POWERCOMPUTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and principles of consolidation

The accompanying unaudited consolidated financial statements include the accounts of PowerCompute, Inc., previously known as LM Funding America, Inc. (“we,” “our,” “PWCM,” or the “Company”), and its wholly-owned subsidiaries: US Digital Mining and Hosting Co., LLC (“US Digital”) (includes all 100% owned subsidiary limited liability companies), 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; and various single purpose limited liability companies owned by REO Management Holdings, LLC which own various properties. It also includes LMFAO Sponsor LLC (a 69.5% owned subsidiary). All significant intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in the annual consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. The interim consolidated financial statements as of June 30, 2026 and for the three and six months ended June 30, 2026 and June 30, 2025, respectively, are unaudited. In the opinion of management, the unaudited interim consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to provide a fair statement of the results for the interim periods. The accompanying consolidated balance sheet as of December 31, 2025, is derived from the audited consolidated financial statements presented in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

There were no changes to the Company’s most significant estimates and assumptions, significant accounting policies, or recent accounting pronouncements that were disclosed in Note 2 - Summary of Significant Accounting Policies included in the Form 10-K other than as discussed below.

On June 24, 2026, the Board approved a one-for-twenty-five (1:25) reverse split of the Company’s issued and outstanding common stock, par value$0.001 per share, pursuant to which every twenty-five outstanding shares of common stock was converted into one share of common stock (the “Reverse Stock Split”). The Reverse Stock Split became effective at 12:01 a.m. Eastern Time on July 13, 2026. The Company has retroactively adjusted all share amounts and per share data herein to give effect to the Reverse Stock Split. Refer to Note 6 – Stockholders’ Equity.

Corporate Name and Ticker Symbol Change

On July 20, 2026, the Company filed a Certificate of Amendment to its Certificate of Incorporation to change its corporate name from LM Funding America, Inc. to “PowerCompute, Inc.” The Name Change became effective at 12:01 a.m., Eastern Time, on July 22, 2026. In connection with the name change, the Company’s common stock began trading on the Nasdaq Capital Market under the new ticker symbol “PWCM” on July 22, 2026.

Going Concern

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. On August 27, 2014, FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s ability to Continue as a Going Concern, which requires management to assess a company’s ability to continue as a going concern within one year from financial statement issuance and to provide related footnote disclosures in certain circumstances. 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 June 30, 2026, the Company had approximately$854 thousand available cash on-hand and Bitcoin with a fair market value of approximately$8.5 million (of which approximately$7.7 million is pledged as collateral against outstanding borrowings and classified within“Digital assets - collateral” on the consolidated balance sheets). In addition, the Company had Bitcoin with a fair market value of approximately$10.2 million classified as Digital assets receivable which is pledged as collateral against approximately$11 million of borrowings.

The Company has experienced significant operating losses over the past two and a half years (2024 through 2026) with cumulative losses of approximately$49.3 million. These losses resulted in the usage of all cash proceeds from the Company’s public offerings in 2021, 2025 and 2026. The Company’s net cash used in operating activities for the six months ended June 30, 2026 was approximately $7.2 million and net working capital was approximately negative$0.1 million. Additionally, as of June 30, 2026 the Company had $11.0 million of outstanding debt under the Galaxy Loan Facility, $7.0 million of outstanding debt under the Liebel loan and $1.5 million of outstanding debt under the Brown Family Trust loan that was scheduled to mature over the next twelve months. As of June 30, 2026 the Company held approximately 130 Bitcoin valued at approximately $7.7 million as collateral against the Liebel loan. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

Subsequent to June 30, 2026, and prior to the issuance of these financial statements, the Company was able to fully repay the $7.0 million Liebel loan and partially paydown the Brown Family Trust loan by $250 thousand through a combination of refinancing (Refer to Note 9) and the use of the Company's ATM. The Company has a history of refinancing debt and management believes it will be able to refinance the remaining balance of the Brown loan. However, there can be no assurance that the Company will be able to successfully refinance the remaining balance or otherwise generate sufficient liquidity to meet its obligations as they become due.

