Kindly MD, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025 (UNAUDITED)

NOTE 1—ORGANIZATION AND NATURE OF OPERATIONS

Kindly MD, Inc. (the “Company,” “KindlyMD,” “we,” “us,” or “our”) is a Utah corporation headquartered in Salt Lake City, Utah. The Company, and its wholly-owned subsidiaries, have historically been engaged in the healthcare sector focusing on holistic pain management. Recently, the Company began a Bitcoin treasury and investment strategy, involving the deployment of corporate treasury assets for the acquisition of Bitcoin and investing in Bitcoin focused companies globally.

Merger with Nakamoto Holdings, Inc.

On August 14, 2025, the Company acquired, in accordance with the terms of the Agreement and Plan of Merger (the “Merger Agreement”) dated May 12, 2025, the assets of Nakamoto Holdings, Inc. (“Nakamoto”), a privately held Bitcoin treasury company through a reverse triangular merger, whereby a wholly owned subsidiary of KindlyMD merged with and into Nakamoto, with Nakamoto surviving as a wholly owned subsidiary of the Company, in accordance with the Merger Agreement.

The stockholders of Nakamoto received 22,321,143 shares of KindlyMD common stock, par value $0.001 per share (“Common Stock”) as merger consideration (the “Merger”), based on the fair value of KindlyMD common stock price of $1.12 per share as set forth in the Merger Agreement entered into on May 12, 2025 and as of August 14, 2025, the date of the closing of the Merger Agreement (the “Closing”), resulting in total consideration of $24,999,679. See Note 3 – Asset Acquisition for additional information regarding the Merger.

Although the transaction was structured as a legal merger, Nakamoto (i) did not meet the definition of a business under Accounting Standards Codification (“ASC”) Topic 805,Business Combinations (“ASC 805”). And (ii) qualified as a variable interest entity (“VIE”) under ASC 810,Consolidation (“ASC 810”). Accordingly, the transaction was accounted for as a forward merger with KindlyMD being considered the primary beneficiary of Nakamoto. Further, in accordance with ASC 810 the Company recognized a loss on the acquisition measured as the difference between the fair value of the consideration paid and the net amount of Nakamoto’s identifiable assets and liabilities.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed financial statements of KindlyMD have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with Rule 8-03 of Regulation S-X and the related rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). These interim unaudited condensed financial statements should be read in conjunction with those audited financial statements included in the Form 10-K, as filed with the SEC on March 28, 2025 (“Form 10-K”). In the opinion of management, all adjustments considered necessary for a fair presentation of the financial statements, consisting of normal recurring accruals, have been made. Operating results for the three and nine months ended September 30, 2025, are not necessarily indicative of the results that may be expected for the entire year.

Fair Value Measurements

As defined in ASC 820,Fair Value Measurements and Disclosures, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that prioritizes the inputs 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 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement.

Digital Assets

The Company accounts for its digital assets, which currently are comprised solely of Bitcoin, as indefinite-lived intangible assets in accordance with ASC Topic 350-60, “Intangibles—Goodwill and Other—Crypto Assets.” The Company has ownership of and control over its digital assets and may use third-party custodial services to secure it. The Company’s digital assets are initially recorded at cost and are subsequently remeasured on the balance sheet at fair value.

The Company determines the fair value of its digital assets on a recurring basis in accordance with ASC Topic 820, “Fair Value Measurement,” based on quoted prices on the active exchange that the Company has determined is its principal market for such digital assets (Level 1 inputs). The Company determines the cost basis of digital assets using the specific identification of each unit received. Realized and unrealized gains and losses from changes in the fair value of digital assets are recognized in the statement of operations.

The Company purchases Bitcoin for long-term investment. It intends to hold its digital assets for long-term gains and treats them as long-term capital assets for tax purposes. Unrealized gains/losses are treated as capital gains/losses for tax purposes. See “Note 4-Disaggregation of Revenues” for additional information regarding the Company’s purchases and sales of digital assets.

Fair Market Value

Digital assets are measured in their fair market values using the last close price of the day in the Coordinated Universal Time zone at each reporting period end on the balance sheet. The Company’s digital assets are presented as current assets.

