Nakamoto Inc.
For the period ended Dec 31, 2025. Filed Mar 30, 2026.
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FY2025 · Filed Mar 30, 2026
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Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our Company conducted an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer, of the effectiveness of the design and operation of its disclosure controls and procedures as defined in Rules 13a-15(e) and 15-d-15(e) under the Exchange Act as of the end of the period covered by this Annual Report on Form 10-K. Based on that evaluation, our Company’s principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were not effective as of December 31, 2025, due to the material weaknesses in internal control over financial reporting described below.
Management’s Annual Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in rule 13a-15(f) and 15d-15(f) under the Exchange Act. Management has evaluated the effectiveness of our internal control over financial reporting as of December 31, 2025, based on criteria established in*Internal Control — Integrated Framework (2013)*issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
Management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2025, due to the material weaknesses described below.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
Management identified material weaknesses related to the following:
| ● | Segregation of duties. The Company did not maintain adequate segregation of duties within certain finance and accounting processes, including with respect to the preparation, review, and approval of journal entries. |
| ● | Accounting and finance resources. The Company did not maintain sufficient in-house finance and accounting personal with appropriate experience in designing, implementing, operating and documenting effective internal controls over financial reporting commensurate with the Company’s financial reporting requirements. |
| ● | Formal policies, procedures and risk assessment. The Company did not maintain adequately formalized and documented policies and procedures for certain key financial reporting processes, including a formal risk assessment process and sufficient documentation evidencing the performance and review of certain recurring controls, including the completeness and accuracy of information used in the operation of such controls. |
Notwithstanding the material weaknesses described above, management believes that the consolidated financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, the Company’s financial position, results of operations and cash flows for the periods presented.
Progress on Plan of Remediation of Material Weaknesses
Management, with the oversight of the Audit Committee, has begun implementing, and intends to continue implementing, measures designed to remediate the material weaknesses described above. These measures include:
| ● | Strengthening the finance and accounting organization, including through the hiring of additional personnel with public company and internal controls experience, such as both a Chief Financial Officer and a Chief Accounting Officer in December 2025; |
| ● | Engaging external advisors and consultants, as needed to assist with financial reporting risk assessment, control design, documentation and remediation activities, such as increasing in-house resources within the finance department potentially through additional hires in roles involved in key internal controls, a change in the mix of responsibilities assigned to in-house resources vs those provided by vendors, as well as sharing of certain resources across the business of Nakamoto, including those recently acquired in the Mergers; |
| ● | Developing accounting policies and procedures for key financial reporting processes; |
| ● | Enhancing documentation and evidentiary support for the operation and review of recurring controls; and |
| ● | Continuing to improve process-level oversight, accountability and responsibility for internal controls across the organization. |
The material weaknesses will not be considered remediated until the applicable controls have been designed and implemented, operate for a sufficient period of time, and management has concluded, through testing, that these controls are operating effectively. Management may also determine that additional remediation measures are required.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2025 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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