Management’s plans to address these conditions also include the continued use of its ATM program. The ATM program is currently effective and has been utilized to raise capital; however, future proceeds under the ATM program depend, among other things, on the Company's ability to maintain compliance with Nasdaq's continued listing requirements, including applicable market value requirements, market conditions, trading volume, the Company's stock price, and other factors that are not within the Company's control.

As of the date these financial statements are issued, management has not concluded that its plans are probable of mitigating the conditions and events that raise substantial doubt within one year after the date these financial statements are issued. Accordingly, substantial doubt about the Company's ability to continue as a going concern has not been alleviated. The financial statements do not reflect any adjustments that may be required if the Company is unable 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 the evaluation of probable losses on balances due from third parties, the realization of deferred tax assets, the evaluation of contingent losses related to litigation and reserves on notes receivables, estimates of the recoverability and useful lives of long-lived assets and stock-based compensation. 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.

Income Taxes

The Company’s calculation of its tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. The Company recognizes tax liabilities for uncertain tax positions based on management’s estimate of whether it is more likely than not that additional taxes will be required. The Company hadno uncertain tax positions as of June 30, 2026 and December 31, 2025.

Deferred income taxes are recognized in the consolidated financial statements for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates. Temporary differences arise from net operating losses, differences in depreciation methods of archived images, and property and equipment, stock-based and other compensation, and other accrued expenses. A valuation allowance is established when it is determined that it is more likely than not that some or all of the deferred tax assets will not be realized.

The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability for U.S., or the various state jurisdictions, may be materially different from management's estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities. Interest and penalties are included in tax expense.

Income tax expense/(benefit) from operations for the three and six months ended June 30, 2026 and 2025 wasnil in each period, which resulted primarily from maintaining a full valuation allowance against the Company's deferred tax assets.

Income (Loss) Per Share

Basic income (loss) per share is calculated as net income (loss) to common stockholders divided by the weighted average number of common shares outstanding during the period. The number of outstanding shares used for the EPS calculation includes outstanding penny warrants. Refer to Note 6 – Stockholder’s Equity.

Diluted income (loss) per share for the periods presented equals basic income (loss) per share as the effect of any stock-based compensation awards and warrant repricing would be anti-dilutive.

The anti-dilutive stock-based compensation awards consisted of:

The following table illustrates the computation of basic and diluted EPS for the three and six months ended June 30, 2026 and 2025:

Note 2. Digital Assets and Digital Assets Receivable, net

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 or the cost paid for purchased Bitcoin. Fair value of Bitcoin was determined using Level 1 inputs. As of June 30, 2026 and December 31, 2025 approximately 131.8 Bitcoin and 88 Bitcoin, respectively, (with an approximate fair value of $7.7 million) were held in a custody account as collateral for the Company’s loans with SE & AJ Liebel Limited Partnership. 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 six months ended June 30, 2026 and 2025:

The Company recognized realized loss (gain) from dispositions of Bitcoin during the three and six months ended June 30, 2026 and 2025 of approximately ($0.2) million and $0.7 million for 2026, respectively, and approximately ($0.2) million and ($0.1) million for 2025, respectively.

Digital Assets Receivable, net

As required under the Galaxy Loan Facility established in October 2025, the Company has pledged 174 and 145 Bitcoin, respectively, as collateral as of June 30, 2026 and December 31, 2025. While a loan is outstanding under the Galaxy Loan Facility, 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. Because 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 is initially measured upon transfer at fair value and subsequently remeasured at fair value as of the balance sheet date. For the three and six months ended June 30, 2026 and 2025, the Company recognized a decrease in fair value of approximately $1.7 million and $4.9 million for 2026, respectively, andnil andnil for 2025, respectively, 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 ofnil and approximately $9 thousand was recorded in “Digital assets receivable, net” on the Company’s consolidated balance sheets as of June 30, 2026 and December 31, 2025, respectively.

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

Note 3. Fixed Assets and Intangible Assets, net

The components of fixed assets as of June 30, 2026 and December 31, 2025 are as follows:

As of June 30, 2026 and December 31, 2025, there were approximately 7,500 and 7,200 miners, respectively, located at various hosting sites. The Company’s depreciation expense recognized for the three and six months ended June 30, 2026 and 2025 wasapproximately $0.8 million and $1.5 million for 2026, respectively andapproximately$2.0 million and $4.0 million for 2025, respectively.