Acquisitions

The Company accounts for acquisitions in accordance with ASC 805,“Business Combinations”. The Company evaluates each transaction to determine whether the acquired set of assets and activities constitute a business. If the acquired set meets the definition of a business, the transaction is accounted for as a business combination, and the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest at their respective acquisition date fair values. Any excess of the purchase consideration over the fair value of the net identifiable assets acquired is recorded as goodwill. If the acquired set does not meet the definition of a business, the transaction is accounted for as an asset acquisition, and the cost of the group of assets acquired are allocated to the individual assets acquired or liabilities assumed based on their relative fair value without giving rise to goodwill.

Investments in Equity Securities

The Company’s investments in equity securities primarily consist of minority, non-controlling interests in unconsolidated affiliates that do not provide the Company with the ability to exercise significant influence over the investees’ operating or financial policies. Accordingly, these investments are accounted for in accordance with ASC 321,“Investments – Equity Securities”.

Investments in publicly traded equity securities are measured at fair value, with unrealized gains and losses recognized in earnings for each reporting period. Fair value is based on quoted market prices of the investee’s common stock on the applicable exchange, re-measured into U.S. dollars using the period end spot foreign-exchange rate when denominated in a foreign currency.

Investments in privately held equity securities that do not have readily determinable fair values are accounted for under the measurement alternative in ASC 321-10-35-2. These investments are initially recorded at cost and are subsequently adjusted for observable price changes in orderly transactions for the identical or similar securities and for impairments when events or circumstances indicate the carrying amount may not be recoverable. Qualitative impairment assessments are performed quarterly and consider factors such as investee financial performance, macroeconomic conditions, and regulatory developments. See Note -11 Investments for further information.

For equity investments denominated in foreign currencies, changes in fair value reflect the combined effect of market price movements and foreign-currency re-measurement adjustments. For publicly traded equity securities measured at fair value through net income, all changes in fair value, including those resulting from currency translation, are recognized in earnings.

Related Parties

The Company identifies related parties and transactions with such parties in accordance with ASC 850, “Related Party Disclosures”. Related parties include affiliates, principal owners, directors, executive officers, and entities under common control. Transactions with related parties are recorded at amounts that are considered to approximate arm’s length terms. The Company discloses all material related party transactions and outstanding balances in the accompanying unaudited condensed consolidated financial statements and related footnotes.

Segments

As of September 30, 2025, The Company operates under a single reportable segment focusing on holistic pain management while deploying corporate treasury assets for the acquisition of Bitcoin. The deployment of corporate treasury assets for the acquisition of Bitcoin is in its early development. The determination of a single reportable segment is consistent with the financial information regularly provided to the Company’s chief operating decision maker (“CODM”). The Company’s CODM is its Chief Executive Officer, who reviews and evaluates consolidated profit and loss and total assets for the purpose of assessing performance, making operating decisions, allocating resources, and planning and forecasting for future periods.

Reclassifications

Certain reclassifications within the balance sheets and operating expenses have been made to the prior period’s financial statements to conform to the current period financial statement presentation. There is no impact in total to the results of operations and cash flows in all periods presented.

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-08, “Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets,” which requires certain crypto assets to be measured at fair value in the statement of operations, with gains and losses from changes in the fair value of such crypto assets recognized in net income each reporting period. ASU 2023-08 also requires certain interim and annual disclosures for crypto assets within the scope of the standard. ASU 2023-08 is effective for annual periods beginning after December 15, 2024, including interim periods within those fiscal years. The Company adopted ASU 2023-08 on January 1, 2025.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which enhances the transparency and decision usefulness of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted. The Company is currently evaluating the impact this standard will have on its financial statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization included in each relevant expense caption presented on the statement of operations. The standard also requires disclosure of qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, as well as the total amount of selling expenses and an entity’s definition of selling expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company is currently evaluating the impact this standard will have on its financial statements.

The Company currently believes there are no other issued and not yet effective accounting standards that are materially relevant to its interim unaudited condensed financial statements.

NOTE 3—ASSET ACQUISITION

Merger with Nakamoto Holdings

On May 12, 2025, the Company entered into the Merger Agreement, by and among the Company, the Company’s newly formed, wholly-owned subsidiary Kindly Holdco Corp., a Delaware corporation (“Merger Sub”), Nakamoto, a Delaware corporation, and Wade Rivers, LLC, a Wyoming limited liability company.

