Hyperscale Data, Inc.

Company Overview

Hyperscale Data, Inc., a Delaware corporation (the “Company,” “we,” “us,” “our company” or similar terminology) was incorporated in September 2017. Through our wholly and majority owned subsidiaries and strategic investments, we own and/or operate data centers at which we mine Bitcoin and offer colocation and hosting services for the emerging artificial intelligence (“AI”) ecosystems and other industries as well as provide mission-critical products that support a diverse range of industries, including an AI software platform, equipment rental services, defense/aerospace, industrial, automotive, medical/biopharma and hotel operations. Our direct and indirect wholly owned subsidiaries include:

We own Ault Capital Group, Inc. (“Ault Capital”), which either wholly owns or has a direct controlling interest in, among other entities:

We were founded by Milton C. (Todd) Ault, III, our Executive Chairman, and are led by Mr. Ault, William B. Horne, our Chief Executive Officer and Vice Chairman, and Henry Nisser, our President and General Counsel. Together, they constitute the Executive Committee, which manages the day-to-day operations of the Company. Our long-term objective is to maximize per share intrinsic value. All major investment and capital allocation decisions are made for us by Mr. Ault and the Executive Committee.

We currently have the following reportable segments, though it should be noted that we are in the process of transitioning our data centers away from Bitcoin mining to operations dedicated to high-performance computing (“HPC”) and AI purposes:

We operate as a holding company with operations conducted primarily through our subsidiaries, which are described below.

Recent Events and Developments

On December 9, 2024, we completed the distribution of 650,000 shares of our 10% Series E Redeemable Perpetual Preferred Stock (the “Series E Preferred Stock”), a $16.25 million stated value, to holders of Class A Common Stock and Series C Convertible Preferred Stock on an as-converted basis. Dividends will accrue on the stated amount of $25.00 per share of the Series E Preferred Stock at a rate per annum equal to 10.00%.

On December 16, 2024, we completed the distribution of approximately 5.0 million shares of our Class B common stock (the “Class B Common Stock”) to all holders of our Class A Common Stock and Series C Convertible Preferred Stock on an as-converted basis. There is currently no public trading market for the Class B Common Stock. While we may seek to have the Class B Common Stock listed for trading on the NYSE American within the foreseeable future, there can be no assurance when, or if, such a listing will occur. The Class B Common Stock is identical to the currently outstanding Class A Common Stock, with the exception that each such share carries 10 times the voting power of a share of Class A Common Stock. The Class B Common Stock is convertible at any time into Class A Common Stock on a one-for-one basis.

On November 20, 2024, pursuant to the approval provided by our stockholders at the annual meeting of stockholders held on June 28, 2024, we filed an Amendment to our Certificate of Incorporation with the State of Delaware to effectuate a reverse stock split of our Class A Common Stock affecting the issued and outstanding number of such shares by a ratio of one-for-thirty-five. The reverse stock split became effective on November 22, 2024. All share amounts in this Annual Report have been updated to reflect the reverse stock split.

On December 23, 2024, we completed the distribution of 1.0 million shares of our Series F Exchangeable Preferred Stock (“Series F Preferred Stock”) to holders of Class A Common Stock and Series C Convertible Preferred Stock on an as-converted basis. The Series F Preferred Stock has a $1.00 liquidation preference and does not pay a dividend. Each share of Series F Preferred Stock will be exchangeable, at the option of its holder, for (i) 10 shares of Class A Common Stock of Ault Capital and (ii) five shares of Class B Common Stock of Ault Capital, at any time beginning on the later of (A) one year after issuance of the Series F Preferred Stock and (B) the date of the registration under the Securities Act of all of the foregoing shares of Ault Capital Class A Common Stock and Ault Capital Class B Common Stock. Once the Series F Preferred Stock has been exchanged into shares of Ault Capital Class A Common Stock and Class B Common Stock, our sole business will be our ownership of (i) Sentinum, through which we operate our Bitcoin mining business as well as its HPC and AI operations and hold our digital assets and (ii) Omnipresent, through which we are focused on the development, deployment, and commercialization of advanced robotics systems, AI and data-driven automation technologies.

In December 2024, pursuant to the November 2023 SPA we entered into with Ault & Company, Inc. (“Ault & Company”), we sold an aggregate of 3,020 shares of Series C Convertible Preferred Stock and warrants to purchase an aggregate of 25,509 shares of Class A Common Stock to Ault & Company, for an aggregate purchase price of $3.0 million. As of the date of this Annual Report, Ault & Company has purchased an aggregate of 50,000 shares of Series C Convertible Preferred Stock and warrants to purchase an aggregate of 422,337 shares of Class A Common Stock, for an aggregate purchase price of $50.0 million.

On December 13, 2024 (the “Closing Date”), Third Avenue Apartments LLC (“Third Avenue”), which was a subsidiary of AGREE, completed the sale of its real property located at the southeast corner of 5th Street North and 3rd Avenue North in St. Petersburg, Florida (the “Property”). The Property was sold on the Closing Date to Cats Mirror Lake, LLC (the “Buyer”) pursuant to a contract of sale, as amended, entered into by Third Avenue and the Buyer. The sale price for the property was $13.0 million. In February 2025, Third Avenue filed a certificate of elimination with the Delaware Secretary of State.

On December 21, 2024, we entered into a securities purchase agreement (the “December 2024 SPA”) with Ault & Company, pursuant to which we agreed to sell to Ault & Company, in one or more closings, up to 25,000 shares of Series G convertible preferred stock (“Series G Preferred Stock”) and warrants to purchase up to 4.2 million shares of Class A Common Stock (the “Series G Warrants”) for a total purchase price of up to $25.0 million. The December 2024 SPA provides that the financing may be conducted through one or more closings. Through the date of this Annual Report, pursuant to the December 2024 SPA, we have sold to Ault & Company 960 shares of Series G Preferred Stock and Series G Warrants to purchase 162,217 shares of Class A Common Stock, for a purchase price of $1.0 million.

Each share of Series G Preferred Stock has a stated value of $1,000.00 and is convertible into shares of Class A Common Stock at a conversion price equal to the greater of (i) $0.10 per share, and (ii) the lesser of (A) $6.74 or (B) 105% of the volume weighted average price of the Class A Common Stock during the ten trading days immediately prior to the date of conversion. The conversion price is subject to adjustment in the event of an issuance of Class A Common Stock at a price per share lower than the conversion price then in effect, as well as upon customary stock splits, stock dividends, combinations or similar events. The holders of Series G Preferred Stock are entitled to cumulative cash dividends at an annual rate of 9.5%, or $95.00 per share, based on the stated value per share. Dividends shall accrue for 10 years from the date of issuance of such shares of Series G Preferred Stock and are payable monthly in arrears. For the first two years, we may elect to pay the dividend amount in shares of Class A Common Stock rather than cash. The holders of the Series G Preferred Stock are entitled to vote with the Class A Common Stock as a single class on an as-converted basis.

On February 5, 2025, we entered into an exchange agreement with an institutional investor (“Orchid”), pursuant to which we issued to the investor a convertible promissory note in the principal face amount of $1.9 million (the “February 2025 Convertible Note”), in exchange for the cancellation of an outstanding term note we issued to the investor in April 2024. That note had an outstanding principal amount and accrued but unpaid interest of $1.9 million. The February 2025 Convertible Note accrued interest at the rate of 15% per annum, unless an event of default (as defined in the February 2025 Convertible Note) occurs, at which time the February 2025 Convertible Note would accrue interest at 18% per annum. The February 2025 Convertible Note was to mature on May 5, 2025. The February 2025 Convertible Note was convertible into shares of Class A Common Stock at a fixed conversion price of $4.00 per share. The February 2025 Convertible Note was exchanged for the Orchid Exchange Note, as defined below.

On March 14, 2025, we entered into an exchange agreement with Orchid Finance LLC pursuant to which we issued to Orchid a promissory note (the “Orchid Exchange Note”) in the amount of $4.2 million in exchange for the cancellation of (i) a term note issued by us on May 16, 2024, with outstanding principal and accrued but unpaid interest of $0.7 million, (ii) a term note issued by us on May 20, 2024, with outstanding principal and accrued but unpaid interest of $1.5 million, and (iii) the February 2025 Convertible Note issued by us on February 5, 2025, with outstanding principal and accrued but unpaid interest of $2.0 million. Between March 28, 2025 and July 9, 2025, we issued 3.7 million shares of Class A Common Stock valued at $4.4 million in payment of all principal and accrued interest on the Orchid Exchange Note.

On March 21, 2025, we entered into an exchange agreement pursuant to which we issued to SJC Lending LLC a convertible note in the amount of $4.9 million in exchange for the cancellation of (i) a term note issued by us on January 14, 2025, with outstanding principal and accrued but unpaid interest of $2.6 million, (ii) a promissory note issued by us on March 7, 2025, with outstanding principal and accrued but unpaid interest of $0.5 million, (iii) a promissory note issued by us on March 12, 2025, with outstanding principal and accrued but unpaid interest of $1.5 million, and (iv) a promissory note issued by us on March 13, 2025, with outstanding principal and accrued but unpaid interest of $0.3 million.

On March 28, 2025, our majority owned subsidiary, Avalanche International Corp. (“AVLP”), filed a petition for liquidation under Chapter 7 of the bankruptcy laws. The filing placed AVLP under the control of the bankruptcy court, which oversaw its liquidation. As a result, AVLP is no longer a subsidiary of ours.

On March 31, 2025, we entered into a securities purchase agreement with an institutional investor pursuant to which we agreed to sell up to 50,000 shares of Series B Convertible Preferred Stock (“Series B Preferred Stock”) for a total purchase price of up to $50.0 million. The securities purchase agreement provides that the transaction shall be conducted through 49 separate tranche closings, provided, however, that the investor has the ability, exercisable in its sole discretion, to purchase any number of shares of Series B Preferred Stock prior to the dates of the tranche closings provided for in the securities purchase agreement. The initial tranche closing occurred on May 21, 2025, which consisted of the sale and issuance to the investor of 2,000 shares of Series B Preferred Stock for an aggregate of $2.0 million. The investor has purchased an additional 30,414 shares of Series B Preferred Stock through the date of this Annual Report. Of such 32,414 shares of Series B Preferred Stock, the investor has converted approximately 29,506.22 shares of Series B Preferred Stock into 50.3 million shares of Class A Common Stock as of the date of this Annual Report. Pursuant to the securities purchase agreement, provided certain closing conditions have been met, the investor shall purchase up to an aggregate of 4,800 shares of Series B Preferred Stock, with the investor being required to purchase 100 shares per month. As of the date of this Annual Report, purchases by the investor have not been made in accordance with the contractual monthly purchase schedule set forth in the securities purchase agreement. The Company continues to assess the status of the arrangement and its rights thereunder.

Each share of Series B Preferred Stock has a stated value of $1,000 and is convertible into shares of Class A Common Stock at a conversion price equal to the greater of (i) $0.40 per share (the “Floor Price”), which Floor Price shall not be adjusted for stock dividends, stock splits, stock combinations and other similar transactions and (ii) 75% of the lowest VWAP (as defined in the note) of our Class A Common Stock on any trading day during the five trading days immediately prior to the date of conversion into shares of Class A Common Stock, but not greater than $10.00 per share (the “Maximum Price”), which Maximum Price shall be adjusted for stock dividends, stock splits, stock combinations and other similar transactions.

The holders of Series B Preferred Stock are entitled to cumulative cash dividends at an annual rate of 15%, or $150 per share, based on the stated value per share. Dividends shall accrue for as long as any shares of Series B Preferred Stock remain issued and outstanding and are payable monthly in arrears. For the first two years, we may elect to pay the dividend amount in additional shares of Series B Preferred Stock rather than cash. The holders of the Series B Preferred Stock are entitled to vote with the Class A Common Stock as a single class on an as-converted basis.

On April 1, 2025, we issued to an accredited investor a convertible promissory note in the principal face amount of $1.65 million in consideration for an advance we received of $1.5 million. The note accrues interest at the rate of 15% per annum, unless an event of default (as defined in the note) occurs, at which time the note would accrue interest at 18% per annum. The note will mature on September 30, 2025. The note is convertible into shares of Class A Common Stock at a conversion price equal to the greater of (i) the Floor Price and (ii) the lesser of 75% of the VWAP (as defined in the note) of the Class A Common Stock during the five trading days immediately prior to (A) the date of issuance of the note or (B) the date of conversion into shares of Class A Common Stock. During July 2025, we issued 920,265 shares of Class A Common Stock valued at $0.7 million and during August 2025 we paid $1.0 million in payment of all principal and accrued interest on the note.

On April 8, 2025, we issued to an accredited investor a convertible promissory note in the principal face amount of $110,000 in consideration for $100,000. The note accrues interest at the rate of 15% per annum, unless an event of default (as defined in the note) occurs, at which time the note would accrue interest at 18% per annum. The note will mature on September 30, 2025. The note is convertible into shares of Class A Common Stock at a conversion price equal to the greater of (i) $0.45 and (ii) the lesser of (A) 75% of the VWAP (as defined in the note) of the Class A Common Stock during the five trading days immediately prior to the date of issuance of the note or (B) 75% of the lowest daily VWAP of the Class A Common Stock during the five trading days immediately prior to the date of conversion into shares of Class A Common Stock. On June 16, 2025, we issued 60,526 shares of Class A Common Stock in payment of all principal and accrued interest.

On April 15, 2025, we issued to two accredited investors convertible promissory notes in the aggregate principal face amount of $5.0 million in aggregate gross consideration of $4 million in cash paid by the investors, prior to placement agent fees and expenses of approximately $0.5 million. The notes were issued with an OID of 20%, or $1 million. The notes do not accrue interest unless an event of default (as defined in the notes) occurs, at which time the notes would accrue interest at 20% per annum. The notes matured on September 30, 2025. The notes were convertible into shares of Class A Common Stock at a conversion price equal to the greater of (i) $0.40 and (ii) 80% of the lowest closing price of the Class A Common Stock during the five trading days immediately prior to the date of conversion into shares of Class A Common Stock. Between June 18, 2025 and July 1, 2025, we issued 2.8 million shares of Class A Common Stock valued at $3.4 million. The remaining balance of $1.6 million was paid on the maturity date.

On May 13, 2025, we entered into an OID only term note agreement with an institutional investor with a principal amount of $1.4 million and an OID of $0.1 million. The maturity date of the promissory note is May 27, 2025. All principal and accrued interest on this promissory note has been paid. Mr. Ault entered into a personal guaranty agreement for the benefit of the investor.

On June 6, 2025, we entered into a settlement agreement with our defense affiliate Gresham and Gresham’s senior secured lenders pursuant in its Chapter 11 bankruptcy proceedings. On November 28, 2025, the United States Bankruptcy Court for the District of Arizona confirmed Gresham’s bankruptcy plan. Under that plan, Gresham’s senior lenders released Gresham and us in exchange for a settlement payment. That payment was made on October 1, 2025. Consequently, Gresham may be deemed to have emerged from bankruptcy on November 28, 2025.

On June 9, 2025, Sentinum entered into a Hosting Services Agreement (the “Agreement”) with a data center hosting company (the “Service Provider”). Under the Agreement, the Service Provider provides Sentinum with operations and asset management services and access to approximately 20 megawatts of energy capacity and other critical infrastructure to be used for Sentinum’s Bitcoin mining operations. The Agreement has an initial term of one year with automatic one-year renewals unless either Sentinum or the Service Provider elects to terminate the Agreement 90 days prior to the end of the current term. Sentinum deploys approximately 6,800 S19j miners (the “Miners”) at the Service Provider’s data center.

Sentinum paid the Service Provider a non-refundable fee of $10 per Miner for the setup, installation and configuration of the Miners (the “Initial Setup Fee”) as well as an initial deposit of $0.8 million (the “Initial Deposit” and together with the Initial Setup Fee, the “Initial Fees”). The Initial Fees shall be paid out of Bitcoin rewards and Bitcoin transaction fee awards (the “Earned BTC”) that would otherwise be due to the customer until such time as 100% of the Initial Fees have been paid. Thereafter, Sentinum is entitled to 70% of the Earned BTC and the Service Provider is entitled to 30%. The Agreement provides that, during periods of high demand on the utility grid, the Service Provider has the option to curtail the electrical load to the facility and redirect the electrical load to the utility grid. Upon any curtailment, the net profits from such energy sales shall be equally split between Sentinum and the Service Provider.

On July 31, 2025, we entered into a securities purchase agreement (the “July 2025 SPA”) with Ault & Company, pursuant to which we agreed to sell to Ault & Company, in one or more closings, up to 100,000 shares of Series H convertible preferred stock (“Series H Preferred Stock”) for a total purchase price of up to $100 million. On November 7, 2025, we and Ault & Company entered into an amendment to the July 2025 SPA to extend its termination date. Under the amendment, the termination date will be extended to the later of (i) one year after we have a sufficient number of authorized shares of Class A Common Stock to satisfy all conversion and share-reserve requirements under the July 2025 SPA or (ii) December 31, 2027. Through the date of this Annual Report, pursuant to the July 2025 SPA, we have sold 4,000 shares of Series H Preferred Stock to Ault & Company.

Each share of Series H Preferred Stock has a stated value of $1,000 and is convertible into shares of Class A Common Stock at a conversion price equal to the greater of (i) $0.10 per share, and (ii) the lesser of (A) $0.79645 or (B) 105% of the volume-weighted average price of the Class A Common Stock during the ten trading days immediately prior to the date of conversion. The conversion price is subject to adjustment in the event of an issuance of Class A Common Stock at a price per share lower than the conversion price then in effect, as well as upon customary stock splits, stock dividends, combinations or similar events. The holders of Series H Preferred Stock are entitled to cumulative cash dividends at an annual rate of 9.5%, or $95.00 per share, based on the stated value per share. Dividends shall accrue for 10 years from the date of issuance of such shares of Series H Preferred Stock and are payable monthly in arrears. For the first two years, we may elect to pay the dividend amount in shares of Class A Common Stock rather than cash. The holders of the Series H Preferred Stock are entitled to vote with the Class A Common Stock as a single class on an as-converted basis.

On August 29, 2025, we entered into an At-the-Market Issuance Sales Agreement with Wilson-Davis, as sales agent to sell shares of our Class A Common Stock, having an aggregate offering price of up to $125 million from time to time, through an “at the market offering” (the “First ATM Offering”) as defined in Rule 415 under the Securities Act. On August 29, 2025, we filed a prospectus supplement with the SEC relating to the offer and sale of up to $125 million of Class A Common Stock in the First ATM Offering. We sold 255,490,454 shares of our Class A Common Stock under the First ATM Offering for gross proceeds of $125 million and then terminated the First ATM Offering. The offer and sale of the shares of our Class A Common Stock were made pursuant to our effective “shelf” registration statement on Form S-3 and an accompanying base prospectus contained therein (Registration Statement No. 333-288778) filed with the SEC on July 18, 2025, and declared effective by the SEC on August 28, 2025.

On December 2, 2025, we issued to JGB Capital, LP, JGB Partners, LP and JGB Capital Offshore Ltd. the Convertible Notes in the aggregate principal face amount of $12.8 million in consideration for an aggregate of $12.0 million paid to us. The Convertible Notes bear interest at 12.5% per annum, mature on December 2, 2027, and are convertible into shares of our Class A Common Stock at a conversion price equal to the lower of (i) $0.3235 per share and (ii) 85% of the lowest daily volume-weighted average price during the three (3) trading days immediately preceding and including the applicable conversion date, but not less than the Floor Price.

