Nakamoto Inc.

Current report

The following discussion and analysis provide information which we believe relevant to an assessment and understanding of our financial condition and results of operations. This discussion should be read together with our consolidated financial statements and related notes that are included elsewhere in this Annual Report on Form 10-K. All statements other than statements of historical facts contained in this Annual Report on Form 10-K, including statements regarding the financial position, business strategy and the plans and objectives of management for our future operations, are forward-looking statements. See the section of this Annual Report on Form 10-K entitled “Cautionary Note Regarding Forward-Looking Statements” for further information.

Current report

Presentation of non-GAAP Information

Current report

We use non-GAAP financial performance measures, such as Adjusted operating loss, to supplement the financial information presented on a GAAP basis. Non-GAAP financial measures are financial measures that are derived from consolidated financial statements, but that are not presented in accordance with GAAP. Non-GAAP financial measures are subject to material limitations as they are not measurements prepared in accordance with GAAP, and are not a substitute for such measurements. We use these non-GAAP financial measures and other key metrics internally to facilitate analysis of our financial and business trends and for internal planning and forecasting purposes. We believe these non-GAAP financial measures, when taken collectively, may be helpful to investors because they provide consistency and comparability with past and future financial performance by excluding certain items that may not be indicative of our business, results of operations, or outlook. However, non-GAAP financial measures have limitations as an analytical tool and are presented for supplemental information purposes only. They should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

Current report

Company Overview

Current report

We hold Bitcoin on our balance sheet and, through our ecosystem-wide presence, seek to provide investors with exposure to Bitcoin’s global growth and to leverage our treasury to acquire and develop an ecosystem of Bitcoin companies across finance, media and advisory. Additionally, we operate a healthcare and healthcare data company, focused on holistic pain management.

Current report

In 2025, we began our transformation from a healthcare company to a Bitcoin operating company and that transformation continues into 2026. On August 14, 2025, we acquired Nakamoto Holdings, a privately held Bitcoin treasury company through a reverse merger, established a Bitcoin treasury and obtained a call option to purchase BTC Inc, the leading provider of Bitcoin-related media and events. BTC Inc had a call option to purchase UTXO, an investment firm focused on private and public Bitcoin companies.

Current report

On February 20, 2026, we acquired BTC Inc and UTXO. The acquisition represents a significant addition to our portfolio and advances our mission to develop an ecosystem of Bitcoin-native companies. The consideration for these acquisitions consisted solely of shares of our Common Stock and assumed options to purchase shares of our Common Stock. BTC Inc and UTXO securityholders received, on a fully diluted basis, 364,795,104 shares of our Common Stock at a combined value of $81.6 million, net of aggregate strike prices for assumed options, based on our closing price on February 19, 2026.

Current report

The results of operations for the year ended December 31, 2025, reflect a full year of our legacy healthcare business combined with costs associated with the Nakamoto Merger, changes in the fair value of our newly established Bitcoin treasury, as well as a significant increase in the value of our call option to purchase BTC Inc.

Current report

The following tables set forth our summary consolidated results of operations in dollars for the periods presented. The period-to-period comparisons of our historical results are not necessarily indicative of the results that may be expected in the future. The results of operations data for the years ended December 31, 2025 and December 31, 2024 have been derived from the consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Amounts may not foot due to rounding.

Current report

Loss before income taxes was $52.2 million for the year ended December 31, 2025, compared to a loss before income taxes of $3.6 million for the year ended December 31, 2024. The loss in the year ended December 31, 2025 is impacted by the following significant items:

Current report

Segment Results

Current report

A discussion of our operating results for our Bitcoin Operations, Healthcare Operations and Other segments is below. Prior to the Nakamoto Merger, we operated a single segment consisting of Healthcare Operations. All operating expenses prior to the Nakamoto Merger are reflected in Healthcare Operations. Beginning in 2025 after the Nakamoto Merger, we established our Bitcoin Operations segment and began separately tracking other corporate expenses, which are included in Other segment results.

Current report

A summary of operating results for the year ended December 31, 2025 follows and includes a reconciliation of our Operating loss (GAAP) to Adjusted operating loss (non-GAAP). Our Adjusted operating loss removes the change in fair value of digital assets, loss on investments, transaction-related compensation and transaction-related general and administrative expenses from our operating loss.

