QumulusAI, Inc.

This quarterly report on Form 10-Q contains certain forward-looking statements that are within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by those sections. For more information, see“Part I. Financial Information–* Item 2. Management*’s Discussion and Analysis of Financial Condition and Results of Operations–* Forward-Looking Statements.*”

As used in this report, references to“QumulusAI,”* the*“Company,”* “we,” “our” or*“us,”* unless the context otherwise requires, refer to QumulusAI, Inc. and its subsidiaries, all of which are consolidated on the Company*’s consolidated financial statements.

All trademarks, trade names or service marks referred to in this report are the property of their respective owners.

PART I—FINANCIAL INFORMATION

CONDENSED CONSOLIDATED BALANCE SHEET

QUMULUSAI, INC. (FORMERLY GLOBAL DIGITAL HOLDINGS, INC.) AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’** EQUITY**

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Nature of Operations

The Company

QumulusAI, Inc. (“QumulusAI” or the “Company”) is a cloud infrastructure company specializing in rapid deployment of graphics processing unit (“GPU”)-powered solutions for artificial intelligence (“AI”) applications, serving a critical market that is often overlooked by large-scale cloud providers (“hyperscalers”), which operate massive, standardized computing infrastructures primarily serving the largest enterprises. The Company’s platform delivers flexible, competitively priced, and customizable solutions for underserved small and mid-market customers—including machine learning teams, AI infrastructure startups, and research institutions—while also supporting the scale and complexity requirements of large enterprises, such as long-term deployments or supplemental on-demand compute capacity.

The Company traces its origins to WAHA Technologies, Inc. (“WAHA”) and WAHA, Inc. (renamed SPRE Commercial Group, Inc., or “SPRE”), both incorporated in 2019. SPRE focused on data center assets and operations, while WAHA specialized in blockchain managed services. In December 2022, the two entities completed a corporate roll-up to form Global Digital Holdings, Inc. and remain wholly owned subsidiaries of the Company. In April 2025 (after a substantial minority investment in October 2023), Global Digital Holdings, Inc. acquired The Cloud Minders, Inc. (“TCM”) (a company focused on GPU-as-a-Service (“GPUaaS”) assets and operations), now a wholly owned subsidiary, and rebranded the combined operations as QumulusAI. On August 18, 2025, Global Digital Holdings, Inc. changed its name to QumulusAI, Inc.

The Company’s Registration Statement on Form S-1, as amended (File No. 333-292514), filed in connection with the Company’s direct listing, was declared effective on July 14, 2026 by the Securities and Exchange Commission (the “SEC”), and the Company began trading publicly on the Nasdaq Global Market on July 16, 2026.

Reverse Stock Split

The Company effected a 1-for-3 reverse stock split (“Reverse Stock Split”) on September 30, 2025, pursuant to which every three shares of the Company’s issued and outstanding common stock were combined into one share of common stock. The Reverse Stock Split had no impact on the authorized number of shares of common stock, which continue to have no par value. Unless otherwise indicated, all share and per share information prior to the Reverse Stock Split date of September 30, 2025 in these unaudited condensed consolidated financial statements is retroactively adjusted to reflect the Reverse Stock Split, prior to the rounding of any fractional shares. Any fractional shares resulting from the Reverse Stock Split were rounded up to the next whole number of shares.

Going Concern

Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15,Presentation of Financial Statements-Going Concern (Subtopic 205-40), management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the financial statements are issued. Management’s evaluations are based on relevant conditions and events that are known and reasonably knowable as of the date the financial statements were issued.

The Company has incurred recurring operating losses since inception resulting in an accumulated deficit of $109,788,460 as of June 30, 2026. For the six months ended June 30, 2026, the Company had operating cash inflows of $22,305,214 and had an operating loss of $13,197,322. The Company’s operations have been funded partially through the issuance of debt. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these unaudited condensed consolidated financial statements.

In assessing the Company’s ability to continue as a going concern, the Company monitors and analyzes its cash and its ability to generate sufficient cash flow in the future to support its operating and capital expenditure commitments. At June 30, 2026, the Company had cash of $19,967,188. The Company’s plans to alleviate the substantial doubt include receiving access to $19,925,104 in previously restricted cash as a result of the Company’s public listing and completing an additional $15,300,000 draw under the USD.AI protocol. The Company also entered into multiple significant revenue contracts in July 2026 for approximately $103,900,000 in future revenue in which the Company received approximately $20,900,000 in cash deposits. Accordingly, management concluded these plans will alleviate the substantial doubt about the Company’s ability to continue as a going concern for the one-year period extending from the date of issuance of these financial statements.

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, WAHA, SPRE, SPRE Watonga OK, LLC (“Watonga”), and TCM and its partially owned consolidated entities, QAI Moon, LLC (“QAI Moon”), SPRE Brooklyn NY, LLC (“SPRE Brooklyn”) and SPRE NKC MO, LLC (“SPRE NKC”). The Company uses the equity method to account for investments in other companies if the investment provides management with the ability to exercise significant influence over the operating and financial policies of the investee. The condensed consolidated net loss includes the Company’s proportionate share of the net income or loss of these companies. Management’s judgment regarding the level of influence over each equity method investee includes considering key factors, such as ownership interest, representation on the board of directors and participation in policy-making decisions. All significant intercompany transactions and balances have been eliminated in consolidation. For financial and income tax reporting purposes, the Company has adopted a calendar year-end fiscal year.

Basis of Presentation

The unaudited condensed consolidated financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC for interim financial information. Certain disclosures normally included in financial statements have been condensed or omitted from these unaudited condensed consolidated financial statements as they are not required for interim financial statements under U.S. GAAP and the rules of the SEC. Accordingly, these unaudited condensed consolidated financial statements do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation of the financial position, operating results and cash flows for the periods presented have been included. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or any future period. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2025, and related notes thereto included in the Company’s Registration Statement on Form S-1 as amended (File No. 333-292514).

Non-Controlling Interests

The Company follows ASC 810,Consolidation, which governs the accounting for and reporting of non-controlling interests (“NCIs”) in partially owned consolidated entities and the loss of control of those entities. NCI positions are reported as a separate component of consolidated shareholders’ equity from the equity attributable to QumulusAI’s shareholders for all years presented. The net income (loss) attributed to the NCIs is separately designated in the accompanying condensed consolidated statements of operations resulting from the Company’s controlling position in QAI Moon, SPRE Brooklyn and SPRE NKC.

Reclassifications

Certain reclassifications have been made to the prior period financial statements to conform to the current period financial statement presentation. Certain expenses that were previously classified as general and administrative were reclassified to sales and marketing on the condensed consolidated statements of operations.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Management’s estimates and assumptions include, but are not limited to, estimating the fair value of consideration of acquisitions, the accounting for business combinations and allocating purchase price, valuation and estimating the useful life of identifiable intangible assets, valuation of goodwill, estimates used for forecast in business combinations, allowance for credit losses, financial instruments recorded at a fair value on a recurring basis, revenue recognition from digital asset mining, collectability of accounts receivable, valuation of convertible note payable, fair value of assets and liabilities assumed in acquisitions, valuation of stock-based awards, salvage values and estimated useful lives of property and equipment, valuation of deferred taxes and uncertain tax positions, valuation of common stock and warrant liabilities, and other assumptions used to measure stock-based compensation, calculation of incremental borrowing rate, and estimates for transfers of investments and valuation of assets. Management’s estimates and assumptions are derived from and are continually evaluated based upon available information, judgment, and experience.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable.

The Company maintains cash balances in various financial institutions. At times, such balances may be in excess of the Federal Deposit Insurance Corporation insurance limit. As of June 30, 2026 and December 31, 2025, interest-bearing accounts and non-interest bearing accounts were insured by the Federal Deposit Insurance Corporation up to $250,000 per financial institution. In lieu of insurance, the financial institution may collateralize the commercial paper with U.S. government securities, in which case they become repurchase agreements. The Company has not experienced any losses in such accounts and monitors the credit worthiness of the financial institutions with which they conduct business. Management believes that the Company is not exposed to significant credit risk with respect to its cash balances.

The Company is exposed to counterparty risk through the deposits it places with suppliers of equipment to secure orders and delivery dates. The risk of a supplier failing to meet its contractual obligations may result in late deliveries of equipment needed to fulfill customer orders. The Company attempts to mitigate this risk by procuring hardware from larger, more established suppliers and those whom the Company has existing relationships and knowledge of their reputation in the market.