On December 19, 2025, we entered into an At-the-Market Issuance Sales Agreement with Spartan Capital Securities, LLC (“Spartan”), as sales agent to sell shares of our Class A Common Stock, having an aggregate offering price of up to $50 million from time to time, through an “at the market offering” (the “Second ATM Offering”) as defined in Rule 415 under the Securities Act. On December 19, 2025, we filed a prospectus supplement with the SEC relating to the offer and sale of up to $50 million of Class A Common Stock in the Second ATM Offering. On January 16, 2026, we amended the At-the-Market Issuance Sales Agreement and filed a prospectus supplement to indicate that Spartan will serve as the lead sales agent and to add Wilson-Davis as an additional sales agent.

Through April 12, 2026, we have sold 91.6 million shares of our Class A Common Stock under the Second ATM Offering for gross proceeds of approximately $18.1 million. The offer and sale of the shares of our Class A Common Stock are being made pursuant to our effective “shelf” registration statement on Form S-3 and an accompanying base prospectus contained therein (Registration Statement No. 333-291595) filed with the SEC on November 17, 2025, and declared effective by the SEC on December 11, 2025.

On February 13, 2026, we entered into an At-the-Market Issuance Sales Agreement with Wilson Davis, as sales agent to sell shares of our 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock, par value $0.001 per share (the “Series D Preferred”), having an aggregate offering price of up to $35.4 million from time to time, through an “at the market offering” (the “Series Preferred D ATM Offering”) as defined in Rule 415 under the Securities Act. On February 13, 2026, we filed a prospectus supplement with the SEC relating to the offer and sale of up to $35.4 million of Series D Preferred in the Series D Preferred ATM Offering.

Through the date of this Annual Report, we have sold 2,909 shares of our Series D Preferred under the Series D Preferred ATM Offering for gross proceeds of approximately $65,000. The offer and sale of the shares of our Series D Preferred are being made pursuant to our effective “shelf” registration statement on Form S-3 and an accompanying base prospectus contained therein (Registration Statement No. 333-291595) filed with the SEC on November 17, 2025, and declared effective by the SEC on December 11, 2025.

Corporate Information

We are a Delaware corporation, initially formed in California in 1969 and reincorporated in Delaware in 2017. We are located at 11411 Southern Highlands Parkway, Suite 190, Las Vegas, NV 89141. Our phone number is (949) 444-5464 and our website address is www.hyperscaledata.com.

Our Corporate Structure

On certain dates in 2024, 2025 and 2026, we reorganized our corporate structure pursuant to a series of transactions by and among the Company and its directly and indirectly owned subsidiaries as well as third parties. The purpose of the reorganization was to simplify our organizational and reporting structure to more accurately reflect our business operations. As a result of the foregoing transactions, our corporate structure is currently as follows:

We currently expect the divesture of Ault Capital (the “Divestiture”) to occur in the second quarter of 2027. Upon the occurrence of the Divestiture, we would be an owner and operator of data centers to support high-performance computing services, as well as a holder of digital assets. Until the Divestiture occurs, we will continue to provide, through Ault Capital and its wholly and majority-owned subsidiaries and strategic investments, mission-critical products that support a diverse range of industries, including an AI software platform, equipment rental services, defense/aerospace, industrial, automotive, medical/biopharma and hotel operations. In addition, Ault Capital is actively engaged in private credit and structured finance through Ault Lending.

On December 23, 2024, we issued one million (1,000,000) shares of Series F Preferred Stock to all common stockholders and holders of the Series C Preferred Stock on an as-converted basis. The Divestiture will occur through the voluntary exchange of the Series F Preferred Stock for shares of Class A Common Stock and Class B Common Stock of Ault Capital (collectively, the “ACG Shares”). We remind our stockholders that only those holders of the Series F Preferred Stock who agree to surrender such shares, and do not properly withdraw such surrender, in the exchange offer through which the Divestiture will occur, will be entitled to receive the ACG Shares and consequently be shareholders of Ault Capital upon the occurrence of the Divestiture. Therefore, if you do not own shares of our Series F Preferred Stock or you do not surrender your shares of Series F Preferred Stock, you will not receive any ACG Shares of Ault Capital upon the Divestiture, you will have no ongoing rights to the assets, operations, or future performance of Ault Capital and its subsidiaries, and the value of your investment will only reflect the remaining business of Hyperscale Data, including Sentinum and Omnipresent.

Our Business Strategy

As principally a holding company, our business strategy is designed to increase stockholder value. Under this strategy, we are focused on managing and financially supporting our existing subsidiaries and partner companies, with the goal of pursuing monetization opportunities and maximizing the value returned to stockholders. We have, are and will consider initiatives including, among others: public offerings, the sale of individual partner companies, the sale of certain or all partner company interests in secondary market transactions, or a combination thereof, as well as other opportunities to maximize stockholder value, such as activist trading. We anticipate returning value to stockholders after satisfying our debt obligations, working capital needs and other senior capital commitments.

On October 7, 2019, we created an Executive Committee which is comprised of our Executive Chairman, Chief Executive Officer and President. The Executive Committee meets on a daily basis to address the Company’s critical needs and provides a forum to approve transactions which are communicated to our Chief Financial Officer and Senior Vice President of Finance on a bi-weekly basis by our Chief Executive Officer.

Our Executive Committee approves and manages our investment and trading strategy. The Executive Committee has decades of experience in financial, investing and securities transactions. Led by our Founder and Executive Chairman, Milton C. (Todd) Ault, III, we seek to find undervalued companies and disruptive technologies with a global impact. We use a traditional methodology for valuing securities that primarily looks for deeply depressed prices. Upon making an investment, we often become actively involved in the companies we seek to acquire. That activity may involve a broad range of approaches, from influencing the management of a target to take steps to improve stockholder value, to acquiring a controlling or sizable but non-controlling interest or outright ownership of the target company in order to implement changes that we believe are required to improve its business, and then operating and expanding that business. Mr. Ault relies heavily on William B. Horne, our Vice Chairman and Chief Executive Officer, and Henry Nisser, our President and General Counsel, to provide analysis and guidance on all acquisition targets and throughout the acquisition process.

From time to time, we engage in discussions with other companies interested in our subsidiaries or partner companies, either in response to inquiries or as part of a process we initiate. To the extent we believe that a subsidiary partner company’s further growth and development can best be supported by a different ownership structure or if we otherwise believe it is in our stockholders’ best interests, we will seek to sell some or all of our position in the subsidiary or partner company. These sales may take the form of privately negotiated sales of stock or assets, mergers and acquisitions, public offerings of the subsidiary or partner company’s securities and, in the case of publicly traded partner companies, transactions in their securities in the open market. Our plans may include taking subsidiaries or partner companies public through rights offerings, mergers or spin-offs and directed share subscription programs. We will continue to consider these and functionally equivalent programs and the sale of certain subsidiary or partner company interests in secondary market transactions to maximize value for our stockholders.

Over the recent past, we have provided capital and relevant expertise to fuel the growth of businesses in Bitcoin mining, generative AI and metaverse platform development, crane services, defense/aerospace, industrial, automotive, medical/biopharma, consumer electronics and textiles. We have provided capital to subsidiaries as well as partner companies in which we have an equity interest or may be actively involved, influencing development through board representation and management support.

Our Principal Subsidiaries and their Businesses

The following is a brief summary of the businesses in which we own a controlling interest, or whose financial statements we consolidated in this Annual Report:

Sentinum

Sentinum conducts data center operations and Bitcoin mining through ACS.

Sentinum’s revenue is currently generated primarily from mining Bitcoin for our own account. However, during 2024 we began the process of transitioning our primary operations from Bitcoin mining to developing our Michigan data center, which constitutes a 617,000 square foot energy-efficient facility located on a 34.5 acre site in southern Michigan (the “Michigan Facility”) to support the growing demand of enterprise, HPC and AI cloud providers with high-density workloads.

ACS has entered into an agreement to acquire approximately 48.5 acres of land, providing the Company opportunity to expand the Michigan Facility and continue to address the surging demand for AI and high-performance computing. Upon the closing of this agreement, the Company will own approximately 83 acres, more than doubling its current acreage in the area.

Through its wholly owned and operated data centers, Sentinum’s mission is to support internal computing requirements and to empower AI-focused businesses and other businesses requiring high-density power with reliable, scalable, and secure hosting solutions. We currently have data centers in Michigan and Montana. The Michigan Facility’s design and available power provides Sentinum the ability to create bespoke solutions enabling it to seize growth opportunities within the broader data center services market. The Michigan Facility’s design continues to evolve to address prospective customer requirements, including cooling techniques such as direct to chip heat exchange and backup power systems such as uninterruptible power supplies with batteries to store energy. Sentinum can provide a range of service options tailored to a customer’s needs, including HPC and AI. HPC and AI are synonymous with applications requiring immense computational power to process complex models and perform real-time inferences. These use cases are being adopted by a wide range of industries, such as healthcare, energy, automotive, robotics and other autonomous systems. We are exploring the potential of working directly with end user companies as well as companies with which we could collaborate to provide comprehensive solutions.

Sentinum’s attentiveness to disruptive technologies such as HPC, AI and blockchain combined with the foundational elements of data centers, power infrastructure, telecommunications and security enable it to support the internal operations for Bitcoin mining alongside non-mining solutions for third party customers. The economies of scale created by Bitcoin mining operations provide a competitive advantage to Sentinum as it seeks to add non-mining applications to its services portfolio. If successful in adding non-mining applications, it is highly likely that the Bitcoin mining operations will be gradually phased out. Sentinum continues to evaluate opportunities to add HPC and AI applications. Sentinum conducts preliminary engineering design sessions with prospects and provides site tours at its Michigan Facility for prospective customers that we believe represent qualified opportunities. Sentinum continually monitors critical equipment supply chains and lead times in support of preferred installation timelines requested by prospective customers. During April 2025, Sentinum completed the installation requirements for deployment of a 250 kilowatts HPC customer.

Sentinum currently mines Bitcoin using purpose-built computers (or “miners”) to solve complex cryptographic algorithms (or “verify” or “solve” blocks) in the blockchain in exchange for rewards and fees denominated in the native token of that blockchain network, which is Bitcoin. Sentinum’s miners provide computing power to a Bitcoin mining pool operator, in which all the participants’ machines mine Bitcoin as a collective group, and Sentinum gets paid the expected value of both the block reward and transaction fees for doing so. The mining pool operator receives block rewards and transaction fees paid in Bitcoin by the blockchain when the mining pool finds new blocks. The reward and transaction fees are then shared by the pool participants based on their hash rate contributions to the pool, less a small amount of fees.

We have determined that Bitcoin, the only crypto asset that Sentinum mines, would likely not be considered a security under U.S. federal securities laws, in consultation with outside counsel. We base our analysis on relevant case law, applying the frameworks established by the U.S. Supreme Court and taking into consideration relevant guidance by the SEC and its staff. A particular crypto asset’s status as a “security” in any relevant jurisdiction is subject to a high degree of uncertainty and if a regulator disagrees with our characterization of Bitcoin, we may be subject to regulatory scrutiny, investigations, fines and penalties, which may adversely affect our business, operating results and financial condition. A determination that Bitcoin that we own or mine is a “security” may adversely affect the value of Bitcoin and our business.

In August 2025, we began to acquire crypto assets for investment purposes. As of December 31, 2025, we held approximately 525 Bitcoin valued at $46.2 million, based on the fair value as of such date. During the year ended December 31, 2025, our mining operations generated a loss from operations of $14.2 million and revenue of $22.6 million. In comparison, during the year ended December 31, 2024, our mining operations generated a loss from operations of $12.6 million and revenue of $31.5 million. As of December 31, 2025, the $46.2 million carrying value of our Bitcoin represented 14.7% of our total assets of $313.7 million as of such date.

Digital Asset Treasury Strategy

On September 15, 2025, we announced the launch of a $100 million Bitcoin treasury strategy as part of our transformation into a pure play AI data center and digital asset company, which we refer to as our digital asset treasury strategy (“DAT”). The initiative will be funded by capital raised through our previously announced at-the-market equity program and from Bitcoin generated from our mining operations. Contemporaneously, we are accelerating the expansion of our Michigan Facility, where customer-installed NVIDIA graphics processing unit (“GPU”) servers are enabling advanced AI and HPC workloads.

Through Sentinum, we have mined Bitcoin for years, providing a foundation of operational expertise in digital assets. Building on this experience, we now plan to hold Bitcoin as a primary treasury reserve asset, similar to the approach pioneered by MicroStrategy, while continuing to invest in Michigan as our long-term infrastructure hub.

As part of the DAT, we publish our crypto asset holdings weekly, reinforcing our commitment to transparency and accountability.

As of April 12, 2026, our Bitcoin treasury, consisting of Bitcoin generated from mining operations and Bitcoin acquired in the open market, totaled approximately $45.6 million, based on the price of Bitcoin as of April 12, 2026.

Sentinum Breakeven Analysis

Since commencement of Sentinum’s mining operations in 2021, we have received approximately 3,316 Bitcoin for providing computing power to a Bitcoin mining pool operator and from hosted mining operations, pursuant to the terms of a Master Services Agreement (“MSA”) with Core Scientific, Inc. (“Core Scientific”). The MSA terminated on August 31, 2024. The Bitcoin received is available for sale in the ordinary course of business. Historically, we have sold Bitcoin as it is mined to fund our operating expenses. We believe that holding Bitcoin represents an attractive option to increase our liquid assets and in August 2025 we changed our corporate policy and we began holding all Bitcoin that we mined. We believe that our integrated model with close control over our power sources and owning our Bitcoin mining data center helps us to produce Bitcoin with attractive cost efficiency, since we are not burdened with additional costs that are typical in a third party hosting relationship such as per miner operational fees and revenue sharing. This helps us to produce Bitcoin, excluding depreciation of our miners which is a non-cash expense, at a cost that we believe is attractive versus the price of Bitcoin.

Our net cost of power was between approximately $42 to $62 per megawatt-hour in 2024 to the present. During the years ended December 31, 2025 and 2024, we had an average of approximately 10,000 and 16,000 miners in operation, respectively. In aggregate, these miners generated approximately 212 and 677 Bitcoin during the years ended December 31, 2025 and 2024, respectively, for providing computing power to a Bitcoin mining pool operator and from hosted mining operations with Core Scientific. Alternatively, during the years ended December 31, 2025 and 2024, we generated an average of 0.58 and 1.85 Bitcoin per day, respectively, from our mining operations. Due to the termination of our hosting agreement with Core Scientific and the block reward halving that occurred during April 2024, the average Bitcoin mined from our operations has decreased to approximately $0.58 per day during the year ended December 31, 2025.

During October 2025, Sentinum purchased 4,092 S21+ and S21 Pro Bitcoin miners (the “S21 Miners”) for approximately $16 million. The S21 Miners operate at a higher hashrate than the older model S19J Pro Bitcoin miners that were replaced. As a result, during the quarter ended March 31, 2026, the average Bitcoin mined increased to approximately 0.76 Bitcoin per day.

The following table reflects the actual costs that we incurred to mine one Bitcoin during the years ended December 31, 2025 and 2024.

Additionally, Sentinum’s daily general and operating costs were approximately $8,247 and ($1,101), respectively, per Bitcoin mined during the years ended December 31, 2025 and 2024. Conversely, the price of Bitcoin ranged from approximately $38,500 to approximately $108,300 during the year ended December 31, 2024 and from approximately $74,400 to approximately $126,300 during the year ended December 31, 2025, and was approximately $71,100 as of April 8, 2026, according to Coin Market Cap.

On February 24, 2023, BNI Montana entered into an asset purchase agreement with TypeX, LLC to acquire two land lease agreements and two corresponding power purchase agreements in Montana. The lease and power agreements run for a period of 10 years, with a 10-year renewal option. Sentinum is building out and developing fully operational data centers dedicated to Bitcoin mining operations on the properties (the “Montana Facilities”). If we complete the initial phase of development of the Montana Facilities, which is currently on hold, then we would expect the Montana Facilities to provide up to a combined 20 megawatts (“MWs”) of power, enabling up to 6,500 S19j Pro Antminers to operate. Inclusive of costs previously incurred to acquire two land lease agreements and two corresponding power purchase agreements, the Montana Facilities would cost approximately $7 million. Further, given the favorable cost differential for power between Montana and Michigan, the increase in operating costs and depreciation from capitalized expenditures is expected to approximate the power cost savings. However, while completion of the development of the Montana Facilities would not be expected to have a negative impact on our operating results, we have currently placed this project on hold to focus on the development of our Michigan Facility to support HPC and AI applications. During 2026, we anticipate large expenditures in our Michigan Facility to facilitate the transition of the facility to support HPC and AI applications. Initially, these expenditures will likely increase Sentinum’s losses unless we are able to pass these costs on to our future customers. These uncertainties make it impossible to predict when, if ever, Sentinum will achieve profitable operations.

Thus, if the price of Bitcoin, level of difficulty to mine, the amount of the block reward or the amount of Bitcoin earned by miners for mining one block on the Bitcoin blockchain remain constant, then Sentinum will not be profitable in 2026. While we do not expect that Sentinum will achieve profitability during 2026, the expected cash generated from our Bitcoin mining operations (prior to any decision to hold or sell mined Bitcoin) is still expected to exceed that of our operating costs given the significance of depreciation charges, which are expected to account for nearly 30% of Sentinum’s total costs of operations during 2026.

During the year ended December 31, 2025, Sentinum reported a loss from operations of approximately $14.2 million inclusive of depreciation and amortization of approximately $10.3 million. During the year ended December 31, 2024, Sentinum reported a loss from operations of approximately $12.6 million inclusive of depreciation and amortization and an impairment charge on our miners of approximately $25.4 million. As such, excluding capital expenditures, Sentinum generated approximately $12.8 million in cash for the year ended December 31, 2024. During the year ended December 31, 2025, Sentinum’s loss from operations, net of depreciation, resulted in a use of cash of $3.9 million. The use of cash during 2025 was due to the Company’s accumulation of Bitcoin, which resulted in a decline in the fair value of its Bitcoin of $7.6 million. During 2024, the cash generated from Sentinum’s mining operations was used to pay for a portion of the costs we incurred. Beginning around September 2025, consistent with the DAT strategy, we have not sold any Bitcoin mined and as a result we do not anticipate that our mining operations will contribute cash in the near term.

Bitcoin and Bitcoin Mining Overview

Blockchain and Bitcoin Overview

Many forms of crypto assets, including Bitcoin, are a type of digital asset that function as a medium of exchange, a unit of account and/or a store of value (i.e. a new form of digital money). Crypto assets operate by means of blockchain technology, which generally uses open-source, peer-to-peer software to create a decentralized digital ledger that enables the secure use and transfer of crypto assets. We believe that Bitcoin and the associated blockchain technology has potential advantages over traditional payment systems, including: the tamper-resistant nature of blockchain networks; rapid-to-immediate settlement of transactions; lower fees; elimination of counterparty risk; protection from identify theft; broad accessibility; and a decentralized nature that enhances network security by reducing the likelihood of a “single point of failure.” However, since centralized exchanges, which operate intermediate processes for executing trades, storing coins and initiating transactions, account for the majority of Bitcoin trading volume there remains the risk that a malicious actor may be able to alter blockchains on which transactions of crypto asset reside and rely by constructing fraudulent blocks or preventing certain transactions from completing in a timely manner, or at all. Additionally, cybersecurity risks from unauthorized third parties employing illicit operations such as hacking, phishing and social engineering, could introduce a level of counterparty risk, in other words a risk that a party is unable to fulfill its contractual obligations. Recently, crypto assets, and Bitcoin in particular, have gained widespread mainstream attention and have begun to experience greater adoption by both retail and institutional holders and the broader financial markets. For example, Bitcoin’s aggregate market value had appreciated to $2.27 trillion in September 2025 compared to $828 billion in December 2023. All figures are derived from Coin Market Cap. As Bitcoin, and blockchain technologies more generally, have entered the mainstream, prices of Bitcoin have reached all-time highs, albeit with periodic price decreases, and the broader ecosystem has continued to develop. While we expect the value of Bitcoin to remain volatile, we believe this increase in its aggregate market value signals institutionalization of Bitcoin and wider adoption of crypto asset. For example, in January 2024, the SEC approved the listing and trading of Bitcoin exchange-traded funds, of which, as of April 8, 2026, approximately 40 are trading with over $96 billion of Bitcoin assets held (https://etfdb.com/themes/bitcoin-etfs/#complete-list&sort_name=assets_under_management&sort_order=desc&page=1).