Current report

A summary of operating results for the year ended December 31, 2024 is as follows:

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Bitcoin Operations

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We launched our Bitcoin Operations strategy with the closing of the Nakamoto Merger on August 14, 2025. For the year ended December 31, 2025, we had a loss on the change in fair value of our digital assets of $166.2 million as the price of Bitcoin declined in 2025 from our weighted average purchase price of $118,171 per Bitcoin to $87,519 per Bitcoin at December 31, 2025.

Current report

Our loss on investments for the year ended December 31, 2025, was $9.9 million. The loss primarily consisted of a decline in the fair value of our Metaplanet common stock investment of $9.3 million in 2025.

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Healthcare Operations

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Our revenues were $1.8 million in the year ended December 31, 2025, compared to $2.7 million in the year ended December 31, 2024. The $0.9 million decline in revenues, representing a 33% decrease, was primarily attributable to a decrease in cash-pay patient care services and the closing of our Bountiful, Utah location.

Current report

Our operating expenses for the year ended December 31, 2025 were $8.8 million as compared to $6.1 million for the year ended December 31, 2024, representing a change of 46%. The $2.8 million increase in 2025 was primarily attributable to $2.4 million expense associated with the Nakamoto Merger. The transaction-related expenses were primarily incurred by us prior to the merger with Nakamoto Holdings and included legal, investment banking and other merger related expenses.

Current report

General and administrative expenses were $4.2 million for the year ended December 31, 2025, compared to $1.9 million for the year ended December 31, 2024. The increase was primarily due to $2.1 million of legal, investment banking and other expenses related to the Nakamoto merger. Compensation expenses were $4.7 million for the year ended December 31, 2025, compared to $3.6 million for the year ended December 31, 2024. The increase was primarily due to higher stock-based compensation and additional contract labor in support of our operations in medical services, additional support as a public company and transaction-related costs associated with the Nakamoto Merger.

Current report

In March 2026, the Company announced that it now intends to exit its legacy healthcare business.

Current report

Other

Current report

Our other segment consists of our corporate overhead. We began separately tracking our corporate overhead upon the Nakamoto Merger on August 14, 2025. Compensation for the year ended December 31, 2025, totaled $6.0 million, of which approximately $2.8 million related to the Nakamoto Merger. General and administrative expenses for the year ended December 31, 2025, totaled $6.9 million, of which approximately $2.2 million was related to one-time transaction related expenses. The one-time transaction expenses primarily related to the Nakamoto Merger and diligence on our acquisitions of BTC Inc and UTXO that closed February 20, 2026.

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Non-operating income (expense)

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Non-operating income for the year ended December 31, 2025, was $144.9 million compared to $0.3 million of non-operating expense for the year ended December 31, 2024. We had the following significant items impacting our non-operating income:

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Provision for income taxes

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Our benefit from income taxes was $12.8 million for the year ended December 31, 2025, and $0.8 million for the year ended December 31, 2024. The benefit from income taxes was fully offset in both 2025 and 2024 by valuation allowances.

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Liquidity

Current report

Our assets primarily consist of Bitcoin held on our balance sheet, cash and cash equivalents and investments in unconsolidated investees. Our operations have been primarily funded through net proceeds from sales of equity securities as well as through debt we have incurred. Our cash requirements consist primarily of the payment of principal and interest on our debt and cash overhead expenses.

Current report

In December 2025, we entered into the Master Loan Agreement with Kraken for a 210.0 million USDT, 8.0% per annum fixed rate fee loan that matures on December 4, 2026. The Master Loan Agreement includes certain collateral requirements, collateral maintenance and liquidation mechanics. The obligations under the Master Loan Agreement are prepayable at our option, provided that prepayments made prior to the six-month anniversary of the initial funding date shall be subject to a make-whole payment for such six-month period. As of December 31, 2025, approximately 3,717 of our 5,342 Bitcoin are held as collateral for the Master Loan Agreement.

Current report

As of December 31, 2025 we held approximately 1,625 unencumbered Bitcoin worth approximately $142.2 million, based on the $87,519 price of Bitcoin on December 31, 2025, had cash and cash equivalents of $22.6 million and held an investment in a publicly traded stock of $20.7 million. Based on the foregoing, we have determined that our sources of liquidity will be sufficient to meet our cash needs for the one-year period from the issuance of the Audited Financial Statements. However, our liquidity position may be materially impacted by volatility in the market price of Bitcoin and other market conditions. In March 2026, we sold approximately 284 Bitcoin for $20 million. We plan to use the proceeds to invest further in our businesses as well replenish our working capital for costs associated with the recent Mergers.

