Datacentrex, Inc.

Datacentrex, Inc.

Notes to the Consolidated Financial Statements

December 31, 2025

Note 1 -Business Organization and Nature of Operations

Datacentrex (“DTCX” or the “Company”), formerly Thumzup Media Corporation (“Thumzup” or “TZUP”) was incorporated on October 27, 2020, under the laws of the State of Nevada, and its headquarters is located in Los Angeles, California. In December 2025, The Company completed a merger with Dogehash Technologies Inc (“Dogehash”) which was accounted for a reverse recapitalization as described in Note 2. Thumzup’s primary business is software as a service provider dedicated to connecting businesses with consumers and allowing the business to incentivize consumers to post about their experience on social media. Thumzup’s mission is to democratize social media marketing by connecting advertisers with non-professional people, who can be paid for their posts about products and services they love through its technology which utilizes a proprietary mobile app (“App”). The App generates scalable word-of-mouth product posts and recommendations for advertisers on social media and is designed to connect advertisers with individuals who are willing to promote their products online. Dogehash is a digital asset mining company focused on mining Dogecoins (“DOGE”) and other Litecoins (“LTC”). The Company was incorporated in the state of Nevada in July 2025. The Company acquired, through an asset purchase agreement effective July 25, 2025, US Data and Energy, LLC who commenced operations in January 2025 and is the historical operating entity included in these financial statements.

Note 2 –Reverse Recapitalization

On August 18, 2025 (the “Agreement Date”), Thumzup Media Corporation (“Thumzup”), through its wholly owned subsidiary TZUP Merger Sub, Inc., entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Dogehash Technologies Inc. (“DTCX”). Under the terms of the Merger Agreement, TZUP Merger Sub, Inc. merged with and into DTCX, with DTCX surviving as the post-merger entity. In exchange, Thumzup agreed to issue 30.075 million shares of Thumzup common stock as consideration for 100% of the outstanding shares of DTCX as of the Agreement Date.

On December 8, 2025, the shareholders of Thumzup approved the merger. The transaction closed on December 15, 2025 (the “Effective Date”), upon completion of all required regulatory filings and the receipt of NASDAQ approval. At the Effective Date, Thumzup issued 13,835,188 shares of common stock and 16,239.812 shares of Series D convertible preferred stock as consideration for the acquisition of all remaining outstanding DTCX common shares.

On December 15, 2025, Thumzup and DTCX completed a reverse recapitalization (the “Transaction”). For accounting purposes, the Transaction was treated as a reverse recapitalization in accordance with ASC 805-40, Reverse Acquisitions, with Dogehash Technologies Inc. identified as the accounting acquirer and Thumzup identified as the legal acquirer.

The consolidated financial statements reflect the historical financial statements of Dogehash, as Dogehash is considered the continuing reporting entity for accounting purposes. Thumzup’s assets, liabilities, and results of operations are included in the consolidated financial statements only from the Effective Date forward. Thumzup’s historical financial statements are not included for periods prior to the Transaction because such information represents the operations of the legal acquirer, not the accounting acquirer.

Because the accounting acquirer, Dogehash, was incorporated in fiscal year 2025 and did not have historical operations, it did not prepare stand-alone financial statements prior to the Transaction, the Company is presenting only current-period information in these consolidated financial statements. No comparative period or prior-year financial information is presented. Accordingly, the consolidated financial statements include: The assets, liabilities, and operations of Dogehash for the period presented; the assets and liabilities of Thumzup recognized as of the Effective Date, recorded at historical cost, consistent with the accounting requirements of a reverse recapitalization (no goodwill or intangible assets are recognized); and the results of operations of Thumzup from December 15, 2025 through the end of the reporting period.

Accordingly, transactions completed by Thumzup are presented for the period from December 15, 2025 through December 31, 2025, while the results for the year ended December 31, 2025 reflect the accounting acquirer’s operations

All share and per-share amounts presented in these consolidated financial statements have been retroactively adjusted, as applicable, to reflect the equity structure of Thumzup, the legal acquirer and surviving publicly traded entity, in accordance with reverse recapitalization accounting.

Note 3 –Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The Company’s financial statements have been prepared on a consolidated basis and as of December 31, 2025 and for the year ended December 31, 2025 include the consolidated accounts of the Company. All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements herein.