During the three months ended June 30, 2026, the Company had four customers that accounted for approximately 90% of the Company’s total revenues. During the three months ended June 30, 2025, the Company had three customers that accounted for approximately 84% of the Company’s total revenues.

During the six months ended June 30, 2026, the Company had four customers that accounted for approximately 86% of the Company’s total revenues. During the six months ended June 30, 2025, the Company had three customers that accounted for approximately 81% of the Company’s total revenues.

For each significant customer, revenue as a percentage of total revenue are as follows:

Cash and Restricted Cash

For purposes of the condensed consolidated balance sheets and condensed consolidated statements of cash flows, the Company considers cash in operating bank accounts and cash on hand as cash.

Cash that is restricted as to withdrawal or use under the terms of certain contractual agreements are recorded as restricted cash in current assets on our condensed consolidated balance sheets. At June 30, 2026, the Company had a restricted cash balance of $19,925,104. Following the Company’s direct listing, the Company does not have any restricted cash balance.

The following table provides a reconciliation of cash and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows:

Digital Assets

Crypto Assets

The Company accounts for crypto assets in accordance with ASU 2023-08,Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, which requires entities to measure certain crypto assets at fair value with changes recognized in the condensed consolidated statements of operations for each reporting period. The Company’s crypto assets, Bitcoin and Ethereum Classic (“ETC”), which have not been determined to be stablecoins or derivatives, are within the scope of ASU 2023-08. The Company has deemed the price of crypto assets to be a Level 1 input under ASC 820 hierarchy as these were based on observable quoted prices in the Company’s principal market for identical assets. The Company’s crypto assets are received in exchange for services transferred to a customer and are converted to cash daily. Cash proceeds from the sale of digital assets are classified within operating activities in the Company’s consolidated statements of cash flows.

The Company acquires crypto assets through its network operations and holds these crypto assets. Each crypto asset acquisition is considered its own “lot” with its own cost basis based on the crypto asset-to-U.S. dollar (“USD”) conversion price from the Company’s principal market at time of acquisition. Any realized gain/loss on the disposition of crypto assets is calculated on a weighted-average basis.

Principal Market and Fair Value Determination

To determine which market is the Company’s principal market (or in the absence of a principal market, the most advantageous market) for purposes of determining fair value of individual digital assets, the Company follows ASC 820,Fair Value Measurement, which outlines the application of fair value accounting. ASC 820 determines fair value to be the price that would be received for digital assets in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820 requires the Company to assume that the digital asset is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact.

The Company transacts in a Brokered Market, a Dealer Market, Principal-to-Principal Markets and Exchange Markets, each as defined in the FASB Master Glossary (collectively, “Digital Asset Markets”). In determining which of the eligible Digital Asset Markets is the Company’s principal market, the Company reviews these criteria in the following order:

The Company determines its principal market (or in the absence of a principal market, the most advantageous market) annually to determine (i) if there have been recent changes to each Digital Asset Market’s trading volume in the trailing twelve months, (ii) if any Digital Asset Markets to which the Company has access have developed, ceased to operate, or become inaccessible, or (iii) if recent changes to each Digital Asset Market’s price stability have occurred that would materially impact the selection of the principal market and necessitate a change in the Company’s determination of its principal market.

The Company’s holdings of Bitcoin and ETC are recorded at fair value, as determined using the period-end closing price at 16:00:00 coordinated universal time (“UTC”) for Bitcoin and ETC on the Company’s principal markets, New York Digital Investment Group and Coinbase (the “Principal Markets”), and changes in fair value are recognized as a change in fair value of digital assets on the condensed consolidated Statements of Operations.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset in the principal or most advantageous market for the asset in an orderly transaction between market participants on the measurement date. Fair value should be based on assumptions market participants would use when pricing an asset. U.S. GAAP provides a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Assets and liabilities that are required to be recorded at fair value on the balance sheet are categorized based on the inputs to valuation techniques as follows:

The fair values of financial instruments including cash, accounts receivable, accounts payable, accrued expenses, and other current assets and liabilities approximate their respective carrying values due to the short maturities of those instruments. The fair value of notes payable approximates the carrying value, principally because of the maturity dates and the current terms applicable to the notes payable.

Financial Instruments—*** Credit Losses (ASU 2016-13)***

Under the current expected credit loss (“CECL”) impairment model, the Company develops and documents its allowance for credit losses on its accounts receivables based on two portfolio segments: Bitcoin mining trade receivables and Bitcoin mining hosting trade receivables. The determination of portfolio segments is primarily based on customer type, while also taking into account factors that may influence credit risk, such as macroeconomic conditions, industry trends, and the geographic location of customers and mining facilities. The Company develops and documents the allowance for credit losses on its loans receivable based on debtor type, while also taking into account factors that may influence credit risk, such as macroeconomic conditions and liquidity risks.

The Company’s quantitative allowance for credit loss estimates under CECL was determined using the loss rate method for trade receivables and the Probability of Default and Loss Given Default Methods (“PD method” and “LGD method”) for loans receivables. In addition to the quantitative allowance for credit losses, the Company also incorporates qualitative adjustments that may relate to unique risks, changes in current economic conditions that may not be reflected in quantitatively derived results, or other relevant factors to further inform the Company’s estimate of the allowance for credit losses.

Accounts Receivable, Net

Accounts receivable are stated at the amount management expects to collect from balances outstanding at year-end. Accounts receivable are due 30 days after issuance of the invoice. Accounts receivable past due more than 90 days are considered delinquent. If amounts become uncollectible, they will be charged to operations when that determination is made. Under ASC 326, the Company determines its allowance by applying a peer-based loss rate method to the Company’s trade receivables.

The following table represents the impact of the CECL allowance on accounts receivable:

Property and Equipment, Net

Property and equipment are recorded at cost, less accumulated depreciation. Expenditures for additions, improvements, betterments, if material, and individual purchases are generally capitalized. Minor replacements, maintenance, and repairs that do not improve or extend the lives of the assets are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period.

The useful life of the Company’s high performance compute equipment, consisting of servers and networking equipment, range from 3 to 7 years. The useful life of the Company’s mining related equipment, consisting of pods and transformers, is five years. Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In the event that facts and circumstances indicate that the cost of any long-lived assets may be impaired, an evaluation of recoverability would be performed.

Management reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of property and equipment may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of property and equipment. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property and equipment are used, and the effects of obsolescence, demand, competition, and other economic factors. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods, generally, Modified Accelerated Cost Recovery System, for income tax purposes. These differences in depreciation methods result in related deferred taxes.

Digital Asset Machines

Management assesses and adjusts the estimated useful lives of its digital asset machines (miners) when there are indicators that productivity of the mining assets is higher or lower than the assigned estimated useful life. The rate at which the Company generates digital assets and, therefore, consumes the economic benefits of its transaction verification servers, is influenced by a number of factors including the following:

Equity Method Investments

Prior to February 13, 2026, the Company held certain investments accounted for under the equity method. Under the equity method, investments are carried at cost and increased or decreased by the Company’s pro rata share of the investee earnings or losses. The carrying cost of this investment is also increased or decreased to reflect additional contributions or distributions of capital. Any difference in book equity and the Company’s pro rata share of the net assets of the investment will be reported as gain or loss at the time of the liquidation of the investment. It is the Company’s policy to record losses in excess of the investment if the Company is committed to provide financial support to the investee.

At acquisition, any excess of the acquisition cost over the total fair value of the net assets acquired constitutes equity method goodwill. Equity method goodwill is included in the balance of equity method investments and is not reported separately as goodwill on the Company’s condensed consolidated balance sheet. Equity method goodwill is not reviewed for impairment; however, the equity method investment is reviewed for impairment. There were no impairment losses recognized for the three and six months ended June 30, 2026 and 2025.

Investments in Equity Securities

Investments in which the Company does not have the ability to exercise significant influence over operating and financial matters are accounted for in accordance with ASC 321,Investments - Equity Securities. Investments without readily determinable fair values are accounted for using the measurement alternative which is at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company periodically evaluates its investments for impairment. If the Company determines that fair value is less than the investment’s carrying value, then an impairment loss is recorded in the accompanying consolidated statements of operations.