Current report

On August 14, 2025, and in connection with the Nakamoto Merger, we issued (i) 343,192,232 shares of Common Stock to certain accredited investors (the “PIPE Subscribers”), including (a) 322,979,583 shares of Common Stock at a price per share of $1.12, and (b) 5,682,586 shares of Common Stock at a price per share of $5.00, and (ii) 133,800,773 pre-funded warrants to purchase shares of Common Stock (the “Acquired Securities”) at a price per pre-funded warrant of $1.12. We received net cash of $518 million related to these issuances (“PIPE Financings”). In addition, we issued 14,530,063 shares of Common Stock as compensation to certain advisors for their services in connection with the Nakamoto Merger.

Current report

On August 26, 2025, we entered into the ATM Program under which we may offer and sell Common Stock from time to time up to $5,000,000,000. For the year ended December 31, 2025, we sold 1,362,340 shares of Common Stock, for aggregate cash proceeds of $5.7 million, net of issuance costs.

Current report

In December 2025, the Board approved the 2025 Repurchase Program through which the Company may purchase up to $10 million worth of shares of its Common Stock from time to time, as market conditions warrant. As of December 31, 2025, the Company had repurchased approximately $0.7 million worth of shares under the 2025 Repurchase Program. The 2025 Repurchase Program ended on January 31, 2026, with share repurchases totalling approximately $0.9 million.

Current report

As of December 31, 2025, we did not have any material commitments for capital expenditures.

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Cash Flows

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Our consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), which requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and related notes. Actual results can and may differ from estimates. These differences could be material to our consolidated financial statements.

Current report

We believe our application of U.S. GAAP and the associated estimates are reasonable. Our accounting estimates are reevaluated, and adjustments are made when facts and circumstances dictate a change.

Current report

For further discussions of the following significant accounting policies and other significant accounting policies, refer to Note 2 – Summary of Significant Accounting Policies in our consolidated financial statements included in this Annual Report on Form 10-K.

Previous report

The statements contained in the following MD&A and elsewhere throughout this Annual Report on Form 10-K, including any documents incorporated by reference, that are not historical facts, including statements about our beliefs and expectations, are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend” and similar words or expressions. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances are forward-looking statements.

Previous report

These forward-looking statements, which reflect our management’s beliefs, objectives, and expectations as of the date hereof, are based on the best judgement of our management. All forward-looking statements speak only as of the date on which they are made. Such forward-looking statements are subject to certain risks, uncertainties and assumptions relating to factors that could cause actual results to differ materially from those anticipated in such statements, including, without limitation, the following: economic, social and political conditions, global economic downturns resulting from extraordinary events such as the COVID-19 pandemic and other securities industry risks; interest rate risks; liquidity risks; credit risk with clients and counterparties; risk of liability for errors in clearing functions; systemic risk; systems failures, delays and capacity constraints; network security risks; competition; reliance on external service providers; new laws and regulations affecting our business; net capital requirements; extensive regulation, regulatory uncertainties and legal matters; failure to maintain relationships with employees, customers, business partners or governmental entities; the inability to achieve synergies or to implement integration plans and other consequences associated with risks and uncertainties detailed in our filings with the SEC, including our most recent filings on Forms 10-K and 10-Q.

Previous report

We caution that the foregoing list of factors is not exclusive, and new factors may emerge, or changes to the foregoing factors may occur, that could impact our business. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events or otherwise, except to the extent required by the federal securities laws.

Previous report

Certain information contained in this discussion and elsewhere in this report may include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and is subject to the safe harbor created by that act. The safe harbor created by the Private Securities Litigation Reform Act will not apply to certain “forward looking statements” because we issued “penny stock” (as defined in Section 3(a)(51) of the Securities Exchange Act of 1934 and Rule 3(a)(51-1) under the Exchange Act) during the three year period preceding the date(s) on which those forward looking statements were first made, except to the extent otherwise specifically provided by rule, regulation or order of the Securities and Exchange Commission. We caution readers that certain important factors may affect our actual results and could cause such results to differ materially from any forward-looking statements which may be deemed to have been made in this Report or which are otherwise made by or on our behalf. For this purpose, any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “explore,” “consider,” “anticipate,” “intend,” “could,” “estimate,” “plan,” or “propose” or the negative variations of those words or comparable terminology are intended to identify forward-looking statements. Factors that may affect our results include, but are not limited to, the risks and uncertainties associated with:

Previous report

We are also subject to other risks detailed from time to time in our other filings with Securities and Exchange Commission and elsewhere in this report. Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

Previous report

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). the preparation of these financial statements requires management to make assumptions, judgments and estimates that can have a significant impact on the reported amounts of assets, liabilities, revenues and expenses. We base our estimates on historical experiences and on various other assumptions believed to be applicable and reasonable under the circumstances accordingly. We also discuss our critical accounting estimates with the Audit Committee of the Board of Directors. Note 2,Summary of Significant Accounting Policies, in Notes to Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K describes the significant accounting policies used in the preparation of the financial statements.