Use of Estimates

The Company prepares its financial statements in accordance with U.S. GAAP, which requires management to use its judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures at the date of the financial statements and the reported amounts of expenses during the reported period. These assumptions and estimates could have a material effect on the financial statements. Actual results may differ materially from those estimates. The Company’s management periodically reviews estimates on an ongoing basis based on information currently available, and changes in facts and circumstances may cause the Company to revise these estimates. Significant estimates include estimates used in the accounting for digital assets, revenue recognition, useful lives of equipment and the evaluation allowance related to deferred tax assets. Actual results may differ from these estimates.

Fair Value Measurement

As defined in GAAP, fair value represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a result, fair value is a market-based approach that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering these assumptions, GAAP defines a three-tier value hierarchy that prioritizes the inputs used in the valuation methodologies in measuring fair value.

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Cash and Cash Equivalents

Cash and cash equivalents include all cash on hand, demand deposits and short-term investments with original maturities of three months or less when purchased.

As of December 31, 2025, the Company’s cash and cash equivalents consisted of $38,919,486, respectively. The Company maintains its cash in banks insured by the Federal Deposit Insurance Corporation (“FDIC”) in accounts that at times may be in excess of the federally insured limit of $250,000 per bank. The Company minimizes this risk by placing its cash deposits with major financial institutions. At December 31, 2025, the uninsured balances amounted to $37,914,117. There is a risk the Company may lose uninsured balances over the FDIC insurance limit. The Company has not experienced any such losses.

Digital Assets

The Company holds digital assets classified as indefinite-lived intangible assets in accordance with Accounting Standard Update (“ASU”) 2023-08, “Accounting for and Disclosure of Crypto Assets.” These crypto assets are measured at fair value on a recurring basis. As part of its scope assessment, the Company evaluated all digital assets held during the years ended December 31, 2025, to determine whether they meet the criteria for recognition under ASU 2023-08. Based on this assessment, the Company concluded that its holdings of Bitcoin, Dogecoin and other Litecoins are in-scope digital assets. These assets are actively traded, held in custodial arrangements with enforceable rights, and used in operations or treasury activities. Further, the Company noted there are no digital assets that are not actively used, lack enforceable ownership rights, or are immaterial in value during the year ended December 31, 2025.

The Company determines the fair value of its in-scope digital assets using the market approach, primarily based on observable market prices in active exchanges. The valuation process considers relevant inputs such as exchange prices of similar digital assets, liquidity, and market depth. The fair value measurements are classified within Level 1 of the fair value hierarchy, as the inputs are quoted prices in active markets for identical assets. As of December 31, 2025, the Company’s digital assets are recorded at a fair value of $4,430,202. During the year ended December 31, 2025, the Company recognized a net unrealized and realized loss of $443,696 in the consolidated statements of operations and related to changes in fair value of digital assets. The Company continuously evaluates the fair value of its digital assets, considering market conditions and other factors that may impact valuation. There were no significant changes in the valuation techniques or inputs used during the reporting period.

Impairment of long-lived assets

Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. There we no impairment recognized during the year ended or as of December 31, 2025.

Prepaid Expenses and Other Assets

As of December 31, 2025, the Company had $468,817 of prepaid expenses which primarily consisted of premiums on insurance policies and prepaid power charges associated with its locations. As of December 31, 2025, the Company had $621,660 of other assets which primarily consisted of hosting deposits for its colocation locations. See Note 7 for further details on the Company’s colocation arrangements.

Equipment

Equipment, which consists of mining and computer equipment, is recorded at cost and depreciated using the straight-line method over the estimated useful lives. Ordinary repair and maintenance costs are included in general and administrative expenses on our statement of operations. However, expenditures for additions or improvements that significantly extend the useful life of the asset are capitalized in the period incurred. At the time assets are sold or disposed of, the cost and accumulated depreciation are removed from their respective accounts and the related gains or losses are reflected in the consolidated statements of operations in gains from sales of property and equipment, net. The estimated useful life for mining equipment and computer equipment is two andthree years, respectfully. The Company evaluates the appropriateness of remaining depreciable lives assigned to computer equipment at the end of each fiscal year.