Bitcoin is a decentralized asset that enables near instantaneous transfers. Transactions occur via an open-source, cryptographic protocol platform which uses peer-to-peer technology to operate with no central authority. The online network hosts the public transaction ledger, known as the blockchain, and each crypto asset is associated with a source code that comprises the basis for the cryptographic and algorithmic protocols governing the blockchain. In a crypto asset network, every peer has its own copy of the blockchain, which contains records of every historical transaction — effectively containing records of all account balances. Each account is identified solely by its unique public key (making it effectively anonymous) and is secured with its associated private key (kept secret, like a password). The combination of private and public cryptographic keys constitutes a secure digital identity in the form of a digital signature, providing strong control of ownership.

No single entity owns or operates the network. The infrastructure is collectively maintained by a decentralized public user base. As the network is decentralized, it does not rely on either governmental authorities or financial institutions to create, transmit or determine the value of the currency units. Rather, the value is determined by market factors, supply and demand for the units, the prices being set in transfers by mutual agreement or barter among transacting parties, as well as the number of merchants that may accept the crypto asset. Since transfers do not require involvement of intermediaries or third parties, there are only nominal transaction costs in direct peer-to-peer transactions. For example:

The network fee is separate and distinct from the pool fee we pay Luxor Technology (“Luxor”) for its services in acting as a pool operator, discussed below. The network fee is applicable to anyone who transacts on the blockchain.

Given that block space is limited, mining fees can and often do fluctuate significantly from transaction to transaction as a result of “congestion.” However, this congestion does not negate any of the statements made immediately above.

Units of Bitcoin can be converted to fiat currencies, such as the U.S. dollar, at rates determined on various exchanges, such as Binance, Coinbase, Bybit, Kraken, Gemini and others. Bitcoin prices are quoted on various exchanges and fluctuate with extreme volatility.

We believe that Bitcoin, the only crypto asset we provide computing power to a mining pool operator for mining purposes, offers many advantages over traditional, fiat currencies, though many of these factors also present potential disadvantages and may introduce additional risks, including:

However, crypto assets may not provide all of the benefits they purport to offer.

Limitations on Bitcoin Mining

In addition to competition, there are two principal factors that may affect Bitcoin mining companies: (i) limitations on the supply of Bitcoin; and (ii) the market price of Bitcoin.

The blockchain’s method for creating new Bitcoins is mathematically determined in a manner such that the supply of Bitcoins grows at a limited rate pursuant to a pre-set schedule. Specifically, the number of Bitcoins awarded for solving a new block is automatically halved for every 210,000 blocks that are solved. The current fixed reward for solving a new block is 3.125 Bitcoins per block, which was reduced from 6.25 Bitcoins in April 2024 and will be reduced further to 1.5625 Bitcoins per block in approximately March 2028. This deliberately controlled rate of Bitcoin creation means that the number of Bitcoins in existence will never exceed 21 million and that Bitcoin cannot be devalued through excessive production unless the Bitcoin network’s source code and the underlying protocol for Bitcoin issuance is altered. This also means, however, that our revenue prospects will decline unless the price of a Bitcoin increases commensurately or we acquire more miners.

We only participate in mining pools that mine Bitcoin. Our ability to generate revenue from these mining operations will be dependent on the price of Bitcoin. The price of Bitcoin has experienced substantial volatility, including fluctuation patterns which may reflect “bubble” type volatility, meaning that high or low prices at a given time may not be indicative of the current or future value of Bitcoin. The price of a Bitcoin may be subject to rapidly changing investor and market sentiment, and may be influenced by factors such as technology, regulatory developments and media coverage. Further, Bitcoin’s value may be based on various factors, including their acceptance as a means of exchange or purchasing power by consumers and vendors, volume, liquidity and transferability and market demand. Bitcoin’s current price reflects, in part, the belief by some that Bitcoin could become a widely accepted form of currency; however, if this prediction turns out to be incorrect its price could decrease dramatically, as would our prospects for future revenue and profits. See “Risk Factors – Risks Related to Our Bitcoin Operations” for more information on the risks we face due to our mining of Bitcoin and its speculative and volatile nature.

Bitcoin Mining and Mining Pools

As a participant in a Bitcoin mining pool, we use specialized miners to solve cryptographic math problems necessary to record and “publish” crypto asset transactions to blockchain ledgers. Generally, each crypto asset has its own blockchain, which consists of software code (also known as a protocol), which is run by all the computers on the network for such blockchain. Within this code, transactions are collated into blocks, and these blocks must meet certain requirements to be verified by the blockchain software, added to the blockchain or ledger of all transactions and published to all participants on the network that are running the blockchain software. After a transaction is verified, it is combined with other transactions to create a new block of data for the blockchain. For proof-of-work blockchains, the process of verifying valid blocks requires computational effort to solve a cryptographic equation, and this computational effort protects the integrity of the blockchain ledger. This process is referred to as “mining.” As a reward for verifying a new block, miners receive payment in the form of the native crypto asset of the network, in our case Bitcoin. This payment is comprised of a block reward (i.e., the automatic issuance of new Bitcoin) and the aggregated transaction fees for the transactions included in the block (paid in existing crypto asset tokens by the participants to the transactions). The block reward payments and the aggregated transaction fees provide the incentive for miners to contribute hash rate to the network.

A “hash” is the actual cryptographic function run by the miners, and is a unique set of numbers and letters derived from the content of the block. The protocol governing the relevant blockchain sets certain requirements for the hash. Miners compete to be the first to generate a valid hash meeting these requirements and, thereby, secure payment for solving the block. Hash rate is the speed at which miners can complete the calculation, and therefore is a critical measure of performance and computational power. A high rate means a miner may complete more calculations over a given period and has a greater chance to solve a block. An individual miner has a hash rate total of its miners seeking to mine a specific crypto asset, and the blockchain-wide hash rate for a specific crypto asset, in our case Bitcoin, can be understood as the aggregate of the hash rates of all of the miners actively trying to solve a block on that blockchain at a given time.

The protocols governing Bitcoin are coded to regulate the frequency at which new blocks are verified by automatically adjusting what is known as the “mining difficulty,” which is the level of computational activity required before a new block is solved and verified. For example, on the Bitcoin blockchain the protocol is coded such that a new block is solved and verified approximately every ten minutes. As such, to the extent the hash power on the network is increased or decreased due to, for example, fluctuations in the number of active miners online, mining difficulty is correspondingly increased or decreased to maintain the preset interval for the verification of new blocks.

On Bitcoin networks, the rewards for solving a block are also subject to periodic incremental halving. Halving is a process designed to control the overall supply and reduce the risk of inflation in Bitcoin using a proof-of-work consensus algorithm. After a predetermined number of blocks are added to the blockchain, the mining reward is cut in half, hence the term “halving.” The last halving for Bitcoin occurred on April 20, 2024. Transaction fees are variable and depend on the level of activity on the network. Generally, transaction fees increase during times of network congestion, as miners will prefer transactions with higher fees, and therefore a higher fee can reduce the time to process a transaction, and decrease when there are fewer transactions on the network.

As the total amount of available hash rate has increased on the Bitcoin network, it has become increasingly difficult for any individual miner to independently solve a block and as a result “mining pools” have emerged as an efficient way for miners to pool resources. Mining pools aggregate the hash rate of various miners participating in the mining pool. In this way the mining pool operator, rather than an individual miner, validates the block and receives the block reward and related transaction fees. The mining pool is organized by a third party, in our case, Luxor. All of the approximately 11,000 miners currently in operation at our Michigan and Montana facilities provide hash rate to the Luxor mining pool. In consideration for receiving a percentage of the earned block rewards and transaction fees, Luxor administers the pool and ensures that the participants in the pool receive their share of the block reward and related transaction fees, generally pro-rata to their contributed hash rate. Mining pools offer miners more predictable and consistent revenue compared to mining individually. We participate in mining pools by providing what the industry refers to as “hashrate” to the pool. Hashrate is defined as the computing power that our mining equipment produces when helping to validate a block that the mining pool is trying to solve. We use the FPPS, or Full Pay-Per-Share, method when mining with Luxor. Pursuant to the “Full Pay-Per-Share” model, both the block reward and the mining service charge are settled according to the theoretical profit. It includes the calculation of a standard transaction fee within a certain period and distributes it to mining pool participants according to their hash power contributions in the pool. It increases the mining pool participants’ earnings by sharing transaction fees. Standard transaction fees are calculated using a certain period which are then distributed to miners according to their hash power contributions in the pool. Luxor currently charges us a 0.68% mining fee.

We provide computing power to the mining pool, which is run by the mining pool operator with which we contract, which in turn provides transaction verification services. Based on the terms of the agreement, in our judgment, the mining pool operator is considered the principal in providing mining pool services. We recognize revenue, net of certain transaction fees from the mining pool operator, which are not considered material. Our current mining pool agreement is cancelable at any time by either party without penalty. Revenue received for providing computing power would be directly impacted positively or negatively should we start and stop providing computing power to the mining pool operator within a given reporting period.

Our Strategy

Own and Operate Our Mining Facilities

We have in the past invested heavily in purchasing, building and operating our mining facilities, though we have no intention of acquiring more miners. By owning and operating our miners at facilities that offer competitive advantages, including access to reliable, low-cost, renewable power, we expect to have greater control over the timing of the deployment of our miners. We also may enhance our ability to intelligently and quickly adapt our operating model and reap savings compared to paying for outsourced operations and infrastructure.

Reliable, Low-Cost, Renewable Power

Power represents our highest variable direct cost for our mining operations, with electrical power required to operate the miners. We believe the combination of increased mining difficulty, driven by greater hash rates, and the periodic adjustment of reward rates, such as the halving of Bitcoin rewards, will drive the increasing importance of power efficiency in Bitcoin mining over the long term. As a result, we are focused on deploying our miners at locations with access to reliable, renewable power sources, as successfully doing so should enable us to reduce our power costs.

Miners require considerable amounts of electrical energy to perform their functions and mine Bitcoin; consequently, a critical aspect of operating in the crypto asset mining industry is obtaining a reliable supply of electricity at a relatively low and stable cost. To this end, in January 2021, ACS purchased the Michigan Facility. Since the purchase of the Michigan Facility, we have invested in infrastructure improvements and began both ramping up the power capacity and installing miners. To date, we have increased the power load from 1.5 MWs to approximately 30 MWs. Currently, we have approximately 4,300 S19 XP Antminers and 3,900 S21+ Antminers in operation at our Michigan Facility but it is our intention to dedicate all the power capacity at the Michigan Facility to our AI hyperscale data center operations. If successful, we expect to either sell any idle miners in the secondary market or relocate any idle miners to a third party hosting facility, which could be between 15,000 and 18,000 miners.

We have also invested in a data center through BNI Montana. We have completed the build-out at one of the two sites at the Montana Facilities, which provides up to 10 MWs of power. If we complete the build-out of the second site, which is currently on hold pending the transition of our Michigan Facility to support HPC and AI applications, the Montana Facilities will provide up to a combined 20 MWs of power and allow us to operate approximately 6,500 miners. We believe that the capacity of the Montana Facilities can be significantly expanded, and we have begun an electrical load study in collaboration with the local utility to explore potential power upgrades. However, given the current price of Bitcoin and the level of difficulty to mine, at this time we have no plans to expand the capacity at the Montana Facilities, which has the capacity to operate approximately 3,250 S19j Pro Antminers. We presently have approximately 3,100 S19j Pro Antminers mining at the Montana Facilities.

We continue to evaluate other sites, locations, and partnerships for additional and alternative support of future mining operations. While we have not at present entered into any other agreements, we continue to explore and evaluate additional facilities that would enable us to expand our mining operations as needed.

Our Bitcoin Mining Operations

Currently, we have approximately 4,300 S19 XP Antminers and 3,900 S21+ Antminers in operation at our Michigan Facility and approximately 3,100 S19j Pro Antminers in operation at our Montana facility. Additionally, approximately 11,500 S19j Pro Antminers, 300 S19 XP Antminers and 200 S21+ Antminers are not in operation, primarily because of the termination of our hosting agreement with Core Scientific on August 31, 2024, and, to a lesser extent, due to units currently undergoing repairs. Antminers in operation have an aggregate mining production capacity of approximately 1.83 exahashes per second.

Our strategy includes identifying clean power for our Bitcoin mining operations. Management has considered the issues surrounding the environmental impact of our Bitcoin mining operations and concluded that the environmental impact of our mining operations is not material. The basis for this conclusion was that Indiana Michigan Power, the regulated utility that provides power to our Michigan Facility, reported that in 2023 it generated more than 87% of its energy from emission-free sources, including solar, wind, hydro and nuclear. The power source for our Montana Facilities, Basin Electric Power Cooperative, reported that approximately 28% of its power was from emission-free sources, primarily wind and hydro. Since we are only mining Bitcoin at our Michigan Facility, approximately 87% of our mining operations are being generated from emission-free sources. If we resume operations at our Montana Facilities, more than 75% of power used in our mining operations would be generated from emission-free sources. In addition to our continued expansion investments at the Michigan Facility, we also seek out new locations to support our Bitcoin mining business. We consider sites with a variety of offerings, including purchasing the site (as we have done in Michigan), but also leasing buildings and facilities (as we have done with the Montana Facilities), hosting relationships and strategic partnerships. At this time, we have not entered into any new mining agreements at locations other than the Michigan Facility and the Montana Facilities. We mine Bitcoin only.

Coins that are mined are held in a custodial account. We securely store our Bitcoin at Gemini Trust Company, LLC (“Gemini”), a regulated, audited and insured crypto asset custodian. Gemini is a fiduciary and qualified custodian under the New York Banking Law and is licensed by the New York State Department of Financial Services. Additionally, Gemini holds numerous money transmitter licenses or the statutory equivalent and has obtained System and Organization Controls (“SOC”) 1 Type 2 and SOC 2 Type 2 certifications from its independent third-party auditor, Deloitte and Touche LLP. A SOC 1 report evaluates controls that are applicable to internal control over financial reporting whereas a SOC 2 report evaluates a security framework that authenticates an organization’s ability to securely handle customer data. Further, Gemini has insurance coverage against the theft of crypto assets that results from a direct security breach or hack of Gemini’s systems, or theft by a Gemini employee.

The custody arrangements require that we mine to a custodial wallet address where the private key is held by the custodian and all keys for the wallet are held in cold storage. This provides a layer of protection in both the transaction and liquidation phases of the operations by using multi-factor and multi-person approval processes, to include know your customer and anti-money laundering (“AML”) procedures of the receiving party. We will either hold the Bitcoin or may choose to convert those assets into fiat currency depending on financial needs and plans. When we opt to convert the Bitcoin we sell or exchange our Bitcoin through Gemini, the custodian of our digital wallet. When we elect to make a sale or exchange our Senior Vice President - Finance submits a request to Gemini’s execution department to exchange Bitcoin for U.S. dollars. Gemini sends an approval email to both our CEO and CFO to approve. Once approved by either our CEO or CFO, Gemini executes the sale/exchange on its trading platform at current market prices, less commissions, and deposits the U.S. dollars into our bank account.

Beyond the foregoing, our custody agreement with Gemini provides that:

Currently, we retain Bitcoin generated from our mining activities as a treasury asset rather than converting it into fiat currency on a daily basis. We may periodically convert Bitcoin into cash to fund operating expenses or capital expenditures, but we are actively holding Bitcoin as part of our treasury strategy.

Regulation

The laws and regulations applicable to crypto asset are evolving and subject to interpretation and change. Governments around the world have reacted differently to crypto assets; certain governments have deemed them illegal, and others have allowed their use and trade without restriction, while in some jurisdictions, such as in the United States, many crypto assets are subject to extensive, and in some cases overlapping, unclear and evolving regulatory requirements, which generally does not apply to Bitcoin. As crypto assets have grown in both popularity and market value, the U.S. Congress and a number of U.S. federal and state agencies, including the Financial Crimes Enforcement Network (“FinCEN”), the SEC, the Commodity Futures Trading Commission (“CFTC”), Financial Industry Regulatory Authority (“FINRA”), the Consumer Financial Protection Bureau, the Department of Justice (“DOJ”), the Department of Homeland Security, the Federal Bureau of Investigation (“FBI”), the Internal Revenue Service (“IRS”) and state financial regulators, have been examining the operations of crypto asset networks, crypto asset users and crypto asset exchange markets, with particular focus on the extent to which crypto assets can be used to launder the proceeds of illegal activities or fund criminal or terrorist enterprises and the safety and soundness and consumer-protective safeguards of exchanges or other service-providers that hold, transfer, trade or exchange crypto assets for users.

Many of these state and federal agencies have issued consumer advisories regarding the risks posed by crypto assets to investors. In addition, federal and state agencies, and other countries have issued rules or guidance about the treatment of crypto asset transactions or requirements for businesses engaged in activities related to crypto assets. Depending on the regulatory characterization of the Bitcoin we mine, the markets for Bitcoin in general, and our activities in particular, may be subject to one or more regulators in the United States and globally. Ongoing and future regulatory actions may alter, perhaps to a materially adverse extent, the nature of crypto asset markets and our crypto asset operations. Additionally, U.S. state and federal, and foreign regulators and legislatures have taken action against crypto asset businesses or enacted restrictive regimes in response to adverse publicity arising from hacks, consumer harm, or criminal activity stemming from crypto asset activity. There is also increasing attention being paid by U.S. federal and state energy regulatory authorities as the total load of crypto mining grows and potentially alters the supply and dispatch functionality of the wholesale grid and retail distribution systems. Many state legislative bodies are also actively reviewing the impact of crypto mining in their respective states. For example, in May 2023, Montana enacted S.B. 178 which established a right-to-mine for digital assets and prevents local governments from enacting any ordinance, resolution, or rule that selectively targets digital asset miners. In addition to Michigan and Montana, other states are also considering or have enacted laws aimed at regulating crypto mining. For example, in 2022, New York placed a two-year moratorium on certain cryptocurrency mining companies that use fossil fuels, which expired in November 2024.

Environmental

The perceived threat of climate change continues to attract considerable attention in the United States and around the world. Numerous proposals have been made and could continue to be made at the international, national, regional and state levels of government to monitor and limit emissions of greenhouse gases (“GHGs”). These efforts have included consideration of cap-and-trade programs, carbon taxes, GHG disclosure obligations and regulations that directly limit GHG emissions from certain sources. In addition, President Biden identified addressing climate change and the energy transition as priorities under his Administration. He has issued executive orders and regulatory directives related to climate change, and has recommitted the United States to long-term international goals to reduce emissions. In recent years, the U.S. Congress has considered legislation to reduce emissions of GHGs and has included climate change considerations in its funding bills. For example, the Inflation Reduction Act of 2022, which appropriates significant federal funding for renewable energy initiatives, was signed into law in August 2022 and could accelerate the transition away from fossil fuels. These laws, initiatives, and associated regulations or other national or regional commitments to reduce GHG emissions could adversely affect fossil fuel consumption, require the installation of emissions control technologies, and increase the expense associated with the purchase of emissions reduction credits or allowances to comply with current or future emissions reduction programs.

