as net loss to common stockholders divided by the weighted average number of common shares outstanding during the period (as adjusted to give effect to the Reverse Stock Split).

Diluted loss per share for the period equals basic loss per share as the effect of any convertible notes, stock based compensation awards, cancellation of such awards or stock warrants would be anti-dilutive.

The anti-dilutive stock based compensation awards and convertible notes consisted of:

The following table illustrates the computation of basic and diluted EPS for the years ended December 31, 2025 and 2024:

Contingencies

The Company accrues for contingent obligations, including estimated legal costs, when the obligation is probable and the amount is reasonably estimable. As facts concerning contingencies become known, the Company reassesses its position and makes appropriate adjustments to the consolidated financial statements. Estimates that are particularly sensitive to future changes include those related to tax, legal and other regulatory matters.

Related Party

ASC 850 - Related Party Disclosures requires disclosure of related party transactions and certain common control relationships. The Company disclosures related party transactions and such transactions are approved by the Company’s Board of Directors. See Note 11.

Risks and Uncertainties

Funding amounts are secured by a priority lien position provided under Florida law (see discussion above regarding Florida Statute 718.116). However, in the event the first mortgage holder takes title to the property, the amount payable by the mortgagee to satisfy the priority lien is capped under this same statute and would generally only be sufficient to reimburse the Company for funding amounts noted above for delinquent assessments. Amounts paid by the mortgagee would not generally reimburse the Company for interest, administrative late fees and collection costs. Even though the Company does not recognize these charges as revenues until collected, its business model and long-term viability is dependent on its ability to collect these charges. In the event a delinquent unit owner files for bankruptcy protection, the Company may at its option be reimbursed by the Association for the amounts funded (i.e., purchase price) and all collection rights are re-assigned to the Association.

Non-cash Financing and Investing Activities

Digital assets transferred to digital assets - receivable -The Company pledged 145 Bitcoin collateral related to the Galaxy Loan Facility which was derecognized from the Company’s ending Bitcoin balance, and recorded in “Digital assets receivable, net” on the Company’s consolidated balance sheets. Refer to Note 4.

Initial recognition of Galaxy loan derivative - The Company recognized a debt discount and corresponding derivative liability at the inception of the Galaxy Loan facility during the year ended December 31, 2025.

Issuance of common stock as retainer for services - The Company issued 188,000 shares of common stock to vendors as retainer for advisory services. The total fair value of the shares at the time of issuance was $254 thousand, which was recorded as a prepaid expense.

Change in equity due to change in accounting principal ASC 350-60 - The Company has elected to early adopt the new guidance effective January 1, 2024 resulting in a $614 thousand cumulative-effect change to adjust the Company's Bitcoin held on January 1, 2024 with the corresponding entry to beginning accumulated deficit.

Financing of insurance premium – the Company financed the purchase of various insurance policies during the year ended December 31, 2025 and 2024 in the amount of approximately $904 thousand and $528 thousand, respectively, using a finance agreement.

ROU assets and operating lease obligation recognized- Due to the extension of its office building operating lease during the year ended December 31, 2024, the Company remeasured its lease liability and ROU asset associated with the lease. The Company also recognized a lease liability and ROU asset related to the acquired land lease as part of the Arthur acquisition (refer to Note 3). The total adjustment to the right-of-use asset and lease liability wasnil and $0.9 million for the years ended December 31, 2025 and 2024, respectively.

Tech infrastructure note receivable applied towards acquisition -during the year ended December 31, 2024, the Company acquired the Oklahoma site, of which $3.8 million of the purchase price was credited against outstanding loans, including accrued interest, made by the Company and its affiliates to Seller.

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)No. 2023-08, Intangible - Goodwill and Other -Crypto Assets (Subtopic 350-60)(“ASC 350-60”). ASC 350-60 requires entities with certain crypto assets to subsequently measure such assets at fair value, with changes in fair value recorded in net income in each reporting period. In addition, entities are required to provide additional disclosures about the holdings of certain crypto assets. Crypto assets that meet all the following criteria are within the scope of the ASC 350-60: (1) meet the definition of intangible assets as defined in the Codification (2) do not provide the asset holder with enforceable rights to or claims on underlying goods, services, or other assets (3) are created or reside on a distributed ledger based on blockchain or similar technology (4) are secured through cryptography (5) are fungible, and (6) are not created or issued by the reporting entity or its related parties. Bitcoin, which is the sole crypto asset mined by the Company, meets each of these criteria. For all entities, the ASC 350-60 amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. The Company elected toearly adopt the new guidance effective January 1, 2024 resulting in a $614 thousand cumulative-effect change to adjust the Company’s Bitcoin held on January 1, 2024 with the corresponding entry to beginning accumulated deficit.

In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which addresses improvements to reportable segment disclosures. The guidance is effective for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, applied retrospectively with early adoption permitted. The new guidance requires incremental disclosures in annual and interim periods related to a public entity's reportable segments, particularly on segment expenses, but does not change the definition of a segment, the method for determining segments, or the criteria for aggregating operating segments into reportable segments. The Company has applied the new guidance to its segment disclosures. Refer to Note 13.

On December 14, 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires more detailed income tax disclosures. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company has reflected the enhanced disclosure requirements within Note 10.

There were no other new accounting pronouncements adopted during the year ended December 31, 2025 or 2024 that were determined to have a material effect on the Company's financial position, results of operations or cash flows.

Recently Issued Accounting Pronouncements

The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”) issued the Financial Accounting Standards Board (“FASB”). ASUs issued by FASB, but which are not yet effective, were assessed and determined to be either not applicable to the Company or to have an insignificant impact on the consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires public business entities to provide additional disclosures in the notes to financial statements, disaggregating specific expense categories within relevant income statement captions. The prescribed categories include purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation, depletion, and amortization related to oil-and-gas producing activities. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its financial statement disclosures.

In November 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2024-04, Debt—Debt with Conversion and Other Options: Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”), which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion or extinguishments of convertible debt. ASU 2024-04 is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact of the standard on its consolidated financial statements and related disclosures.

Note 2. Revisions to Previously Issued Financial Statements

In connection with the preparation of the Company’s Consolidated Financial Statements as of and for the period ended December 31, 2024, the Company identified errors in relation to the accounting for the change in depreciation life for the Bitcoin miners when accelerating such life as of January 1, 2024 from 60 months to 48 months.

The Company has a history of cash loses and as such believes most investors rely on EBITDA, Core EBITDA and cash used/provided by operations on the statement of cash flows as metrics for evaluating the performance of the Company. As such the overstatement of depreciation expense does not impact such metrics.

The errors did have an impact on net property, plant and equipment and depreciation expense of approximately $449,800 as of and for the three months ended March 31, 2024, approximately $464,300 as of and for the three months ended June 30, 2024 and approximately $413,800 as of and for the three months ended September 30, 2024. The error did not impact revenues or net loss before income tax expense for any of the fiscal years ended December 31, 2025 or 2024 as the errors were corrected during the three months ended December 31, 2024.

The Company assessed the materiality of the errors, including the presentation on prior periods consolidated financial statements, on a qualitative and quantitative basis in accordance with SEC Staff Accounting Bulletin (“SAB”) No. 99, Materiality and SAB No. 108 on Quantifying Financial Statement Errors, codified in Accounting Standards Codification Topic 250, Accounting Changes and Error Corrections. The Company concluded that these errors and the related impacts did not result in a material misstatement of our previously issued unaudited consolidated interim financial statements as of and for the periods ended March 31, 2024, June 30, 2024 and September 30, 2024. The Company corrected the relevant prior periods of our consolidated financial statements and adjusted the disclosures included within Note 5.