Capitalized Software Costs

The Company capitalizes certain costs related to the development and enhancement of the Thumzup platform. In accordance with authoritative guidance, including ASC 350-40, we began to capitalize these costs when the technological feasibility was established and preliminary development efforts were successfully completed, management has authorized and committed project funding, and it was probable that the project would be completed and the software would be used as intended. Such costs are amortized when placed in service, on a straight-line basis over the estimated useful life of the related asset, generally estimated to be three years. Costs incurred prior to meeting these criteria together with costs incurred for training and maintenance are expensed as incurred and recorded in product development expenses on our consolidated statements of operations. Costs incurred for enhancements that were expected to result in additional features or functionality that would generate additional revenue are capitalized and expensed over the estimated useful life of the enhancements, generally three years. The Company does not capitalize any testing or maintenance costs. The accounting for these capitalized software costs requires the Company to make significant judgments, assumptions and estimates related to the timing and amount of recognized capitalized software development costs.

The Company evaluates its capitalized software costs for impairment annually, at year-end. As of December 31, 2025, the Company determined no impairment of its capitalized software costs was warranted.

Revenue Recognition

The Company engages in digital asset mining utilizing the Scrypt hashing algorithm which falls outside of ASC 606, Revenue from Contracts with Customers.

The Company engages in the mining of digital assets, primarily utilizing the Scrypt hashing algorithm, such as Litecoin (LTC) and Dogecoin (DOGE). Scrypt is a cryptographic proof-of-work algorithm designed to be computationally and memory intensive, offering an alternative to the SHA-256 algorithm used in Bitcoin mining.

Scrypt mining involves solving complex mathematical problems that require both processing power and memory bandwidth. This algorithm supports the security and integrity of blockchain networks by making it economically impractical to manipulate transaction data. The Company utilizes specialized mining equipment optimized for the Scrypt algorithm to maximize efficiency and output. The Company participates in merged mining of Litecoin and Dogecoin, leveraging the Scrypt algorithm to simultaneously validate blocks on both blockchain networks.

Under Scrypt mining, there is no contract with a customer as the mining rewards area granted by the decentralized blockchain protocol and not a party entering into a contractual agreement. Therefore, Revenue is recognized when control of the mined digital assets is obtained and transferred to a digital wallet, measured at the fair market value of the assets at the time of receipt. Fair value is based on a principal or most advantageous market, using observable market prices from reputable exchanges.

Cost of Revenue

The Company’s cost of revenue consists primarily of direct production costs related to mining operations, including electricity costs, and other relevant costs paid to our hosting facilities in accordance with the colocation agreement.

Sales and Marketing

Sales and marketing expenses primarily include costs related to advertising and marketing programs. Sales and marketing costs are expensed as incurred and totaled $2,804 for year ended December 31, 2025 and are included in general and administrative expenses on the consolidated statement of operations.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires that deferred income taxes be provided for temporary differences between the tax basis of the Company’s assets and liabilities and their financial statement carrying amount. In addition, deferred tax assets are recorded for the future benefit of utilizing net operating losses and research and development tax credit carryforwards. A valuation allowance is provided against deferred tax assets unless it is more likely than not that they will be realized. Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, the Company considers all available evidence, including past operating results, estimates of future taxable income and the feasibility of tax planning strategies.

In the event that the Company changes its determination as to the amount of deferred tax assets that is more likely than not to be realized, the Company will adjust its valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. The Company follows the authoritative guidance regarding uncertain tax positions. This guidance requires that realization of an uncertain income tax position must be more likely than not (i.e., greater than 50% likelihood of receiving a benefit) before it can be recognized in the financial statements. The guidance further prescribes the benefit to be realized assumes a review by tax authorities having all relevant information and applying current conventions.

Segment Reporting

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (the “CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information for purposes of making operating decisions, allocating resources, and evaluating financial performance. While the Company does have revenue from multiple products, no measures of profitability by product are available, so discrete financial information is not available for each such component. As such, the Company has determined that it operates asone operating segment andone reportable segment.

Share-based Compensation

The Company maintains its 2024 Equity Incentive Plan 2025 Equity Incentive Plan and 2025 Omnibus Equity Incentive plan (collectively, the “Equity Plans”), under which, the Company’s employees, officers, directors, and other eligible participants may be and have been awarded various types of share-based compensation, including options to purchase shares of the Company’s common stock, restricted stock units (“RSUs”), and other stock-based awards. Additionally, under the Equity Plans, awards may be and have been granted that are subject to the achievement of one or more performance measures established by the Company’s board of directors or a duly authorized committee thereof.