The loss (gain) on disposal of fixed assets during the three and six months ended June 30, 2026 and 2025 was approximately ($3) thousand and ($3) thousand for 2026, respectively, and $100 thousand and $286 thousand for 2025, respectively.

Intangible assets as of June 30, 2026 and December 31, 2025 consist of the following:

During the three and six months ended June 30, 2026 and 2025 the Company recognized approximately$66 thousand and $131 thousand amortization expense for 2026, respectively, andapproximately$55 thousand and $110 thousand amortization expense for 2025, respectively.

Note 4. Debt and Other Financing Arrangements

Galaxy Loan Facility

On October 29, 2025, the Company entered into a Master Digital Currency Loan Agreement (the “Galaxy Loan Facility”) with Galaxy Digital LLC (“Galaxy”), which establishes the terms and conditions pursuant to which the Company may borrow U.S. Dollars and/or specified digital currencies under the Galaxy Loan Facility. On October 30, 2025, the Company made a draw under the Galaxy Loan Facility and borrowed a principal sum of $11 million (the “October 2025 Loan”). In connection with the October 2025 Loan, the Company granted to Galaxy a security interest in 145 Bitcoin owned by the Company as collateral. This security interest was subsequently increased to 174 Bitcoin in the six months ended June 30, 2026.

The settlement amount of the loans borrowed under the Loan Agreement are adjusted based on the Bitcoin price relative to a contractual floor and ceiling market price of Bitcoin (“Collar Feature”), and is cash settled.

During the first half of 2026, the Company amended the Galaxy Loan Facility on January 28, February 27, and April 6 to extend the loan and modify the collar's pricing terms, resulting in realized derivative settlement losses of approximately$48 thousand and gains ofapproximately$67 thousand and $214 thousand, respectively. On May 26, 2026, the Company extended the Galaxy Loan Facility from June 26, 2026 through August 28, 2026 with no other terms modified.

The Collar Feature is an embedded derivative requiring bifurcation under ASC 815-15. The fair value of the Collar Feature is calculated using a Black-Scholes calculation using Level 3 inputs. Significant inputs for the fair value of the Collar Feature for the January, February and April modifications include the volatility of Bitcoin observed for a similar term as the remaining term of the loan of 32.4% -59.25% and short-term treasury interest rates of 3.5%. The derivatives are classified as a debt discount and amortized over the life of the contract.

The derivative asset of approximately$980 thousand and $48 thousand was classified as “Galaxy loan derivative asset” on the consolidated balance sheets as of June 30, 2026 and December 31, 2025, respectively.

Debt of the Company consisted of the following as of June 30, 2026 and December 31, 2025:

Minimum required principal payments on the Company's debt as of June 30, 2026 are as follows:

The Company subsequently refinanced the Galaxy Loan Facility and the SE & AJ Liebel Limited Partnership loans. See Note 9. Subsequent Events.

Note 5. Commitments and Contingencies

Leases

Lease expense recognized for the three and six months ended June 30, 2026 and 2025 was approximately$63 thousand and $130 thousand for 2026, respectively andwas approximately$76 thousand and $147 thousand for 2025, respectively.

The following table presents supplemental balance sheet information related to leases as of June 30, 2026 and December 31, 2025:

The following table presents supplemental cash flow information and non-cash activity related to leases for the six months ended June 30, 2026 and 2025:

The following table presents maturities of lease liabilities on an undiscounted basis as of June 30, 2026:

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.