On May 1, 2026, the Company entered into a Simple Agreement for Future Equity (“SAFE”) pursuant to which the Company invested $1.0 million. The SAFE provides the Company with the right to receive equity securities upon the occurrence of specified events, including an equity financing, at a conversion price reflecting a 20% discount to the price paid by new investors. The SAFE does not accrue interest, has no maturity date, and terminates upon conversion into equity or settlement upon a qualifying event. The outstanding balance of the SAFE as of June 30, 2026 was $1,000,000. The Company did not recognize impairment during the six months ended June 30, 2026.

Business Combinations

The Company accounts for business acquisitions using the acquisition method of accounting, in accordance with ASC 805,*Business Combinations,*under which assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date. The fair value of the consideration paid is assigned to the assets acquired and liabilities assumed based on their respective fair values. Goodwill represents the excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed.

The Company’s management exercises significant judgments in determining the fair value of assets acquired and liabilities assumed, as well as intangibles and their estimated useful lives. Fair value and useful life determinations are based on, among other factors, estimates of future expected cash flows and appropriate discount rates used in computing present values. These judgments may materially impact the estimates used in allocating acquisition date fair values to assets acquired and liabilities assumed, as well as the Company’s current and future operating results. Actual results may vary from these estimates which may result in adjustments to goodwill and acquisition date fair values of assets and liabilities during a measurement period or upon a final determination of asset and liability fair values, whichever occurs first. Adjustments to the fair value of assets and liabilities made after the end of the measurement period are recorded within the Company’s operating results.

Long-Lived Assets, Including Definite-Lived Intangible Assets

The Company reviews for the impairment of long-lived assets annually and whenever events and or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Such indicators include, among others, the nature of the asset, the projected future economic benefit of the asset, historical and future cash flows and profitability measurements. Definite-lived intangible assets primarily consist of customer relationships and trade names. An impairment loss would be recognized when the value of the undiscounted estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than the carrying value. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. There were no impairment losses recognized for the three and six months ended June 30, 2026 and 2025.

Goodwill

Goodwill, which represents the excess of purchase price over the fair value of net assets acquired in business combinations, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. Goodwill represents the excess of the purchase price over the fair value of net assets acquired. Goodwill is not amortized but tested annually for impairment or when indicators of impairment are present. The test for goodwill impairment involves a qualitative assessment of impairment indicators. If indicators are present, a quantitative test of impairment is performed. Goodwill impairment, if any, is determined by comparing the reporting unit’s fair value to its carrying value. An impairment loss is recognized in an amount equal to the excess of the reporting unit’s carrying value over its fair value, up to the amount of goodwill allocated to the reporting unit. The Company’s policy is to review goodwill for impairment on an annual basis as of the last day of the Company’s fiscal year or more frequently, unless a triggering event requires an analysis sooner. There was no impairment of goodwill for the three and six months ended June 30, 2026 and 2025.

Revenue and Cost Recognition

Overview

The Company generates revenue from the following sources: (1) cryptocurrency mining, (2) mining hosting services and (3) compute power.

In accordance with ASC 606,Revenue Recognition, the Company recognizes revenue from contracts with customers using a five-step model, which is described as follows:

Revenue from Cryptocurrency Mining

The Company participates in a third-party operated mining pool. As of April 2025, the pool operator is Luxor Technology Corporation (“Luxor”). Prior to April 2025, the pool operator was Foundry (now Foundry Digital) (“Foundry”). As a result of the change in pool operator, the Company updated its accounting policy to change the end of its contract period from 16:00:00 UTC to 23:59:59 UTC. As a participant in the third-party operated mining pool, the Company provides computing power to the third-party operated mining pool. The Company’s enforceable right to compensation begins when, and lasts as long as, the Company provides computing power to the mining pool operator.

Step 1: The Company has identified the third-party mining pool operator as its customer. The Company enters into a contract with the customer to provide its computing power to the customer’s mining pool. The contracts are terminable without penalty at any time by either party, and thus the contract term is shorter than a 24-hour period and the contracts are continuously renewed.

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

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

Based on these criteria, the Company has identified a single performance obligation of providing computing power to the mining pool operator. The continuous renewal options do not represent material rights because they do not provide the customer with the right to purchase additional goods or services at a discount. Specifically, the contract is renewed at the same terms, conditions, and rate as the current contract which is consistent with market rates, and there are no upfront or incremental fees in the initial contract.

Step 3: The Company receives non-cash consideration in the form of bitcoin, the fair value of which the Company measures at 23:59:59 UTC and 16:00:00 UTC on the date of contract inception using the Company’s principal market for bitcoin, Bitcoin Reference Rate, when the pool operator is Luxor and Foundry, respectively. The contract renews continuously throughout the day, and thus the value of the consideration should be assessed continuously throughout the day, and the Company has concluded to use the 23:59:59 UTC and 16:00:00 UTC bitcoin price each day when the pool operator is Luxor and Foundry, respectively. Revenue is recognized on the same day that control of the services transfers to the customer, which is the same day as contract inception. According to the customer contract, daily settlements are made to the Company by the customer based on the computing power provided over the contract periods occurring over a 24-hour period and the payout is made the following day. There are no other forms of variable considerations, such as discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties, or other similar items.

The Company earns non-cash consideration based on the Full-Pay-Per-Share (“FPPS”) payout method set forth by the customer in the form of bitcoin. The amount of bitcoin the Company is entitled to for providing hash calculations to the customer’s mining pool under the FPPS payout method is made up of block rewards and transaction fees less mining pool fees determined as follows:

Step 4: There is a single performance obligation (i.e., to provide computing power to the customer) for the contract; therefore, all consideration from the customer is allocated to this single performance obligation.

Step 5: The Company’s performance is completed over time as the customer obtains control of the computing power. The performance obligation of computing power is fulfilled over time, as opposed to a point in time, because the Company provides the computing power throughout the contract period and the customer simultaneously obtains control of the service and uses it to produce bitcoin.

Revenue from Mining Hosting Services

The Company has also entered into hosting contracts where it operates mining equipment owned by third parties within its facilities in exchange for a fee or reimbursement of electricity cost at a markup.

Step 1: The Company has identified the third-party mining equipment owners as its customer. The Company enters into a contract with the customer to host its miners on the Company’s network. The contracts are terminable without penalty at any time if the termination is agreed upon by both parties, and thus the contract term is the stated term.

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

Based on these criteria, the Company has identified one performance obligation of hosting the mining equipment. The service the Company provides also includes monitoring, active troubleshooting, and various maintenance levels for the mining equipment.

Step 3: The Company receives non-cash consideration in the form of US Digital Coin (“USDC”). The Company uses a spot rate on the date of payment from the customer to convert USDC to USD.

The Company’s hosting contracts can contain service level agreement clauses, which guarantee a certain percentage of time the power will be available to its customer. In the rare case that the Company may incur penalties under these clauses, the Company recognizes the payment as variable consideration and a reduction of the transaction price and, therefore, of revenue, when not in exchange for a good or service from the customer.

Customer contracts can include advance payment terms in the form of monthly cash prepayments and/or upfront cash payments at contract inception. Advance payments are recorded as deferred revenue and recognized over time (generally, the month of hosting service to which they relate) as the customer simultaneously receives and consumes the benefits of the Company’s performance. There is no significant financing component in these transactions due to the short-term nature of the payments.

Step 4: No allocation of transaction price is required as there is only one performance obligation in each contract.

Step 5: The Company recognizes variable hosting revenue each month as the uncertainty related to the consideration is resolved, hosting services are provided to its customer, and its customer utilizes the hosting service (the customer simultaneously receives and consumes the benefits of the Company’s performance). The Company’s performance obligation related to these services is satisfied over time.

Revenue from Compute Power

The Company generates revenue from providing compute power both to marketplace customers, such as RunPod, Inc. (“RunPod”), and directly to customers. For marketplace customers, the compute power is maintained by the Company and made available to RunPod’s customers for large-scale cloud processing. For direct customers, the compute power is provided directly to the customer for their use.

Step 1: For marketplace sales, the Company has entered into a Services Agreement with RunPod, which acts as the customer. The agreement is structured around ongoing service delivery, with compute power provided on a usage basis. The contract is enforceable and includes defined terms for service levels, pricing, and revenue sharing. The contract is continuously active and renewed, with no penalties for termination, and services are delivered daily based on actual usage. Applying the criteria per ASC 606-10-25-1, the contract between the Company and RunPod arises at the point the Company begins providing compute power through its bare metal servers. This marks contract inception, as the customer’s consumption of compute power is simultaneous with the Company’s delivery of the service. The contract supports continuous usage-based billing, and the Company’s enforceable right to compensation begins and continues as long as compute power hours are delivered and consumed by RunPod’s customers.