At the federal level, the Environmental Protection Agency (“EPA”) has also adopted rules that, among other things, establish construction and operating permit reviews, emissions control standards, and monitoring and annual reporting for GHG emissions from certain large stationary sources. In November 2021, the Biden Administration released “The Long-Term Strategy of the United States: Pathways to Net-Zero Greenhouse Gas Emissions by 2050,” (the “2050 Plan”) which establishes a roadmap to net zero emissions in the United States by 2050 through, among other things, improving energy efficiency, decarbonizing energy sources via electricity, hydrogen and sustainable biofuels, eliminating subsidies provided to the fossil fuel industry, reducing non-CO2 GHG emissions and increasing the emphasis on climate-related risks across government agencies and economic sectors. Additionally, from time to time the EPA has proposed, revised, and adopted rules establishing new source performance standards for certain pollutants from coal-fueled electric generating plants.

We note that the implementation of the rule depends, in part, on the widespread development, adoption, and availability of carbon capture and storage technology and solutions, which may not be certain at this time. While many of the Biden Administration’s initiatives are being rolled back or are scheduled to be rolled back under the Trump Administration, including the abandonment of the 2050 Plan, there are no assurances that they will be rolled back or that future administrations will not look to reimpose such restrictions. While no final rules have been published to date and none are currently anticipated under the Trump Administration, any future proposed rule and any other new agency action or rulemaking that applies to our facilities could increase our compliance costs or otherwise materially restrict our operations. Currently, it is unclear how future legislation and regulation will affect our Bitcoin mining operations. The course of future legislation and regulation in the United States remains difficult to predict, and potential increased costs associated with new legislation or regulation cannot be predicted at this time.

Competition

Our business environment is constantly evolving, and cryptocurrency miners can range from individual enthusiasts to professional mining operations with dedicated data centers. We compete with other companies that focus all or a portion of their activities on cryptocurrency mining activities at scale. We face significant competition in every aspect of our business, including, but not limited to, the ability to raise capital, obtaining the lowest cost of electricity, obtaining access to energy sites with reliable sources of power, and evaluating new technology developments in the industry.

At present, the information concerning the activities of these enterprises may not be readily available as the vast majority of the participants in this sector do not publish information publicly or the information may be unreliable. Published sources of information include “bitcoin.org” and “blockchain.info”; however, the reliability of that information and its continued availability cannot be assured and the contents of these sites are not incorporated into this Annual Report.

A number of public companies (traded in the U.S. and internationally) and private companies may be considered to compete with us, including the following companies:

Intellectual Property

We do not currently own, and do not have any current plans to seek, any patents in connection with our existing and planned blockchain and cryptocurrency related operations. We do expect to rely upon trade secrets, trademarks, service marks, trade names, copyrights and other intellectual property rights and expect to license the use of intellectual property rights owned and controlled by others.

Blockchain Background

Blockchain technology first came to public attention in 2008 as the database technology that underpins Bitcoin, the world’s first cryptocurrency. Blockchains are generally open-source, peer-to-peer software programs that act as decentralized digital ledgers, each comprising a series of data “blocks” that are linked and secured using cryptography in a “chain.” The blockchain program consists of a software protocol with several functions. The software protocol is run by multiple computer systems or “nodes.” For many blockchain networks, each node has its own copy of the blockchain ledger, which contains a historical record of every transaction. The digital ledger continuously grows as new blocks are added to it to record the most recent transactions in a linear, chronological order. The same information is stored across a network of computers all over the world, and this record makes it possible to track the ownership and transfer of cryptocurrency from the creation of the blockchain to its current state, and effectively records of all account balances (as one can identify what account holds what value through the decentralized ledger).

We do not operate a complete node; rather, as noted above under the heading “Bitcoin Mining and Mining Pools,” we provide computing power to a pool operator.

The blockchain protocol allows users to submit transactions to the network for confirmation. However, a transaction will not be accepted by the protocol if the inputs to the transaction have previously been used in another transaction. This prevention of “double spending” is a key security feature of blockchain networks.

Another key function of the blockchain that protects the integrity of the network is the hashing process, which acts as a tamper-evident seal that confirms the validity of the new block and all earlier blocks. Hashing is the process of a block being posted to the network. Hashing results from miners, who are responsible for receiving broadcast transactions, processing those transactions into new blocks and updating the blockchain with the new blocks through hashing. The hashing process ties every new block to the existing block on the blockchain to ensure each is a continuous record of verified transactions.

The hashing algorithm on a proof-of-work blockchain network is a mathematical transformation function with two key properties. The first important function of hashing is that the algorithm accepts any alphanumeric dataset as an input and produces a unique output code. The smallest change in the dataset results in a significant change in the unique code. Any tampering of the dataset can be detected by re-hashing the data and checking for a change in the unique code. Any user that runs the hash algorithm on the same data will derive the same unique code. Consequently, the data on the distributed ledger can be run through a series of hash algorithms to create a unique code, which would reveal if any changes to the ledger have been made.

Second, whenever a new set or “block” of transactions is added to the ledger, it is appended with the code from the prior state of the ledger before it is hashed. Thus, the hash created from the new block will incorporate the hash from the previous block. An alteration made to an earlier block would make the hashes of all subsequent blocks invalid, as the discrepancy would be easily detected by future miners through the protocols governing the blockchain. If a hacker were to attempt to make a change to an earlier block and broadcast it along with following blocks to the other nodes on the network, that broadcast would be discarded in favor of one from a different node which complied with the requirements of the protocol.

Thus, in addition to creating new blocks, miners “vote” with their computer power, expressing their acceptance of valid blocks by working on adding them to the blockchain, and rejecting invalid blocks by refusing to work on them. If a miner’s proposed block is added to the blockchain by a majority of the nodes on the network, it is considered part of the blockchain. The nodes on the network synchronize with each other to ensure that once a block is accepted by the majority, the new block will eventually be added to all the nodes. Consequently, the historical state of the ledger can be changed if control of more than 50% of the network is obtained; however, in the case of widely held cryptocurrencies with non-trivial valuations, it may be economically prohibitive for any actor or group of actors acting in concert to obtain computing power that consists of more than 50% of the network.

Unlike proof-of-work networks, in which miners expend computational resources to compete to validate transactions and are rewarded cryptocurrency in proportion to the amount of computational resources expended, in a proof-of-stake network, miners (sometimes called validators) risk or “stake” assets to compete to be randomly selected to validate transactions and are rewarded cryptocurrency in proportion to the amount of assets staked. Any malicious activity, such as mining multiple blocks, disagreeing with the eventual consensus or otherwise violating protocol rules, results in the forfeiture or “slashing” of a portion of the staked assets. Proof-of-stake is viewed by some as more energy efficient and scalable than proof-of-work.

Blockchain technology enables the secure use and transfer of digital assets. “Digital asset” is a broad term that encompasses additional applications, including ownership, transaction tracking, identity management, and smart contracts. A digital asset can represent physical or virtual assets, a value, or a use right/service (e.g., computer storage space).

Whereas digital assets can take many forms and be used for a variety of functions, cryptocurrencies are a type of digital asset that primarily function as a medium of exchange, a unit of account, and/or a store of value. Cryptocurrencies allow anyone who holds a compatible wallet, anywhere in the world, to hold and transfer that cryptocurrency without the need for an intermediary or trusted third party. Units of a cryptocurrency may exist only as data on the internet, and often are not issued or controlled by any single institution, authority or government. Whereas most of the world’s money currently exists in the form of electronic records managed by central authorities such as banks, units of a non-government cryptocurrency exist as electronic records in a decentralized blockchain database. Because cryptocurrencies have no inherent intrinsic value, the value of cryptocurrencies is determined by the value that various market participants place on them through their transactions. Bitcoin, Ethereum and other cryptocurrencies have historically exhibited high price volatility relative to more traditional asset classes.

Private entities also issue digital assets called “stablecoins” whose prices are pegged to those of an underlying fiat currency, a commodity or other financial instrument or other physical asset and are therefore less susceptible to volatility. Stablecoins can be backed by fiat money, physical assets, or other crypto assets. Government institutions are also reportedly testing and considering issuing Central Bank Digital Currencies (“CBDC’s”). While stablecoins or CBDC’s may exhibit less price volatility than other cryptocurrencies, both rely on a central authority to establish the value of the asset, and therefore represent an exception to the general discussion of the design of cryptocurrencies in this Annual Report.

Each cryptocurrency has a source code that comprises the basis for the cryptographic and algorithmic protocols, which govern the blockchain. The source code is commonly open-source and therefore can be inspected by anyone, and is maintained on an ongoing basis through contributors proposing amendments to the protocol, which are peer reviewed and adopted by consensus among participants on the blockchain network. These protocols govern the functioning of the network, including the ownership and transfer of the cryptocurrency, and are executed on the decentralized peer-to-peer blockchain infrastructure. The peer-to-peer infrastructure on which a blockchain operates is not owned or operated by a single entity. Instead, the infrastructure is collectively maintained by a decentralized user base. Each peer user is generally known as a “node” or “miner,” and each miner processes transactions on the network in accordance with the protocols of the relevant cryptocurrency.

As a result, these cryptocurrencies do not rely on either governmental authorities or financial institutions to create, transmit or determine the value of units of cryptocurrency. Rather:

Cryptocurrencies may be open-source projects with no official developer or group of developers that control the network. However, certain networks’ development may be overseen informally by a core group of developers that may propose quasi-official releases of updates and other changes to the network’s source code. The release of updates to a blockchain network’s source code does not guarantee that the updates will be automatically adopted. Users and miners must accept any changes made to the source code by downloading the proposed modification of the network’s source code. A modification of the network’s source code is effective only with respect to the users and miners that download it. If a modification is accepted by only a percentage of users and miners, a division in the network will occur such that one network will run the pre-modification source code and the other network will run the modified source code. Such a division is known as a “fork.” Consequently, a modification to the source code becomes part of a blockchain network only if accepted by participants collectively having most of the processing power on the network.

Each “account” on a blockchain network is identified by its unique public key, and is secured with its associated private key (which the account holder must keep secret, like a password). Cryptocurrencies are treated as bearer assets, because possession of the private key generally determines who controls or owns a cryptocurrency. Protecting private keys from unwarranted access and theft is critically important, as once the private key is taken, in most circumstances, control over the related cryptocurrency is gone. The combination of private and public cryptographic keys constitutes a secure digital identity in the form of a digital signature. As long as the private key is kept private (i.e., confidential to the owner of the account) it provides strong control of ownership.

Omnipresent Robotics, LLC

Omnipresent is a wholly owned subsidiary of Hyperscale Data formed in January of 2025 focused on the development, deployment, and commercialization of advanced robotics systems, AI and data-driven automation technologies. Omnipresent’s activities are anticipated to span robotics hardware, sensing systems, autonomous navigation, and software platforms designed to enable real-world machine intelligence across industrial, commercial, and service environments.

We anticipate that Omnipresent will enter the commercialization phase during 2026, with initial deployments and customer engagements beginning in key verticals including hospitality, security, and enterprise automation to follow thereafter. We expect that Omnipresent will enter into contracts with third parties within the foreseeable future that will enable it to conduct its business as described below.

We expect that Omnipresent will, once executed agreements with these entities are in place, lead it to become a practical, revenue-generating robotics company in the real-world environment. Omnipresent would operate out of our Michigan Facility. With approximately 617,000 square feet of existing infrastructure and approximately 20 additional acres available for expansion, the Michigan Facility provides a foundation for robotics deployment. Located approximately 90 miles from Chicago and within proximity to leading universities and engineering talent, we believe the site is ideally positioned for robotics training, development and advanced assembly.

As the U.S. robotics industry continues to expand, we anticipate announcing partnerships across the robotics ecosystem. We believe a large-scale facility like our Michigan Facility, particularly with its access to high-performance NVIDIA GPU infrastructure, can play a meaningful role in future robotics operations. We believe that Omnipresent Robotics represents a key step in our strategy to build a diversified technology platform spanning AI infrastructure, blockchain systems and real-world automation.

Omnipresent is being developed as a robotics and AI infrastructure platform that combines physical robotic systems with data generation and AI model training capabilities. The Michigan Facility, including its planned robotics and AI Center of Excellence, a large-scale, controlled environment where engineers and developers can test robotics systems, is expected to serve as a centralized testing, training, and data monetization hub for humanoid robotics and large-scale AI systems, with a focus on generating high-value datasets for leading AI developers.

The robotics industry broadly encompasses autonomous and semi-autonomous machines capable of performing physical tasks using sensing, perception, and decision-making systems. Existing industry participants develop solutions including unmanned aerial vehicles, autonomous ground systems, and AI-powered perception software for industrial inspection, infrastructure monitoring, and defense-related applications.

We believe that Omnipresent is positioned to expand beyond traditional robotics applications by integrating large-scale AI models, data collection, and real-world operational environments into a unified platform.

Core Capabilities

Omnipresent’s capabilities are anticipated to include: (i) Robotics Hardware Systems, consisting of design, integration, and deployment of robotic platforms, including mobile robots, service robots, and specialized autonomous systems, (ii) AI and Perception Systems, consisting of computer vision, sensor fusion, and real-time decision-making software enabling robots to interpret and interact with physical environments, (iii) Autonomous Navigation, consisting of technologies supporting movement and operation in dynamic or GPS-constrained environments, and (iv) Data Collection and Analytics, consisting of the capture and processing of operational data generated through robotic activity for training and optimization of AI models

Strategic Focus: AI-Driven Robotics and Data Monetization

Omnipresent’s long-term strategy is to position itself as a data-centric robotics platform, where physical robotic operations generate high-value datasets used to train, validate, and improve AI systems, including large language models (“LLMs”) and multimodal AI systems. Unlike traditional robotics companies that primarily generate revenue from hardware sales or service contracts, Omnipresent intends to monetize real-world interaction data, movement and autonomy datasets, human-robot interaction datasets, and multimodal training data (vision, language, motion).

The Planned Capabilities at the Michigan Facility

We intend to establish our Michigan Facility as a large-scale humanoid robotics and AI testing environment. The Michigan Facility is expected to support: (i) Humanoid Robotics Testing, where Omnipresent would evaluate robots performing real-world tasks such as navigation, manipulation, and human interaction, (ii) AI Model Integration, which would involve the deployment of LLMs and multimodal AI systems into physical robotic platforms, (iii) Movement and Autonomy Testing, consisting of training and validation of robotic locomotion, dexterity, and spatial awareness, (iv) Simulation-to-Reality Training, which involves bridging simulated AI training environments with real-world operational data, and (v) Continuous Data Capture, i.e., the collection of structured and unstructured datasets for AI model training and refinement.

Robotics and AI Center of Excellence

We currently expect to allocate approximately 100,000 square feet of the Michigan Facility to create a dedicated Robotics and AI Center of Excellence. This Center of Excellence is intended to provide a large-scale, controlled environment where engineers and developers can test robotics systems, including humanoid robots and other autonomous machines, under real-world operating conditions.

We further expect that this facility will enable the testing of robotics systems integrated with LLMs and multimodal AI platforms, training of robotic systems to exhibit human-like behaviors, including interaction, decision-making, and responsiveness, and the evaluation of robotic movement, dexterity, and operational performance in dynamic environments

We believe that dedicating significant square footage to robotics testing and training infrastructure will support the advancement of robotics systems capable of operating effectively alongside humans in commercial and industrial settings.

Commercial Model

We intend to commercialize the Michigan Facility, including the Robotics and AI Center of Excellence, as a robotics Testing-as-a-Service platform, including (i) charging customers on a per-hour or usage-based model for access to robotics testing environments, (ii) providing data generation and engineering services for AI and robotics companies, and (iii) offering integrated compute and robotics infrastructure, leveraging the Company’s AI data center capabilities. We expect that significant volumes of operational data will be generated through robotic testing activities conducted at the Michigan Facility, which data may include movement data, visual data, environmental interaction data, and human-robot interaction datasets.

We further intend to aggregate, process, and monetize this data, including through licensing or sale to third parties engaged in AI development. Target customers are expected to include leading participants in the global AI ecosystem, including companies developing LLM’s and AI infrastructure and other enterprises operating in the LLM and advanced AI markets.

Competitive Positioning

We believe our strategy will differentiate us from traditional robotics companies by combining physical robotics infrastructure, AI data center compute capabilities and large-scale data generation and monetization. This integrated approach positions Omnipresent at the intersection of robotics hardware, AI model development, and data infrastructure.

Growth Strategy

Our growth strategy includes expanding robotics deployments across commercial and industrial environments, scaling the Michigan Facility into a centralized hub for AI and robotics training, partnering with AI developers and enterprises requiring real-world datasets, integrating robotics with our broader AI data center infrastructure, and developing recurring revenue streams through usage-based robotics and data services

Risks and Considerations

The Company’s robotics and AI initiatives are subject to several risks, including, but not limited to: (i) technological uncertainty given that humanoid robotics and real-world AI integration remain emerging fields, (ii) the need for the requisite financing as robotics infrastructure and testing environments require significant investment, (iii) risks surrounding commercial adoption, (iv) regulatory considerations, and (v) customer concentration risk, particularly with respect to dependence on large AI customers, which could impact revenue stability. See “Risk Factors Related to Omnipresent Robotics” for further information.

Ault Capital Group

Ault Blockchain

The Ault Blockchain protocol is our blockchain infrastructure and digital asset ecosystem business. The Ault Blockchain network is operated by the Ault DAO, a Wyoming decentralized autonomous organization, which can generally be described as a blockchain-based, member-governed entity operating without central leadership, using smart contracts to automate rules and decisions. Ault Capital indirectly owns Ault DAO LLC, the Wyoming limited liability company that serves as the legal and corporate entity of record for the Ault DAO. The Ault DAO has formally granted Ault Capital, through Ault DAO LLC, the rights to sell node licenses (as described below, the “Node Licenses”) to network participants. We launched the Ault Blockchain Mainnet in March 2026. In the cryptocurrency context, a Mainnet, which is shorthand for “main network,” is a fully developed, operational, and public blockchain where real cryptocurrency transactions occur and digital assets hold real-world value.

Through Ault Blockchain, our goal is to build a compliance-oriented blockchain network and ecosystem designed to support financial market applications and, over time, technology and AI services. The business is organized around three core elements: (i) the Ault Blockchain network itself, which processes transactions and hosts decentralized applications, (ii) the Node License program, through which participants acquire infrastructure rights and earn newly distributed tokens, and (iii) the Ault DAO, the on-chain governance body through which licensed participants collectively govern the network’s direction. The Ault DAO operates on a two-tier participation model: (i) voting on proposals requires node ownership and completion of know-your-customer (“KYC”) identity verification, whereas (ii) submitting proposals requires full membership in the Ault DAO, which, in addition to the requirements in (i) above, also requires formal acknowledgement of the Ault DAO Constitution (as further described below, the “Constitution”). KYC verification is a baseline requirement for all governance participation.

Corporate Structure

The Ault Blockchain network is operated by the Ault DAO. The corporate structure supporting the Ault DAO is as follows: Ault Capital owns Ault DAO LLC through its subsidiary Ault Markets, Inc., which is the sole member of Ault DAO LLC. Ault DAO LLC holds contracts, engages vendors, and provides administrative and compliance support to the ecosystem. The Ault DAO has formally granted Ault Capital, through Ault DAO LLC, the rights to sell community node licenses (the “Community Node Licenses”) to network participants. Community Node Licenses are purchased rights that allow an individual to operate a specific node within a blockchain network and earn rewards for supporting that network.

There is an important distinction that is used throughout this Annual Report. Ault DAO LLC is legally and functionally separate from the Ault DAO, which is the on-chain governance body through which licensed node holders vote on decisions affecting the Ault Blockchain. The Ault DAO holds no membership interest, equity, or economic rights in Ault DAO LLC, and the treasury governed by Ault DAO members is entirely separate from Ault DAO LLC’s balance sheet and assets. References in this filing to “Ault DAO LLC” refer to the Wyoming limited liability company, whereas references to the “Ault DAO” refer to the on-chain governance body.