For options and other stock-based awards, the share-based compensation expense is based on the fair value of the awards on the date of grant, as estimated using the Black-Scholes valuation model. For restricted stock units, the share-based compensation expense is based on the fair value of the Company’s common stock on the date of grant. The fair value of liability-classified awards (e.g., the other stock-based awards and cash-settled restricted stock units) is remeasured at each reporting date.

The Company recognizes share-based compensation expense for service-conditioned awards granted under the Equity Plans on a straight-line basis over the requisite service period (generally, the vesting period for service-conditioned awards under the Equity Plans).

See Note 9, Stock Options, to the financial statements for further information regarding the Equity Plans, related share-based compensation expense, and assumptions used in determining fair value.

Treasury Stock

On February 26, 2025, the Thumzup board of directors approved a share repurchase program authorizing the Company to purchase up to an aggregate of $1 million of common stock. Subject to applicable rules and regulations, the shares may be purchased from time to time in the open market or in privately negotiated transactions. Such purchases will be at times and in amounts as deemed appropriate, based on factors such as market conditions, legal requirements and other business considerations.

On September 23, 2025, the Thumzup board of directors approved a share repurchase program authorizing the Company to purchase up to an aggregate of $10 million of common stock. Subject to applicable rules and regulations, the shares may be purchased from time to time in the open market. Such purchases will be at times and in amounts as deemed appropriate, based on factors such as market conditions, cash reserves, cash flows and other business considerations.

The Company accounts for treasury stock at cost. During the period ended December 31, 2025, the Company repurchased 59,191 shares of common stock for approximately $274,231 under its share repurchase program.

As of December 31, 2025, the Company had $274,231 in treasury stock.

Preferred Stock

The Company is authorized to issue 25,000,000 shares of preferred stock, par value $0.001 per share. At December 31, 2025,174,630 shares were issued and outstanding.

Common Stock

The Company is authorized to issue 250,000,000 shares of common stock, par value $0.001 per share. At December 31, 2025,30,375,530 shares were issued and outstanding.

Member Units

During 2025, the Company issued 11,215,625 Class A -1 units for cash proceeds of $17,945,000.

During 2025, the Company issued 5,794,556 Class A – 2 units for cash proceeds of $10,422,402 and incurred issuance costs, including escrow fees, totaling approximately $1,167,000.

All member units were eliminated upon the consummation of the transaction between Dogehash and Thumzup.

Net Loss Per Common Share

The Company computes loss per share under ASC subtopic 260-10, Earnings Per Share. Net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods, as applicable.

The computation of basic and diluted loss per share, for the years ended December 31, 2025, excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of the common stock during the period.

Potentially dilutive securities excluded from the computation of basic and diluted net loss per share are as follows:

Recent Accounting Pronouncements Adopted

Crypto Assets

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-08,Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires in-scope crypto assets (including the Company’s bitcoin and dogecoin holdings) to be measured at fair value in the statement of financial position, 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. The Company adopted this guidance effective January 1, 2025, on a prospective basis.

The Company expects the adoption of ASU 2023-08 will have a material impact on its consolidated balance sheets, consolidated statements of operations, statements of cash flows and disclosures. The Company will initially record its bitcoin and dogecoin purchases at cost, upon adopting ASU 2023-08, any subsequent increases or decreases in fair value will be recognized as incurred in the Company’s consolidated statements of operations, and the fair value of the Company’s bitcoin and dogecoin will be reflected within the Company’s consolidated balance sheets each reporting period-end. Additionally, the Company will provide quantitative and qualitative disclosures to meet the new requirements under ASU 2023-08, including a roll-forward of its bitcoin and dogecoin holdings during the reporting period and period-end cost basis, fair value, number of units held, and restrictions.

Segment Reporting

In November 2023, the FASB issued Accounting Standards Update No. 2023-07,Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires enhanced disclosures surrounding reportable segments, particularly (i) significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included in the reported measure(s) of a segment’s profit and loss and (ii) other segment items that reconcile segment revenue and significant expenses to the reported measure(s) of a segment’s profit and loss, both on an annual and interim basis. Companies are also required to provide all annual disclosures currently required under Topic 280 in interim periods, in addition to disclosing the title and position of the CODM and how the CODM uses the reported measure(s) of segment profit and loss in assessing segment performance and allocating resources. The Company adopted ASU 2023-07 for interim periods beginning January 1, 2025 and it did not have a material impact on the Company’s financial reporting or disclosures.