On August 14, 2025 (the “Closing Date”), the Company effected a reverse triangular merger with Nakamoto, whereby Merger Sub merged with and into Nakamoto, with Nakamoto surviving as a wholly owned subsidiary of the Company (the “Surviving Corporation”), in accordance with the Merger Agreement (such transaction, the “Merger”). In connection with the Closing, the Company acquired all of the issued and outstanding securities of Nakamoto, a privately held Bitcoin treasury company.

Upon consummation of the Merger on the terms and subject to the conditions set forth in the Merger Agreement, the holders of Nakamoto Class A and Class B common stock (other than shares held in treasury or by dissenting stockholders) received an aggregate 22.3 million shares of Common Stock. Shares of Merger Sub’s common stock were converted into shares of common stock of the Surviving Corporation. No fractional shares were issued.

Concurrently with the execution of the Merger Agreement, the Company entered into subscription agreements (collectively, the “Initial Subscription Agreements”) with certain accredited investors (the “Initial Subscribers”) in an aggregate amount of approximately $512 million, pursuant to which the Company agreed to issue, and the Initial Subscribers agreed to purchase, shares of Common Stock at a purchase price of $1.12 per share and/or pre-funded warrants to purchase shares of Common Stock (the “Pre-Funded Warrants”), in a private placement (the “Initial PIPE Financing”). Additionally, the Company entered into a Secured Convertible Debenture Purchase Agreement (the “Debenture Purchase Agreement”) with YA II PN, Ltd., an investment fund managed by Yorkville Advisors (the “Convert Investor”), under which the Company agreed to sell and issue to the Convert Investor a secured convertible debenture (the “Convertible Debenture”) in aggregate principal amount of $200.0 million (the “Principal Amount”) in exchange for cash or Bitcoin equal to 96.0% of the Principal Amount (the “Debt Financing”).

Additionally, on June 19, 2025, the Company subsequently entered into additional subscription agreements, (the “Additional Subscription Agreements” and, together with the Initial Subscription Agreements, the “Subscription Agreements”), with certain new and/or existing investors (the “Additional Subscribers” and, together with the Initial Subscribers, the “Subscribers”) in an aggregate amount of $28.4 million. Under these Additional Subscription Agreements, the Company agreed to issue and sell to the Additional Subscribers shares of Common Stock at a purchase price of $5.00 per share in a private placement on substantially similar terms as the Initial Subscription Agreements (the “Additional PIPE Financing” and, together with the Initial PIPE Financing, the “PIPE Financings”).

Accounting for the Merger

Pursuant to the Merger Agreement, the stockholders of Nakamoto received 22,321,143 shares of Common Stock as consideration for the Merger. Such shares of Common Stock were issued on August 14, 2025, based on the fair value of $1.12 per share, resulting in total consideration of $24,999,679. The stock price of $1.12 per share was determined based on the price of the Company’s Common Stock in the PIPE Financings that closed on the same date, in which the Company issued 346,192,232 shares of Common Stock to certain accredited investors. The Company concluded that the $1.12 per share price used in the PIPE Financings more accurately represented the fair value of the Common Stock on the acquisition date than the closing market price of $15.02 per share reported on the Nasdaq Stock Market.

Prior to the consummation of the PIPE Financings and Merger, the Company had 7,576,321 shares of Common Stock issued and outstanding. The Company determined that the significant increase in the number of shares outstanding and the contemporaneous pricing established through the PIPE Financings reflected a more representative and reliable measure of the fair value of the Common Stock for purposes of valuing the purchase consideration in accordance with ASC 805,“Business Combinations” and ASC 820, Fair Value Measurement”as the PIPE Financings should be considered the principal market for our outstanding common shares.

Although the transaction was structured as a legal merger, management concluded that Nakamoto did not meet the definition of a business under ASC 805, “Business Combinations.”.

In addition, (i) Nakamoto qualified as a variable interest entity at the acquisition date (“VIE”) under ASC 810,“Consolidation”, as its pre-Merger equity capitalization was not sufficient to finance its activities without additional subordinated financial support, and (ii) KindlyMD was the primary beneficiary of Nakamoto. As such, KindlyMD recognized a $59,753,811 loss on the acquisition measured as the difference between the fair value of the consideration paid and the net amount of Nakamoto’s identifiable assets and liabilities measured in accordance with ASC 805, which was primarily comprised of the put option liability.