Blockchain Background

A blockchain is a shared digital record-keeping system with no single controlling authority. Validators, who use specialized computers in a blockchain network responsible for verifying transactions, ensuring network security, and maintaining the integrity of the ledger as well as full node operators - individuals or entities that manage the hardware and software (a node) required to support a blockchain network, thereby ensuring that the node stays online to validate transactions, stores the blockchain ledger, and propagate data, and are therefore crucial for maintaining network security and decentralization - maintain complete copies of the ledger and verify that new transactions comply with the network’s rules, a process governed by a defined set of rules called a consensus mechanism. Not all participants in a blockchain network maintain a full copy of the ledger; on the Ault Blockchain, licensed Mining Nodes (the “Licensed Mining Nodes”), for example, perform services off-chain and do not hold a full record of blockchain stake. Because no single entity controls the ledger, blockchains can enable transactions and agreements to be executed and recorded without relying on a bank, clearinghouse, or other intermediary.

Applications that run on a blockchain are typically built using self-executing software programs called smart contracts. A smart contract is a program stored on the blockchain that automatically carries out the terms of an agreement when specified conditions are met, without requiring a human intermediary. Smart contracts are the foundation for a broad category of applications commonly referred to as decentralized applications, which can range from digital asset trading platforms to lending protocols to governance systems.

The Ault Blockchain is a Layer 1 network, meaning it is a foundational, standalone blockchain with its own security, transaction processing, and governance rules, as distinct from networks that are built on top of an existing blockchain. The network uses a hybrid architecture that combines two types of participation. Validators participate in a proof-of-stake consensus process, meaning they commit AULT tokens (the “AULT Tokens”) as economic collateral to qualify for and perform block production, and earn transaction fees in return. Licensed Mining Nodes perform off-chain work, meaning work that occurs outside the core consensus process, specifically verifiable randomness generation at launch, and earn newly distributed AULT Tokens in return. This separation is designed to allow the network to scale to a large number of node participants without creating bottlenecks in the consensus layer. Unlike proof-of-work networks such as Bitcoin, the Ault Blockchain’s consensus mechanism does not require energy-intensive computation; the proof-of-work component of the network is limited to the lightweight micro-proof-of-work performed by Licensed Mining Nodes in connection with verifiable randomness generation, which is computationally minimal by design.

The Ault Blockchain is also built to be compatible with the Ethereum Virtual Machine (“EVM”), the computing standard used by the Ethereum network, one of the most widely adopted blockchain platforms in the world. EVM compatibility means that software developers can build and deploy applications on our network using the same tools, programming languages and standards they would use on Ethereum, without needing to rewrite their code.

The AULT Token

The native digital asset of the Ault Blockchain is the AULT Token. A digital token is a unit of value or utility created and tracked on a blockchain. The AULT Token serves three primary functions within the network: (i) paying transaction fees for all activity on the network; (ii) staking, meaning that validators commit AULT Tokens as economic collateral to participate in block production; and (iii) participation in the governance of the Ault Blockchain through the Ault DAO.

The total supply of AULT Tokens is fixed at 100 billion, all minted at genesis. Approximately 99.9999% of total supply is allocated to what we refer to as the Emissions Supply, which is distributed to network participants over a ten-year schedule under a fixed mathematical formula. Of that Emissions Supply, 95% is allocated to Licensed Mining Node rewards and 5% is allocated to staking rewards for validators and their delegator (a delegator is a token holder who participates in proof-of-stake networks by assigning its stake to a validator to earn rewards without managing technical infrastructure). The Emissions Supply follows a declining schedule with approximately 9.4% annual decay, beginning at approximately 41 million Ault Tokens per day during the first year following the emission and declining to approximately 17 million such tokens per day by the tenth year. The emissions schedule is fixed by protocol and cannot be changed without a governance vote of the Ault DAO. We do not sell AULT tokens; rather, they are earned solely through active network participation. There can be no assurance that the AULT Token will ever have monetary value or generate any financial return.

Block production on the Ault Blockchain is performed by validators, who are selected from the top one hundred nodes ranked by staked AULT Tokens. To qualify as a validator, a node must self-bond a minimum of ten thousand AULT Tokens. Validators earn transaction fees and priority tips from the blocks they produce, and earn a commission on staking rewards distributed to their delegators. Validator participation carries economic risk in that they are subject to slashing, meaning a protocol-enforced reduction of their staked AULT Tokens, in the event of downtime beyond defined thresholds, double-signing, or censorship of transactions. Slashing events reduce the staked position of both the validator and its delegators in proportion to their respective stakes.

Node License Program

A Node License is a right to operate a Licensed Mining Node, which is a software program that performs defined off-chain services for the network and earns AULT Token emissions through a work credit system. Each epoch, approximately every one minute, a set of licensed nodes is randomly selected to submit what we refer to as a Verifiable Random Function output, gated by a lightweight proof-of-work computation. Nodes whose outputs are accepted contribute to the network’s randomness beacon and earn work credits for that epoch. Daily emissions are then distributed to Licensed Mining Nodes pro-rata based on accumulated work credits. All licenses have an equal probability of selection in each epoch; what determines a node’s earnings over time is uptime and output correctness, not computational power or hardware resources.

Node Licenses are priced at $1,500 per license at issuance and are non-transferable for two years from the date of issuance. The total number of Node Licenses is fixed at one million. Of those, five hundred thousand are Project Nodes issued to Ault Capital as part of the contractual terms under which Ault Capital was granted the rights to sell Community Nodes on behalf of the Ault DAO, and are not available for public sale. The remaining 500,000 are Community Nodes available for sale or distribution. Each Node License confers one governance vote in the Ault DAO, provided the holder has completed the requisite KYC identity verification, subject to a per-member cap of two hundred thousand votes regardless of total licenses held. The non-transferability period and voting cap are structural features designed to limit concentration of governance power during the network’s early phase.

Following the expiration of the two-year non-transferability period, Node Licenses may be transferred subject to certain conditions. Any transferee must satisfy KYC identity verification and receive whitelist approval before a transfer may be completed. Node Licenses may be revoked in limited circumstances, including in the event of a chargeback or payment fraud in connection with the original license purchase. In the event of revocation, any AULT Tokens already earned and distributed to the node prior to revocation are not subject to a clawback. Purchasers of Node Licenses should be aware that they are agreeing to the terms of the Constitution, which includes a limitation of liability provision under which members waive claims against us arising from Ault DAO membership, and a dispute resolution provision requiring binding arbitration administered by the American Arbitration Association, where the venue is New York City but the court must apply Wyoming substantive law.

We anticipate the scope of services performable by Licensed Mining Nodes may expand in future phases, subject to governance approval and protocol upgrades, to include oracle services, data indexing, and distributed AI computation. Any expansion of node functionality beyond its current scope requires an amendment to the Constitution and, where applicable, a protocol upgrade approved by network validators. There can be no assurance that any such expansion will occur on any particular timeline or at all.

Revenue and Token Distributions

The Ault Blockchain segment currently generates revenue through the sale of Community Node Licenses at a list price of $1,500 per license. There are no ongoing service fees or subscription charges associated with a license after issuance. The total number of Node Licenses is fixed at one million, structured as follows: (i) five hundred thousand Project Nodes were issued to Ault Capital as part of the contractual terms under which Ault Capital was granted the rights to sell Community Nodes on behalf of the Ault DAO, and are not available for sale, and (ii) five hundred thousand Community Nodes are available for sale or distribution to third parties. The five hundred thousand Community Nodes represent the maximum number of licenses available for sale at the current list price. There can be no assurance that all available licenses will be sold or that the list price will remain unchanged.

Investors should be aware that we and some of our subsidiaries are among the potential purchasers of Community Node Licenses. Sentinum, our data center and Bitcoin mining subsidiary, has acquired approximately one hundred thousand Community Node Licenses. Any Node License purchases by Sentinum or any of our other subsidiaries constitute related-party transactions and will be disclosed in accordance with applicable financial reporting and related-party disclosure requirements. To the extent Sentinum or any other of our subsidiaries or affiliates holds Community Node Licenses, it will receive AULT Token emissions through the work credit system on the same terms as any other Community Node holder; the quantity of tokens received will depend on the uptime, correctness, and selection frequency of those nodes over the ten-year emissions schedule.

In addition to Node License sale revenue, Ault Capital, as the contractual recipient of five hundred thousand Project Nodes, will receive AULT Token emissions distributed by the protocol to those nodes in accordance with the work credit system described above. The quantity of such tokens received will depend on the uptime, correctness, and selection frequency of the Project Nodes over the ten-year emissions schedule. These token distributions, whether received by Ault Capital through Project Nodes or by Sentinum or other affiliates through Community Node holdings, are not revenue in the traditional sense and their economic value, if any, will depend entirely on whether and at what price AULT Tokens may be exchanged in the future. Neither Ault DAO LLC nor any affiliate of ours makes any representation that AULT Tokens distributed to Project Nodes or Community Nodes will ever have monetary value or be available for sale or exchange at any particular price or at all.

Ault Capital, Sentinum, and other subsidiaries or affiliates of ours may also participate in the network as validators or delegators. Validators earn transaction fees and a commission on staking rewards distributed by the protocol, as described in the AULT Token section above. Delegators earn staking rewards in proportion to their delegated stake net of validator commission. To the extent Ault Capital, Sentinum, or any of our other affiliates operates as a validator, delegates AULT Tokens to a validator, or otherwise participates in staking, it may receive distributions of AULT Tokens or transaction fees through those activities. There can be no assurance that validator or staking activity will generate meaningful returns or that any affiliate will elect to participate.

Governance

The Ault Blockchain protocol is governed by the Ault DAO, whose structure and procedures are set out in a formal governing document called the Constitution. Governance authority includes the ability to propose and vote on changes to protocol parameters, allocate treasury funds, and amend the Constitution itself. The DAO operates on two tiers of participation. Voting on proposals is open to any node holder who has completed KYC identity verification, without requiring full DAO membership. Submitting proposals requires full DAO membership, which in addition to KYC verification requires formal acknowledgement of the Constitution. This structure ensures that all governance participants are identified while keeping the voting process broadly accessible to verified node holders.

Governance proposals are submitted by Ault DAO members and voted on by KYC-verified node holders through an on-chain process. A proposal requires a stake of five hundred thousand AULT Tokens to submit, a default voting window of ten days, a quorum of 20% of eligible Community Nodes, and a simple majority to pass. Any proposal may be blocked regardless of the number of affirmative votes if votes cast as “No With Veto” reach or exceed 33.4% of participating voting power, providing a minority protection mechanism intended to prevent any coordinated group from imposing changes that would harm the broader network.

Ault DAO LLC, as the legal entity supporting the Ault DAO, performs a compliance screening function; it may decline to post a proposal for a vote if the proposal appears to violate applicable law or present a material risk to the network. Ault DAO LLC may not override or negate the outcome of a completed Ault DAO vote; the only veto mechanism is the on-chain process available to voting members described above. Gas fees, which are transaction fees paid to blockchain validators (miners or stakers) to process transactions and execute smart contracts on a network, collected by the network are split 90% to validators and delegators and 10% to the Ault DAO community pool, which is the on-chain treasury governed by Ault DAO members and used to fund grants, liquidity programs, and network development.

Investors should note that we and our affiliates, taken together, hold or may hold a majority of all outstanding Node Licenses, comprising the 500,000 Project Nodes issued to Ault Capital and any Community Nodes acquired by our affiliates. Notwithstanding this aggregate holding, we and all of our affiliated entities intend that the combined voting power exercised by us, collectively, in any Ault DAO governance vote will not exceed 49.9% of the total outstanding Node License votes, regardless of the number of Node Licenses held, such that unaffiliated node holders retain meaningful collective governance authority and no governance outcome can be determined solely by the affiliated group. This voluntary limitation is intended to apply to our company and any and all of our affiliates.

Ecosystem Strategy

Our strategy for Ault Blockchain is to build a network and application ecosystem serving institutional and retail participants in digital asset markets and technology services. The network is designed to launch with core infrastructure and to expand through a phased series of application modules. Planned applications include Ault Markets, a marketplace for tokenized real-world assets and derivatives intended to bridge traditional financial infrastructure with decentralized settlement; a spot decentralized exchange for permissionless trading of digital assets on the network, consisting of: (i) OnlyBulls, a financial data interface and integrated digital asset wallet intended to serve as the primary user gateway to the Ault ecosystem, (ii) Ault Lending, an on-chain borrowing and lending protocol, and (iii) askROI, a distributed AI analytics platform. None of these applications has been launched as of the date of this Annual Report, and there can be no assurance that any planned application will be deployed on the anticipated timeline or at all.

We also intend to pursue cross-chain connectivity, meaning the ability for users to move supported digital assets between the Ault Blockchain and other networks, and to develop relationships with institutional custodians and compliance service providers to support adoption by institutional market participants. Developer grants and ecosystem partnerships are planned as early-stage adoption mechanisms funded through the Ault DAO community pool.

Tokenization and Real-World Assets

Tokenization is the process of representing ownership rights in a real-world asset (an “RWA”) as a digital token on a blockchain. A tokenized asset is a blockchain-based record that corresponds to an underlying interest in a physical or financial asset, such as equity securities, debt instruments, real estate, commodities, or other instruments. Tokenization does not change the legal nature of the underlying asset; rather, it creates a digital representation of that asset that can be transferred, tracked, and settled on a blockchain as opposed to through traditional intermediaries such as brokers, custodians, or clearinghouses. RWAs is the term commonly used in blockchain markets to refer to the class of traditional financial and tangible assets that are represented on-chain through tokenization.

The Ault Blockchain was designed from the outset to support tokenized RWA applications. Several architectural features of the network are specifically relevant to this use case. The network’s KYC requirement for governance participation reflects a broader design philosophy of identity-verified participation, which is a foundational requirement for any compliant tokenized asset ecosystem. EVM compatibility allows issuers and developers to deploy tokenized asset contracts using established smart contract standards widely used for on-chain asset representation. The network’s target transaction confirmation time of approximately one second is intended to support the settlement speed demands of financial market applications.

Our strategic intent for the Ault Blockchain is to position the network as infrastructure for compliant tokenized RWA activity. We intend to develop application layer capabilities that would allow verified participants to issue, transfer, and settle tokenized representations of financial instruments on the network. The scope of intended asset classes includes, but may not be limited to, equities, debt instruments, commodities, and structured products. These application capabilities are in the planning and development stage and have not been initiated as of the date of this Annual Report. There can be no assurance that any particular capability will be developed or made available on any specific timeline, or that the regulatory approvals and legal structures necessary to support any given asset class will be obtained.

The Ault Blockchain is a permissionless network at the application layer, meaning any developer may deploy smart contracts or applications on the network without prior approval from Ault DAO LLC or any affiliate of ours. We do not vet, endorse, or control applications deployed by third parties on the network. See “Risk Factors” for a discussion of regulatory risks specific to tokenized asset activities on the network.

The Ault Blockchain operates in the market for Layer 1 blockchain infrastructure and digital asset services, competing primarily with other public blockchain networks for developer adoption, application deployment, and network participants. The competitive landscape includes established general-purpose networks, purpose-built financial blockchain networks, emerging Layer 1 and Layer 2 platforms, and private or permissioned blockchain networks deployed by financial institutions, various consortia, and enterprise technology providers. Private and permissioned chains in particular may appeal to institutional participants who prefer a closed network with defined participants and centralized governance over a public network. We believe the primary competitive factors in this market are network security and reliability, transaction throughput and settlement speed, developer tooling and ecosystem depth, regulatory posture and compliance infrastructure, and the breadth of applications available to end users.

We believe the Ault Blockchain’s primary points of differentiation consist of the following: (i) its compliance-oriented design, including the KYC requirement for Node License purchases and Ault DAO governance participation; (ii) its focus on financial market applications and RWA tokenization; and (iii) and its hybrid architecture combining proof-of-stake consensus with a distributed licensed node program. We compete for developer talent, application partnerships, node license purchasers, and institutional relationships with other networks and digital asset businesses. See “Risk Factors” for a discussion of competitive risks.

Regulation

The Ault Blockchain operates across multiple regulatory jurisdictions. The United States, the European Union, the United Kingdom, the Middle East, and the Asia-Pacific region each maintains distinct and evolving regulatory frameworks applicable to blockchain networks, digital assets, and decentralized governance structures. We monitor regulatory developments across these jurisdictions as part of our ongoing compliance efforts.

In the United States, the primary federal regulators with oversight of digital asset markets are the SEC, the CFTC, the Financial Crimes Enforcement Network (“FinCEN”), and the Office of Foreign Assets Control (“OFAC”). The SEC has asserted jurisdiction over digital assets it characterizes as securities under the Securities Act and the Exchange Act. The CFTC has asserted jurisdiction over digital assets it characterizes as commodities.

The regulatory framework for digital assets in the United States continues to evolve, with recent developments reflecting increased coordination among federal regulatory agencies and a growing focus on establishing clearer jurisdictional boundaries and market structure. These developments may contribute to a more consistent and transparent regulatory environment over time; however, the classification, treatment, and regulatory requirements applicable to digital assets remain subject to ongoing interpretation and potential change.

FinCEN has issued guidance applying anti-money laundering and KYC requirements to certain participants in digital asset markets. OFAC administers and enforces economic and trade sanctions programs. We apply KYC and OFAC screening to Node License purchasers and to participants in the Ault DAO’s governance. We operate Ault DAO LLC under Wyoming’s statutory framework for decentralized autonomous organizations formed as limited liability companies, which provides a defined legal structure for the Ault DAO’s contracting and administrative operations.

In the European Union, the Markets in Crypto-Assets Regulation (“MiCA”), entered into force in 2023 and applies uniformly across all EU member states. MiCA establishes a comprehensive licensing and disclosure framework for crypto asset service providers and issuers of asset-referenced tokens and e-money tokens. The AULT Token is not intended to be structured as an asset-referenced token or e-money token under MiCA. In the United Kingdom, the Financial Conduct Authority has established a registration regime for crypto asset businesses and the UK government has indicated its intention to develop a broader regulatory framework for digital assets.

In the Middle East, the United Arab Emirates has developed licensing frameworks for virtual asset service providers through the Dubai Virtual Assets Regulatory Authority and the Financial Services Regulatory Authority of the Abu Dhabi Global Market. Other Gulf Cooperation Council jurisdictions maintain varying regulatory positions on digital asset activities. In the Asia-Pacific region, Singapore regulates digital payment token service providers through the Monetary Authority of Singapore under the Payment Services Act. Hong Kong has established a licensing regime for virtual asset trading platforms. Japan regulates cryptocurrency exchanges and certain digital asset activities under the Payment Services Act and the Financial Instruments and Exchange Act. China has prohibited most digital asset trading and mining activities for persons within its jurisdiction.

We intend for our activities and the controlled access points of the network, including Node License sales and Ault DAO governance participation, to operate in compliance with applicable law across the jurisdictions in which we operate. See “Risk Factors” for a detailed discussion of regulatory risks specific to this business.

Intellectual Property

We do not currently own, and do not have any current plans to seek, patents in connection with our Ault Blockchain operations. We expect to rely on trade secrets, trademarks, service marks, trade names, and other intellectual property rights in connection with this business and expect to license intellectual property rights owned and controlled by others, including open-source software frameworks used in the network’s development.