Income Taxes

In December 2023, the FASB issued Accounting Standards Update No. 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures(“ASU 2023-09”). ASU 2023-09 requires enhanced disclosures surrounding income taxes, particularly related to rate reconciliation and income taxes paid information. In particular, on an annual basis, companies will be required to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Companies will also be required to disclose, on an annual basis, the amount of income taxes paid, disaggregated by federal, state, and foreign taxes, and also disaggregated by individual jurisdictions above a quantitative threshold. The standard is effective for the Company for annual periods beginning January 1, 2025, on a prospective basis, with retrospective application permitted for all prior periods presented. The Company adopted ASU 2023-09 and it did not have a material impact on the Company’s financial reporting or disclosures.

Recent Accounting Pronouncements Not Yet Adopted

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued Accounting Standards Update No. 2024-03,Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)(“ASU 2024-03”). ASU 2024-03 requires specified information about certain costs and expenses be disclosed in the notes to the financial statements, including the expense on the face of the income statement in which they are disclosed, in addition to a qualitative description of remaining amounts not separately disaggregated. Entities will also be required to disclose their definition of “selling expenses” and the total amount in each annual period. The standard is effective for the Company for annual periods beginning January 1, 2027, and for interim periods beginning January 1, 2028, with updates applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its disclosures.

There are other various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

Note 4 –Digital Assets

The following table presents the Company’s significant digital assets holdings as of December 31, 2025:

The following table summarizes the Company’s digital asset activity for the years indicated:

The following table presents a roll-forward of Bitcoin (“BTC”) for the year ended December 31, 2025, based on the fair value model under ASU 2023-08:

The following table presents a roll-forward of Dogecoin for the year ended December 31, 2025, based on the fair value model under ASU 2023-08:

Note 5 –Deposits on Equipment

The deposits for equipment represented advance payments for purchases of miner, high performance computing equipment and other equipment used in digital asset mining activity at the Colocation site. The Company initially recognizes deposits for equipment when cash is advanced to our suppliers. Subsequently, the Company derecognizes and reclassifies deposits for mining equipment to mining equipment when control is transferred to and obtained by the Company. At December 31, 2025, the Company had deposits and advance payments of approximately $3,600,100 for mining equipment.

Note 6 –Equipment

As of December 31, 2025, equipment, net consisted of the following:

Depreciation expense for the year ended December 31, 2025 totaled $7,503,083 and is included in operating expenses on the consolidated statement of operations.

Note 7 –Capitalized Software

As of December 31, 2025, capitalized software consisted of the following:

Amortization expense for the year ended December 31, 2025 totaled $303 and is included in operating expenses on the consolidated statement of operations.

Note 8 –Contingencies

Legal

From time to time, the Company may be involved in various litigation matters and disputes arising in the ordinary course of business. The Company reviews its lawsuits, regulatory investigations and other legal proceedings on an ongoing basis. The Company records liabilities for contingencies, including legal costs, when it is probable that a liability has been incurred before the balance sheet date and the amount can be reasonably estimated.

Various legislative and executive bodies in the United States and in other countries may, in the future, adopt laws, regulations or guidance, or take other actions that could severely impact the permissibility of digital assets generally and the technology behind them or the means of transacting in or transferring them. It is difficult to predict how or whether regulatory agencies may apply existing or new regulation with respect to this technology and its applications.

Colocation Agreement

The Company utilizes third-party data center facilities to support its digital asset mining operations. Specifically, the Company has entered into a colocation and hosting services agreement with an independent data center provider for the ongoing provision of rack space, electrical power capacity, network connectivity, and cooling infrastructure required to operate the Company’s mining hardware. These arrangements do not convey to the Company the right to control the use of any identified physical asset within the data center, and the service provider retains substantive substitution rights of the assets at all times. Accordingly, consistent with the guidance in ASC 842, the Company has concluded that the arrangement represents a service contract and does not contain a lease, as the Company does not obtain control of an identified asset during the contract term.