Uptime Purchase Agreement Matter

In October 2021, we entered into a sale and purchase agreement (the “Uptime Purchase Agreement”) with Uptime Armory LLC (“Uptime”) to purchase 18 modified 40-foot cargo containers (“POD5ive containers”) for approximately $3.15 million, of which we paid approximately $2.4 million (75%) in 2021 as a non-refundable down payment and the remaining 25% in 2022 upon Uptime’s notice of completion; however, no containers have been delivered as of June 30, 2026. In November 2022, we filed suit in Florida circuit court against Uptime and Bit5ive, LLC (“Bit5ive”) alleging breach of contract and violation of the Florida Deceptive and Unfair Trade Practices Act. The court stayed the action and ordered the parties to confidential arbitration governed by the American Arbitration Association. We recorded an impairment charge of approximately $3.15 million on our mining machine deposit in the fourth quarter of 2022. The arbitrator ruled in favor of US Digital’s dispositive motions against Uptime and Bit5ive, and we have filed a Proof of Claim in the amount of the arbitrator’s award of approximately $3.2 million (owed joint and several with Bit5ive) following the Defendants’ filing for Assignment for the Benefit of Creditors. The likelihood and amount of recovery of the Company’s outstanding claims cannot be estimated at this time.

Uptime Hosting Agreement Matter

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 for 6 cents per kilowatt with a one-year term, under which we paid a refundable deposit of approximately $0.8 million. On June 29, 2022, the Hosting Agreement was terminated pursuant to a Release and Termination Agreement in which Uptime Hosting LLC agreed to repay the $0.8 million deposit. We recorded an impairment charge of approximately $0.8 million on our prepaid hosting deposit in the fourth quarter of 2022. In September 2022, we filed suit in Florida circuit court against Uptime Hosting LLC for return of the deposit and other damages, alleging breach of contract and violation of the Florida Deceptive and Unfair Trade Practices Act. We have since amended the complaint to add claims against additional defendants, including breach of contract, violations of Florida’s Uniform Fraudulent Transfer Act and Florida Fraudulent Asset Conversion, violation of the Florida Deceptive and Unfair Trade Practices Act, and claims for equitable liens.

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, 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. There has been no significant development in this case in 2026. The likelihood and amount of recovery of the Company's outstanding claims against Uptime, Uptime Hosting LLC and Bit5ive cannot be estimated at this time.

Note 6. Stockholders’ Equity

On June 24, 2026, the Board approved the Reverse Stock Split. The Reverse Stock Split was effected by the filing of an amendment to our Certificate of Incorporation on July 9, 2026 which provided that the Reverse Stock Split became effective at 12:01 a.m. Eastern Time on July 13, 2026. No fractional shares were issued as a Result of the Reverse Stock Split 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 received one share of common stock. The Company’s common stock began trading on The Nasdaq Capital Market on a split-adjusted basis on July 13, 2026. 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 March 27, 2026, the Company entered into an at the market offering agreement (the “Sales Agreement”) with Maxim Group LLC (the “Agent”), pursuant to which the Company may, from time to time, at the Company’s discretion, offer and sell shares of the Company’s common stock, having an aggregate offering price of up to $75,000,000 (the“Shares”), through the Agent, acting as sales agent. The Shares to be sold under the Sales Agreement, if any, will be issued and sold pursuant to the Company’s shelf registration statement which was filed with the Securities and Exchange Commission (“SEC”) on August 13, 2024 (the “Registration Statement”)

andwas declared effective on November 21, 2024. A prospectus supplement related to the Company’s at the market offering (“ATM”) program with the Agent under the Sales Agreement was filed with the SEC on March 27, 2026. The ATM program will remain in effect until the Sales Agreement is terminated by either the Company or Agent, with the Company having the right to terminate the agreement at any time upon 10 days’ notice and the Agent having the right to terminate at any time.

The Company sold approximately 179,000 shares and generated approximately $795 thousand in net proceeds for the three and six months ended June 30, 2026.

As of June 30, 2026, an aggregate gross sales limit of approximately $74,174,000 remains available for issuance under the ATM program. Approximately $101 thousand of legal and professional fees incurred related to the establishment of the ATM program as of June 30, 2026 were deferred and recorded within“Prepaid expenses and other assets” on the Consolidated Balance Sheets and will be amortized ratably as stock is issued under the program.

Stock Options

The following is a summary of the stock option plan activity during the six months ended June 30, 2026 and 2025:

Stock compensation expense recognized for the three and six months ended June 30, 2026 and 2025 related to stock options was approximately $199 thousand and $530 thousand, respectively for 2026 and approximately $25 thousand and $135 thousand, respectively for 2025. There was approximately $0.3 million of unrecognized compensation cost associated with unvested stock options remaining as of June 30, 2026.