Precious Metals Treasury Management

As part of our evolving treasury management strategy, we have initiated a program focused on the acquisition and storage of physical precious metals, specifically silver and gold, to diversify our balance sheet holdings and mitigate risks associated with currency fluctuations and inflation. In the current economic environment, where inflation has persisted above longer-term targets and contributed to concerns over the ongoing devaluation of the U.S. dollar's purchasing power, we view physical precious metals as a prudent hedge. These commodities have historically served as reliable stores of value over many generations, providing a tangible counterbalance to fiat currency risks and macroeconomic uncertainties. This operation will function as an integral component of our overall treasury management system, treating these commodities as strategic assets.

Operations

To execute this program, we intend to partner with precious metals miners and mints, enabling us to source high-quality bullion directly from producers. Acquisitions are expected to be conducted on a systematic basis through a dollar-cost averaging approach, whereby we would make periodic purchases throughout each month to average out costs over time and reduce exposure to short-term market volatility.

All acquired metals would be stored in secure, audited physical vaults managed by reputable third-party custodians, ensuring compliance with industry standards for inventory verification, security, and insurance. To further enhance transparency and risk management, we will require our vaulting and storage partners to maintain rigorous chain of custody protocols, including serialized tracking from acquisition to storage, multi-layered security measures such as 24/7 surveillance and segregated client holdings to prevent commingling.

Further, independent third-party audits will be conducted on a regular basis by accredited firms specializing in precious metals assurance, providing detailed reports on inventory accuracy, purity verification, and overall compliance with international standards like those from the London Bullion Market Association (“LBMA”) or equivalent bodies.

These holdings will be accounted for on our balance sheet at fair market value, with the assets marked to market quarterly based on prevailing market prices (such as LBMA or equivalent benchmarks), and any resulting unrealized gains or losses recognized to reflect current economic conditions and support transparent financial reporting.

Strategic Alignment

This initiative aligns with our broader financial objectives of enhancing long-term shareholder value through the strategic allocation of hard assets to our balance sheet, positioning us to better navigate periods of inflation, currency pressures, and economic volatility by incorporating time-tested stores of value into our treasury reserves.

Ault Lending

Ault Lending provides commercial loans to companies throughout the U.S. to provide them with operating capital to finance the growth of their businesses. The loans range in duration from six months to three years. Ault Lending’s loans are made or arranged pursuant to a California Financing Law license (Lic.no. 60 DBO77905).

Ault Lending acquires controlling or non-controlling interests in and actively manages businesses that we generally believe (i) are undervalued and have disruptive technologies with a global impact, (ii) operate in industries with long-term macroeconomic growth opportunities, (iii) have the potential for positive and stable cash flows, (iv) face minimal threats of technological or competitive obsolescence, and (v) have strong management teams largely in place. We offer investors a unique opportunity to own a diverse group of leading middle-market businesses in the niche-industrial and branded-consumer sectors.

Ault Lending uses a traditional methodology for valuing securities that primarily looks for deeply depressed prices. Upon making an investment, we often become actively involved in the companies we seek to acquire, whether in its entirety or merely a controlling or non-controlling interest. That activity may involve a broad range of approaches, from influencing the management of a target to take steps to improve stockholder value, to acquiring a controlling or non-controlling interest or outright ownership of the target company in order to implement changes that we believe are required to improve its business, and then operating and expanding that business.

Ault Lending believes that private company operators and corporate parents looking to sell their business units may consider us an attractive purchaser because of our ability to:

In particular, we believe that our outlook on length of ownership and active management on our part may alleviate the concern that many private company operators and parent companies may have with regard to their businesses going through multiple sale processes in a short period of time. We believe this outlook enhances our ability to develop a comprehensive strategy to increase the earnings and cash flows of each of our businesses.

Finally, it has been our experience that our ability to acquire businesses without the cumbersome delays and conditions typical of third-party transactional financing is appealing to sellers of businesses who are interested in confidentiality, speed and certainty to close.

We believe our management team’s strong relationships with industry executives, accountants, attorneys, business brokers, commercial and investment bankers, and other potential sources of acquisition opportunities offer us substantial opportunities to assess small businesses available for acquisition. In addition, the flexibility, creativity, experience and expertise of our management team in structuring transactions allows us to consider non-traditional and complex transactions tailored to fit a specific acquisition target.

In terms of the businesses in which we have a controlling interest as of December 31, 2025, we believe that these businesses have stable management teams, operate in strong markets with defensible market niches, and maintain long-standing customer relationships.

Ault Lending provides funding to businesses through loans and investments. Ault Lending offers a variety of loan types including commercial loans, convertible notes and revolving lines of credit. Ault Lending is engaged in providing commercial loans to companies throughout the United States to provide them with operating capital to finance the growth of their businesses. The loans are primarily short-term, ranging from six to 12 months, but may be of longer duration. These terms are subject to change as market needs dictate, and Ault Lending anticipates offering additional products in the future.

Ault Lending uses its considerable financial experience, data analytics, and a credit scoring model to assess the creditworthiness of each small business borrower applicant. If the business meets Ault Lending’s criteria, Ault Lending sets the initial interest rate according to its credit and financial models. The final interest rate offered to the borrower will be determined by Ault Lending’s interpretation of the marketplace. In order to borrow from Ault Lending, borrowers must display characteristics indicative of durable business and financial situations. These include factors such as revenue, time in business, number of employees, and financial and credit variables. In order to qualify, business borrower applicants must be approved through Ault Lending’s underwriting process, which analyzes credit and financial data of both the business and the business owner. Ault Lending takes into account several business factors (including revenue, age of business, cash flows, and other variables). The underwriting process determines the loan amount to approve, how loans will be priced, and whether to include a blanket lien, as well as additional factors (including length of loan, estimated default rates by type and grade, and general economic environment).

Our Executive Committee, which is comprised of our Executive Chairman, Chief Executive Officer and President, acts as the underwriting committee for Ault Lending and must approve all lending transactions. The Executive Committee has decades of experience in financial, investing and securities transactions. Under its business model, Ault Lending generates revenue through origination fees charged to borrowers and interest generated from each loan. Ault Lending may also generate income from appreciation of investments in marketable securities as well as any shares of common stock underlying convertible notes or warrants issued to Ault Lending in any particular financing.

As noted above, we will from time to time, through Ault Lending, engage in discussions with other companies interested in our subsidiaries or partner companies, either in response to inquiries or as part of a process we initiate. To the extent we believe that a subsidiary partner company’s further growth and development can best be supported by a different ownership structure or if we otherwise believe it is in our stockholders’ best interests, we will seek to sell some or all of our position in the subsidiary or partner company. These sales may take the form of privately negotiated sales of stock or assets, mergers and acquisitions, public offerings of the subsidiary or partner company’s securities and, in the case of publicly traded partner companies, transactions in their securities in the open market. Our plans may include taking subsidiaries or partner companies public through rights offerings, mergers or spin-offs and directed share subscription programs. We will continue to consider these and functionally equivalent programs and the sale of certain subsidiary or partner company interests in secondary market transactions to maximize value for our stockholders.

During 2026, we anticipate providing significant new funding to expand Ault Lending’s loan and investment portfolio. Ault Lending loans are made or arranged pursuant to a California Financing Law license (Lic.no. 60 DBO77905).

Gresham

Gresham designs, manufactures and distributes purpose-built electronics equipment, automated test solutions, power electronics, supply and distribution solutions, as well as radio, microwave and millimeter wave communication systems and components for a variety of applications with a focus on the global defense industry and the healthcare market. Gresham has two subsidiaries, Microsource and Gresham Holdings. Gresham Holdings has three subsidiaries: Relec and Enertec, which are both wholly owned, and Microphase, which is majority owned.

Gresham’s operations consist of three business segments:

Gresham is focused on products that are getting “designed-in” for use in military systems such as fighter jets, ships, armored vehicles and missile defense systems, which Gresham’s management believes provide a recurring revenue stream for years to come and reduce competition because the cost of replacing designed in products is prohibitive for both the competition and the customer.

Gresham was incorporated in California on March 5, 1980 as GIGA-tronics Incorporated, and changed its name to Gresham Worldwide, Inc. effective March 1, 2024.

Gresham Holdings Acquisition

On September 8, 2022, Gresham acquired Gresham Holdings. Pursuant to the acquisition, Gresham acquired all of the outstanding shares of capital stock of Gresham Holdings.

In connection with the consummation of the acquisition, Gresham Holdings was deemed to be the accounting acquirer in the acquisition based on an analysis of the criteria outlined in Accounting Standards Codification 805 “Business Combinations.” While Gresham was the legal acquirer in the acquisition, because Gresham Holdings was deemed the accounting acquirer, the historical financial statements of Gresham Holdings became the historical financial statements of the combined company upon the consummation of the acquisition.

Gresham operates both within the United States and at three locations abroad. A summary of Gresham’s locations and high-level review of its operations at each facility is provided in the table below:

*75.35% owned

Gresham’s Voluntary Reorganization under Chapter 11

On August 14, 2024 (the “Petition Date”), Gresham (the “Debtor”), filed a voluntary petition (the “Bankruptcy Petition”) for reorganization under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court (the “Bankruptcy Court”) for the District of Arizona, Case No. 2:24-bk-06732-SHG (the “Chapter 11 Case”). Since the Petition Date through the date that Gresham emerged from bankruptcy proceedings on November 28, 2025, the Debtor operated its and its subsidiaries’ businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

The filing of the Bankruptcy Petition constituted an event of default that accelerated Gresham’s obligations under certain debt instruments:

The debt instruments set forth above provided that as a result of the Bankruptcy Petition, the principal and interest due thereunder became immediately due and payable. Any efforts to enforce such payment obligations under the debt instruments set forth above were automatically stayed as a result of the Bankruptcy Petition, and the creditors’ rights of enforcement in respect of the debt instruments set forth above are subject to the applicable provisions of the Bankruptcy Code. We agreed not to enforce remedies, subject to the terms and conditions of a forbearance agreement.

The Debtor requested relief from the Bankruptcy Court that would enable the Debtor and its subsidiaries (collectively, the “Debtors”) to maintain business-as-usual operations and uphold their commitments to their stakeholders, including the Debtors’ employees, customers, and vendors during the restructuring process, subject to the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code, which was granted. While the Chapter 11 Case was pending, the Debtors made no interest payments due under the majority of the Debtor’s debt instruments.

On June 6, 2025, we entered into a settlement agreement with Gresham and its senior secured lenders pursuant in its Chapter 11 bankruptcy proceedings. On August 29, 2025, the United States Bankruptcy Court for the District of Arizona confirmed Gresham’s bankruptcy plan. Under that plan, Gresham’s senior lenders released Gresham and us in exchange for a settlement payment. That payment was made on September 30, 2025. Gresham substantially consummated its bankruptcy plan and emerged from bankruptcy on November 28, 2025.”

Industry Background

Gresham’s operations focus exclusively on the market for electronic solutions that support the defense and aerospace industries and other mission critical applications, including medical technology, transportation, and telecommunication. The essential nature of these applications provides a degree of insulation from volatility associated with other segments of the global economy while accounting for stability and steady growth of the addressable market opportunities available in segments that it serves. Demand for purpose-built solutions to meet these requirements continues unaffected, and in many instances increases, in times of global crisis. Total defense spending in the three countries in which Gresham currently operates was estimated to exceed approximately $1.125 trillion in 2024, driven primarily by continued increases in U.S. defense expenditures, which reached approximately $997 billion for the year, according to the Stockholm International Peace Research Institute. Globally, military expenditure reached an estimated $2.7 trillion in 2024, representing a 9.4% year-over-year increase and the highest level on record, reflecting sustained geopolitical tensions and increased procurement activity across North America, Europe, the Middle East, and Asia. Gresham currently supports defense contractors and military programs in more than 15 additional countries, providing exposure to a broad and expanding global defense market. Industry forecasts indicate that global defense spending will continue to grow, with total expenditures projected to reach approximately $2.4–$2.6 trillion annually in 2025–2026, implying a continued multi-year expansion trend supported by modernization programs, supply chain localization, and heightened security priorities among NATO and allied nations. The United States is expected to remain the largest defense spender globally over this period, accounting for a significant portion of total global expenditures and continuing to drive demand for advanced electronic systems, power solutions, and RF technologies, according to the International Institute for Strategic Studies.

The current conflict with Iran, the war in the Ukraine, military reprisals taken by Israel in response to various actions taken in recent years by terrorist organizations sponsored by Iran and tensions with China and in the Middle East have intensified interest and investment in defense platforms throughout the United Kingdom and Europe.

Gresham believes that the increasing emphasis on electromagnetic spectrum operations and close coordination of air, land, sea, space and cyber operations will fuel an increase in defense modernization, force protection and situational awareness, all of which will drive increased spending in procurement of components and systems to enable electronic warfare, countermeasures and unattended solutions. The global defense electronics market was estimated at approximately $231.8 billion in 2024 and is projected to grow to approximately $244.4 billion in 2025 and $257.6 billion in 2026, reflecting a compound annual growth rate of approximately 5% to 6%. Growth in this sector is driven by increased global defense spending, modernization of radar and sensor systems, expansion of electronic warfare capabilities, and rising demand for advanced communications and power solutions. The drive for greater connectivity and analytics will, in Gresham’s management’s belief, in turn increase demand for radio frequency (“RF”) communications, power electronics and electronic control solutions content in new major military platforms, which are the core offerings of Gresham’s operating units.

Thousands of companies compete in this market to deliver electronics solutions to meet defense and other mission critical applications. However, Gresham’s operating units have longstanding relationships with dominant defense contractors in the United States, the United Kingdom, Israel and other countries that hold contracts for major defense platforms with very long life cycles. Gresham’s customers typically have unique needs, and they engage with Gresham in funding development contracts for custom solutions. Once a solution is proven in its application, Gresham typically realizes a secure, recurring revenue stream for products, services and/or repairs for many years (sometimes decades) until the technology becomes outdated. Because Gresham is often sole-sourced for developmental projects, it is unlikely that a competitor will replace such a designed-in product as the cost and re-qualification time to do so is often prohibitive. These relationships enable Gresham to narrow the field of competition considerably and grow based on repeat business with relatively low selling costs. As technology evolves, prime contractors may, over subsequent years, migrate to systems other than those Gresham produces.

Gresham Business Strengths

Gresham has the following core strengths that its management believes gives it a competitive advantage:

Gresham Business Strategies

Gresham’s goal is to become the supplier of choice for larger companies in the defense industry and provide solutions for mission critical applications in health care.

Gresham’s near-term business strategies are focused on developing synergies as a result of the acquisition of Gresham Holdings:

Gresham incurred major overhead expenses being a public company with very limited sales and more recently expending resources borrowed from us and incurred in connection with its filing for bankruptcy under Chapter 11 of the Bankruptcy Code, which occurred on August 14, 2024. Gresham is combining the overhead functions, shrinking its leased facilities and focusing on cost reductions across all subsidiaries; Gresham is prioritizing vertical integration across its portfolio to drive supply chain alignment, leverage shared engineering capabilities, and expand cross-subsidiary business opportunities.

Gresham’s long-term business strategies include the following key elements:

Gresham Business Operations

Gresham conducts its business through its subsidiaries. After the Gresham Holdings acquisition, Gresham aligned the operations of its subsidiaries as follows:

RF Solutions

Microphase focuses on designing, engineering, assembling, tuning and testing components, integrated assemblies and subsystems that detect, filter, analyze and process radio frequency, microwave and millimeter wave signals for defense applications.

Precision Electronic Solutions

In the Precision Electronic Solutions group, Enertec, the GIGA-tronics Division and Microsource focus on designing, engineering, developing and producing turnkey precision electronic solutions for mission critical applications primarily focused on defense customers and large global healthcare customers.

Power Electronics and Display Solutions

Relec distributes power electronics and displays for mission critical applications to customers in health care, transportation, telecommunications and industrial businesses.

The defense electronic technology solutions industry is highly fragmented and characterized by intense competition. Competition includes thousands of companies located throughout the world, many of which have advantages in terms of labor and component costs, and many of which offer products superior or comparable in quality to Gresham’s products. Each operating subsidiary confronts a different set of competitors depending on solutions offered, vertical markets targeted and geographic scope of operations. Gresham also faces competition from current and prospective customers who may decide to design and manufacture power electronics, communications components and precision electronic solutions needed to satisfy their internal programmatic requirements.

Consolidation in the defense technology solutions market, including through mergers, acquisitions and/or strategic alliances among major primes to whom Gresham sells its products has the potential to intensify the competitive pressures that Gresham faces. Many of Gresham’s existing and potential competitors may be better positioned than it is to acquire other companies, technologies or products. Gresham competes favorably on the basis of multiple factors, including product quality and reliability, technological capabilities, service, past performance, design flexibility and ability to develop and implement complex, integrated solutions customized to its customers’ needs, and cost-effectiveness. Focusing on products with relatively low volumes and high margins enables Gresham’s operating subsidiaries to compete favorably on price against larger companies with much higher indirect cost structures (overhead and G&A) and cumbersome internal bureaucracies. Finally, the fragmentation of the defense technology market also creates opportunities to grow through acquiring competitors and/or potential competitors.

Many competitors have substantially greater financial and marketing resources and geographic presence than Gresham does. However, cost-effective designs, elegant engineering, a collaborative/consultative approach to managing customer relations and a long history of delivering high quality, ultra-reliable, custom designed components and subsystems have enabled Gresham to compete effectively and carve out a defensible niche position against competitors with more resources.

RiskOn International, Inc.

RiskOn International, Inc. (“ROI”), operates primarily through its wholly owned subsidiary, BitNile.com, Inc. (“BNC”). BNC is engaged in the development of an online predictions market platform (the “Platform”). A predictions market is an online marketplace in which registered users take positions on the probable outcome of future real-world events such as elections, sporting competitions and macroeconomic data releases and receive settlements determined by verified actual results. The Platform is located at BitNile.com and is intended to be accessible via any internet-connected device using any standard web browser, without requiring downloads or dedicated applications.

The Platform represents a fundamental repositioning of BNC’s business. BNC has discontinued its prior sweepstakes gaming operations and is currently developing the BitNile.com platform as a predictions market. The Platform is currently in alpha testing and is accessible only to a limited number of users in jurisdictions where such access is permitted under applicable law. BNC intends to expand availability of the Platform upon completion of its technical build-out and satisfactory compliance with applicable regulatory requirements. The Platform will be available only in jurisdictions where predictions market operations are permitted under applicable federal and state law in the U.S., and elsewhere under applicable national law.

BNC’s planned Platform features include:

Business Strategy

The predictions market industry in the United States is an emerging and rapidly developing segment of the broader financial technology market, driven by increased public interest in event-driven financial products and a developing federal regulatory framework that has begun to provide greater clarity for domestic operators. BNC’s business strategy is centered on establishing the Platform as a predictions market destination for retail participants seeking to express views on real-world event outcomes.

The strategic priorities for the development and growth of the Platform include: (i) completing the technical build-out and launching the Platform to registered users in compliance with applicable regulatory requirements; (ii) establishing sufficient market depth and liquidity across the initial set of available event categories; (iii) developing a user acquisition strategy appropriate to the Platform’s regulatory and geographic operating parameters; and (iv) pursuing integrations with third-party data providers that supply verified real-world event outcomes to the Platform’s settlement system.

BNC will face competition from both established predictions market platforms and new entrants as the industry continues to develop. It will compete with Kalshi, Inc., a federally regulated designated contract market, meaning a trading facility formally authorized by the CFTC, the federal agency that oversees commodity and derivatives markets in the United States, to offer event contracts to domestic retail users. BNC will also compete with offshore platforms such as Polymarket, which does not currently serve United States users due to regulatory constraints, as well as a number of smaller forecasting and prediction platforms operating under varying frameworks across multiple jurisdictions. Certain competitors, including Kalshi, have already obtained formal CFTC regulatory authorization, which may provide those competitors with a structural advantage in accessing the domestic retail market. BNC’s ability to compete effectively will depend on the regulatory pathway available to BNC, the breadth and liquidity of markets offered, the quality and reliability of the user experience and BNC’s ability to attract and retain users in a market that includes well-capitalized participants. There can be no assurance that BNC will compete successfully with established platforms or achieve sufficient scale to sustain its operations.