Loss on Acquisition Calculation

As discussed above, the Company recognized a loss of $59,753,811 on the acquisition of Nakamoto in accordance with ASC 810-10-30, calculated by the difference between the sum of the fair value of the consideration paid and the net amount of the VIE’s identifiable assets and liabilities recognized and measured in accordance with ASC 805.

The recognized loss on the acquisition as of August 14, 2025 was calculated as follows:

Put Option Liability – BTC Marketing and Sales Agreement

In connection with the Merger, the Company assumed a Marketing and Sales Agreement from Nakamoto (the “BTC Media Agreement”) with BTC Inc. (“BTC”). The BTC Media Agreement provides for certain marketing and promotional rights and includes put and call options (collectively, the “Options”) that permit either the Company to acquire, or shareholders of BTC to sell, all of their equity interests in BTC. The call/put option had an exercise period of 36 months beginning with the date of the merger.

If exercised, the Options would be settled through the issuance of shares of Common Stock, with the number of shares determined based on BTC’s enterprise valuation (calculated as BTC’s EBITDA multiplied by an agreed upon multiple) divided by the PIPE Financing price of $1.12 (“the call consideration”).

The Company evaluated the put and call options in the BTC Media Agreement under the relevant accounting guidance, including ASC 480,*“Distinguishing Liabilities from Equity”and ASC 815,“Derivatives and Hedging”*as follows:

Based on the above, the Company concluded that the put and call options, which are potentially indexed to, and potentially settled in the Common Stock, should be considered a non-derivative liability in accordance with ASC 815-40 and should therefore be re-measured to fair value at the end of each reporting period. As of the date of the transaction, the Company concluded that the call/put option was a liability with a fair value of $27,314,000. Further, upon re-measurement of the put option as of September 30, 2025, the Company determined that the fair value of the put option liability was $5,469,000. The $21,845,000 change in fair value was recognized as a gain in the unaudited condensed consolidated statement of operations under other income (expense) during the three months ended September 30, 2025 and was primarily the result of the decrease in fair value the Company’s Common Stock as of September 30, 2025 as compared to the fair value as of August 14, 2025.

As discussed below, the Company considers BTC. to be a related party as it has significant influence over that entity. To that extent, the Company determined that the call option should not be considered in-substance Common Stock (resulting in recognition using the equity method investment) as the call option does not have risks and rewards that are substantially similar to an investment in that entity’s common stock.

NOTE 4—DISAGGREGATION OF REVENUES

The Company’s revenues are disaggregated based on revenue type, including (i) healthcare services, (ii) product retail sales, and (iii) service affiliate agreements.

The Company’s net revenues for the three and nine months ended September 30, 2025 and 2024 are disaggregated as follows:

The Company earned $356,548 in reimbursements from insurance payers during the three months ended September 30, 2025, representing a 234.6% increase from the $106,567 in reimbursements from insurance payers earned during the three months ended September 30, 2024. The Company earned $673,547 in reimbursements from insurance payers during the nine months ended September 30, 2025, representing a 189.3% increase from the $232,842 in reimbursements from insurance payers earned during the nine months ended September 30, 2024.

NOTE 5—DIGITAL ASSETS

Digital assets consisted of the following at September 30, 2025:

As of September 30, 2025, the Company has purchased 5,765 Bitcoin at a weighted average price of $118,204.88 per Bitcoin for approximately $681 million. The Company has utilized 367 Bitcoin for strategic investments and holds 5,398 Bitcoin.

As of September 30, 2025,2,903 of the Company’s 5,398 Bitcoin were pledged as collateral in connection with an outstanding loan with a third-party lender (see Note 9 – Debt). The pledged Bitcoin can be rehypothecated, loaned, or sold by the lender under the terms of the collateral arrangement. The remaining Bitcoin are held with a third-party custodian and are considered under the Company’s control.

During the three and nine months ended September 30, 2025, the Company recognized an unrealized loss from remeasurement of digital assets of $22,066,010 and $22,105,029, respectively.

NOTE 6—PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at September 30, 2025 and December 31, 2024:

Property and equipment, net, is included within “Other current assets” on the accompanying unaudited condensed consolidated balance sheets. Depreciation expense for the three months ended September 30, 2025 and 2024, was $10,392 and $25,576, respectively. Depreciation expense for the nine months ended September 30, 2025 and 2024, was $42,855 and $76,210, respectively.