For direct sales, the Company enters into contracts directly with customers. The agreement is structured around ongoing service delivery, with compute power provided over the term of the contract. The contract is enforceable and includes defined terms for service levels and pricing. The contract is continuously active and renewed, with no penalties for termination, and services are delivered daily. Applying the criteria per ASC 606-10-25-1, the contract between the Company and its customers arises at the point the Company begins providing compute power through its bare metal servers. This marks contract inception, as the customer’s consumption of compute power is simultaneous with the Company’s delivery of the service. The contract supports monthly billing, and the Company’s enforceable right to compensation begins and continues as long as compute power is delivered to the customer.

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

Based on these criteria, the Company has identified a single performance obligation to provide compute power for both its marketplace and direct customers. The continuous renewal options do not represent material rights because they do not provide the customer with the right to purchase additional goods or services at a discount. Specifically, the contract is renewed at the same terms, conditions, and rate as the current contract which is consistent with market rates, and there are no upfront or incremental fees in the initial contract.

Step 3: For marketplace sales, the transaction price is based on Net Revenue received by RunPod from its customers for compute power. The Company receives 80% of Net Revenue as its revenue share. There is no non-cash consideration involved, and all payments are made in U.S. dollars. The contract does not include other forms of variable consideration such as rebates, penalties, or bonuses, except for service credits tied to uptime performance, which are treated as variable consideration and reduce the transaction price when applicable.

For direct sales, the transaction price is based on a fixed price per hour of compute power provided per unit. There is no non-cash consideration involved, and all payments are made in U.S. dollars. The contract does not include other forms of variable consideration such as rebates, penalties, or bonuses, except for service credits tied to uptime performance, which are treated as variable consideration and reduce the transaction price when applicable.

Step 4: For both marketplace and direct sales, there is a single performance obligation (i.e., to provide compute power) for the contract; therefore, all consideration from the customer is allocated to this single performance obligation.

Step 5: For both marketplace and direct sales, the Company’s performance is completed over time as compute power is delivered and consumed. The performance obligation of computing power is fulfilled over time, as opposed to a point in time, because the Company provides the compute power throughout the contract period and the customer simultaneously obtains control of the service and integrates it into its platform offerings.

For any deposits the Company receives in advance of providing services, those payments are initially recognized as deferred revenue and recognized as revenue when the related performance obligation has been met. The Company reassesses variable consideration (e.g., service credits) and pricing adjustments at each reporting period to ensure accurate revenue recognition.

Income Taxes

The Company accounts for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and income tax basis of assets and liabilities, and for operating losses and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the years in which those items are expected to be realized. Tax law and rate changes are recorded in the period such changes are enacted. The Company establishes a valuation allowance when it is more likely than not that certain deferred tax assets will not be realized.

The Company recognizes a tax benefit from any uncertain tax positions only if they are more likely than not to be sustained upon examination based on the technical merits of the position. The amount of the accrual for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. Interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense.

The “One Big Beautiful Bill Act” (“OBBBA”) was signed into law in the United States on July 4, 2025. Key tax provisions under OBBBA include the restoration of 100% bonus depreciation, immediate expensing for domestic research and experimental expenditures, changes to the interest limitations in Section 163(j) of the U.S. Internal Revenue Code (the “Code”), updates to Global Intangible Low Taxed Income and Foreign-Derived Intangible Income rules, and expanded aggregation requirements under Section 162(m) of the Code. The application of the OBBBA to the Company did not have a material impact on its unaudited condensed consolidated financial statements.

Leases

The Company accounts for leases in accordance with ASC 842,Leases. The Company determines if an arrangement is a lease at inception and classifies its leases at commencement. Operating and finance leases are presented as right-of-use (“ROU”) assets and the corresponding lease liabilities are included in operating or finance lease liabilities, current and operating or finance lease liabilities on the Company’s condensed consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset, and lease liabilities represent the Company’s obligation for lease payments in exchange for the ability to use the asset for the duration of the lease term.

ROU assets and lease liabilities are recognized at commencement date and determined using the present value of the future minimum lease payments over the lease term. For leases in which the rate is not implicit in the lease, the Company uses a discount rate based on a benchmark approach to derive an appropriate incremental borrowing rate to discount remaining lease payments. The Company benchmarked itself against other companies of similar credit ratings and comparable quality and derived imputed rates for a lease term length of 10 years. Some leases include multiple year renewal options. The Company’s decision to exercise these renewal options is based on an assessment of its current business needs and market factors at the time of the renewal. Currently, the Company has certain leases for which the option to renew is reasonably certain, and therefore, options to renew were factored into the calculation of its right-of-use asset and lease liability as of June 30, 2026 and December 31, 2025. In addition, the Company does not recognize short-term leases that have a term of twelve months or less as ROU assets or lease liabilities for all asset classes. The Company recognizes operating lease expense on a straight-line basis over the lease term.

The Company has lease agreements which contain both lease and non-lease components, which it has elected to account for as a single lease component for all asset classes when the payments are fixed. As such, variable lease payments, including those not dependent on an index or rate, such as real estate taxes, common area maintenance, and other costs that are subject to fluctuation from period to period are not included in lease measurement.

Segment Reporting

In November 2023, the FASB issued ASU No. 2023-07,Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. See Note 23 - Segment Reporting for additional disclosures

Net Income (Loss) per Share

The calculation of earnings per share is based on the weighted average number of common shares or common stock equivalents outstanding during the applicable period. The dilutive effect of common stock equivalents is excluded from basic earnings per share and is included in the calculation of diluted earnings per share, unless their impact is antidilutive. Convertible notes, employee stock options and similar equity instruments granted by the Company are treated as potential ordinary shares outstanding in computing diluted earnings per share. Diluted shares outstanding are calculated using the if-converted method for convertible notes and the treasury stock method for other potentially dilutive securities. Under the if-converted method, the dilutive impact of securities is calculated as if conversion occurred at the beginning of the reporting period. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized and the amount of benefits that would be recorded in common shares when the award becomes deductible for tax purposes are assumed to be used to repurchase shares.

Loan Origination Costs

Costs incurred in connection with securing loans payable have been capitalized and are being amortized as a component of interest expense over the term of the respective debt using the effective interest method. The unamortized balance of loan origination costs is reflected on the condensed consolidated balance sheets as a direct deduction of the outstanding balance owed on the long-term debt.

Stock Issuance Costs

Stock issuance costs represent incremental costs incurred that are directly attributable to the sale of securities. The costs are charged against the gross proceeds of the respective sale and recorded as a reduction to equity.

Convertible Notes

The Company elected to account for its convertible note payable at fair value at inception and at each subsequent reporting date. Subsequent changes in fair value are recorded as a component of non-operating (loss) income in the consolidated statements of operations or as a component of other comprehensive (loss) income for changes related to instrument-specific credit risk. As a result of electing the fair value option, direct costs and fees related to the convertible note are expensed as incurred.

Distinguishing Liabilities from Equity

The Company relies on the guidance provided by ASC 480,Distinguishing Liabilities from Equity, and ASC 815-40,Derivatives and Hedging: Contracts in Entity’s Own Equity, to classify certain redeemable and/or convertible instruments. The Company first determines whether a financial instrument should be classified as a liability. The Company will determine the liability classification if the financial instrument is mandatorily redeemable, or if the financial instrument, other than outstanding shares, embodies a conditional obligation that the Company must or may settle by issuing a variable number of its equity shares.

Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet (“mezzanine equity”). The Company will determine mezzanine equity classification if the redemption of the financial instrument is outside the control of the Company (i.e., at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity.

Stock-Based Compensation

The Company measures the cost of employee and non-employee services in exchange for awards of equity instruments based on the grant-date fair value of the award. The fair value is determined using an option pricing model. The cost of awards of equity instruments is recognized on a straight-line basis over the vesting period, which is the requisite service period, and is recorded as stock-based compensation expense together with a corresponding increase in paid-in capital. The Company has elected to account for forfeitures of awards as they occur.

Variable Interest Entities (“VIEs”)

The Company evaluates its interests in VIEs and will consolidate any VIE in which the Company has a controlling financial interest and are deemed to be the primary beneficiary. A controlling financial interest has both of the following characteristics: (1) the power to direct the activities of the VIE that most significantly impact its economic performance; and (2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could be significant to the VIE. If both of the characteristics are met, the Company is considered to be the primary beneficiary and therefore will consolidate that VIE into its unaudited condensed consolidated financial statements. See Note 9 - Equity Method Investments and Note 10 - Joint Ventures for additional disclosures.