Regulatory Environment

As the predictions market industry continues to develop, regulatory considerations represent one of the most significant factors shaping the competitive landscape and BNC’s operating strategy.

Present Regulatory Challenges

The regulatory classification of predictions market platforms in the United States remains subject to significant uncertainty. Predictions markets may, depending on their structure and the nature of the contracts offered, be subject to regulation as event contracts under the Commodity Exchange Act (the “CEA”), administered by the CFTC; as gambling or gaming activities under applicable state law; or under a combination of federal and state frameworks. In 2024, a federal court affirmed the right of Kalshi, Inc. to offer election-related event contracts as a CFTC-regulated designated contract market, resolving a specific area of uncertainty at the federal level. However, that ruling does not establish a comprehensive framework applicable to all predictions market operators or contract types, and the CFTC retains broad authority to determine which contracts are permissible and under what conditions.

Data privacy and user verification requirements also present ongoing compliance obligations. Platforms that accept user funds and settle financial positions are subject to KYC and AML requirements, which refer to the regulatory obligations to verify the identity of users and monitor for suspicious financial activity. BNC intends to implement a user verification process consistent with applicable law prior to accepting live user positions on the Platform.

Future Regulatory Challenges

As the predictions market industry matures, additional regulatory questions are likely to emerge. At the state level, certain jurisdictions may independently characterize predictions markets as gambling or gaming activities subject to state licensing requirements, separate and apart from any federal commodity law analysis. Payment processing and banking access may draw increased regulatory scrutiny as the volume of funds flowing through predictions market platforms grows. Emerging contract structures and digital settlement formats may require additional guidance from federal and state regulators to determine their proper classification. BNC intends to monitor regulatory developments across all jurisdictions in which the Platform operates and to seek required authorizations before expanding into new markets or contract categories. There can be no assurance that BNC will obtain all required authorizations, that the regulatory environment will not change in ways adverse to BNC’s business model, or that BNC will not be subject to regulatory inquiry or enforcement action, any of which could materially and adversely affect BNC’s business, financial condition, and results of operations.

askROI

askROI, Inc. (“askROI”) is a company that has developed and maintains an AI productivity platform. Artificial intelligence refers to computer systems designed to perform tasks that typically require human intelligence, such as reading and understanding text, answering questions, summarizing information, writing content, and carrying out complex analytical tasks. The askROI platform makes a range of AI tools available to individual users, business professionals, and entrepreneurs through a website at askroi.com and through free applications available for download on the Apple App Store and Google Play Store. As of March 2026, the platform had surpassed 1.3 million cumulative downloads since its commercial launch in April 2025. The platform is built and maintained by MeetKai, Inc. (“MeetKai”), a third-party technology development company; askROI retains ownership of the platform’s intellectual property.

The central feature of the askROI platform is the ability for users to choose from and interact with multiple LLMs within a single application. An LLM is a type of AI system trained on large volumes of text that can read questions written in plain English, generate written responses, summarize documents, produce original content, assist with writing and coding, and perform detailed research and analysis. Rather than offering access to only one such system, askROI makes a selection of leading AI models from multiple providers available within the platform, and each user decides which model to use for a given task. Users may switch between models at any time, including in the middle of an active conversation, and the conversation continues without interruption so that the user does not lose the context of what has already been discussed. The platform may retain information from prior conversations to provide more relevant and personalized responses over time. The platform is designed so that new AI models can be added as they become available, allowing users to access the latest AI systems without needing to change applications. askROI does not build or train the AI models it offers; it provides the interface and tools that allow users to access and work with models built by third-party AI companies.

In addition to AI model access, the platform includes a set of productivity tools. Users may upload their own documents, including files such as PDFs, spreadsheets, and presentations, so that the AI can read and reference those materials when answering questions or producing analysis. The platform also supports images and voice: Users may ask the platform to analyze or generate images, convert spoken words to text, or work with visual content alongside written prompts. For users who need to run calculations or analyze data, the platform includes the ability to write and run Python code, which is a widely used computer programming language suited to data analysis and financial modeling, directly within the AI interface. The platform also supports team use through shared group chat environments where multiple users can work together, share files, search past conversations, and receive AI-generated responses within a shared workspace.

The platform additionally supports AI agents. An AI agent is a program that can carry out a series of steps on its own to complete a task, with limited need for the user to direct each step individually. askROI has developed AI agent capabilities focused on automating customer service and business workflow tasks, and has deployed these agents within the Hyperscale Data family of companies. Users may also connect the platform to outside tools and data sources, allowing the AI to draw on information from those sources when generating responses.

OnlyBulls (onlybulls.com) is a consumer-facing financial research application developed and operated by askROI. OnlyBulls is described separately in this Annual Report.

Business Strategy

askROI’s strategy is focused on making AI tools accessible to a broad range of individual users and professionals, rather than targeting a single industry or customer type. The platform is available at no cost to download, with additional features available through a paid subscription model. askROI believes that offering users a choice of AI models from multiple providers, rather than locking them into a single AI system, makes the platform more useful and more durable over time as the AI technology market continues to change rapidly.

Key elements of askROI’s strategy include the following. askROI intends to continuously add new AI models to the platform as leading systems are released by third-party AI providers, so that users can always access the most capable tools available without switching platforms. askROI plans to expand the platform’s features over time, including through further development of AI agent capabilities, additional tools for working with documents and data, and expanded connections to outside services and applications. askROI also intends to build additional purpose-built consumer applications on top of the platform, as it has done with OnlyBulls, to serve users in specific markets with tailored product experiences. Ongoing development will continue in partnership with MeetKai, guided by user feedback and real-world usage data.

The market for AI productivity applications is highly competitive and changing quickly. askROI competes with AI tools and applications offered by large technology companies and by the companies that built the underlying AI models, many of which have far greater financial resources, established customer relationships, and brand recognition than askROI does. Some of these competitors have begun offering users the ability to choose between multiple AI models within their own platforms, which may reduce one of askROI’s points of differentiation.

askROI believes its primary competitive advantages consist of: (i) the ability for users to choose directly from a range of AI models provided by multiple companies within a single platform; (ii) a broad set of productivity tools that go beyond basic AI chat, including document analysis, data tools, team workspaces, and AI agents, and (iii) wide distribution through the Apple App Store and Google Play, which has enabled organic growth to result in more than 1.3 million downloads since April 2025. askROI’s ability to maintain its competitive position will depend on its continued ability to add new AI models quickly, expand its feature set, and build user loyalty before larger and better-funded competitors replicate its offerings.

Regulatory Environment (Present and Future)

The rules and laws that apply to AI technology are changing rapidly in the United States, member states of the European Union, and other countries. Governments are developing new requirements related to how AI systems operate, how user data is protected, and what disclosures must be made to users about AI-generated content. For example, the European Union’s Artificial Intelligence Act, which has begun to take effect in phases, creates different compliance requirements depending on how an AI system is used and the level of risk it poses. Several U.S. states have also passed or are considering laws related to AI systems and consumer data privacy.

Because askROI does not build the underlying AI models it offers but instead provides a platform through which users interact with models built by other companies, there is legal uncertainty about whether askROI would be treated as an AI developer, a company that deploys AI tools built by others, or both under applicable law. This distinction may affect what compliance obligations apply to askROI. askROI follows regulatory developments through industry groups and outside advisors and uses data encryption, access controls, and data management policies to protect user information. Future changes in applicable law could require askROI to modify features, increase its compliance spending, or limit the availability of the platform in certain markets, any of which could adversely affect its business.

askROI – OnlyBulls

OnlyBulls (onlybulls.com) is a consumer-facing financial research and market intelligence platform developed and operated by askROI. The platform is built primarily around market data, charting, and portfolio monitoring tools, with an integrated AI-powered research assistant as one component of the broader product experience. OnlyBulls is designed for individual investors and retail market participants who want a single mobile-first application for tracking securities and digital assets, conducting independent research, and managing a self-custody digital asset wallet. The platform does not function primarily as an AI product; rather, it uses AI as one tool within a broader set of financial research and monitoring capabilities focused on publicly available market information.

The OnlyBulls platform currently provides users with the following capabilities: (i) access to real-time and historical financial market data and interactive price charts, (ii) the ability to create and manage personalized watchlists of securities and digital assets of interest, and (iii) an integrated AI-powered research assistant that enables users to conduct independent investment research using natural language queries. The platform does not currently offer the ability to purchase, sell, or otherwise execute trades in securities. OnlyBulls is designed and operated as a research, monitoring, and market intelligence tool and does not function as a broker-dealer or investment adviser.

Market data and pricing information displayed on the OnlyBulls platform are sourced through one or more third-party market data providers that aggregate and distribute equity, options, foreign exchange and digital asset pricing information. Interactive charting functionality is delivered through an integration with one or more third-party financial charting and data visualization platforms. askROI does not control the underlying data infrastructure of these providers and relies on each provider's continued service availability and compliance with applicable data licensing arrangements. askROI may add, replace, or remove data and charting providers over time as it evaluates service quality, pricing, and coverage.

The AI research assistant embedded within OnlyBulls is powered by the askROI platform and operates on the same LLM (a type of AI system trained on large volumes of text data that can interpret questions and generate written analysis) infrastructure described above. Users may direct queries to the research assistant regarding publicly available market data, company fundamentals, sector conditions, macroeconomic trends, and other investment-relevant topics. Outputs generated by the research assistant are intended to support users’ own independent analysis and are not intended to constitute, and should not be construed as, personalized investment advice.

DeFi Self-Custody Digital Asset Wallet

In addition to its market intelligence features, OnlyBulls includes a fully functional decentralized finance, or DeFi, self-custody digital asset wallet. Decentralized finance refers to financial services and applications, such as asset swaps, transfers, and holdings management, that operate through software on a blockchain without reliance on a traditional bank or centralized financial intermediary. A self-custody wallet is one in which the user, and not any third party, holds effective control over the digital assets held within it.

The OnlyBulls wallet is built on an embedded wallet architecture, which means the wallet is integrated directly into the application and users do not need to install separate software or manage a traditional seed phrase. A seed phrase is a sequence of words historically used as a master backup for self-custody wallets; embedded wallet infrastructure replaces this model with modern authentication methods such as email login, social login, biometric verification and passkeys. The private key underlying the wallet, which is the unique cryptographic code that authorizes transactions, is managed through a combination of hardware-secured environments and distributed key management techniques provided by Privy, Inc. (“Privy”), askROI’s wallet infrastructure provider, such that no single party, including askROI or Privy, ever holds the complete key. Users access and control their wallet through their authenticated login credentials rather than through direct management of a private key or seed phrase.

Users are solely responsible for maintaining access to the authentication credentials they use to access their wallet, including their email account, linked social media login, passkey, or any multi-factor authentication method configured on their account. askROI does not independently custody user assets and cannot restore access to a wallet or recover digital assets on a user’s behalf in the event that authentication credentials are lost, compromised, or otherwise rendered inaccessible. Users who wish to hold their private key directly may export it through a key export function, after which the user assumes full responsibility for that key and all risks associated with its storage and safekeeping.

Users of the OnlyBulls wallet may exchange one digital asset for another directly within the platform through an integration with one or more decentralized exchange aggregators. A decentralized exchange aggregator is a service that sources available liquidity from multiple digital asset trading venues simultaneously in order to execute asset swaps at competitive rates without routing transactions through a single centralized intermediary. These swap transactions are settled on the applicable blockchain network and are subject to network transaction fees, commonly referred to as gas fees, as well as the availability of liquidity across the venues accessed by the applicable aggregator.

Users may also convert traditional fiat currency, such as U.S. dollars, into digital assets through on-ramp and off-ramp services and vice versa. An on-ramp service allows a user to purchase digital assets using traditional payment methods; an off-ramp service allows a user to convert digital assets back into traditional currency. These conversion services are provided through arrangements with one or more third-party payment and conversion service providers. The identity and number of these providers may change over time as askROI evaluates service quality, compliance posture, fee structures, and geographic availability.

Circle 8

Description of the Business

Headquartered in Houston, Circle 8 is a premier lifting services provider serving clients in Texas, Oklahoma, Louisiana and New Mexico with five strategically located branches in Texas and Oklahoma. Its modern fleet consists of 47 mobile all-terrain cranes, with lifting capacities of up to 350 tons that provide services across the Eagle Ford, Permian, Delaware and Haynesville basins. Circle 8’s fleet consists of Grove, Liebherr, Xuzhou Construction Machinery Group and other leading original equipment manufacturers (“OEMs”). In 2025, Circle 8 continued its fleet optimization strategy by selectively disposing of certain underutilized and maintenance-intensive cranes. Management conducted a detailed review of fleet utilization, maintenance costs and market demand and elected to sell specific units that were not achieving targeted utilization levels or required disproportionate maintenance expenditures. This disciplined approach allowed the Company to improve overall fleet utilization, reduce maintenance costs and redeploy capital toward more productive assets within the fleet.

Circle 8 provides experienced professionally certified operators to deliver customized solutions to lifting clients in oil field services, construction, commercial, refining / marketing and wind energy markets. Circle 8 maintains an industry leading safety record. Safety personnel hold certifications and undergo in-house training.

Competitive Advantage

Circle 8’s operating experience and the mid-sized diverse fleet that it has developed serves the oil service and petrochemical industries, providing full-service lifting solutions with an industry leading safety record. Key strengths of Circle 8 include:

Industry

Over the past twelve months, the U.S. lifting solutions and equipment rental industry has continued to evolve through consolidation, capital investment and shifting end-market demand. In 2025, Herc Holdings completed the acquisition of H&E Equipment Services in a transaction valued at approximately $5.3 billion, further strengthening Herc’s position among the largest equipment rental companies in North America and highlighting the continued consolidation occurring among large national rental operators.

Despite this consolidation activity among national equipment rental companies, the lifting solutions industry remains highly fragmented, consisting of a small number of large national rental platforms alongside numerous regional and locally owned crane and lifting service companies. Regional providers such as Circle 8 continue to play an important role in delivering specialized lifting expertise, certified operators and project-specific lifting solutions that large national rental companies often do not provide.

Demand for lifting solutions during 2025 remained supported by activity in infrastructure construction, petrochemical and refining projects, energy development, and industrial facility expansion. Federal infrastructure spending programs and continued investment in domestic energy production have helped sustain demand for lifting services across many U.S. markets. At the same time, certain segments of commercial construction have experienced slower growth due to elevated interest rates, higher borrowing costs and tighter capital markets.

Looking forward over the next twelve months, the industry faces heightened uncertainty related to geopolitical developments and global energy market volatility. Recent developments involving Iran and Venezuela have the potential to influence global oil supply and pricing dynamics. Higher oil prices may stimulate drilling, infrastructure development and refinery maintenance activity in North America, which historically increases demand for crane and lifting services. However, geopolitical instability or economic disruptions could also delay or reduce capital investment in construction and industrial projects.

In addition to geopolitical uncertainty, equipment procurement costs continue to be influenced by global supply chain conditions, tariffs and foreign currency fluctuations. A significant portion of mobile cranes used in the United States are manufactured in Europe, particularly in Germany. Tariffs on imported heavy equipment and the relative strength of the Euro against the U.S. dollar have contributed to increased purchase costs for new cranes and replacement components. These factors may continue to influence fleet replacement cycles and capital investment decisions across the industry.

Despite these near-term uncertainties, long-term demand for lifting solutions remains supported by structural growth drivers including U.S. infrastructure investment, liquid natural gas export facility development, petrochemical plant expansions, renewable energy projects and continued growth in large-scale industrial and data center construction.

Sales and Marketing

Led by Arnold Mabee and Brett Rhuland, the sales force is highly specialized in lifting solutions sales to oil services customers, seeking long term purchase orders and master service agreements. Circle 8 plans to continue the extensive training program which involves OEM training sessions on operations and maintenance to ensure the entire sales force knows the fleet inside and out.

Circle 8 will be working with continuing management to implement a back-office content resource management system that will be heavily focused on data collection so that it can continue to improve margin and help streamline scheduling, operations and fleet management to optimize utilization.

Competitive Business Strategy

The oil services’ lifting solutions demand has historically been one of the leading sub-segments of the industry for profitability due to high utilization rates that coincide with the continuous workstreams of extraction. Circle 8 plans to expand this business line in both topline sales through optimizing service and quality operations with a strong safety record.

While the oil and gas sector remains an important component of Circle 8’s operations, Circle 8 has undertaken strategic initiatives to diversify its end markets and customer base in order to reduce exposure to cyclical fluctuations in upstream energy activity. Management has focused on expanding Circle 8’s business development efforts into additional sectors that require complex lifting solutions and experienced operators.

These diversification efforts include pursuing projects in refinery and petrochemical maintenance, plant turn-around work, industrial facility construction, infrastructure development and renewable energy projects such as wind energy installation and maintenance. These markets provide opportunities for long-duration projects, recurring maintenance work and infrastructure development that complement Circle 8’s traditional oilfield lifting services.

Circle 8 has also focused on securing master service agreements and strengthening relationships with customers operating across these diversified sectors. These agreements provide greater visibility into future project opportunities and allow Circle 8 to deploy its fleet across a wider range of lifting applications.

In addition, Circle 8 continues to invest in operational systems, fleet management processes and scheduling capabilities designed to improve equipment utilization and operational efficiency. These initiatives allow Circle 8 to allocate cranes more effectively across geographic markets and industry sectors while seeking to maximize fleet productivity.

Management believes that expanding into infrastructure, industrial construction, plant maintenance and renewable energy projects will help stabilize revenue streams, reduce dependence on oilfield activity cycles and allow Circle 8 to maximize utilization of its fleet.

In addition to expanding the existing business, Circle 8 will seek to make additional forays into infrastructure construction, refinery and manufacturing plant turn-around projects and industrial facility construction as additional equipment becomes available and market opportunities develop.

Customers

With a focus on the oil services sub-segment of the lifting solutions business in the Eagle Ford, Haynesville, Permian, Delaware and Anadarko basins, Circle 8 has a diversified base of blue-chip customers in Texas and Oklahoma. While about a third of its sales are expected to be made up from six of the largest players in the industry, the remaining two thirds of sales will be highly diversified, leading to minimal concentration risk. With its longstanding relationships with blue-chip customers and incoming fleet units, Circle 8 believes it has the ability to scale up sales with these customers locally and most likely into other adjacent areas.

Due to the highly skilled nature and competitive nature of the lifting solutions business, the sector typically consists of companies like Circle 8 that provide full service lifting solutions on rental or contract basis, including the manpower required to operate the equipment or companies that require extensive lifting solutions straight purchasing the equipment and hiring crane operators directly.

The full-service lifting solutions business is highly fragmented and local with only a few national service providers. In Circle 8’s existing subsegment of the lifting solutions business to the petrochemical industry, the competition is not as strong as it is in others as the contract terms are usually longer term and driven by maintaining strong customer relationships. The diversification strategy for Circle 8 into other subsegments will be faced with competition that is largely driven based on availability, quality (including safety record), reliability and price.

Environmental and Safety Regulations

Circle 8’s equipment, facilities and operations are subject to comprehensive and frequently changing federal, state and local environmental and occupational health and safety laws, which may vary locally. These laws regulate (1) the handling, storage, use and disposal of hazardous materials and waste and, if any, the associated cleanup of properties affected by pollutants; (2) air quality (emissions); and (3) wastewater. While lifting solutions’ operations generally do not raise significant environmental risks, Circle 8 uses petroleum products, solvents and other hazardous substances for fueling and maintaining its fleet and vehicles. Circle 8 has made, and will continue to make, capital and other expenditures to comply with environmental requirements. Circle 8 does not currently anticipate any material adverse effect on its business, financial condition or competitive position as a result of its efforts to comply with such requirements.