NOTE 7—CAPITALIZED SOFTWARE

Capitalized software consisted of the following at September 30, 2025 and December 31, 2024:

Capitalized costs for in-process internal-use software development primarily consist of direct and contracted labor and related expenses for developing internal systems and tools, and cloud-based solutions, including the Company’s Enterprise Data Management (“EDM”) system. These costs are not amortized until it is available for its intended use. Capitalized software is included within “Other current assets” on the accompanying unaudited condensed consolidated balance sheets.

During the three and nine months ended September 30, 2025, the Company capitalized software costs of $2,147 and $233,670, respectively. There wasno capitalized software during the three and nine months ended September 30, 2024.

During the three and nine months ended September 30, 2025, the Company, due to its decision to no longer continue with its EDM project, wrote off the outstanding balance of capitalized software, resulting in a $622,008 loss on disposal of assets as recorded on the unaudited condensed consolidated statement of operations.

NOTE 8—LEASES

Operating Leases

The following was included in the condensed balance sheets at September 30, 2025 and December 31, 2024:

The components of lease expense consisted of the following for the three and nine months ended September 30, 2025 and 2024:

Operating lease right-of-use assets is included within “Other current assets” on the accompanying unaudited condensed consolidated balance sheets. Cash payments included in the measurement of our operating lease liabilities were $50,423 and $32,969 for the three months ended September 30, 2025 and 2024, respectively. Cash payments included in the measurement of our operating lease liabilities were $152,781 and $33,214 for the nine months ended September 30, 2025 and 2024, respectively. The decrease in respective periods was primarily due to the closing of redundant office locations.

Estimated future minimum payments of operating leases for the next five years consists of the following as of September 30, 2025:

Finance Leases

The following was included in the condensed balance sheets at September 30, 2025, and December 31, 2024:

NOTE 9—DEBT

Promissory Note.

On May 12, 2025, the Company entered into a non-interest bearing promissory note in favor of BTC with a principal amount up to $1,750,000 (the “BTC Note”). Pursuant to the terms of the BTC Note, BTC could make advances to the Company in an aggregate principal amount not to exceed $1,750,000, with individual advances capped at $350,000 in any calendar month. The BTC Note matured on the Closing Date. The Company did not draw any proceeds against the BTC Note and the BTC Note was terminated on August 14, 2025.

Convertible Debenture

On May 12, 2025, and in conjunction with the Merger with Nakamoto, see Note 3 – Asset Acquisition, the Company entered into the Debenture Purchase Agreement with the Convert Investor in connection with the Debt Financing. The aggregate Debt Financing costs included, resulted in a debt discount of $8,150,000 being recorded.

The Convertible Debenture had an interest rate of 0.0% per annum for the first two years, and 6.0% per annum for the third year and was payable on the third-year anniversary of the issuance date or earlier redemption. The interest rate would increase to a rate of 18.0% per annum upon the occurrence and during the continuance of an event of default. The Convertible Debenture was secured by Bitcoin having a value of not less than $400 million within 10 business days following the Merger. The Bitcoin serving as collateral for the obligations under the Convertible Debenture was at all times to be held by a special purpose “digital asset subsidiary” that fully guaranteed the obligations of the Company under the Convertible Debenture.

The Convert Investor could convert all or any portion of the Principal Amount, together with any accrued and unpaid interest, at an initial conversion rate of $2.80, which was subject to a one-time down round only reset. The Convert Investor was not permitted to convert the Convertible Debenture to the extent that the shares of Common Stock issuable upon conversion of the Convertible Debenture would exceed 19.99% of the Company’s outstanding shares immediately prior to executing the Debenture Purchase Agreement without prior stockholder approval.

The Company had the right to redeem the Convertible Debenture if(i) the volume-weighted average price of the Common Stock is less than the Fixed Price (as defined in the Convertible Debenture) and it provides the Convert Investor at least ten (10) trading days’ notice, or (ii) the volume-weighted average price of the Common Stock is equal to or greater than $4.50 and it provides the Convert Investor at least thirty (30) trading days’ notice, and in each case, at a redemption price equal to 101.5% of the Principal Amount redeemed plus accrued and unpaid interest thereon if redeemed within the first twelve (12) months, 103.0% if redeemed between twelve (12) and twenty-four (24) months, and 105.0% if redeemed between twenty-four (24) and third-six (36) months (the “Payment Premium”). Following such notice and prior to the respective redemption, the Convert Investor would have the right to elect to convert all or any portion of the outstanding principal plus all accrued and unpaid interest, plus the Payment Premium.