The colocation and hosting contracts generally include variable charges based on power consumption and other usage-based elements. Under ASC 842, the Company recognizes expense for such service arrangements as incurred, and no right-of-use (“ROU”) asset or lease liability is recorded on the consolidated balance sheet because the contract is outside the scope of lease accounting.

For the year ended December 31, 2025, the Company incurred $3,353,355 in colocation and hosting-related service expenses, which are included within cost of revenues in the accompanying consolidated statements of operations.

Note 9 –Stock Options

Thumzup’s stockholders approved Thumzup’s 2024 Equity Incentive Plan in May 2024, amending it in July 2024 to increase the number of shares reserved for issuance thereunder to 2,000,000, and approved Thumzup’s 2025 Equity Incentive Plan in April 2025 with an additional 2,000,000 shares reserved for issuance thereunder. In December 2025, the Company’s stockholders approved the 2025 Omnibus Equity Incentive Plan. The number of shares reserved for issuance under the plan are 7,000,000. The equity plans approved by the stockholder are collectively referred to as the “Plans”.

The Plans provide for the grant of incentive stock options to Thumzup’s employees, including officers, consultants and directors, and its subsidiaries’ employees, including officers, consultants and directors and for the grant of stock options, stock bonus awards, restricted stock awards, performance stock awards and other forms of stock compensation. The Plans also provide that the grant of performance stock awards may be paid out in cash as determined by the committee administering the Plans.

Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option pricing model with a volatility figure derived from historical data. The Company accounts for the expected life of options based on the contractual life of the options.

As of December 31, 2025, the Company had 5,187,575 shares of common stock available for future issuance under the Plans.

A summary of the stock option activity for the year ended December 31, 2025, is as follows:

A summary of the stock options outstanding at December 31, 2025, is as follows:

The aggregate intrinsic value of outstanding stock options was $0, based on options with an exercise price less than the Company’s stock price of $5.00 as of December 31, 2025, which would have been received by the option holders had those option holders exercised their options as of that date.

The fair value of all options that vested during the year ended December 31, 2025 was $1,560,492. Unrecognized compensation expense was $1,455,508 as of December 31, 2025.

On December 22, 2025,1,612,425 RSUs were granted to directors of the Company. The RSUs will vest 33% annually starting June 1, 2026.

The Company determined the fair value of all the RSUs issued during the year ended December 31, 2025 to be $22,411,593 based on the price of the most recent sale of common stock prior to each grant date for those RSU’s granted prior to the Listing Date, or the quoted market value on the date of issuance of the RSU’s granted after the Listing Date. As of December 31, 2025, there was unamortized stock-based compensation of approximately $5,400,282 which the Company expects to recognize over approximately 2.5 years.

The activity related to RSUs is summarized as follows:

Note 10 –Warrants

On July 3, 2025, Thumzup issued 65,000 warrants with a $6.00 exercise price with a fair value of $559,793 to its financial advisor. The Company estimated the fair value of the warrants using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 147.16% (3) risk-free interest rate of 3.94%, and (4) expected life of 5 years.

On July 16, 2025, Thumzup issued 10,688 warrants with a $6.25 exercise price with a fair value of $62,260 to its financial advisor for the exercise of its over-allotment option. The Company estimated the fair value of the warrants as of the date of the financing, October 28, 2024, using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 154.62%, (3) risk-free interest rate of 4.11%, and (4) expected life of 5 years.

On August 12, 2025, Thumzup issued 350,000 warrants with a $10.00 exercise price with a fair value of $3,240,946 to its financial advisor. The Company estimated the fair value of the warrants using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 145.61% (3) risk-free interest rate of 3.83%, and (4) expected life of 5 years.

A summary of the warrant activity for the year ended December 31, 2025, is as follows:

A summary of the warrants outstanding at December 31, 2025, is as follows:

The aggregate intrinsic value of outstanding stock warrants was $0 based on warrants with an exercise price less than the Company’s stock price of $5.00 as of December 31, 2025, which would have been received by the warrant holders had those holders exercised the warrants as of that date.

Note 11-Secured Promissory Notes

In February 2025, the Company entered into a Secured Promissory note for a principal sum of $2,150,000, bearing interest of 10% and matured on August 21, 2025 As of December 31, 2025, the note was repaid in full.

In March 2025, the Company entered into a Secured Promissory note for a principal sum of $2,000,000, bearing interest of 10% and matured on April 26, 2025 As of December 31, 2025, the note was repaid in full.