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We have listed below our critical accounting estimates that we believe have the greatest potential impact on our financial statements. historically, our assumptions, judgments and estimates relative to our critical accounting estimates have not differed materially from actual results. We do not expect the estimates and assumptions to change materially.

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Revenue Recognition

Previous report

The Company records revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers.” Revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, the Company applies the following five-step approach: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as a performance obligation is satisfied.

Previous report

The Company primarily recognizes revenue from: (i) patient care services related to medical evaluation and treatment and (ii) product retail sales, (iii) service affiliate agreements.

Previous report

Revenue from patient care services, which relates to medical evaluation and treatment, is reported at the amount reflecting the consideration to which the Company expects to be entitled in exchange for providing these services. These amounts are due from patients, third-party payors (including Medicare, Medicaid, and commercial insurance payers), and others. The patient is considered the Company’s customer, and a signed patient treatment consent typically constitutes a written contract between the Company and the patient. Patient care services are considered discrete and are initiated and concluded at the patient’s discretion, which occurs each individual appointment. Generally, the Company satisfies its performance obligations at a point in time, specifically when it has the right to invoice the customer for the work completed, which usually occurs on an interaction basis for the work performed during any given billable interaction. The Company has determined that the underlying nature of the services provided remains consistent across different payor types. Consequently, the Company utilizes a portfolio approach to assess price concessions in its contracts with patients. The Company recognizes revenue for patient care services net of price concessions, which include contractual adjustments provided to third-party payors, discounts offered to uninsured patients in accordance with the Company’s policy, and/or implicit price concessions extended to patients. Implicit price concessions, representing differences between the amount the Company expects to receive from patients and standard billing rates, are accounted for as contractual adjustments or discounts, deducted from gross revenue to calculate net revenues. The Company bases its estimates of contractual adjustments and discounts on contractual agreements, its discount policies, and historical experience.

Previous report

Revenue from retail sales is recognized when control of the goods is transferred to the customer. This occurs when the customer can direct the use of, and obtain substantially all benefits from, the Company’s products, generally at the time of shipment or customer pickup. Revenue is recorded at the net sales price, which includes estimates of variable consideration such as product returns, rebates, discounts, and other adjustments. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues.

Previous report

Revenue from service affiliate agreements is recognized when control of the promised goods or services is transferred to our customers, or when services are rendered to the customer, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and the collectability of consideration is probable. The company recognizes revenue after the service price has been allocated and when it satisfies the performance obligation. Usually, there is only a single performance obligation in the sale and service, and therefore the entire transaction price is allocated to the single performance obligation. This typically occurs at a point in time when products and or services are rendered, delivered, or shipped. The transaction price for contracts is set per the contract language. The transaction price for services is set by the company for the various service options, less current discounts or coupons offered, where those discounts are set and approved by management from time to time.

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Stock-Based Compensation

Previous report

Stock-based awards granted to qualified employees, non-employee directors and consultants are measured at fair value and recognized as an expense in accordance with ASC Topic 718, “Share-Based Payments.” For service-based awards, stock-based compensation is recognized on a straight-line basis over the requisite service period, which is generally the vesting period. The fair value of stock options is estimated using a Black-Scholes option valuation model. Restricted stock awards are valued based on the closing stock price on the date of grant (intrinsic value method). The Company has elected to recognize forfeitures as they occur.

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Recent Accounting Pronouncements

Previous report

For a complete description of recent accounting pronouncements, including the expected dates of adoption and estimated effects on financial condition and results of operations, refer to Note 2,Summary of Significant Accounting Policies, in Notes to Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.

Previous report

The following table sets forth key components of our results of operations during the years ended December 31, 2024 and 2023, both in dollars and as a percentage of our revenues.

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Revenues

Previous report

The Company recognized $114,741 in reimbursements from insurance payers during the three months ended December 31, 2024, representing a 7.7% increase compared to the $106,567 recognized during the three months ended September 30, 2024. The Company recognized $347,633 in reimbursements from insurance payers during the twelve months ended December 31, 2024, representing a 1,088% increase compared to the $29,265 recognized during the twelve months ended December 31, 2023.