The Company evaluated the Convertible Debenture for potential embedded derivatives under ASC 815,“Derivatives and Hedging”. The Company concluded that the only potential embedded features were (i) the conversion option and (ii) the Company’s optional redemption provisions. After concluding that the embedded features satisfied the separation criteria in ASC 815-15-25, the Company then assessed the embedded options to determine whether they satisfied the scope exception outlined in ASC 815-40. To that extent, the Company concluded that the embedded features were both indexed to their stock and could be classified in stockholders’ equity. As such, the embedded options were not bi-furcated and accounted for separately.

In addition, the Company issued 3,000,000 shares of Common Stock (the “Convert Fee Shares”) to the Convert Investor as payment for the Convert Investor’s fees for entering into that certain Debenture Purchase Agreement. The Convert Fee Shares were issued with a fair value of $1.12 per share, resulting in a debt discount on a relative fair value basis of $3,304,485. The Company recorded $188,545,515 of Convertible Debenture upon issuance, net of debt discount.

The Company executed its option of redemption, effective on September 29, 2025. As of September 30, 2025, the Convertible Debenture was fully repaid and there was no outstanding principal or accrued interest related to the Convertible Debenture. As a result of the extinguishment, the Company recorded a loss on debt extinguishment of $14,454,485.

Naka SPV2 Credit Facility

On September 30, 2025, the Company, through its subsidiary Naka SPV2, LLC, a Delaware limited liability company (“Naka”), entered into a Credit Facility Agreement with Two Prime Lending Limited, a limited company existing under the laws of the British Virgin Islands, (the “Naka Credit Facility”), for an aggregate principal amount of $203,017,500. The Naka Credit Facility has an interest rate of 8.5% per annum and matures on September 30, 2026. The Company used proceeds of the Naka Credit Facility to satisfy its obligations in full under its outstanding Convertible Debenture.

Management deemed, under the guidance of ASC 470-50,“Debt-Modifications and Extinguishments”, that the satisfaction of the Convertible Debenture with the funds from the Naka Credit Facility qualified for debt extinguishment accounting. As a result, the Company recorded a loss on extinguishment of debt of $14,454,485 in other expenses and income on the unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2025. The outstanding amount under the Naka Credit Facility was reduced to $0 with proceeds from a loan entered into on October 6, 2025 (see Note 15 - Subsequent Events). The Naka Credit Facility is an uncommitted guidance line of credit and will remain open and available to Naka for future borrowings through September 30, 2026.

Loan Agreement

On October 6, 2025, Naka entered into a Master Loan Agreement with Antalpha Digital Pte. Ltd. a private company organized under the laws of Singapore (“Holder”) (such Master Loan Agreement being referred to as, the “Loan Agreement”). The Holder extending a term loan facility in an aggregate principal amount of 206,000,000 USDT (the “Loan”), bearing interest of 7.0% per annum.

The Loan had an initial maturity date of November 6, 2025, subject to an optional maturity date extension of an additional 30 days at the election of Naka. Naka elected to extend the maturity date and the Loan will now mature on December 6, 2025. The loan is currently prepayable without premium or penalty. The obligations under the Loan Agreement are secured solely by Bitcoin or other digital assets agreed to by Naka and Holder, and are subject to customary affirmative and negative covenants, loan-to-value requirements, representations and warranties, and events of default. The collateral for the Loan is held by Holder.

Naka used the proceeds of the Loan to satisfy its existing obligations in full under that certain Naka Credit Facility, dated as of September 30, 2025, between the Company and Holder and for expenses incurred in connection with the Loan Agreement. As of the date of this filing, the Company has added to the collateral balance to maintain levels required under the Loan Agreement.

As of the date of this filing, the Naka Credit Facility remains open and has no principal drawn against it.

NOTE 10—STOCKHOLDERS’ EQUITY

Preferred Stock

As of September 30, 2025 and December 31, 2024, the Company was authorized to issue 10,000,000 shares of preferred stock. As of September 30, 2025 and December 31, 2024, the Company hadno shares of preferred stock issued and outstanding for either period.