In June 2025, the Company entered into a Secured Promissory note with a Fund for a principal sum of $1,900,000 less an original issue discount amount of $150,000. The original issue discount is amortized to maturity date by utilizing the effective interest method. The note originally matured December 24, 2025, however, if the Company closes on a financing with an institutional lender for an amount of net loan proceeds in excess of the total principal amount, ordinary interest, and late interest then outstanding; or a sale of all or substantially all the assets of the Company, then the Maturity Date shall accelerate to the date of such closing. Based on completion on the transaction as of December 15, 2025, the note became due as was paid in full.

In September 2025, the Company entered into a Secured Promissory note for a principal sum of $2,500,000. The note originally matured on September 24, 2026, however, if the Company consummates the planned merger through the purchase agreement between the Company and Thumzup Media Corporation the Maturity Date shall accelerate to the date of such closing. Based on completion on the transaction as of December 15, 2025, the note became due as was paid in full

Note 12-Segment Information

The Company applies the provisions of ASC 280, Segment Reporting, which requires public entities to disclose information about operating segments based on the internal reports that are regularly reviewed by the Company’s Chief Operating Decision Maker (“CODM”) for purposes of allocating resources and assessing performance.

The CODM, who is the Company’s Chief Executive Officer, evaluates the business and makes operating decisions using a consolidated set of financial information. Management has determined that the Company operates asone operating segment, as the Company’s operations are organized and managed as a single business component with:

One set of economic activities—the development, deployment, and operation of digital asset mining infrastructure; A single management team making decisions about resource allocation across all activities; and revenue focus on the production, validation, and sale of digital assets; and a centralized cost structure, including equipment procurement, colocation arrangements, power usage, maintenance, and operational oversight.

Based on this analysis, management has concluded that the Company has one reportable segment, referred to as the “Digital Asset Mining Business.” This segment is primarily engaged in mining Dogecoin and other Litecoin-network digital assets, utilizing specialized hardware and third-party colocation facilities.

Because the Company has only one reportable segment, separate segment information (such as disaggregated revenues, profit or loss measures, or segment assets) is not presented, as such information is identical to the information presented in the Company’s consolidated financial statements. Because substantially all operations and assets are located in a single geographic area, no additional geographic disaggregation is presented.

**Note 13 –Income Taxes **

Effective July 25, 2025, the Company converted from a limited liability company (LLC) to a C Corporation as a result of the asset purchase agreement between the Company and US Data and Energy, LLC . Prior to the conversion, the Company was treated as a pass-through entity for federal and state income tax purposes, and accordingly, no provision for income taxes was recorded at the entity level for the period from January 1, 2025 through June 30, 2025. Income during this period was taxable directly to the members.

Following the conversion, the Company became subject to federal and applicable state corporate income taxes. As a result, the Company has recorded a provision for income taxes for the period from June 30, 2025 through December 31., 2025 in accordance with ASC 740, Income Taxes. The provision includes both current and deferred income tax expense.

Deferred tax assets and liabilities were established as of the conversion date based on temporary differences between the book and tax bases of assets and liabilities. The Company also evaluated the realizability of its deferred tax assets and recorded a valuation allowance where it was determined that it is more likely than not that certain deferred tax assets will not be realized.

As of December 31, 2025, the Company has approximately $737,000 in gross deferred tax assets resulting from net operating loss carry-forwards of $3,509,000, available to offset future taxable income through 2041 subject to the change in ownership provisions under IRC 382. A valuation allowance has been recorded to fully offset these deferred tax assets because the Company’s management believes future realization of the related tax benefits is uncertain.

Note 14 –Related Party Transactions

Westside Strategic Partners, LLC

Westside Strategic Partners, LLC (“Westside”) is owned and controlled by Robert Haag, a former member of the Company’s Board of Directors who resigned effective October 4, 2025.

During the year ended December 31, 2025, Westside received 2,580 shares of Series A Preferred Stock, respectively, as dividends due under the Series A Preferred Certificate of Designation. Of the 2,580 shares earned during the year ended December 31, 2025, approximately 664 shares attributable to the December 15, 2025 quarterly dividend had been declared and were due and payable as of December 31, 2025, but were not issued until January 2026 due to administrative processing delays.

During the year ended December 31, 2025, Westside received 337 shares of common stock as dividends due under the Series B Preferred Certificate of Designation.