Previous report

The Company had revenues of $2,719,840 for the year ended December 31, 2024, compared to $3,768,598 for the year end December 31, 2023. Revenues decreased comparable to the prior year, by $1,048,758, or 27.8 %. The decrease in revenues is primarily attributed to a decrease in retail sales as the Company discontinued white-labeled product sales in 2024 and decreases in cash-pay patient care services compared to the prior period as KindlyMD focused on shifting toward insurance billing with commercial and governmental payers including Medicare, Medicaid, Select Health, Blue Cross Blue Shield, Cigna, and other commercial payers. We believe the investment in the expansion of in-network insurance contracts will provide greater opportunity for more revenue growth in the future compared to previous years.

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Operating Expenses

Previous report

Operating expenses increased by $677,793, or 12.6%, to $6,066,611 for the year ended December 31, 2024, from $5,388,818 for the year ended December 31, 2023. The increase in operating expenses is primarily due to the following:

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Other Income (Expense)

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Other income decreased by $273,635, or 9917.9%, to $(270,876) for the year ended December 31, 2024, from $2,759 for the year ended December 31, 2023. This decrease in net other income is primarily attributable to the combination of the following:

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Net Loss

Previous report

As a result of the cumulative effect of the factors described above, our net loss was $3,617,647 for the year ended December 31, 2024, compared to $1,617,461 for the year ended December 31, 2023.

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Net loss per share increased by $0.31 or 86.7%, to $(0.67) for the year ended December 31, 2024, compared to $(0.36) for the year ended December 31, 2023. Management continues to look for opportunities to increase sales, acquire additional businesses, improve margins, and control ongoing operating expenses.

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As of December 31, 2024, we had working capital of $1,899,602, an increase of $2,097,122, or 1,061.7%, compared to a working capital deficit of $197,520 as of December 31, 2023. The increase in working capital is primarily due to $5.9 million in net proceeds received from the Company’s IPO, offset by cash used for operations. We believe that our existing balances of cash, and capital resources, inclusive of available financing opportunities and funds generated from operations, are sufficient to meet anticipated capital requirements, fund our operations and support our growth. Our cash requirements, however, are subject to change as business conditions change.

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As of December 31, 2024, we had total assets of $3,677,992, an increase of $2,578,790, or 234.6%, compared to $1,099,202 as of December 31, 2023. The increase in total assets is primarily due to an increase in cash and cash equivalents in the amount of $1,748,124, right of use assets operating leases in the amount of $405,945, and capitalized software of $388,338. These increases were offset by a decrease in PP&E of $112,337.

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As of December 31, 2024, we had total liabilities of $1,109,682, a decrease of $97,932, or 8.1%, compared to $1,207,614 as of December 31, 2023. This decrease is primarily due to the decrease in derivative liability of $238,000 and a decrease in notes payable of $228,871 offset by increases in right of use liabilities of $331,722.

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As of December 31, 2024, we had total stockholders’ equity of $2,568,310, an increase of $2,676,722, or 2,469.0%, compared to stockholders’ deficit of $108,412 as of December 31, 2023.

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**The following table sets forth key components of our results of cash flow activities during the years ended December 31, 2024 and 2023.

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Cash Flow

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As a result of cash flow activities, our net cash increased by $1,748,124, or 332.7%, to $2,273,624 as of December 31, 2024 from $525,500 as of December 31, 2023.

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Outlook

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We are in the early stages of development. During 2024 our focus was on enhancing the Company’s in-network status with commercial insurance payers, beginning development of an industry leading data management program, and continuing the shift-from cash-pay services to insurance reimbursed services. During 2025 and beyond, we expect to continue investing in our growth initiatives, including expanding our insured client base, enhancing our integrated behavioral health and telemedicine service offerings, and improving our operational efficiency. We continue to focus on building the foundational data environment and integration pathways for initial data sources and standardization of data for analysis to create and enhance the value of our data offerings. We also continue to seek transactions that will enhance shareholder value.

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We believe that these investments will support our long-term growth and profitability.

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However, we recognize that there are inherent risks and uncertainties associated with our growth strategy, including the ability to maintain and grow our client base, successfully execute on our strategic initiatives, and manage our operating expenses. We will continue to monitor our financial performance and make adjustments to our growth strategy as necessary to ensure the long-term success of our business.

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Plan of Operation