Common Stock

On May 20, 2025, the board of directors of the Company (the “Board”) and a majority of the stockholders of the Company approved the Second Amended and Restated Articles of Incorporation (the “Amended Articles”), which became effective upon filing with the Utah Division of Corporations on August 11, 2025. The Amended Articles increase the authorized shares of Common Stock to 10,000,000,000, from 100,000,000, among other changes.

As of September 30, 2025 and December 31, 2024, the Company was authorized to issue 10,000,000,000 and 100,000,000 shares of Common Stock, respectively. As of September 30, 2025, the Company had 427,152,834 shares of Common Stock issued and outstanding. As of December 31, 2024, the Company had 6,050,148 shares of Common Stock issued and 6,029,648 shares of Common Stock outstanding.

Warrants

As of September 30, 2025, the Company has 85,091,274 warrants exercisable and outstanding. The outstanding warrants have a weighted-average remaining contractual life of 0.28 years and a total intrinsic value of $90,333,464.

At-The-Market Offering

On August 26, 2025, the Company entered into a Sales Agreement (the “Sales Agreement”) with TD Securities (USA) LLC; Cantor Fitzgerald & Co.; B. Riley Securities, Inc.; The Benchmark Company, LLC; Canaccord Genuity LLC; Cohen & Company Capital Markets (a division of Cohen & Company Securities, LLC); Craig-Hallum Capital Group LLC; Needham & Company, LLC; and Yorkville Securities, LLC (collectively, the “Agents”).

Pursuant to the Sales Agreement, the Company may, at its option and from time to time, offer and sell shares of its Common Stock, through the Agents having an aggregate gross sales price of up to $5,000,000,000.

For the three months ended September 30, 2025, the Company sold 1,362,340 shares of Common Stock at an average price of $4.15 per share, for aggregate cash proceeds of $5,659,975, net of issuance costs.

NOTE 11—INVESTMENTS

Treasury B.V.

On September 4, 2025, Nakamoto, the Company’s wholly-owned subsidiary, made an investment in Treasury B.V., a private limited liability company under the laws of the Netherlands (the “Minority Investment”). In connection with the Minority Investment, Nakamoto entered into a Private Deed of Issuance by and among Treasury, Stichting Administratiekantoor Treasury, a foundation under the laws of the Netherlands (“Stichting”), and Nakamoto, pursuant to which Treasury agreed to issue to Stichting 1,363,027 (the “Issuance”) ordinary shares of Treasury, par value €0.01 (the “Treasury Shares”), in exchange for €12,835,870.08 (approximately $15.0 million). In connection with the Minority Investment, Stichting issued 1,363,027 depositary receipts, representing each of the Treasury Shares, to Nakamoto in exchange for a subscription price of approximately €9.42 (approximately $10.98) per depositary receipt, for an aggregate of €12,835,870.08 (approximately $15.0 million) to be paid directly to Treasury by Nakamoto in USD Coin (USDC).

Nakamoto accounted for its investment in accordance with ASC 321,“Investments-Equity Securities”. Accordingly, the investment is recorded as an equity security without a readily determinable fair value and is measured at cost and is measured for impairment at each reporting period. As of September 30, 2025, the Company did not record impairment and the carrying amount of the investment is $15 million.

Metaplanet Inc.

On September 9, 2025, Nakamoto, a wholly-owned subsidiary of the Company, made a commitment to purchase up to $30 million of shares of common stock of Metaplanet Inc. (the “Metaplanet Stock”), a corporation organized under the laws of Japan, (TSE: 3350) (OTC:MTPLF) (“Metaplanet”), in connection with Metaplanet’s previously announced international equity financing (the “International Offering”).

Nakamoto paid a purchase price of $3.751 per share for a total of 8,000,000 of Metaplanet Stock. The International Offering closed on September 17, 2025. No separate share purchase agreement or subscription document was required to be signed by the Company in connection with its commitment.

Although both David Bailey, KindlyMD’s Chief Executive Officer and Chairman of the Board, and Tyler Evans, KindlyMD’s Chief Investment Officer, hold certain advisory and board positions with Metaplanet, management concluded that Nakamoto does not exercise significant influence over Metaplanet’s operating or financial policies. As such, the investment in Metaplanet is recognized at fair value in accordance with ASC 321.