The aggregate intrinsic value of the outstanding common stock options as of June 30, 2026 and December 31, 2025 wasnil. The remaining weighted average life of the options as of June 30, 2026 was approximately 8.28 years.

Warrants

The following is a summary of the warrant activity during the six months ended June 30, 2026 and 2025:

During the three and six months ended June 30, 2026,109,440 and 190,816 pre-funded warrants were exercised for $0.025 per share.

The outstanding 2021 public warrants to purchase an aggregate of 46,151 shares of Company common stock at an exercise price of $12.00 per share were reduced to $3.58 pershare as a result of sales under the ATM program. 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 approximately$40 thousand in the basic and diluted EPS calculations for the six months ended June 30, 2026.

The aggregate intrinsic value of the outstanding common stock warrants as of June 30, 2026 and December 31, 2025 was approximately $0.4 million and $3.2 million, respectively. The remaining weighted average life of the warrants as of June 30, 2026 and December 31, 2025 was 3.08 years and 3.75 years, respectively.

As of June 30, 2026, there wereno warrants that were unvested. All outstanding warrants contain provisions allowing a cashless exercise at their respective exercise prices.

Note 7. 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”, or “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. 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 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 BLG (the “Services Agreement”). The Services Agreement had set forth the terms under which BLG would act as the primary law firm used by the Company and its association clients for the servicing and collection of association accounts. Bruce M. Rodgers is a 50% owner of BLGAL.

Under the agreement, the Company paid BLG a fixed monthly fee of $43 thousand per month for services rendered during the three and six months ended June 30, 2026 and 2025, respectively. The Company pays BLG a minimum per unit fee of $700 in any case where there is a collection event and BLG received no payment from the property owner, including any unit where the Company has taken title to the unit or where the Association has terminated its contract with either BLG or the Company.

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 the Company 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 three and six months ended June 30, 2026 and 2025 were approximately$129 thousand and $258 thousand, respectively for 2026 andapproximately$129 thousand and $258 thousand, respectively for 2025.

Pursuant to the Services Agreement, as amended, in effect during the three and six months ended June 30, 2026 and 2025, the Company paid 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 is accounted for as a reduction in expense incurred. The Company incurred expenses related to collection costs for the three and six months ended June 30, 2026 and 2025 in the amounts of approximately$19 thousand and $38 thousand, respectively for 2026 andapproximately$20 thousand and $42 thousand, for 2025. Recoveries during the three and six months ended June 30, 2026 and 2025 were approximately$6 thousand and $13 thousand, respectively, for 2026 andapproximately$11 thousand and $16 thousand, respectively, for 2025.

The Company also shares office space, personnel and related common expenses with BLGAL. 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 included within due to related parties in the accompanying consolidated balance sheet. BLGAL was charged for office sub-lease for three and six months ended June 30, 2026 and 2025 for a total of approximately $7 thousand and $15 thousand, respectively for 2026 and approximately $7 thousand and $15 thousand, respectively for 2025.

Amounts payable to BLGAL as of June 30, 2026 and December 31, 2025 were approximately $77 thousand and $48 thousand, respectively.

Note 8. Segment Information

The Company applies ASC 280 Segment Reporting in determining its reportable segments. The Company hastwo reportable segments: Specialty Finance and Mining, HPC and Treasury Operations. The guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker (“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. Segment asset information is not disclosed as such information is not regularly reviewed by the CODM. The CODM regularly reviews total assets as reported on the consolidated balance sheet. 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, HPC and Treasury Operations segment generates revenue from the Bitcoin the Company earns through its mining activities.

The following tables present revenue and segment income (loss) for the Company's reportable segments and reconciliations to consolidated amounts:

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

Note 9. Subsequent Events

ATM Program

The Company sold approximately 756,951 shares under the ATM program between July 1, 2026 and August 11, 2026 at a price range between $1.51 per share to $3.52 per share for a total of approximately$1.6 million in net sales proceeds. 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 ATM program sales, this provision was triggered and the exercise price for 46,151 warrants that were issued in 2021 was reducedto $1.51.