A summary of the corrections to the impacted financial statement line items from our previously issued financial statements are presented below:

Note 3. Acquisitions

Columbus, Mississippi

On September 16, 2025, the Company, through its wholly-owned subsidiary US Digital Mining Mississippi LLC (the “Acquirer”) completed an acquisition from Greenidge Mississippi LLC (“Seller”) of the approximate 6.4 acre parcel of real property, including substantially all of the business assets of Seller located at the property, excluding any Bitcoin miners (the “Transaction”), pursuant to an Asset Purchase Agreement, dated as of August 1, 2025, entered into between the Acquirer and Seller. The total consideration paid by the Acquirer to Seller in the Transaction was approximately $3.9 million.

In connection with the completion of the Transaction, on September 16, 2025, the Company entered into and closed the acquisition (the “Miner Acquisition”) contemplated by that certain Bitcoin Miner Purchase and Sale Agreement (the “Miner Purchase Agreement”) with Greenidge Generation LLC, an affiliate of the Seller (the “Miner Seller”), pursuant to which the Company purchased and acquired from the Miner Seller approximately 2,330 Bitmain Antminer S19, S19 Pro and S19 J Pro Bitcoin miners (collectively, the “Miners”) of the Miner Seller for an aggregate purchase price of approximately $362 thousand, less approximately $32 thousand in sales taxes and fees paid by the seller. The closing of the transactions contemplated by the Miner Purchase Agreement was completed on September 16, 2025, contemporaneously with the consummation of the Transaction.

The Company accounted for the Transaction and Miner Acquisition, collectively, as an acquisition of a business under ASC Topic 805 – Business Combination due to the retention of employees critical to mining operations and obtaining control of all assets and substantive processes necessary to continue Bitcoin mining operations after the close of the acquisition. The purpose of the acquisition was to expand the Company's Bitcoin mining operations.

The acquired business contributed revenues of $700 thousand and a loss of $435 thousand to the Company for the period from September 15, 2025 to December 31, 2025. The following unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2024:

These pro forma amounts have been calculated after applying the Company's accounting policies and adjusting the results of the Mississippi site to reflect the depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant, and equipment, and intangible assets had been applied from January 1, 2024.

The Company incurred $88 thousand in relation to acquisition related costs which were included in “Professional Fees” in the consolidated statements of operations for the year ended December 31, 2025. The year ended December 31, 2025 supplemental pro forma net loss were adjusted to exclude the $88 thousandof acquisition-related costs, and instead, these costs are reflected in pro formanet loss for the year ended December 31, 2024 in the table above.

The following table summarizes the purchase price allocation for the acquisition.

Calumet, Oklahoma

On December 6, 2024, the Company acquired a 15 MW mining site in Calumet Oklahoma from Arthur Mining for approximately $7.3 million and incurred an additional $118 thousand of purchase costs associated with the transaction. This acquisition included a lease for real property, power supply agreement, interconnection rights and mining site equipment. The transaction was accounted for as an asset acquisition.

The Company allocated the total consideration paid, including transaction costs, to the acquired assets based on their relative fair value, as follows:

The Company determined that the acquired land lease qualifies as a finance lease due to the existence of a purchase option. As of December 31, 2024 a right of use asset and lease liability of $0.6 million was recognized based on the net present value of lease payments discounted using an estimated incremental borrowing rate of 10.1%.

Note 4. Digital Assets and Digital Assets Receivable, net

Digital Assets

Digital assets consisted of the following:

The carrying basis represents the valuation of Bitcoin at the time the Company earns the Bitcoin through mining activities. The Fair value of Bitcoin was determined using Level 1 inputs. As of December 31, 2025 and December 31, 2024 approximately 88 Bitcoin and 54 Bitcoin, respectively, (with an approximate fair value of $7.7 million and $5.0 million, respectively) were held in a custody account as collateral for the Liebel loans. Accordingly, the Company is restricted in its ability to use the Bitcoin separately held as collateral in the operation of its business. The Company regularly moves the collateral Bitcoin out of the collateral account when the fair value of such Bitcoin increases and deposits additional Bitcoin into the collateral account when the fair value of such Bitcoin decreases.

The following table presents a roll-forward of Bitcoin for the year ended December 31, 2025 and 2024, based on the fair value model under ASU 2023-08:

Digital Assets Receivable, net

As of December 31, 2025 and 2024 the Company has pledged 145 Bitcoin andnil, respectively, as collateral for a draw under the Galaxy Loan Facility. While the loan is outstanding, Galaxy has the right and the ability to use the digital assets at its discretion, including the ability to sell or pledge the borrowed digital assets to third parties. At the conclusion of the loan, Galaxy is obligated to return the same type and quantity of digital assets as those pledged by the Company. As the collateral pledged related to the Galaxy Loan Facility can be rehypothecated, the Bitcoin is derecognized from the Company’s ending Bitcoin balance, and recorded in “Digital assets receivable, net” on the Company’s consolidated balance sheets.

The digital assets receivable were initially measured upon transfer at fair value and subsequently remeasured at fair value as of December 31, 2025. A decrease in fair value of $3.0 million was recognized within “Loss on fair value of digital assets receivable” on the consolidated statements of operations.

The digital assets receivable balance was evaluated for possible credit losses, in accordance with ASC 326 - Financial Instruments - Credit Losses. An allowance for credit losses of $9 thousand are included in “Credit loss on digital assets receivable” on the consolidated statements of operations.

A summary of digital assets receivable, net is as follows:

Note 5. Fixed Assets and Intangible Assets, net

The components of fixed assets as of December 31, 2025 and 2024 are as follows:

As of December 31, 2025 and 2024, there were approximately 7,200 and 5,840 mining machines, respectively, at various hosting sites. The Company’s depreciation expense recognized for the years ended December 31, 2025 and 2024 was approximately $7.9 million and $7.8 million, respectively.

We purchased 270 S21+ Bitmain machines in December 2024 for an aggregate purchase price of approximately $1.0 million, net of coupons and credits. The machines were delivered in April 2025 and were subsequently sold for approximately $1.0 million in May 2025.

Impairment loss and loss on disposal

Due to the sharp decrease in Bitcoin price during the fourth quarter of the year ended December 31, 2025 management performed a recoverability test to compare the carrying amount of mining machines to the undiscounted future cash flows expected to be generated by the assets. The test concluded it was more likely than not that impairment was present therefore a fair value assessment was performed using a sales comparable approach. Based on the fair value assessment, an impairment loss of $5.3 million was determined as the amount by which the carrying amount of the mining machines exceeded their fair value. Additionally, during the fourth quarter of the year ended December 31, 2025,729 S19 miners in storage were deemed inoperable and an impairment charge of $63 thousand was recorded.

In order to accommodate a shipment of S 21 mining machines in April 2024, management identified 365 mining machines at a Core hosting facility that would require relocation. As part of its impairment testing management considered the possible cashflows and probabilities associated with the relocation and continued use of 365 mining machines at a separate hosting facility location and the potential sale of such assets to a third party. Based on the assessment performed, management concluded a sale was probable and an impairment of $1.2 million on the mining machines was recorded as of March 31, 2024, which was calculated as the net carrying value of the 365 mining machines of $1.3 million less the sales price of $79 thousand.

An impairment loss of $5.4 million and $1.4 million was recorded on our consolidated statements of operations as “Impairment loss on mining equipment” for the year ended December 31, 2025 and 2024, respectively.