Recently Issued Accounting Pronouncements - Adopted

In November 2024, the FASB issued ASU 2024-04,Debt - Debt with Conversion and Other Options (Topic 470). This guidance clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The ASU is effective on a prospective basis, with the option for retrospective application, for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06. The Company adopted this standard effective January 1, 2026. The adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

In May 2025, the FASB issued ASU 2025-04,Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606). This guidance clarifies the requirements for share-based consideration payable to a customer. This ASU is effective for annual periods beginning after December 15, 2026, and interim periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company adopted this standard effective April 1, 2026. The adoption of this standard is reflected in the Company’s unaudited condensed consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05,Financial Instruments—Credit Losses (Topic 326). This guidance contains amendments that provide decision-useful information to investors and other financial statement users while reducing the time and effort necessary to analyze and estimate credit losses for current accounts receivable and current contract assets. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company adopted this standard effective January 1, 2026. The adoption of this standard is reflected in the Company’s unaudited condensed consolidated financial statements.

Recently Issued Accounting Pronouncements - Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03,Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses. This guidance requires additional disclosure of certain amounts included in the expense captions presented on the statement of operations as well as disclosures about selling expenses. The ASU is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted for annual financial statements that have not yet been issued. The Company is currently evaluating the impact of ASU 2024-03 on its unaudited condensed consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06,Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40). This guidance updates the capitalization guidance for internal-use software development costs by removing all references to software project development stages and provide further guidance on when an entity is required to start capitalizing eligible costs. This ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. The Company is currently evaluating the impact of ASU 2025-06 on its unaudited condensed consolidated financial statements and related disclosures.

Other recent accounting pronouncements did not or are not believed by management to have a material impact on the Company’s present or future condensed consolidated financial statements.

Note 3. Business Combination

On April 1, 2025 (the “Effective Date”), the Company entered into Contribution and Exchange Agreements, as amended (together, the “Acquisition Agreement”), with shareholders of TCM, pursuant to which each TCM shareholder contributed all outstanding equity securities in TCM to the Company in exchange for equity securities of the Company. As a result, TCM became a wholly owned subsidiary of the Company, with 75% of the Company’s capital stock held by Company shareholders and 25% of the Company’s capital stock held by former TCM shareholders (the “Acquisition”). The Acquisition formally closed on the Effective Date. The Company expects TCM’s operations to diversify the Company’s revenue base beyond bitcoin mining and hosting. The addition of GPU-based infrastructure is anticipated to generate more stable, recurring revenue streams aligned with demand for high-performance computing (“HPC”) resources across AI, machine learning, and data analytics sectors.

The following table summarizes the fair value of the consideration and the fair value of assets acquired and liabilities assumed associated with the Acquisition:

The Company has applied the acquisition method of accounting in accordance with ASC 805 and recognized assets acquired and liabilities assumed of TCM at their fair value as of the date of acquisition, with the excess purchase consideration recorded to goodwill. The Company recorded $23,542 of acquisition related costs within general and administrative expenses.

Pro Forma Financial Information

The following table represents the revenue, net loss and net loss per share effect of the acquired company, as reported on a pro forma basis as if the acquisition occurred on January 1, 2025. These pro forma results are not necessarily indicative of the results that would have occurred if the acquisition had occurred on the first day of the period presented, nor does the pro forma financial information purport to represent the results of operations for future periods.

Note 4. Revenue and Cost Recognition

The following table provides the Company’s revenue disaggregated by revenue stream:

In accordance with ASC 606-10-50-13, the Company is required to include disclosure on its remaining performance obligations as of the end of the current reporting period. The majority of the Company’s direct to customer compute power contracts have an expected duration of greater than one year. As of June 30, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations for the Company’s direct to customer compute power contracts was $173,107,691 (which represents the amount of backlog related to these contracts). $34,368,785 of our remaining performance obligations will be completed and recognized as revenue during 2026, with the remainder recognized between 2027 and 2029.

Note 5. Fair Value of Financial Instruments

The Company accounts for certain assets and liabilities at fair value and classifies these assets and liabilities within the fair value hierarchy (Level 1, Level 2, or Level 3). The Company’s other current liabilities have fair values that approximate their carrying values.

There were no financial liabilities that were transferred out of a Level 3 category.

Note 6. Property and Equipment, Net

The major classifications of property and equipment, including their estimated useful lives, are summarized as follows at the balance sheet dates:

For the three months ended June 30, 2026 and 2025, depreciation expense relating to property and equipment amounted to $3,054,701 and $1,015,659, respectively.

For the six months ended June 30, 2026 and 2025, depreciation expense relating to property and equipment amounted to $4,879,272 and $1,493,707, respectively.

During the three and six months ended June 30, 2026, the Company recorded a gain on disposal of property and equipment of $1,034 and $36,298 relating to the sale of equipment.

Note 7. Digital Assets, Net

Changes in the Company’s digital assets for the six months ended June 30, 2026 and for the year ended December 31, 2025, were as follows:

Note 8. Intangible Assets, Net

As of June 30, 2026 and December 31, 2025, intangible assets were comprised of the following:

IPR&D and capitalized software are not amortized until the assets are substantially complete and ready for their intended use.

Amortization expense for the three months ended June 30, 2026 and 2025 was $44,241 and $44,241, respectively.

Amortization expense for the six months ended June 30, 2026 and 2025 was $88,482 and $44,241, respectively.

The estimated future amortization expense is as follows:

The weighted average remaining amortization period for the Company’s intangible assets as of June 30, 2026 was 2.42 years.

Note 9. Equity Method Investments

T20 Mining Group, LLC

In March 2023, the Company entered into a Limited Liability Company Interest Purchase Agreement with Turn Key Mountain, LLC and 913 Hero, LLC (“T20 Purchase Agreement”) to acquire a 50.01% ownership interest in T20 Mining Group, LLC (“T20”). Under the terms of the T20 Purchase Agreement, the Company leases certain equipment to T20 and promised to contribute $450,090 to T20 for the development of its digital asset mining operations. The Company determined that T20 is a VIE as the Company has a variable interest in T20 and T20 relies on funding from the Company, Turn Key Mountain, LLC, and 913 Hero, LLC to sustain its operations. The Company has determined that it is not the primary beneficiary of T20 as power to direct or control its significant activities related to the bitcoin mining hosting is shared with Turn Key Mountain, LLC and 913 Hero, LLC. Accordingly, the Company has not consolidated T20’s results of operations and financial position. As the entity is not consolidated, it is accounted for as an equity method investment. The initial investment in T20 amounted to $1,677,197. The Company is entitled to 50.01% of the profits and losses of T20.

In April 2024, the Company entered into a subsequent Limited Liability Company Interest Purchase Agreement with Bishops Bowl Capital, LLC (“Bishops Bowl Purchase Agreement”), whereby the Company sold 10.01% of its ownership interest in T20 to Bishops Bowl for consideration of $1,000,000. As the Company retained significant influence in T20 following its execution of the Bishops Bowl Purchase Agreement, the Company reduced the carrying amount of its equity method investment for the proportion sold in the amount of $164,954 and also recognized a gain of $835,046 related to the difference between the proceeds received and the carrying amount of the equity method investment sold. The Company will continue to account for its retained ownership interest of 40% under the equity method. During the second half of the year ended December 31, 2024, the Company and Bishops Bowl contributed equipment to T20 for the expansion of its digital asset mining operations. The Company increased the carrying amount of its equity method investment for the fair value of the assets contributed in the amount of $926,240 and also recognized a loss of $2,094,030 on the contribution of the assets. In February 2025, the Company contributed additional assets in the amount of $115,210. The additional contributions were made such that each partner’s ownership percentages remained the same, with the Company and Bishops Bowl continuing to own 40% and 60%, respectively, of T20. The Company will continue to account for its retained ownership interest of 40% under the equity method.

On January 12, 2026, the Company entered into a Limited Liability Company Interest Purchase Agreement to sell its 40% interest in the T20 joint venture to a third party. The transaction closed on February 13, 2026 and the Company received approximately $16,500,000 for the sale.