In the future, federal, state or local governments could enact new or more stringent laws or issue new or more stringent regulations concerning environmental and worker health and safety matters, reporting and disclosure obligations, or effect a change in their enforcement of existing laws or regulations, that could affect operations and increase operational and compliance expenditures. Also, in the future, contamination may be found to exist at Circle 8’s facilities or off-site locations where waste has been sent. There can be no assurance that Circle 8, or various environmental regulatory agencies, will not discover previously unknown environmental non-compliance or contamination. Circle 8 could be held liable for such newly discovered non-compliance or contamination. It is possible that changes in environmental and worker health and safety laws or liabilities from newly discovered non-compliance or contamination could have a material adverse effect on Circle 8’s business, financial condition and results of operations.

AGREE

AGREE is actively invested across a diverse range of commercial real estate asset classes, with a particular focus on hospitality and in the future, multifamily properties. AGREE strategically targets the middle market segment in geographic areas that present strong fundamentals and offer relative value, such as emerging or overlooked markets with growth potential. AGREE’s core objective is to deliver attractive, risk-adjusted returns through a combination of ground-up development, targeted capital investments, and operational enhancements that unlock long-term value.

In the hospitality sector, AGREE brings a hands-on, value-driven approach that goes beyond traditional ownership. Recognizing the unique dynamics of hospitality real estate—which blends real estate investment with service-based business operations—AGREE prioritizes both physical improvements and elevated guest experiences to drive performance. By focusing on midscale to upper-midscale hotels in underpenetrated markets, AGREE positions its hospitality assets to capture stable demand from business and leisure travelers alike.

A key component of AGREE’s hospitality platform is AGREE Madison, a wholly owned subsidiary that operates four recently renovated hotel properties in the Midwest. These include the Hilton Garden Inn Madison West, Residence Inn Madison West, Courtyard Madison West, and Hilton Garden Inn Rockford. AGREE operates a total of 526 keys collectively across the four-property portfolio. Each property has undergone substantial upgrades since acquired to enhance both aesthetic appeal and operational efficiency, ensuring they meet modern traveler expectations while maintaining cost discipline. Through AGREE Madison, the firm exercises direct oversight of day-to-day operations, ensuring alignment with its broader investment philosophy of value creation through active management.

TurnOnGreen

TurnOnGreen, Inc., a Nevada corporation, through its wholly owned subsidiaries Digital Power and TOG Technologies (collectively, “TurnOnGreen”), is an emerging provider of premium power electronic and electric vehicle (“EV”) charging solutions. TurnOnGreen designs, develops, manufactures and sells highly engineered, feature-rich, high-grade power conversion systems and power solutions for mission-critical, life-sustaining, and lifesaving applications across a variety of sectors, particularly those operating in demanding and harsh environments. TurnOnGreen serves a broad range of markets, including defense and aerospace, medical and healthcare, industrial applications, telecommunications, e-Mobility, and original equipment manufacturer (“OEM”) solutions. TurnOnGreen’s products are highly adaptive, featuring customized firmware meticulously configured to meet the specific requirements and challenges of its customers’ applications. Approximately 17% of TurnOnGreen’s revenue is generated by core power technologies to deliver comprehensive EV charging infrastructure and subscription-based charging network management services for residential, fleet, hospitality, workplace, healthcare, municipal and educational environments including universities and schools.

Digital Power offers a broad range of rugged power solutions for the defense and aerospace market. These solutions feature the ability to withstand harsh environments. For more than 50 years, Digital Power has provided rugged products and custom power solutions designed end-to-end for military and aerospace applications. Digital Power offers a wide variety of units designed to comply with the most demanding United States and international military standards.

In addition, Digital Power provides a comprehensive range of integrated power system solutions that are designed to meet the diverse and precise needs of its customers with the highest levels of efficiency, flexibility and scalability. Digital Power designs, develops and manufactures custom power systems to meet performance and/or form-factor requirements that cannot be met with standard power products. These power system solutions are designed to function reliably in harsh environments associated with defense and aerospace applications, while also being utilized for applications ranging from industrial and telecommunications equipment to medical instrumentation. TurnOnGreen believes that Digital Power’s power products are highly adaptive and feature digital power management and software configurations that allow them to achieve higher power efficiency to meet the requirements of both its customers and its OEMs. In addition to Digital Power’s custom power system solutions, it also provides a wide range of industry-standard power products. These products include their alternating current (“AC”) into a stable direct current (“DC”) voltage open-frame product series, which TurnOnGreen believes to be among the industry’s leading power switchers in terms of power efficiency. The open-frame products are deployed in highly compact form factors and modular power series that support configurable multiple DC outputs. Additionally, Digital Power offers high-power and high-voltage laser power supplies tailored to meet the unique requirements of medical, dental, and industrial pulsed energy systems. Digital Power’s expertise also encompasses high-performance and high-power data-center power supplies, semiconductor fabrication equipment power source supplies, desktop power supplies, and a comprehensive range of value-added customized AC/DC and DC/DC ruggedized power supply and system solutions.

Digital Power’s power products serve a wide range of applications across several critical industries. In the defense and aerospace industry, typical applications include mobile and ground communications systems, naval power conversion, automated test and simulation equipment for weapon systems, combat and airborne power supplies, radar array power sources, tactical gyro position and navigation systems and active protection systems for tactical vehicles. In the industrial and telecommunications industry, typical applications include packaging equipment, laboratory and diagnostic equipment, industrial laser drivers, data center computing infrastructure and turbomachinery control solutions. In the medical and healthcare industry, typical applications include portable oxygen concentrators, patient monitoring systems, pulsed laser drivers for dental and surgical treatments, DNA sequencers, medical beds, and ultrasound systems.

TOG Technologies provides EV drivers and site hosts with convenient, reliable, and high-speed charging solutions. TOG Technologies designs, manufactures, resells, owns, operates and supplies Level 2 AC and direct current fast charging (“DCFC”) equipment for residential, commercial, and fleet applications. Its Level 2 charging systems are deployed at single-family homes, multi-family residences, hospitality and healthcare facilities, retail properties, municipalities, schools, workplaces and fleet depots. Its DCFC systems are designed for high-traffic urban, suburban, corridor, destination, and fleet locations where rapid charging and high utilization are essential. TOG Technologies also offers a charger-as-a-service model in which customers receive charging hardware bundled with access to the TOG Technologies network.

Compliance with Material Government (Including Environmental) Regulations

Sentinum

Sentinum is subject to various federal, state, local and non-U.S. laws and regulations relating to environmental protection and remediation of hazardous substances and wastes. Sentinum continually assesses compliance status and management of environmental matters to ensure our operations are in compliance with all applicable environmental laws and regulations. Investigation, remediation, and operation and maintenance costs associated with environmental compliance and management of sites are a normal, recurring part of operations. While Sentinum’s regulatory compliance costs are currently not considered material, it is possible that costs incurred to ensure continued environmental compliance could have a material impact on results of operations, financial condition or cash flows if new areas of soil, air and groundwater contamination are discovered and/or expansions of work scope are prompted by the results of ongoing monitoring.

The Michigan Facility is subject to a final corrective measures plan with the EPA. The seller performed remedial activities at the Michigan Facility relating to historical soil and groundwater contamination and Sentinum is responsible for ongoing monitoring and final remediation plans. We estimate the cost of the environmental remediation obligation is approximately $0.4 million and reflects our best estimate of probable future costs for remediation based on the current assessment data and regulatory obligations. Future costs will depend on many factors, including the extent of work necessary to implement monitoring and final remediation plans and ACS’s time frame for remediation. We may incur actual costs in the future that are materially different than this estimate and such costs could have a material impact on results of operations, financial condition, and cash flows during the period in which they are recorded.

Gresham

Gresham must meet applicable regulatory, environmental, emissions, safety and other requirements where specified by the customer and accepted by it or as required by local regulatory or legal requirements. The products that Gresham markets and sells in Europe may be subject to the 2003 European Directive on Restriction of Hazardous Substances (“RoHS”), which restricts the use of six hazardous materials in the manufacture of certain electronic and electrical equipment, as well as the 2002 European Directive on Waste Electrical and Electronic Equipment (“WEEE”), which determines collection, recycling and recovery goals for electrical goods. In July 2006, our industry began phasing in RoHS and WEEE requirements in most geographical markets with specific emphasis on consumer-based products. Gresham believes that RoHS and WEEE-compliant components may be subject to longer lead-times and higher prices as the industry transitions to these new requirements. REACH Registration, Evaluation, Authorization and Restriction of Chemicals Registration, is a European Union regulation dating from December 18, 2006. REACH addresses the production and use of chemical substances, and their potential impacts on both human health and the environment.

In addition to these requirements for Gresham’s dealings with customers in the EU, similar regulatory mandates from the United States, the United Kingdom and Israel apply to all Gresham operating subsidiaries. Gresham has structured operations to comply with these requirements and has experienced little to no impact on lead times or prices. Given the applicability of these requirements to all competitors alike, Gresham believes that compliance has had no impact on the competitive position of any operating subsidiary.

Some of Gresham’s products are subject to the International Traffic in Arms Regulation (“ITAR”), which is administered by the United States Department of State. ITAR controls not only the export of certain products specifically designed, modified, configured or adapted for military systems, but also the export of related technical data and defense services and foreign production. Gresham obtains required export licenses for any exports subject to ITAR. Compliance with ITAR may require a prolonged time period. If the process of obtaining required export licenses for products subject to ITAR is delayed, it could have a materially adverse effect on Gresham’s business, financial condition, and operating results. Any future restrictions or charges may be imposed by the United States or any other foreign country. In addition, from time to time, Gresham enters into defense contracts to supply technology and products to foreign countries for programs that are funded and governed by the United States Foreign Military Financing program.

Gresham is also subject to heightened government scrutiny of its operations pursuant to certain of its contracts.

Gresham’s businesses are heavily regulated in most of its markets. Gresham transacts with numerous U.S. Government agencies and entities, including but not limited to the U.S. Department of Defense (“DoD”), branches of the U.S. military and the Department of Homeland Security. Similar government authorities exercise similar regulatory oversight in Gresham’s non-U.S. markets.

Government Contracts

The governments of the U.S., U.K. and Israel may terminate any of Gresham’s applicable operating subsidiaries’ government contracts at their convenience, as well as for default based on its failure to meet specified performance requirements. If the U.S. Government terminated any of Gresham’s contracts for convenience, Gresham generally would be entitled to receive payment for work completed and allowable termination or cancellation costs. If any of Gresham’s government contracts were to be terminated for default, generally the U.S. government would pay only for the work that has been accepted and could require Gresham to pay the difference between the original contract price and the cost to re-procure the contract items, net of the work accepted from the original contract. The U.S. Government can also hold Gresham liable for damages resulting from the default. Similar provisions apply to Gresham’s contracts with other governments and to Gresham’s subcontractors with major defense contractors who provide systems or military platforms directly to the government.

Power Electronics

In all of Gresham’s markets in the U.S., Gresham’s commercial power electronics offerings must comply with safety, energy use and operational performance regulations and standards (IEC/EN/UL/CSA) issued and administered by international standards organizations. In the U.S., the Department of Energy, the Environmental Protection Agency and the Federal Communications Commission mandate and enforce compliance with these standards. Outside the U.S., various government agencies in the U.K., the EU and Israel mandate and enforce compliance with these international requirements for safety, energy use and operational performance. In commercial markets, Gresham’s suppliers bear most of the expense of compliance with international standards as a standard cost of business. Given the universal application of these requirements, the costs of compliance do not create any competitive disadvantage because all competitors must comply to sell into the market.

Environmental

Gresham must meet applicable regulatory, environmental, emissions, safety and other requirements where its customer specifies, or as applicable local regulations or laws require. The products that Gresham markets and sells in Europe also may be subject to the 2003 European Directive on Restriction of Hazardous Substances (“RoHS”), which restricts the use of six hazardous materials in the manufacture of certain electronic and electrical equipment, as well as the 2002 European Directive on Waste Electrical and Electronic Equipment (“WEEE”), which determines collection, recycling and recovery goals for electrical goods. In July 2006, Gresham’s industry began phasing in RoHS and WEEE requirements in most geographical markets with specific emphasis on consumer-based products. Gresham believes that RoHS and WEEE-compliant components may be subject to longer lead-times and higher prices as the industry transitions to these new requirements. REACH (Registration, Evaluation, Authorization and Restriction of Chemicals Registration) is a European Union regulation dating from 18 December 2006. REACH addresses the production and use of chemical substances, and their potential impacts on both human health and the environment.

These regulatory mandates apply to all of Gresham’s operating subsidiaries. Gresham has structured operations to comply with these requirements and has experienced little to no impact on lead times or prices. Give the applicability of these requirements to all competitors alike, compliance has had no impact on the competitive position of any operating subsidiary.

Non-U.S. Sales

Gresham’s non-U.S. sales are subject to both U.S. and non-U.S. governmental regulations and procurement policies and practices, including regulations relating to import-export control, tariffs, investment, exchange controls, anti-corruption, and repatriation of earnings. Non-U.S. sales are also subject to varying currency, political and economic risks.

TurnOnGreen

TurnOnGreen’s businesses are heavily regulated in many of the markets in which it operates. TurnOnGreen develops and supplies power electronics products primarily used for power conversion. As a result, TurnOnGreen must comply with numerous standards governing electronic safety designed to protect the health of humans and animals. TurnOnGreen serves diverse markets including automotive, defense and aerospace, medical and healthcare as well as industrial and telecommunications, each of which is subject to its own set of safety regulations and standards.

Government Contracts. The U.S. Government, and other governments, may terminate any of TurnOnGreen’s government contracts at their convenience, or for default based on a failure to meet specified performance requirements. If any of TurnOnGreen’s U.S. Government or foreign government contracts were terminated for convenience, TurnOnGreen would generally be entitled to receive payment for work completed and allowable termination or cancellation costs. If a government contract were terminated for breach or default, the U.S. Government or foreign government would generally pay only for work that has been accepted and may require TurnOnGreen to pay the difference between the original contract price and the cost to re-procure the contract items, net of the work accepted from the original contract. The U.S. Government or foreign government may also hold TurnOnGreen liable for damages resulting from the default.

Medical Device Power Supplies. TurnOnGreen’s medical power supplies must incorporate one or more means of protection (“MOP”) to prevent electrical shock. A MOP may include safety insulation, protective earth, defined creepage distance, air gaps (clearance), or other protective impedances. These protections may be used in various combinations such that if one protection fails, another remains in place. TurnOnGreen’s medical power supplies must comply with standards that distinguish between operators and patients, resulting in classifications known as “means of operator protection” and “means of patient protection.” Patient protection requirements are more stringent because patients may be physically connected to equipment through an applied part and may be unconscious when a fault occurs.

Environmental. TurnOnGreen is subject to various federal, state, local and non-U.S. laws and regulations relating to environmental protection, including those governing the discharge, treatment, storage, disposal, and remediation of hazardous substances and wastes. TurnOnGreen continually assesses its compliance status and environmental management practices to ensure its operations comply with applicable environmental laws and regulations. Investigation, remediation, and operation and maintenance costs associated with environmental compliance and site management are a normal and recurring part of TurnOnGreen’s operations.

Non-U.S. Sales. TurnOnGreen’s non-U.S. sales are subject to both U.S. and non-U.S. governmental regulations and procurement policies, including regulations relating to import and export controls, tariffs, foreign investment, exchange controls, anti-corruption laws, and the repatriation of earnings. Non-U.S. sales are also subject to currency, political and economic risks.

Other Compliance Matters

In addition, TurnOnGreen is subject to the local, state, national, and international laws and regulations of the jurisdictions in which it operates, including those governing commerce, intellectual property, trade, health and safety, contracts, privacy and communications, consumer protection, web services, taxation, corporate governance and securities laws. These laws and regulations may change over time. Unfavorable changes in existing or new laws and regulations could increase TurnOnGreen’s cost of doing business and impede its growth.

Research and Development

During the years ended December 31, 2025 and 2024, we spent approximately $4.8 million and $11.0 million, respectively, on research and development.

Human Capital Resources

We are committed to attracting and retaining the brightest and best talent, so investing in human capital is critical to our success. The employee traits we value include industriousness, intellectual curiosity, growth mindset and deeply caring about the quality of work. The human capital measures and objectives that we focus on in managing our business include employee safety, talent acquisition and retention, employee engagement, development and training, diversity and inclusion, and compensation and pay equity. None of our employees is represented by a collective bargaining unit or is a party to a collective bargaining agreement. We believe that our relationship with our employees is good.

The following description provides an overall view of our Company. Since we are a holding company, however, every statement may not be applicable to every subsidiary, particularly since some are located in foreign countries.

Employee Profile

As of December 31, 2025, we had 612 employees located in the U.S., Israel and the U.K., of whom 57 were engaged in engineering and product development, 36 in sales and marketing, 448 in general operations and 71 in general administration and finance. All but 50 of these employees are employed on a full-time basis. None of our employees is currently represented by a trade union. We consider our relations with our employees to be good.

As of December 31, 2025, approximately 27% of our current workforce is female, 73% male, and our average tenure is 5.2 years, an increase of 49% from an average tenure of 3.5 years as of December 31, 2024.

Talent

A core tenet of our talent system is to both develop talent from within and supplement with external hires. This approach has yielded loyalty and commitment in our employee base which in turn grows our business, our products, and our customers, while adding new employees and external ideas supports a continuous improvement mindset and our goals of a diverse and inclusive workforce.

We believe we materially comply with all applicable state, local and international laws governing nondiscrimination in employment in every location in which we operate. All applicants and employees are treated with the same high level of respect regardless of their gender, ethnicity, religion, national origin, age, marital status, political affiliation, sexual orientation, gender identity, disability or protected veteran status.

Employee Engagement and Development

Our employee engagement efforts include our frequent and transparent “all-hands” meetings and executive communications, through which we aim to keep our employees well-informed and to increase transparency. We believe in continual improvement and use employee feedback to drive and improve processes that support our customers and ensure a deep understanding of our employees’ needs. We plan to conduct annual confidential employee surveys as we believe that ongoing performance feedback encourages greater engagement in our business and improves individual performance. Our employees will participate in a 360-degree evaluation process to identify critical capabilities for development and establish new stretch goals.

Pay Equity

Our employee compensation strategy supports three primary objectives: attract and retain the best team members; reflect and reinforce our most important values; and align team member interests with stockholder interests in building enduring value. We believe people should be paid for what they do and how they do it, regardless of their gender, race or other personal characteristics. To deliver on that commitment, we benchmark and set pay ranges based on market data and consider factors such as an employee’s role and experience, the location of their job, and their performance. We also regularly review our compensation practices, both in terms of our overall workforce and individual employees, to ensure our pay is fair and equitable.

Total Rewards

As part of our compensation philosophy, we believe that we must offer and maintain market competitive total rewards programs for our employees in order to attract and retain superior talent. In addition to healthy base wages, additional programs include annual bonus opportunities, healthcare and insurance benefits, paid time off, family leave, family care resources and flexible work schedules. We established a Company matched 401(k) plan during 2021.

Health and Safety

The success of our business is fundamentally connected to the well-being of our people. Accordingly, we are committed to the health, safety and wellness of our employees. We provide our employees and their families with access to a variety of flexible and convenient health and welfare programs, including benefits that support their physical and mental health by providing tools and resources to help them improve or maintain their health status; and that offer choice where possible so they can customize their benefits to meet their needs and the needs of their families.