IRTH Communications, LLC

IRTH Communications, LLC (“IRTH”) is owned and controlled by Robert Haag. On November 20, 2025, the Company entered into a Services Agreement with IRTH pursuant to which IRTH provides investor relations, public relations, financial communications and strategic consulting services. The agreement had an initial term of three months with automatic renewal and provided for a non-refundable monthly fee of $30,000, payable quarterly in advance.

During the year ended December 31, 2025, the Company paid IRTH an aggregate of $105,000, consisting of $90,000 under the quarterly fixed fee and $15,000 for an investor outreach program.

Joanna Massey

Joanna Massey served as a member of the Company’s Board of Directors until her resignation effective December 15, 2025. On March 20, 2024, Ms. Massey acquired 800 shares of the Company’s Series B Preferred Stock at $50 per share for a subscription of $40,000. During the year ended December 31, 2025, Ms. Massey received 127 shares of Series A Preferred Stock, as dividends due under the Series A Preferred Certificate of Designation. Of the 127 shares earned during the year ended December 31, 2025, approximately 33 shares attributable to the December 15, 2025 quarterly dividend had been declared but were not issued until January 2026. During the years ended December 31, 2025, Ms. Massey received 270 shares of common stock, as dividends due under the Series B Preferred Certificate of Designation.

Isaac Dietrich

Isaac Dietrich served as the Company’s Chief Financial Officer and as a member of the Board of Directors until his resignation from both positions effective December 15, 2025, in connection with the Merger. During the years ended December 31, 2025, Mr. Dietrich received 63 shares of Series A Preferred Stock, respectively, as dividends due under the Series A Preferred Certificate of Designation. Of the 63 shares earned during the year ended December 31, 2025, approximately 16 shares attributable to the December 15, 2025 quarterly dividend had been declared but were not issued until January 2026.

Note 15 –Subsequent Events

Issuance of December 15, 2025 Series A Preferred Dividends

In January 2026, the Company issued an aggregate of approximately 3,079 shares of Series A Preferred Stock in satisfaction of the December 15, 2025 quarterly dividend that had been declared but had not yet been issued due to administrative processing delays. The shares were issued to holders of record as of December 15, 2025, including approximately 664 shares to Westside Strategic Partners, LLC,33 shares to Joanna Massey, and 16 shares to Isaac Dietrich, each of whom is a related party (see Note 14).

Amendment to IRTH Communications Services Agreement

On February 20, 2026, the Company and IRTH Communications, LLC (“IRTH”) entered into Amendment No. 1 to the Services Agreement dated November 20, 2025, pursuant to which: (i) the Company, as successor-in-interest to Thumzup Media Corporation, formally assumed all rights and obligations under the original agreement; (ii) the term was extended for a fixed period of six months expiring August 20, 2026, with no automatic renewal; (iii) the monthly cash fee was reduced from $30,000 to $15,000, payable monthly in advance; and (iv) the Company granted IRTH 60,000 fully vested stock options with an exercise price of $2.00 per share under the Company’s 2025 Omnibus Equity Incentive Plan. The equity grant was ratified by the Compensation Committee on February 20, 2026. IRTH is owned and controlled by Robert Haag, a former director of the Company (see Note 14).

March 16, 2026 Series A Preferred Dividends

On March 16, 2026, the Company declared and issued an aggregate of approximately 3,139 shares of Series A Preferred Stock as quarterly dividends due under the Series A Preferred Certificate of Designation, including approximately 677 shares to Westside Strategic Partners, LLC,33 shares to Joanna Massey, and 17 shares to Isaac Dietrich.

Public Offering

On March 26, 2026, we entered into a placement agency with Dominari Securities LLC, pursuant to which we sold directly to investors, in a best efforts offering, an aggregate of(i) 4,510,000 shares of common stock at $2.00 per share and (ii) pre-funded warrants to purchase up to an aggregate of 5,575,000 shares of common stock at $1.99 per pre-funded warrant. The securities were offered and sold by us pursuant to our effective registration statement on Form S-3 (File No. 333-286951). The closing of the offering occurred on March 31, 2026 and the gross proceeds from the offering were approximately $20.2 million, before deducting placement agent fees and expenses and estimated offering expenses payable by us. We intend to use the net proceeds received from the offering for working capital and general corporate purposes.