Because the Metaplanet Stock is publicly traded on the Tokyo Stock Exchange, the investment has a readily determinable fair value. Therefore, the investment will be measured at fair value with changes in fair value recognized in net income. To that extent, the investment was initially recorded at its cost basis of $30,007,992 as of the commitment date. As of September 30, 2025, the carrying amount of the investment is $30,956,627. For the three and nine months ended September 30, 2025, the Company recorded an unrealized gain on investment of $930,431, net of a loss on foreign currency re-measurement of $253,996, in other expenses and income on the unaudited condensed consolidated statements of operations.

NOTE 12-FAIR VALUE MEASUREMENTS

Fair value measurements discussed herein represent management’s best estimate of fair value as of and during the three and nine months ended September 30, 2025. The Company measures the investment in Metaplanet at fair value on a recurring basis in accordance with ASC 820,“Fair Value Measurement”. Fair value represents the price that would be received to sell the investment in an orderly transaction in the principal market at the measurement date.

The fair value of the Metaplanet Stock is based on quoted market prices on the Tokyo Stock Exchange, translated into U.S. dollars using the spot exchange rate at the balance sheet date. Due to the fair value being derived from observable and unadjusted quoted prices in active markets for identical assets, the measurement is classified as a Level 1 input in the fair value hierarchy.

The fair value of the put option liability is measured using certain valuation techniques, including market comparable companies and an option model, which incorporates significant unobservable inputs, including management’s estimates regarding expected cash flows, probability of exercise, counterparty behavior, discount rates, equity volatility and other assumptions that market participants would use in pricing the obligation. Due to the valuation of the put option relies on unobservable inputs, the liability is classified within Level 3 of the fair value hierarchy. Generally, increases in expected cash flows, probability of exercise, or equity volatility would result in a higher fair value of the liability, whereas increases in discount rates would result in a lower fair value.

The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2025:

There were no transfers between Level 1, Level 2, or Level 3 during the periods presented.

The following table presents quantitative information about the significant unobservable inputs used in the Company’s Level 3 fair value measurements as of September 30, 2025:

NOTE 13—RELATED PARTY TRANSACTIONS

As described in Note 3 – Asset Acquisition, the Company acquired Nakamoto during August of 2025. As part of the acquisition, the Company assumed a BTC Media Agreement, which included both a i) call option to acquire the outstanding shares of BTC and ii) a corresponding put option allowing shareholders of BTC to sell all of their outstanding shares to KindlyMD based on a to-be-determined amount of Common Stock (i.e., the “call consideration amount”). The Company determined that BTC inc. should be considered a related party as David Bailey, KindlyMD’s Chief Executive Officer and Chairman of the Board and Tyler Evans, KindlyMD’s Chief Executive Officer, are also the a director of the board and chief executive officer and chief investment officer of BTC, respectively, and therefore have significant influence over that entity. To comply with the requirements of Rule 4-08(k) of Regulation S-X and ASC 850, the Company has presented both the put option liability and change in put option liability as related party amounts in its condensed consolidated financial statements as of and for the period ended September 30, 2025.

NOTE 14 –SEGMENT INFORMATION

As of September 30, 2025, The Company operates as a single reportable segment focusing on holistic pain management while deploying corporate treasury assets for the acquisition of Bitcoin. The deployment of corporate treasury assets for the acquisition of Bitcoin is in its early development. The determination of a single reportable segment is consistent with the financial information regularly provided to the Company’s CODM.

In addition to the significant expense categories included within net loss presented on the Company’s unaudited condensed consolidated statements of operations, see below for disaggregated amounts that comprise professional fees, insurance, and marketing expense:

NOTE 15—SUBSEQUENT EVENTS

The Company entered a Loan Agreement on October 6, 2025 as further described in Note 9 – Debt. The Company used the proceeds of the Loan to satisfy its existing obligations in full under that certain Naka Credit Facility, dated as of September 30, 2025, between the Company and Two Prime Lending Limited, and for expenses incurred in connection with the Loan Agreement. As of the date of this filing, the Company has added to the collateral balance of the Loan Agreement to maintain levels required under the Loan Agreement. Furthermore, the Company has not drawn on funds from the Naka Credit Facility since satisfying the account entirely.