During the six months ended June 30, 2026 and 2025, the Company received distributions of $259,163 and $1,904,000 from T20, respectively. During the three months ended June 30, 2026 and 2025, the Company’s share of net income in T20 amounted to $— and $551,378, respectively, which is included within income from equity method investments in the Company’s condensed consolidated statements of operations. During the six months ended June 30, 2026 and 2025, the Company’s share of net income in T20 amounted to $21,994 and $1,426,463, respectively, which is included within income from equity method investments in the Company’s condensed consolidated statements of operations. As of June 30, 2026 and December 31, 2025, the Company’s investment in T20 amounted to zero and $4,227,130, respectively, and is included in the balance of equity method investments in the accompanying condensed consolidated balance sheets.

Summarized financial information for T20 as of and for the year ended December 31, 2025 is as follows:

From January 1, 2026 to the sale of T20 on February 13, 2026, T20 had net income of $54,985. For the three and six months ended June 30, 2025, T20 had net income of $2,390,889 and $3,566,157, respectively.

The Cloud Minders LLC

On November 1, 2023, the Company acquired an interest in TCM, a partnership that is involved in graphics processing unit cloud hosting services. The Company is initially entitled to 43% of the profit and losses from the investee. The acquisition cost totaled $4,300,000 and consisted of the issuance of the Company’s common stock via a convertible note payable with TCM for $3,300,000 (see Note 17 - Convertible Note Payable) and a payable to TCM totaling $1,000,000 to be repaid over 12 months at no interest. Payments commence on January 1, 2024, and continue on the first of each subsequent month, in exchange for an additional 19,608 (approximately 6%) membership interest to the Company over the twelve months. TCM specializes in high-performance computing and artificial intelligence infrastructure within the cloud computing industry and offers graphics processing unit server hosting, equipped with the latest hardware for deep learning, data science, graphics rendering, and scientific research applications. Its services include configuration, reliability assurance, testing and validation, security measures, installation, and hardware rental for monetization. Accordingly, the Company has not consolidated TCM’s results of operations and financial position. As the entity is not consolidated as of March 31, 2025, but the Company has significant influence over the investee, it is accounted for as an equity method investment.

During the three and six months ended June 30, 2025, the Company’s share of net income (loss) in TCM amounted to $78,438 and $(562,143), which is included within income from equity method investments in the Company’s condensed consolidated statements of operations.

On April 1, 2025, the Company acquired 100% of TCM. Therefore, as of April 1, 2025, the Company does not account for TCM as an equity method investment as the entity is consolidated. See Note 3 - Business Combinations for additional details on the acquisition. On April 1, 2025, the Company marked the value of its investment in TCM to its fair value of $17,216,604 immediately prior to the acquisition and recognized a gain of $14,549,536.

From January 1, 2025 to the acquisition on April 1, 2025, TCM had a net loss of $1,307,308.

Note 10. Joint Ventures

In October 2025, the Company entered into a joint venture agreement with ME Luna Qumulus LLC (“Moonshot”) to form QAI Moon, which serves as the manager for two additional joint ventures: SPRE Brooklyn and SPRE NKC (collectively, the “QAI Moon JVs”).

Under the QAI Moon Operating Agreement, the Company holds a 51% interest and Moonshot holds a 49% interest. The Company appoints three of the five managers on the Board of Managers, giving it majority governance rights over significant decisions such as approving budgets, financing arrangements, and strategic initiatives.

For its ownership interests in QAI Moon, the Company contributed $213,000, funded through a share exchange rather than a direct cash payment. Under this arrangement, the Company issued 19,723 common shares valued at $10.80 per share for a total value of $213,000. In June 2026, the Company received a distribution from QAI Moon of $153,000.

For SPRE Brooklyn, QAI Moon contributed $900 and holds 900 Common Units, which comprises 100% of the entity’s ownership interests.

For SPRE NKC, the Operating Agreement is between QAI Moon, LLC, DAF Compute LLC, and TCM. QAI Moon contributed $300 and holds 300 Common Units which represents 100% of the voting rights while DAF Compute LLC contributed $3,000,000 and holds 350 Preferred Units and TCM contributed $3,000,000 and holds 350 Preferred Units, for a total of 700 Preferred Units. Preferred Units provide economic rights only and do not carry any voting rights.

The QAI Moon JVs were formed to provide HPC infrastructure and services. Based on the governance structure and capital requirements, QAI Moon, SPRE Brooklyn and SPRE NKC are VIEs, and QumulusAI consolidates the QAI Moon JVs in its financial statements.

Accordingly, the entities are deemed VIEs because they rely on the Company’s capital to sustain future operating expenses. The Company is deemed the primary beneficiary of the VIEs because it has the power to direct the activities of the QAI Moon JVs determined to be most significant and has the benefits through its equity interests held. Accordingly, the Company consolidates the QAI Moon JVs balance sheet and results of operations.

As of June 30, 2026, the Company’s condensed consolidated balance sheets included $24,657,068 of assets due to the consolidation of the QAI Moon JVs included within total assets. Upon consolidating the QAI Moon JVs, no gain or loss was recognized. The Company’s total risk of loss is the total $3,213,900 contributed into the QAI Moon JVs, as noted above.

Note 11. Deposits on Power Equipment

The Company makes deposits that represent prepayments made to premier suppliers and manufacturers to purchase compute power and related equipment at a preset price. The prepayments are applied to the purchase price when the vendor ships the equipment. As of June 30, 2026 and December 31, 2025, the Company had outstanding deposits for power equipment totaling $26,022,880 and $13,622,641, respectively.

Note 12. Transactions with Related Parties

As of and for the three and six months ended June 30, 2026 and 2025, the Company had the following related party transactions:

Note 13. Line of Credit

During September 2023, the Company secured a line of credit with Trailhead Growth, LP with a maximum principal amount of $300,000 at an interest rate of 12%. The line of credit was collateralized by a blanket lien on certain assets and was guaranteed by certain of the Company’s shareholders. The line of credit had a maturity date of October 1, 2024.

During April 2024, the Company amended its line of credit agreement with Trailhead Growth, LP with a maximum principal amount of $700,000 at an interest rate of 6%. The line of credit has a maturity date of 360 days following the first principal advance under the line of credit.

During May 2024, the Company made its first advance on the line of credit in the amount of $648,262, in which $6,418 of this amount is related to line of credit origination fees as a result of the advance. The line of credit had a maturity date of May 15, 2025. The line of credit was repaid in full on March 31, 2025. Interest expense for the three and six months ended June 30, 2025 related to the line of credit was $0 and $9,955, respectively.

Note 14. USD.AI Protocol Loans

On September 19, 2025, the Company entered into a $500,000,000 USD.AI protocol. The facility allows the Company to borrow stablecoins against up to 70% of its approved GPU deployments. The Company is under no obligation to draw financing under the USD.AI protocol. On February 13, 2026, the Company made its first draw for approximately $4,282,000, which is scheduled to mature and be repaid in February 2029. On April 17, 2026, the Company completed its second draw for approximately $16,400,000, which is scheduled to mature and be repaid in April 2029. At June 30, 2026, the Company had an outstanding balance of $18,913,377. Interest expense for the three and six months ended June 30, 2026 was $468,363 and $532,227, respectively.

Note 15. Accrued Expenses

Accrued expenses were comprised of the following:

Note 16. Notes Payable

On March 19, 2021, the Company entered into a $2,000,000 convertible balloon note with Trailhead Income, LP. The note bears interest at 12% and originally matured on September 1, 2025. On June 19, 2025, the Company extended the note to October 1, 2026. The note is secured by certain mining equipment. Interest-only payments are due on a quarterly basis through the maturity date. As of June 30, 2026 and December 31, 2025, the outstanding principal balance on the note was $2,000,000.

On February 15, 2022, the Company entered into a $1,849,888 balloon note with GC Opportunities 2 Private Fund. The note bears interest at 12% and matures on February 15, 2026. The note is secured by certain mining equipment. The note was amended on October 4, 2022 to provide a onetime waiver of payment default for unpaid monthly interest due for July 15, 2022, August 15, 2022 and September 2022, and to defer interest due for six months from July 2022 to December 2022, until maturity. The Company repaid the loan in full during January 2026. As of June 30, 2026 and December 31, 2025, the outstanding principal balance was $0 and $1,849,888.

On April 11, 2022, the Company entered into two notes with Caterpillar Financial Services Corporation for an aggregate of $228,314. The notes bear interest at 1.49% and mature on April 11, 2027. The notes are secured by track loaders. Payments of principal and interest are due on a monthly basis through maturity. As of June 30, 2026 and December 31, 2025, the outstanding principal balance was $19,464 and $62,549, respectively.