Approximately $502 thousand and $136 thousand of loss related to the write-off of mining machines was recorded within“Loss on disposal of assets” in the consolidated statements of operations during the years ended December 31, 2025 and 2024, respectively.

Intangible assets

Intangible assets as of December 31, 2025 and 2024 consist of the following:

Intangible assets activity for the years ended December 31, 2025 and 2024 is as follows:

During the year ended December 31, 2025, as part of the Mississippi Site acquisition the Company acquired interconnection rights with a fair value of approximately $1.1 million. During the year ended December 31, 2024, as part of the Arthur acquisition the Company acquired certain power purchase contracts and interconnection rights with a fair value of approximately $5.5 million. Refer to Note 3.

The Company expects to record amortization expense of intangible assets over the next 5 years and thereafter as follows:

Note 6. Deposit on Mining Equipment and Hosting Services

As further described in Note 1, the Company has entered into a series of mining machine purchase agreements, hosting and colocation service agreements in association with our Bitcoin mining operations which required deposits to be paid in advance of the respective asset or service being received.

As of December 31, 2025 and 2024, the Company had a total of $2 thousand and $467 thousand classified as “Deposits on mining equipment”, respectively.

As of December 31, 2025 and 2024, the Company had a total ofnil and $0.2 million in prepaid hosting services and hosting deposits classified as“Prepaid expenses and other assets”, respectively.

Note 7. Investments

Marketable Securities

Our marketable equity securities are publicly traded stocks measured at fair value using quoted prices for identical assets in active markets and classified as Level 1 within the fair value hierarchy. Marketable equity securities as of December 31, 2025 and December 31, 2024 are as follows:

Notes Receivable from Seastar Medical Holding Corporation.

On October 28, 2022, LMFAO Sponsor LLC (“Sponsor”) and SeaStar Medical Holding Corporation (“SMHC”) amended, restated, and consolidated certain previously issued promissory notes into one consolidated amended and restated promissory notes (the “Amended Sponsor Note”). On January 29, 2024, Seastar fully repaid the remaining balance of principal and accrued interest on the Notes which totaled approximately $1.4 million as of the payoff date. As of December 31, 2025 and 2024, there wasnil principal andnil of accrued interest on the consolidated balance sheets.

Long-term Investments

Tech Infrastructure JV I LLC

On June 6, 2024, we, through our wholly-owned subsidiary LMFA Financing, LLC (“LMFAF”), entered into a Loan Agreement (the “Loan Agreement”) with Tech Infrastructure JV I LLC (“Tech Infrastructure”), pursuant to which LMFAF agreed to extend to Tech Infrastructure a non-revolving credit line of up to $2.5 million (the “Loan”) to fund the completion and build out of a 15 MW hosting facility in Calumet, Oklahoma (the “Calumet Hosting Facility”). Concurrent with entering into the Loan Agreement, US Digital Mining and Hosting Oklahoma, LLC, a subsidiary of the Company, entered into a hosting services agreement with Arthur Digital Assets, Inc. (“Arthur”) under which 3,000 of the Company’s Bitmain Antminer S19J Pro machines were hosted at the Calumet Hosting Facility upon completion of the buildout. The Loan Agreement provided that Tech Infrastructure has the right to draw down advances of the Loan to fund specifically identified expenditures relating to the build-out of the Calumet Hosting Facility. On July 16, 2024 the Loan was amended to increase the credit line to $2.9 million and the site became active as of July 28, 2024. The Loan bore interest at a rate equal to 14% per annum, simple interest, through the date on which Arthur began charging market pricing to US Digital Mining at the Hosting Facility (the “Change Date”), and 18% per annum, simple interest, thereafter. Interest would accrue through the Change Date and be paid monthly after the Change Date, and payment of principal would be amortized over a period of 24 months following the Change Date. All unpaid principal and accrued but unpaid interest would become due and payable 24 months after the Change Date. The Loan was secured by all of the personal property assets of Tech Infrastructure and a pledge of Arthur Group Inc.’s equity interest in Tech Infrastructure.

As described in Note 3, on December 6, 2024 the Company completed the Arthur Acquisition. Of the total $7.3 million purchase price, $3.8 million was credited against outstanding loans, including accrued interest, made by the Company and its affiliates to Seller.

A rollforward of loan activity is as follows:

SeaStar Medical Holding Corporation - Warrants

The Company, through its affiliate LMFA Sponsor LLC (“Sponsor”), owns an aggregate 5,738,000 private placement warrants in SeaStar Medical Holding Corporation, a Delaware corporation (“SeaStar Medical”). As of June 7, 2024, Seastar Medical effected a 25-for-1 reverse stock split (the "Seastar Reverse Split”), and, after adjustment, the private placement warrants are exercisable into 229,520 shares of common stock.

Thefair value of the private placement warrants is classified as Level 3 in the fair value hierarchy as the calculation is dependent upon company specific adjustments to the observable trading price of Seastar’s public warrants for lack of marketability. Subsequent changes in fair value will be recorded in the consolidated statements of operations during the period of the change. As of December 31, 2025 and 2024, our re-measurement of the fair value of the private placement warrants resulted in an unrealized loss of approximately$4 thousand and $153 thousand, respectively. The unrealized loss is included within “Unrealized loss on investment and equity securities" within the consolidated statements of operations.

Long-term investments for the SMHC warrants consist of the following:

SeaStar Medical Holding Corporation - Common Stock

As of December 31, 2025 and 2024, Sponsor held 103,500 shares, or approximately 0.30% and 1.7%, respectively, of the total common shares of SMHC, along with 229,520 private placement warrants. Taking into consideration the approximately 30% minority interest in Sponsor, the percentage of ownership in the total common shares of SMHC that is attributable to the Company is approximately 0.2%. The presented amounts do not reflect the 10 for 1 reverse stock split that became effective in January 2026.

Our investment in SMHC common stock qualifies for equity-method accounting, for which we have elected the fair value option which requires the Company to remeasure our retained interest in SMHC at fair value and include any resulting adjustments as part of a gain or loss on investment. The fair value calculation related to our retained interest in SMHC is based upon the observable trading price of SMHC's Class A common stock.

The fair value of our retained interest in SeaStar Medical's common stock is classified as Level 1 in the fair value hierarchy as the fair value is based upon the observable trading price of ICU common stock. The trading price of ICU common stock as of December 31, 2025 and 2024 was $0.24 per share and $1.94 per share, respectively.

Subsequent changes in fair value will be recorded in the income statement during the period of change. As of December 31, 2025 and 2024, our re-measurement of the fair value of ICU common stock resulted in an unrealized loss of approximately $0.2 million and unrealized loss of approximately $0.9 million, respectively. The unrealized loss is included within “Unrealized loss on investment and equity securities” within the consolidated statements of operations.

The net unrealized loss on securities from the Company’s investment in SMHC's common stock and warrants totaled $0.2 million and $1.1 million for the years ended December 31, 2025 and 2024, respectively.

Receivable from the sale of Symbiont assets

On December 26, 2023, the Company entered into an asset purchase agreement with Platonic Holdings, Inc. (“Platonic”) pursuant to which we agreed to sell Symbiont intangible assets to Platonic. The sale closed on December 27, 2023. The sales proceeds were $2.0 million, of which $0.2 million was held in a customary indemnity escrow. Amounts held in escrow were recorded as “Receivable from the sale of Symbiont assets” in the consolidated balance sheets as of December 31, 2024. The $0.2 million escrow amount was received in January 2025.

Note 8. Debt and Other Financing Arrangements

Brown Family Enterprises

On May 13, 2024, the Company entered into a $1.5 million secured loan (“Secured Note”) with Brown Family Enterprises LLC (“Brown Family”) which pays ten percent (10%) interest per annum, simple interest on a monthly basis until the Secured Note is paid in full. The note's maturity date was initially May 14, 2025. The Company granted to the holders of the Secured Note a secured interest in substantially all of the Company's assets and interests.

On March 27, 2025, we entered into a first amendment to secured promissory note with Brown Family to increase the interest rate to eleven percent (11%) interest per annum, simple interest, payable on the maturity date. In addition, we agreed with Brown Family to extend the maturity date of the Brown Secured Note until March 31, 2026. On March 27, 2026, we entered into a second amendment to secured promissory note with Brown Family to extend the maturity date of the Brown Secured Note until June 30, 2026.

SE & AJ Liebel Limited Partnership

On August 6, 2024, the Company entered into a $5.0 million senior secured term loan agreement (“Original Loan Agreement”) with SE & AJ Liebel Limited Partnership (“SE&AJ”). The Senior Note is secured by Bitcoin which is held as collateral in a specified custody account. The Company has also granted SE&AJ a first perfected security interest in substantially all the assets of the Company.

Further, in connection with the Original Loan Agreement, the Company entered into an Intercreditor Agreement, dated August 6, 2024 (the “Intercreditor Agreement”), with Brown Family, pursuant to which the First Lien Obligations and the Second Lien Obligations (as each are defined in the Intercreditor Agreement) are subject to customary intercreditor arrangements. The loan bears interest at a rate of 12.0% per annum and will mature on August 6, 2026 (the “Maturity Date”). The Company will make monthly interest payments in the amount of approximately $50,000 each month until the Maturity Date, and on such date the entire principal balance, together with accrued and unpaid interest, shall become payable.

On September 15, 2025, the Company entered into an amendment of the Original Loan Agreement (the “Loan Agreement Amendment”) by and among the Company, each of LM Funding, LLC and US Digital, as guarantors (jointly and severally, the “Guarantors”), and SE&AJ, as lender (the “Lender”). Pursuant to the Loan Agreement Amendment, the Company obtained an additional loan of up to $2.0 million from the Lender (the “Additional Loan”), which is in addition to the $5.0 million loan that was made to the Company by the Lender under the Original Loan Agreement (the “Initial Loan”).

The Additional Loan bears interest at a rate of 12.0% per annum and will mature on September 15, 2027. As provided in the Loan Agreement Amendment and the Promissory Note issued by the Company thereunder (the “Promissory Note”), an amount equal to $1.3 million of the Additional Loan was funded on the date of the Loan Agreement Amendment, and the balance of the additional loan in an amount of up to $700,000 was funded on October 21, 2025. The Additional Loan is secured by the same collateral, security agreement, and pledge agreement, and is subject to the same guarantees, as the Initial Loan, provided that the minimum Bitcoin collateral value that is pledged to secure the loan has been increased to 110% of the outstanding principal amount of Initial Loan and Additional Loan. As of December 31, 2025 and 2024 Bitcoin valued at $7.7 million and $5.0 million, respectively, was held as collateral for the Initial Loan and Additional Loan.

On October 29, 2025, the Company entered into a Master Digital Currency Loan Agreement (the “Loan Agreement”) with Galaxy Digital LLC (“Lender”). The Loan Agreement establishes the terms and conditions pursuant to which the Company may, from time to time, borrow U.S. Dollars and/or specified digital currencies (each, a “Loan”), including Bitcoin, Ether, and other mutually agreed digital assets, from Lender (the “Loan Facility”). Loans under the Loan Facility may be structured as open loans, term loans, or collar loans, with the specific type, amount borrowed, specified fees, collateral pledged, maturity and other provisions for each Loan to be set forth in a written term sheet executed by the Company and Lender at the time of such Loan. Each Loan will be secured by cash or digital currency collateral, whereby the Company has granted Lender a first‑priority security interest in such collateral to secure the Company’s obligations underlying such Loan.

The Loan Agreement has an initial term of one year and will automatically renew for successive one‑year terms unless terminated in accordance with its terms. In addition to events of default, the Loan Agreement includes termination events such as loss or non-renewal of required licenses or regulatory authorizations, specified governmental or criminal proceedings against the Company or its key personnel, significant declines in net asset value or net worth beyond agreed thresholds, failures to deliver required financial statements or other reporting, and key person events where required management is not replaced with acceptable personnel.

On October 30, 2025, the Company made a draw under the Loan facility and borrowed a principal sum of $11 million and granted to Lender a security interest in 145 Bitcoin owned by the Company as collateral. Refer to Note 4.

Thesettlement amount of the loan is adjusted based on the Bitcoin price relative to a contractual floor and ceiling market price of Bitcoin (“Collar Feature”), and is cash settled. The Collar Feature is an embedded derivative requiring bifurcation under ASC 815-15.

Thefair value of the Collar Feature was calculated using a Black Scholes calculation using Level 3 inputs as of the loan inception date. Significant inputs include the volatility of Bitcoin observed for a similar term as the remaining term of the loan of 35.6% and short term treasury interest rates of 3.5%. The derivative, with a fair value of $237 thousand, was classified as a debt discount and amortized over the life of the contract. As of December 31, 2025 a gain on the change in the fair value of the derivative of $285 thousand was classified within “Unrealized gain on Galaxy loan derivative”. The derivative asset of $48 thousand andnil was classified as “Galaxy loan derivative” on the consolidated balance sheets as of December 31, 2025 and 2024.

Debt of the Company consisted of the following at December 31, 2025 and 2024:

Minimum required principal payments on the Company’s debt as of December 31, 2025 are as follows:

Note 9. Commitments and Contingencies

Leases

The Company leases certain office space and office equipment under non-cancelable operating leases. Leases with an initial term of one year or less are not recorded on the consolidated balance sheets, and the Company generally recognizes lease expense for these leases on a straight-line basis over the lease term. As of December 31, 2025, the Company’s long term operating leases have remaining lease terms of between 5-31 months and includes options to renew the leases. The exercise of lease renewal options is generally at the Company’s sole discretion. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants. As of December 31, 2025, the Company's long term financing land lease has a remaining lease term of 42 months and includes a purchase option.

The Company determines if an arrangement is a lease at inception. Operating lease ROU assets and current and long-term operating lease liabilities are separately stated on the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The present value of future lease payments are discounted using either the implicit rate in the lease, if known, or the Company’s incremental borrowing rate for the specific lease as of the lease commencement date. The ROU asset is also adjusted for any prepayments made or incentives received. The lease terms include options to extend or terminate the lease only to the extent it is reasonably certain any of those options will be exercised. Lease expense for operating leases are recognized on a straight-line basis over the lease term. For finance leases, amortization expense is recognized on a straight-line basis over the shorter of the useful life of the asset or the lease term and interest expense related to the lease is recognized using the interest method. The Company accounts for lease components (e.g., fixed payments) separate from the non-lease components (e.g., common-area maintenance costs).

The Company’s office lease is through July 31, 2028. Subsequent renewal options were not considered probable of being exercised as of December 31, 2025. This office space is in a building owned by a board member. The Company shares this space and the related costs associated with this operating lease with a related party (refer to Note 11) that also performs legal services associated with the collection of delinquent assessments. The related party has a sub-lease for approximately $2.5 thousand per month plus operating expenses for the year ended December 31, 2025 and 2024.

In connection with the Arthur acquisition (refer to Note 3) the Company determined that the acquired land lease qualifies as a finance lease due to the existence of a purchase option. As of December 31, 2024 a right of use asset and lease liability of $0.6 million was recognized based on the net present value of lease payments discounted using an estimated incremental borrowing rate of 10.1%.

Lease expense recognized for the years ended December 31, 2025 and 2024 was approximately $288 thousand and $169 thousand, respectively. Sublease income recognized for the years ended December 31, 2025 and 2024 was approximately $30 thousand and $30 thousand, respectively.

The following table presents supplemental balance sheet information related to operating leases as of December 31, 2025 and 2024:

The following table presents supplemental cash flow information and non-cash activity related to operating and finance leases for the years ended December 31, 2025 and 2024:

The following table presents maturities of lease liabilities on an undiscounted basis as of December 31, 2025:

Legal Proceedings

Except as described below, we are not currently a party to material pending or known threatened litigation proceedings. However, we frequently become party to litigation in the ordinary course of business, including either the prosecution or defense of claims arising from contracts by and between us and client Associations. Regardless of the outcome, litigation can have an adverse impact on us because of prosecution, defense, and settlement costs, diversion of management resources and other factors.

The Company accrues for contingent obligations, including estimated legal costs, when the obligation is probable and the amount is reasonably estimable. As facts concerning contingencies become known, the Company reassesses its position and makes appropriate adjustments to the consolidated financial statements. Estimates that are particularly sensitive to future changes include those related to tax, legal, and other regulatory matters.

Uptime Purchase Agreement Matter

In October 2021, we entered into a sale and purchase agreement (the “Uptime Purchase Agreement”) with Uptime Armory LLC (“Uptime”) pursuant to which US Digital agreed to purchase, and Uptime agreed to supply to US Digital, an aggregate of 18 modified 40-foot cargo containers (“POD5ive containers”) that were designed to hold and operate 280 S19 Pro Antminers manufactured by Bitmain. The purchase price of the POD5ive containers totals $3.15 million, of which $2.4 million or 75% was paid in 2021 as a non-refundable down payment and the remaining 25% was paid after Uptime delivered a “notice of completion” of the equipment in 2022. However, no containers have been delivered as of March 31, 2026.

On November 8, 2022, LMFA filed an action in Florida circuit court against Uptime and Bit5ive, LLC (the “Defendants”) in a case styled US Digital Mining and Hosting Co. LLC v. Uptime Armory, LLC and Bit5ive, LLC (Fla. 11th Cir. Ct., Nov. 8, 2022). In that action, we alleged breach of contract and violation of the Florida Deceptive and Unfair Trade Practices Act and are seeking, among other things, damages of $3.15 million for non-delivery of the 18 POD5ive containers. The Defendants filed a motion to compel confidential arbitration action. The court has now stayed the action in the Florida circuit court, and ordered the parties to confidential arbitration governed by the American Arbitration Association. We recorded an impairment charge of $3.15 million on our mining machine deposit in the fourth quarter of 2022. The arbitrator has ruled in favor of US Digital’s dispositive motions against Uptime Armory and Bit5ive. Uptime, Uptime Hosting, LLC, and Bit5ive, LLC have filed for Assignment for the Benefit of Creditors. US Digital’s Proof of Claim against Uptime and Uptime Hosting, LCC was filed in the Circuit Court of the Eleventh Judicial Circuit, in and for Miami-Dade County, Florida in the amount of the arbitrator’s award of $3.2 million (owed joint and several with Bit5ive, LLC). The likelihood and amount of recovery of the Company's outstanding claims cannot be estimated at this time.

Uptime Hosting Agreement Matter

In addition, in October 2021, US Digital also entered into a hosting agreement with Uptime Hosting LLC (the “Hosting Agreement”) to host the Company’s 18 POD5ive containers at a secure location and provide power, maintenance and other services specified in the contract for 6 cents per kilowatt with a term of one year. Under the Hosting Agreement we paid a deposit of $0.8 million in 2021 and were required to pay an additional deposit for each container three and nine months prior to delivery at the hosting site of $44 thousand and a final deposit for each container one month prior to arrival at the hosting site of $44 thousand. The deposits paid for hosting services under the Hosting Agreement are refundable. On June 29, 2022, the Company and Uptime Hosting LLC entered into a Release and Termination Agreement in which the Hosting Agreement was terminated and Uptime Hosting LLC agreed to pay the $0.8 million. We recorded an impairment charge of $0.8 million on our prepaid hosting deposit in the fourth quarter of 2022.

On September 2, 2022, LMFA filed in Florida circuit court a legal action against Uptime Hosting LLC in an action styled US Digital Mining and Hosting Co, LLC v. Uptime Hosting, LLC (Fla. 13th Cir. Ct. Sept. 2, 2022) for the return of the deposit and other damages, alleging breach of contract and violation of the Florida Deceptive and Unfair Trade Practices Act. LMFA has since amended its complaint, alleging (i) breach of contract against Uptime and Bit5ive, (ii) violation of Florida’s Uniform Fraudulent Transfer Act against Uptime; (iii) violation of Florida’s Uniform Fraudulent Transfer Act against Bit5ive; (iv) violation of Florida’s Uniform Fraudulent Transfer Act against Block Consulting and Robert Collazo (v) violation of Florida Fraudulent Asset Conversion against Block Consulting Services, 6301 Southwest Ranches, LLC, Robert D Collazo, Jr. and Elyam Moral-Collazo; (vi) violation of Florida Deceptive and Unfair Trade Practices Act against all Defendants, (vii) equitable lien against Robert D Collazo, Jr., Elyam Moral-Collazo and 6301 Southwest Ranches, LLC., and (viii) equitable lien against Defendants Robert D Collazo, Jr., Elyam Moral-Collazo and 6301 Southwest Ranches, LLC.

CFTC Enforcement Action

On September 30, 2024, the Commodity Futures Trading Commission (“CFTC”) filed an enforcement action in the U.S. District Court for the Southern District of Florida, styled Commodity Futures Trading Commission v. Traders Domain FX LTD d/b/a The Traders Domain, et al., Case No. 1:24-cv-23745-RKA (the “CFTC Action”). Among the named defendants were Algo Capital LLC (“Algo Capital”) and certain insiders and affiliates of Algo Capital previously involved in state court Assignment for the Benefit of Creditors (“ABC”) proceedings. The Company’s claims against Robert D Collazo, Uptime, Uptime Hosting LLC, Bit5ive LLC, Block Consulting Services, LLC, 6301 Southwest Ranches LLC were under the jurisdiction of the ABC proceedings therefore such claims are now a part of the CFTC Action.

On October 3, 2024, the District Court entered an order granting the CFTC’s motion for the appointment of a receiver (the “Receivership Order”). All assets that are collected from the individuals and entities named in the CFTC action will be remitted to the Receiver for administration and potential distribution under the supervision of the federal court. The receiver is currently in the process of identifying and recovering assets. The likelihood and amount of recovery of the Company's outstanding claims cannot be estimated at this time.

Note 10. Income Taxes

Prior to the Company’s initial public offering in October 2015, the earnings of the Company's predecessor, which was a limited liability company taxed as a partnership, were taxable to its members. In connection with the contribution of membership interests to the Company (a C-Corporation formed in 2015), the net income or loss of the Company after the initial public offering is taxable to the Company and reflected in the accompanying consolidated financial statements.

The Company performs an evaluation of the realizability of its deferred tax assets on a quarterly basis. The Company considers all positive and negative evidence available in determining the potential of realizing deferred tax assets, including the scheduled reversal of temporary differences, recent and projected future taxable income and prudent and feasible tax planning strategies. The estimates and assumptions used by the Company in computing the income taxes reflected in the accompanying consolidated financial statements could differ from the actual results reflected in the income tax returns filed during the subsequent year. Adjustments are recorded based on filed returns when finalized or the related adjustments are identified.

Under ASC 740-10-30-5, Income Taxes, deferred tax assets should be reduced by a valuation allowance if, based on the weight of available evidence, it is more-likely-than-not (i.e., a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. The Company considers all positive and negative evidence available in determining the potential realization of deferred tax assets including, primarily, the recent history of taxable earnings or losses. Based on operating losses reported by the Company in prior years, the Company concluded there was not sufficient positive evidence to overcome this recent operating history. As a result, the Company believed that a valuation allowance was necessary based on the more-likely-than-not threshold noted above. The Company has recorded a valuation allowance of approximately $21.7 million as of December 31, 2025 and $16.2 million as of December 31, 2024.

Significant components of the tax expense (benefit) recognized in the accompanying consolidated statements of operations for the years ended December 31, 2025 and December 31, 2024 are as follows:

The reconciliation of the income tax computed at the combined federal and state statutory rate of 0.0% for the years ended December 31, 2025 and 2024, respectively, to the income tax benefit is as follows:

(a) State taxes in Florida and Oklahoma make up the majority (greater than 50%) of the tax effect in this category

The significant components of the Company’s deferred tax liabilities and assets as of December 31, 2025 and December 31, 2024 are as follows:

As a result of various equity transactions prior to the incorporation, the former members of the Company's predecessor recognized taxable gains associated with redemption consideration and/or deficit capital accounts totaling approximately $5.25 million. In accordance with ASC 740-20-45-11, the Company accounted for the tax effect of the step up in income tax basis related to these transactions with or among shareholders and recognized a deferred tax asset and corresponding increase in equity of approximately $1.91 million. Federal net operating loss carryforwards of approximately $512 thousand related to 2015, $3.96 million related to 2016, $2.98 million related to 2017, $1.41 million related to 2018, $1.95 million related to 2019, and $5.1 million related to 2020 will expire in 2035,2036,2037,2038, respectively and net operating loss generated after January 1, 2018 will not expire. The Company's federal and state tax returns for the 2019 through 2024 tax years generally remain subject to examination by U.S. and various state authorities.

Pursuant to IRC §382 of the Internal Revenue Code, the utilization of net operating loss carryforwards and tax credits may be limited as a result of a cumulative change in stock ownership of more than 50% over athree year period. The Company underwent such a change and consequently, the utilization of a portion of the net operating loss carryforwards is subject to certain limitations.

Note 11. Related Party Transactions

Legal services for the Company associated with the collection of delinquent assessments from property owners was performed by a law firm Business Law Group (“BLG”) which was owned solely by Bruce M. Rodgers, the chairman and CEO of the Company, until and through the date of its initial public offering in 2015. Following the initial public offering, Mr. Rodgers transferred his interest in BLG to other attorneys at the firm through a redemption of his interest in the firm, and BLG is now under control of those lawyers. The law firm has historically performed collection work primarily on a deferred billing basis wherein the law firm receives payment for services rendered upon collection from the property owners or at amounts ultimately subject to negotiations with the Company.

On February 1, 2022, the Company consented to the assignment by Business Law Group (“BLG”) to the law firm BLG Association Law, PLLC (“BLGAL”) of the Services Agreement, dated April 15, 2015, previously entered into by the Company and Business Law Group, P.A. (the “Services Agreement”). The Services Agreement had set forth the terms under which Business Law Group, P.A. would act as the primary law firm used by the Company and its association clients for the servicing and collection of association accounts. The assignment of the Services Agreement was necessitated by the death of the principal attorney and owner of Business Law Group, P.A. On March 28, 2024, BLGAL and the Company reduced the monthly compensation payable to the law firm from $53 thousand to $43 thousand.

The Company had originally engaged BLG on behalf of many of its Association clients to service and collect the Accounts and to distribute the proceeds as required by Florida law and the provisions of the purchase agreements between LMF and the Associations. This engagement was subsequently assigned to BLGAL as described above. Ms. Gould, who is a Director of the Company, worked as the General Manager of BLG and works as the General Manager of BLGAL.

Amounts paid to BLGAL for the years ended December 31, 2025 and 2024 were approximately $516 thousand and $516 thousand, respectively.

Under the Services Agreement in effect during the years ended December 31, 2025 and 2024, the Company pays all costs (lien filing fees, process and serve costs) incurred in connection with the collection of amounts due from property owners. Any recovery of these collection costs are accounted for as a reduction in expense incurred. The Company incurred expenses related to these types of costs of $41 thousand and $33 thousand, during 2025 and 2024, respectively. Recoveries during the years ended December 31, 2025 and 2024 related to those costs were approximately $83 thousand and $74 thousand, respectively.

The Company also shares office space, personnel and related common expenses with BLGAL (previously BLG). All shared expenses, including rent, are charged to BLGAL based on an estimate of actual usage. Any expenses of BLGAL paid by the Company that have not been reimbursed or settled against other amounts are reflected as due from related parties in the accompanying consolidated balance sheets. BLGAL were charged a total of approximately $30 thousand and $30 thousand for the office sub-lease during the years ended December 31, 2025 and 2024, respectively.

Amounts payable to BLGAL as of December 31, 2025 and 2024 were approximately $48 thousand and $16 thousand, respectively.

Note 12. Stockholders’ Equity

Reverse Stock Split

On February 23, 2024, the Board approved a one-for-six (1:6) reverse split of the Company’s issued and outstanding common stock, par value $0.001 per share, pursuant to which every six outstanding shares of common stock was converted into one share of common stock (the “Reverse Stock Split”). The Reverse Stock Split was effected by the filing of an amendment to our Certificate of Incorporation on March 7, 2024 which provided that the Reverse Stock Split become effective at 12:01 a.m. eastern time on March 12, 2024. The amendment provides that no fractional shares shall be issued and, in lieu thereof, any person who would otherwise be entitled to a fractional share of common stock as a result of the Reverse Stock Split will be entitled to receive one share of common stock. The Company’s common stock began trading on The Nasdaq Capital Market on a split-adjusted basis on March 12, 2024. The Company has retroactively adjusted all share amounts and per share data herein to give effect to the Reverse Stock Split.

At the Market Program

On June 26, 2023, we entered into an equity distribution agreement with Maxim Group LLC pursuant to which we may from time to time offer and sell shares of our common stock under our shelf registration statement having an aggregate offering price of up to $4.7 million (the “2023 ATM Program”) in “at-the-market” offerings as defined in Rule 415 under the Securities Act. The ATM was not utilized and expired on June 26, 2024.

Stock Issuance – 2025

December 2025 Offering

On December 19, 2025, the Company and institutional investors (the “December Purchasers”) entered into a securities purchase agreement (the “Securities Purchase Agreement”), pursuant to which the Company issued to the December Purchasers, in a registered direct offering (the “December RDO”),1,822,535 shares (the “Shares”) of the Company’s common stock, pre-funded warrants to purchase 7,332,395 shares of common stock with an exercise price of $0.001 per share in lieu of Shares, and common warrants to purchase 9,154,930 shares of common stock with an exercise price of $0.71. The December RDO closed on December 22, 2025. The Company received aggregate gross proceeds from the December RDO of approximately $6.0 million, before deducting fees to the placement agent and other offering expenses payable by the Company.