December RDO Pre-funded Warrants

During July 2026, the remaining 102,480 pre-funded warrants were exercised for $0.025 per share for a total of $2,562.

Debt Refinancing

On July 27, 2026, the Company, through its wholly owned subsidiary US Digital, entered into a bridge loan transaction (the “Bridge Loan”) under which it borrowed an aggregate of approximately $18.1 million from ChainFi Inc. d/b/a Arch Lending (“Arch”) under two separate Promissory Notes (the “Bridge Notes”). The purpose of the Bridge Loan was to fund the repayment in its entirety of the Company’s $18 million in aggregate indebtedness to Galaxy Digital LLC and SE & AJ Liebel Limited Partnership in advance of the completion of a secured term loan facility with Arch to be secured by the Bitcoin in the Company’s treasury. The Bridge Notes were paid off in full in connection with the Company’s loan facility with Arch.

On August 3, 2026, the Company, through US Digital, entered into new loan facility (the “Loan Facility”) with Arch pursuant to which Arch made available to US Digital a non-recourse, collared, 30-day rolling loan secured by US Digital’s Bitcoin (a “Collar Loan”). On August 3, 2026, US Digital borrowed an aggregate of approximately $18.1 million in an initial 30-day Collar Loan under the Loan Facility secured by 307 Bitcoin (with mutually agreed upon floor and ceiling prices) and bearing interest at 2.0% per annum, which loan was used to pay off the Bridge Notes. Under the Loan Facility, the Collar Loan automatically rolls over for successive 30-day periods unless either party provides notice of non-renewal, and at each rollover date, the interest rate, floor price, and ceiling price are re-set based on then-prevailing market conditions. At each maturity, if the Bitcoin reference price is below the agreed-upon floor price, the Borrower may elect to walk away, repay the loan and recover the collateral, or it may roll the loan by curing the shortfall. The terms and conditions of the Loan Facility are set forth in a Loan and Security Agreement that was entered into by US Digital and Arch on August 3, 2026.

Extension of Loan with Brown Family Enterprises

On July 27, 2026, the Company paid $250,000 in reduction of the outstanding principal balance of the Secured Promissory Note with Brown Family Enterprises, LLC , and the Company has paid all interest accrued under the Note through and including June 30, 2026. As of the Effective Date the outstanding principal balance of the Note is $1,250,000 and $12,205 interest remains accrued and unpaid thereon, representing interest accrued for the period from July 1, 2026 through and including July 27, 2026. On July 28, 2026, we entered into a Third Amendment to Secured Promissory Note under which the Company and Brown Family Enterprises agreed to extend the maturity date of the loan from Brown Family Enterprises to December 31, 2026.

Artificial Intelligence Infrastructure Business

In July 2026, we announced the expansion of our business into high-performance computing (“HPC”) and artificial intelligence (“AI”) infrastructure to take advantage of the 26 MW of power under our control. This expansion follows a broader industry trend in which other companies that, like us, have historically focused on Bitcoin mining have sought to redeploy their power and infrastructure assets to support AI and HPC workloads for hyperscalers and other AI and HPC customers.

In July 2026, we acquiredone graphics processing unit (“GPU”) with approximately 101.7 teraflops of capacity, representing our initial investment in HPC-capable computing hardware. We began selling our computing capacity to Vast.AI in July 2026 under a demand pricing model, pursuant to which the pricing we receive for our computing capacity will vary based on prevailing market demand for such capacity.

Bitcoin mining and Bitcoin treasury operations currently remain our primary business. Consistent with the approach taken by other Bitcoin mining companies that have begun to diversify into HPC and AI infrastructure, we intend to continue operating our Bitcoin mining business to generate cash flow and help fund our operations while we build out our new HPC and AI business line. Over time, we expect our capital allocation to increasingly reflect investment in additional GPUs, power capacity, and data center infrastructure necessary to support HPC and AI workloads, and we may pursue additional strategic arrangements, such as hosting agreements, leasing arrangements, or joint ventures, to accelerate this expansion.