On April 1, 2025, the Company acquired a loan from TCM as part of the acquisition. In January 2025, TCM, prior to termination of its largest finance lease, purchased the equipment leased under the agreement for a purchase price of $6,454,466. The Company financed the equipment purchase with a loan payable to a commercial bank in the amount of $6,450,000 at prime, subject to a 5% floor. The loan calls for principal and interest payments totaling $129,552 beginning in March 2025, and matures in January, 2030. As of June 30, 2026 and December 31, 2025, the outstanding principal balance was $4,850,282 and $5,437,993, respectively.

On October 17, 2025, the Company entered into a $2,500,000 loan with a third party. The interest rate is variable based on the secured overnight financing rate ("SOFR") plus 3.0%. The loan matures on April 20, 2028 with payments of principal and interest due on a monthly basis through maturity. As of June 30, 2026 and December 31, 2025, the outstanding principal balance was $2,209,930 and $2,430,979, respectively.

Notes payable at June 30, 2026 and December 31, 2025 consisted of the following:

Maturities of notes payable are as follows:

Note 17. Convertible Notes Payable

TCM Convertible Note

On November 1, 2023, the Company entered into a Convertible Promissory Note Agreement (the “Note”) with TCM at a face value of $3,900,000. Upon issuance, the Note was issued with an original issue discount of 4%, which amounted to $600,000 and was payable from the funding proceeds. The Note has a fair value of $3,300,000. The Note bears interest at a rate of 0.1% per annum and matures on November 1, 2025. No scheduled payments are due under the Note, and the Note permits early partial or full prepayment under the Note at any time without any prepayment penalty.

Upon the occurrence of an event or events of default under the Note, including bankruptcy, an uncured material breach of the Note Agreement, or a board adopted resolution for liquidation, dissolution or winding-up of the Company, all accrued expenses, accrued interest, and all principal outstanding under the Note shall become immediately due and payable in full.

The Note provides for automatic conversion of the amount of any unpaid principal balance of the Note upon maturity into that number of shares of common stock by dividing such remaining principal balance by the conversion price of $1.00 per share. At maturity, all interest accrued and owing with respect to the remaining principal balance shall be forgiven by TCM.

The Company evaluated the embedded call and put features in accordance with ASC 815-15-25. The embedded puts are clearly and closely related to the debt host instrument and therefore are not required to be bifurcated and separately measured at fair value. The Company additionally determined that the embedded conversion feature did not meet the definition of a derivative under ASC 815 and therefore did not require bifurcation from the host debt instrument.

The Note was initially recorded at fair value, as it was issued as consideration in the acquisition of an equity method investment in TCM (see Note 9 for information regarding the Company’s equity method investment). The Company reflected a discount of $600,000 on the Note at issuance to recognize at fair value at issuance. Subsequently, the Company amortizes the Note discount to interest expense over the period from issuance through the maturity date, at an effective interest rate of 8.5%. For each of the three months ended June 30, 2026 and 2025, the Company recognized $0 as interest expense. For the six months ended June 30, 2026 and 2025, the Company recognized $0 and $135,334 as interest expense, respectively.

For the three months ended June 30, 2026 and 2025, the Company recorded accrued interest of $0 and $612, respectively. For the six months ended June 30, 2026 and 2025, the Company recorded accrued interest of $0 and $612, respectively

Immediately prior to the acquisition of TCM, the Company repaid the principal balance of the Note and accrued interest in full on March 31, 2025. Upon the repayment of the Note, the Company recognized a loss on extinguishment of $153,834 in the condensed consolidated statements of operations.

March 2026 Convertible Note

On March 26, 2026, the Company entered into a securities purchase agreement (the “March Securities Purchase Agreement”) with a third party (the “Investor”), pursuant to which the Company agreed to issue and sell to the Investor senior secured convertible notes (the “March 2026 Note”) in an aggregate principal amount of up to $45,000,000 (the “Facility”).

The Facility consists of an initial tranche in the principal amount of $15,000,000, which was funded on March 26, 2026, and subsequent tranches in an aggregate principal amount of up to $30,000,000. The March 2026 Note bears interest at 7% per annum and the initial tranche matures on July 16, 2028. The March 2026 Note is convertible into shares of the Company’s common stock at $11.50 per share. The Company incurred $1,174,000 in debt issuance costs related to the March 2026 Note.

Due to certain embedded features within the convertible note, the Company elected the fair value option to account for this note, including the embedded features. The initial fair value of the note was determined to be $36,875,000. The fair value of the convertible note was determined based on Level 3 inputs using a scenario-based analysis that estimated the fair value of the convertible notes based on the probability-weighted present value of expected future investment returns, considering each of the possible outcomes available to the noteholder. The significant unobservable input assumptions that can significantly change the fair value included (i) the discount rates, (ii) the timing of payments, and (iii) the probability of certain settlement scenarios. The Company recorded a change in fair value on the convertible note of $2,222,000 for the six months ended June 30, 2026.

The option for the Company to issue additional notes up to $30 million was determined to be a freestanding instrument that is recognized at fair value as of the date of the March Securities Purchase Agreement. The fair value of this option was determined to be $30,991,850 and was determined based upon the fair value of the additional notes as if it were issued today multiplied by the probability of issuance. As the aggregate fair value of the note and the option was in excess of the proceeds received, the Company recorded a loss on issuance of convertible note of $54,640,850, which includes the $1,174,000 in debt issuance costs. The Company recorded a change in fair value on the option of $3,547,850 for the six months ended June 30, 2026.

June 2026 Convertible Note

On June 3, 2026, the Company entered into a securities purchase agreement (the “June Securities Purchase Agreement”) with the Investor, pursuant to which the Company agreed to issue and sell to the Investor senior secured convertible notes (the “June 2026 Note”) in an aggregate principal amount of up to $45,000,000 (the “Second Facility”).

The Second Facility consists of an initial tranche in the principal amount of $15,000,000, which was funded on June 3, 2026, and subsequent tranches in an aggregate principal amount of up to $30,000,000. The June 2026 Note bears interest at 7% per annum and the initial tranche matures on July 16, 2028. The June 2026 Note is convertible into shares of the Company’s common stock at $24.25 per share. The Company incurred $1,075,000 in debt issuance costs related to the June 2026 Note.

Due to certain embedded features within the convertible note, the Company elected the fair value option to account for this note, including the embedded features. The initial fair value of the note was determined to be $20,986,000. The fair value of the convertible note was determined based on Level 3 inputs using a scenario-based analysis that estimated the fair value of the convertible notes based on the probability-weighted present value of expected future investment returns, considering each of the possible outcomes available to the noteholder. The significant unobservable input assumptions that can significantly change the fair value included (i) the discount rates, (ii) the timing of payments, and (iii) the probability of certain settlement scenarios. The Company recorded a change in fair value on the convertible note of $158,000 for the six months ended June 30, 2026.

The option for the Company to issue additional notes up to $30 million was determined to be a freestanding instrument that is recognized at fair value as of the date of the June Securities Purchase Agreement. The fair value of this option was determined to be $11,580,000 and was determined based upon the fair value of the additional notes as if it were issued today multiplied by the probability of issuance. As the aggregate fair value of the note and the option was in excess of the proceeds received, the Company recorded a loss on issuance of convertible note of $19,241,000, which includes the $1,075,000 in debt issuance costs. The Company recorded a change in fair value on the option of $303,000 for the six months ended June 30, 2026.

Note 18. Income Taxes

The tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of its annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The quarterly tax provision, and estimate of the Company’s annual effective tax rate, are subject to variation due to several factors, including variability in pre-tax income or loss, changes in how the Company conducts business, changes in forecast, and tax law developments.

The Company’s effective tax rate was (0.2)% for both the three and six months ended June 30, 2026 primarily due to the partial valuation allowance recorded as a result of the TCM acquisition in April 2025. The effective tax rate for the three and six months ended June 30, 2025 was 2.3% and 2.7%, respectively, caused by recording a deferred tax liability for identified intangibles acquired in the TCM acquisition.

Note 19. Shareholders’** Equity (Deficit)**

Preferred Stock

On September 30, 2025, the Company effected the conversion of all authorized and issued shares of Preferred Stock into Common Stock, as agreed to by all holders of Preferred Stock. Accordingly, there were no shares of Preferred Stock authorized or outstanding as of June 30, 2026 or December 31, 2025. As a result, there is no liquidation preference as of June 30, 2026 or December 31, 2025.