Pursuant to the Securities Purchase Agreement, the Company agreed, contemporaneously with the closing of the December RDO, to reduce the exercise price of 3,472,740 outstanding common stock warrants issued on December 29, 2024 (the “Repriced Warrants”), held by an investor that participated in the December RDO, subject to stockholder approval. The Repriced Warrants had their exercise price reduced to $0.87 per share from $2.95 per share. In addition to the reduction in the exercise price of the Repriced Warrants, the Company agreed to extend the termination date of the Repriced Warrants to the five-year anniversary of the applicable stockholder approval date.

The price reset of the warrants was accounted for as an equity contract modification. The difference in fair value immediately before and after the price reset was determined to be $0.5 million and was recorded as a debit to issuance costs and a credit to APIC, with no net impact to equity.

Additionally, the outstanding August 2025 and 2021 public warrants to purchase an aggregate of 16,670,623 shares of Company common stock at an exercise price of $0.97 per share was reduced to $0.48 per share as a result of the offering. The price reset was accounted for as a deemed dividend. Loss attributable to common shareholders was increased by the calculated value transferred to the holder of $1.1 million inthe basic and diluted EPS calculations for the year ended December 31, 2025.

October 2025 Stock Repurchase

On October 29, 2025, the Company entered into Securities Repurchase Agreements (the “Repurchase Agreements”) with seven institutional investors that participated in the Company’s private placement financing that closed on August 18, 2025 (the “Sellers”). Under the Repurchase Agreements, the Company agreed to repurchase from the Sellers an aggregate of 3,308,575 shares of Company common stock, together with warrants to purchase 3,308,575 shares of common stock that were issued in the August 2025 private placement and that were subsequently adjusted to represent the right to purchase an aggregate of 7,248,787 shares (the “Repurchase”). At the closing of the Repurchase, the Company paid $2.41 per unit of common stock and associated common stock purchase warrant (a “Unit”), with each Unit consisting of one share of common stock and a common stock purchase warrant to purchase approximately 2.19 shares of common stock (after giving effect to the above-described warrant adjustment), for an aggregate repurchase price of approximately $8 million. The closing of the Repurchase was completed on October 30, 2025.

As a result of the Company’s securities repurchase, the exercise price of the remaining August 2025 warrants was reduced to $0.97 per share, and the aggregate number of shares issuable upon exercise of such warrants was increased to 15,516,850 shares in the aggregate. The price reset of the August 2025 warrants was accounted for as an equity contract modification. The difference in fair value immediately before and after the price reset was determined to be $0.4 million and was recorded as a debit to issuance costs and a credit to APIC, with no net impact to equity.

Also on November 7, 2025 and as a result of the foregoing adjustment to the exercise price of the August 2025 Warrants, the exercise price of 1,153,774 warrants was reduced from $1.10 per share to $0.97 per share, which was treated as a deemed dividend. Loss attributable to common shareholders was increased by the calculated value transferred to the holder of $48 thousand in the basic and diluted EPS calculations for the year ended December 31, 2025.

August 2025 Offerings

On August 18, 2025, the Company issued to institutional investors an aggregate of 4,322,265 shares of the Company’s common stock and 4,322,265 warrants to purchase shares of common stock at an exercise price of $2.41 per share in an offering (the “PIPE Offering”). The combined purchase price for each share of common stock and common stock purchase warrant in the PIPE Offering was $2.41. The PIPE Offering closed on August 18, 2025, and the Company received aggregate gross proceeds from the PIPE Offering of approximately $10.4 million, before deducting fees to the placement agent and other offering expenses payable by the Company.

In addition, following the closing of the PIPE Offering, the Company issued to institutional investors an aggregate of 5,231,681 shares of the Company’s common stock and, in a concurrent private placement,5,231,681 warrants to purchase shares of Common Stock at an exercise price of $2.41 per share (the “RD Offering”). The combined purchase price for each share of common stock and common stock purchase warrant in the RD Offering was $2.41. The Company aggregate gross proceeds from the RD Offering of approximately $12.6 million, before deducting fees to the placement agent and other offering expenses payable by the Company.

As a result of the August 2025 transactions the exercise price of 1,153,775 warrants was reduced from $2.88 per share to $1.10 per share, which was treated as a deemed dividend. Loss attributable to common shareholders was increased by the calculated value transferred to the holder of $0.4 million in the basic and diluted EPS calculations for the year ended December 31, 2025.

Stock Issuance - 2024

August 2024 offering

On August 16, 2024, the Company and an institutional investor (the “Investor”) entered into a securities purchase agreement, pursuant to which the Company agreed to issue to the Investor, (i) in a registered direct offering,278,000 shares of the Company’s common stock and pre-funded warrants to purchase 590,185 shares of common stock (the “Pre-Funded Warrants”) with an exercise price of $0.0001 per share, and (ii) in a concurrent private placement, Series A warrants to purchase 868,185 shares of common stock (the “Series A Common Warrants”) and Series B warrants to purchase 868,185 shares of common stock (the “Series B Common Warrants” and together with the Series A Common Warrants, the (“2024 Warrants”), each with an exercise price of $2.98. Such registered direct offering and concurrent private placement are referred to herein as the “2024 Transactions”. The combined effective offering price for each share of common stock (or Pre-Funded Warrants in lieu thereof) and accompanying Series A Warrant and Series B Warrant in the 2024 Transaction was $2.98. The 2024 Transactions closed on August 19, 2024.

Certain outstanding and exercisable warrants include price protection provisions requiring a reduction in the instrument's exercise price in the event that the Company subsequently issues shares at a purchase price, or warrants at an exercise price, lower than the instrument’s original exercise price. As a result of the 2024 Transactions, this provision was triggered and the exercise price for 1,247,807 warrants was reduced from $30.00 to $2.88. Loss attributable to common shareholders was increased by the calculated value transferred to the holder of $1.7 million in the basic and diluted EPS calculations for the year ended December 31, 2024.

In connection with the Transactions, on August 16, 2024, the Company entered into a placement agency agreement with Maxim Group LLC (the “Placement Agent”), pursuant to which the Company engaged the Placement Agent as the exclusive placement agent for the Company. The Company agreed to pay the Placement Agent a cash fee equal to 7.5% of the aggregate gross proceeds raised in the Transactions and reimburse the Placement Agent for certain of its expenses in an aggregate amount up to $60 thousand. The Company received aggregate proceeds from the Transactions of approximately $2.6 million, before deducting fees to the Placement Agent of approximately $0.3 million and other estimated offering expenses payable by the Company of approximately $0.2 million.

On December 8, 2024, the Purchaser agreed to exercise 1,736,370 outstanding common stock warrants (the “Existing Warrants”) to purchase an aggregate of 1,736,370 shares of common stock for cash at the exercise price of $2.98 per share. The Existing Warrants were previously issued in a private placement which closed in August 2024. In consideration for the immediate exercise of the Existing Warrants, the exercising holder received new unregistered common stock warrants (the “New Warrants”) to purchase an aggregate of 3,472,740 shares of common stock. The New Warrants have an exercise price of $2.95 per share and are immediately exercisable for a period of five years from the issuance date. The gross proceeds of the exercise of the Existing Warrants to the Company, before deducting expenses and fees, were $5.1 million.

As of December 31, 2025 and 2024,590,185 of the Pre-Funded Warrants were exercised for $0.0001 per share.

Share Issuance to Service Providers

On August 20, 2025 the Company issued 188,000 shares of common stock as a retainer for advisory services to be rendered by a service provider. The total fair value of the shares at the time of issuance was $254 thousand. The retainer will be applied to future invoices over eighteen months beginning April 1, 2026, at a rate of 10,444 shares per month. Additionally, on August 20, 2025 the Company issued 131,600 shares of common stock as a retainer for financial reporting services to be rendered by a contractor. The total fair value of the shares at the time of issuance was $178 thousand, of which $178 thousand andnil was expensed during the year ended December 31, 2025 and 2024, respectively.

On August 9, 2024, the Company issued 29,674 shares of common stock pursuant to a termination agreement with a service provider which required the delivery of such shares and a cash payment of $100 thousand. The total fair value of the shares at the time of issuance was approximately $100 thousand, of which we expensednil and $100 thousand for the year ended December 31, 2025 and 2024, respectively.

Restricted Shares

On April 20, 2023 (the “Grant Date”), the board of directors of the Company approved the grant of 260,000 shares of restricted stock (“Restricted Shares”) to management and employees.

The Restricted Shares vest in twelve substantially equal installments on each monthly anniversary of the Grant Date for twelve months following the Grant Date (subject to accelerated vesting upon a change of control of the Company), provided that the employee is in continuous employment or service to the Company through the applicable vesting date.

The total fair value of the stock at the time of issuance was approximately $1.2 million which was based on the closing market price on the Grant Date of $4.51. The Company expensed approximatelynil and $76 thousand of compensation costs for the years December 31, 2025 and 2024, respectively. There wasnil unrecognized compensation cost associated with unvested restricted stock as of December 31, 2025 and 2024.

The following is a summary of the restricted share activity during the year ended December 21, 2025 and 2024:

Stock Warrants

The following is a summary of the stock warrant plan activity during the years ended December 31, 2025 and 2024:

The aggregate intrinsic value of the outstanding common stock warrants as of December 31, 2025 and 2024 was approximately $3.2 million andnil. The remaining weighted average life of the warrants as of December 31, 2025 and 2024 was 3.75 years and 4.07 years.

As of December 31, 2025, there were warrants exercisable to purchase 36,630,689 shares of common stock in the Company and there wereno warrants that were unvested. All outstanding warrants contain provisions allowing a cashless exercise at their respective exercise prices.

Stock Options

The following is a summary of the stock option plan activity during the years ended December 31, 2025 and 2024:

The 2015 Omnibus Incentive Plan provided for the issuance of stock options, stock appreciation rights, performance shares, performance units, restricted stock, restricted stock units, shares of our common stock, dividend equivalent units, incentive cash awards or other awards based on our common stock. This plan was reconstituted into a new 2021 Omnibus Plan. The 2021 Omnibus Plan is intended to allow us to continue to use equity awards as part of our ongoing compensation strategy for our key employees. Awards under the Plan will support the creation of long-term value and returns for our stockholders.

Awards may be granted alone or in addition to, in tandem with, or (subject to the 2021 Omnibus Incentive Plan’s prohibitions on repricing) in substitution for any other award (or any other award granted under another plan of ours or of any of our affiliates).

The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions. The model requires the use of subjective assumptions. Expected volatility for each award was based on the historical and expected volatility of the Company. The expected life (in years) is determined using historical data to estimate options exercise patterns. The Company does not expect to pay any dividends for the foreseeable future thus a value of zero was used in the calculations. The risk-free interest rate was based on the rate for US Treasury bonds commensurate with the expected term of the granted options. The Company recognizes the determined value as an expense over the period in which the stock options vest.

The maximum term of an option is 10 years from the date of grant.

Option Awards - Fiscal Year 2025

On August 27, 2025, the Company granted options to purchase an aggregate of 733,320 shares of common stock of the Company to non-employee members of the Board of Directors. The Company used the Black-Scholes model to value these options using a 10 year life, annualized volatility of 118.7%, annual risk free interest rate of 4.26% and a strike price of $1.26 per share which resulted a total fair value for these options of $879 thousand. The grant date fair value of the options was $1.20.

The options grant each recipient the right to purchase shares of Company common stock at a price of $1.26 per share, the fair market value of the Company’s common stock on the grant date. These awards will vest over atwelve month period with 50% after 6 months and the remaining 50% at end of twelve months.

On September 30, 2025, the Board of Directors of the Company approved the grant of options to purchase an aggregate of 453,500 shares of common stock of the Company to management and employees. The Company used the Black-Scholes model to value these options using a 10 year life, annualized volatility of 118.7%, annual risk free interest rate of 4.16% and a strike price of $1.14 per share which resulted a total fair value for these options of $492 thousand. The grant date fair value of the options was $1.08.

The options grant each recipient the right to purchase shares of Company common stock at a price of $1.14 per share, the fair market value of the Company’s common stock on the grant date. The Options vest as to 50% of the total amount of the award on the one-year anniversary of the grant date and 50% of the total amount of the award on the two-year anniversary of the grant date (subject to accelerated vesting upon a change of control of the Company), provided that the executive is in continuous employment or service to the Company through the applicable vesting date.

Stock compensation expense recognized for the year ended December 31, 2025 and 2024 related to stock options was approximately $0.7 million and $0.5 million, respectively. There was $0.8 million of unrecognized compensation cost associated with unvested stock options remaining as of December 31, 2025.

The aggregate intrinsic value of the outstanding common stock options as of December 31, 2025 and December 31, 2024 wasnil. The remaining weighted average life of the options as of December 31, 2025 and 2024 was approximately 8.83 years and 8.1 years, respectively.

Note 13. Segment Information

The Company applies ASC 280, Segment Reporting, in determining its reportable segments. The Company hastwo reportable segments: Specialty Finance and Mining and Treasury Operations. The guidance requires that segment disclosures present the measure(s) used by the CODM to decide how to allocate resources and for purposes of assessing such segments’ performance. The Company’s CODM uses revenue, income from operations and income before taxes of our reporting segments to assess the performance of the business of our reportable operating segments. Performance results are monitored, reviewed, and measured monthly and quarterly to assess returns on investment, compensation decisions and changing strategies, if required.

No operating segments have been aggregated to form the reportable segments. The corporate oversight function, and other components that may earn revenues that are only incidental to the activities of the Company are aggregated and included in the “All Other” category.

The Specialty Finance segment generates revenue from providing funding to nonprofit community associations. The Mining and Treasury Operations segment generates revenue from the Bitcoin the Company earns through its mining activities.

(1) Other segment items for each reportable segment include rent, collection costs, office and general business expenses, travel, insurance, office and general business expenses

Note 14. Subsequent Events

In connection with the Repurchase, on October 29, 2025, the Company entered into a Master Digital Currency Loan Agreement (the “Loan Agreement”) with Galaxy Digital LLC (“Lender”). On October 30, 2025, the Company made a draw under the Loan facility and borrowed a principal sum of $11 million (the “October Loan”) and granted to Lender a security interest in Bitcoin collateral owned by the Company. Subsequent to December 31, 2025, the maturity date for the October Loan was extended by agreement with the Lender with anew maturity date of April 24, 2026.

Miner Purchase

On February 5, 2026, the Company entered into a Sales and Purchase Agreement with Bitmain Technologies Delaware Limited ("Bitmain") for the purchase of 300 Bitmain S19XP miners at a total purchase price of $126,900.

Brown Loan Amendment

On March 27, 2026, we entered into a second amendment to secured promissory note with Brown Family to extend the maturity date of the Brown Secured Note until June 30, 2026.

December RDO Pre-funded Warrants

During January and February 2026,2,034,395 pre-funded warrants were exercised for $0.0001 per share.

Exhibit Index

EX-1

EX-2