The conversion did not occur in accordance with the original terms of the Preferred Stock (as described below), as the Company provided the holders of the Preferred Stock with one share of Common Stock for every share of Preferred Stock outstanding, plus an additional share of Common Stock for every $10.80 of unpaid liquidation preference prior to the conversion transaction. As such, the transaction was accounted for as an extinguishment of preferred stock.

Prior to September 30, 2025, the Company designated a portion of the authorized shares of preferred stock as Series A, Series B, Series C and Series D Preferred Stock, and the issuance of total designated shares cannot exceed the aggregate number of preferred stock shares authorized for issuance.

Common Stock

As of June 30, 2026, the Company was authorized to issue up to 500,000,000 shares of common stock, without any par value per share. Each holder of common stock is entitled to one vote for each share held of record on all matters to be voted on by such holders. Holders of common stock are entitled to receive dividends, if declared. Upon liquidation, dissolution or winding-up, holders of common stock are entitled to share ratably in the net assets legally available for distribution after payment of all debts and other liabilities.

Note 20. Warrants

Type 1 Warrants

The warrants were issued during the year ended December 31, 2022 in conjunction with Series A Preferred Stock in satisfaction of outstanding debt. The warrants were not considered indexed to the issuer’s stock pursuant to ASC 815, as the warrants are subject to vesting upon the thirty-six (36) mensiversaries of the issuance date, at a rate of one thirty-sixth (1/36th) per month. At the option of the Company, the Company can return to the holder any cash it previously received from the holder. Upon the occurrence of such return of capital, the vesting schedule recasts based on amount returned and remaining time period to vest. As this contingency is based on the underlying capital account of the warrant holder it violates the fixed-for-fixed option pricing model. As such, the Company recorded the warrants as liabilities initially measured at fair value with subsequent changes in fair value recognized in earnings each reporting period. 961,256 of the warrants are pre-funded warrants.

The Type 1 warrants are “penny warrants”, meaning they have an exercise price of $0.01 ($0.03 after the Reverse Stock Split). The fair value of these penny warrants was calculated as the Company’s stock price less the exercise price of $0.01 ($0.03 after the Reverse Stock Split) (i.e., intrinsic value). The grant date fair value of the Type 1 Warrants was $692,103. The fair value of the warrants as of June 30, 2026 and December 31, 2025 was $2,968,793 and $1,382,955, respectively.

Type 2 Warrants

During the six months ended June 30, 2026, third parties performed professional services for the Company and were issued 5,295 warrants as payment for the services. The measurement of fair value of the warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance. The warrants issued are not redeemable in cash at the choice of the holder, are not mandatorily redeemable into common stock, and are classified as equity instruments.

On May 1, 2026 the Company issued 86,393 warrants to a customer as consideration for entering into a contract. Fifty percent (50%) of the warrant interests provided for herein vest in six equal monthly installments beginning on May 1, 2026. The remaining fifty percent (50%) of the warrant interests vest in eighteen equal monthly installments beginning on November 1, 2026. The measurement of fair value of the Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance. The warrants issued are not redeemable in cash at the choice of the holder, are not mandatorily redeemable into common stock, and are classified as equity instruments. The Company recognizes the fair value of the warrants within equity over the vesting period of the warrants.

The summary of stock warrant activity is as follows:

No warrants were issued during the three and six months ended June 30, 2025. The total fair value of warrants granted during three and six months ended June 30, 2026 amounted to $1,229,733. The Black-Scholes model utilized the following inputs to value the warrants granted:

Note 21. Stock-Based Compensation

WAHA and SPRE sponsored a stock-based compensation plan known as the 2022 Plan (the “Plan”). The number of shares of common stock authorized for issuance under the Plan, prior to the corporate roll-up into the Company, was 74,000. Pursuant to the contribution and exchange agreement with the Company, the total number of shares of common stock authorized for issuance are 1,461,307 shares.

The Plan allows the Company to grant incentive stock options and non-qualified stock options. The persons eligible to receive awards are the employees, consultants and directors of the Company and its affiliates. Other than incentive stock options that are granted to a shareholder who owns more than 10% of the total combined voting power of all classes of the stock of the Company or of its parent or affiliates (a “Ten Percent Shareholder”), stock options are exercisable for up to ten years from the grant date, at an option price per share not less than the fair market value on the date the option is granted. A Ten Percent Shareholder shall not be granted an incentive stock option unless the option exercise price is at least 110% of the fair market value of the common stock at the grant date and the option is not exercisable after the expiration of five years from the grant date. Incentive stock options may be granted to employees of the Company or any subsidiary corporation. Awards other than incentive stock options may be granted to employees, consultants and directors. The option vesting schedule for options granted is determined at the time of the grant. The Plan provides for accelerated vesting of unvested options in the event of a change in control.

Pursuant to the contribution and exchange agreement, the number of options outstanding as of the date of the agreement were converted in accordance with the Company’s conversion ratio. The following is a summary of stock option activity during the six months ended June 30, 2026 and for the year ended December 31, 2025, effective for the conversion:

For the three and six months ended June 30, 2026, there were no options granted. For the three and six months ended June 30, 2025, the total fair value of the options granted amounted to $58,156 and $3,267,771, respectively. The Black-Scholes model utilized the following inputs to value the options granted during the six months ended June 30, 2025:

The Company recognized $119,939 and $233,208 in stock-based compensation during the three months ended June 30, 2026 and 2025, respectively, in connection with issued stock options. The Company recognized $241,809 and $250,552 in stock-based compensation during the six months ended June 30, 2026 and 2025, respectively, in connection with issued stock options. As of June 30, 2026, non-vested outstanding options totaled 52,439 and the Company expects to recognize $293,701 of stock-based compensation for the non-vested options over the remaining weighted-average contractual period of 0.9 years. Stock-based compensation is recorded in general and administrative expenses in the Company’s condensed consolidated statements of operations.

Note 22. Earnings (Net Loss) per Share

The following table sets forth the computation of the basic and diluted net loss per share:

The table below sets forth all outstanding potentially dilutive securities which were not included in the calculation of diluted earnings per share because their impact would have been antidilutive.

Note 23. Segment Reporting

As part of the acquisition of TCM on April 1, 2025, (See Note 3 - Business Combination), the Company acquired a new revenue stream, “Revenue from compute power” (See Note 2). Accordingly, as of December 31, 2025, the Company operates as two reporting segments. The Company’s segments are Bitcoin and HPC. The Bitcoin segment’s business is focused on bitcoin mining and hosting. The HPC segment’s business is focused on compute power.

The HPC segment was not a part of the Company until the segment was acquired on April 1, 2025. The Bitcoin segment’s operations have remained consistent for all periods presented, however, the Company only had one operating and reportable segment prior to the acquisition.

The CODM uses segment operating income (loss), segment gross profit and segment net income (loss) before income tax to assess segment performance. Segment operating income (loss) is used by the Company’s CODM to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into specific service offerings within the segment, such as for entering into significant contracts, hiring of key management or executive personnel, or making significant capital investment decisions. The CODM also reviews segment gross profit to assess operating efficiency and cost structure within each segment, which helps inform short‑term operational decisions and identify trends affecting segment performance. In addition, the CODM reviews segment net income (loss) before income tax to evaluate overall segment profitability after considering all revenues and expenses attributable to the segment, and to inform broader, longer‑term resource allocation and strategic planning decisions.

As of June 30, 2026, the Bitcoin and HPC segments had total assets of $45,182,834 and $169,819,382, respectively. As of December 31, 2025, the Bitcoin and HPC segments had total assets of $14,419,727 and $77,314,766, respectively. The entire goodwill balance of $31,416,827 as of June 30, 2026 and December 31, 2025 was allocated to the HPC segment.

Revenue and costs are directly attributed to our segments, and the revenues recognized as well as the costs incurred in generating those revenues within each segment are distinguishable based on the information systems in which each segment’s financial information gets recorded. There are no intersegment revenues or other transactions between the two segments that are eliminated in consolidation by the Company for external reporting.

Summary information regarding the Company’s operating segments along with the reconciliation of the Company’s segment net income, segment operating loss and segment gross profit to the Company’s consolidated net loss before income taxes is as follows for the three and six months ended June 30, 2026 and 2025: