Nakamoto Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 (UNAUDITED)

NOTE 1—ORGANIZATION AND NATURE OF OPERATIONS

Nakamoto Inc., formerly known as KindlyMD, Inc., is, with its subsidiaries, a Bitcoin operating company with media, asset management, and advisory capabilities, together with a bitcoin treasury (“Nakamoto,” “the Company,” “we,” “our,” or “us”). Through its ecosystem-wide presence, Nakamoto seeks to provide investors with exposure to Bitcoin’s global growth.

Nakamoto was formed in 2019 as a healthcare company and began its transformation into a Bitcoin operating company in August of 2025, with the merger between Nakamoto Holdings, Inc. and Kindly MD, Inc. On December 27, 2025, the Company converted from a Utah corporation to a Delaware corporation, and on January 21, 2026, the Company changed its name to Nakamoto Inc.

During the three months ended March 31, 2026, the Company completed the acquisitions of both (i) BTC Inc. (“BTC Inc”), a Delaware corporation founded in 2012 and headquartered in Nashville, Tennessee, which operates a Bitcoin-focused media and events company that publishes Bitcoin Magazine and produces the Bitcoin Conference, and (ii) UTXO Management GP, LLC (“UTXO”), a Tennessee limited liability company formed in 2019, which serves as the general partner and investment manager of multiple digital asset focused funds. See Note 3 - Business Combinations for a full description of these transactions and the related accounting.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies are described in Note 2 to the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The following policies are either new to the Company as a result of the BTC Inc and UTXO acquisitions completed during the three months ended March 31, 2026, or have been updated to reflect changes in the current period.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed financial statements of Nakamoto have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with Article 8 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 consolidated financial statements included in the Form 10-K, as filed with the SEC on March 30, 2026 (“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 months ended March 31, 2026, are not necessarily indicative of the results that may be expected for the entire year.

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 on the results of operations and cash flows in all periods presented.

Derivative Contracts

We write covered calls and call spreads to convert the implied volatility embedded in Bitcoin options markets into recurring premium income. We also purchase protective puts and put spreads to reduce our mark-to-market exposure to adverse Bitcoin price movements over defined time horizons. These freestanding option contracts meet the definition of derivative instruments under ASC 815-10, as each contract has an underlying (the price of Bitcoin) and notional amount, an initial net investment smaller than the full notional exposure, and a net settlement mechanism. In accordance with ASC 815-10, purchased options are recognized as derivative assets and written options are recognized as derivative liabilities on the unaudited condensed consolidated balance sheets at trade date. All Bitcoin option contracts are measured initially and subsequently at fair value using Level 1 inputs for exchange-traded contracts.

Consistent with our Bitcoin focused business strategy, in which the active management of our Bitcoin treasury through option contracts constitutes an ongoing component of our operations, realized and unrealized gains and losses on Bitcoin derivative instruments are presented net within the unaudited condensed consolidated statements of comprehensive loss under derivative revenue.

Contract Liabilities

Contract liabilities represent our obligation to transfer goods or services to customers from whom we have received consideration.

Segments

We identify reporting segments based on how the chief operating decision maker (“CODM”) regularly reviews financial information to allocate resources and assess performance. Our CODM, who is our Chief Executive Officer, reviews financial information presented on a consolidated basis accompanied by disaggregated information about revenues and operating income by our four reportable segments: Media & Information Services, Asset Management, Bitcoin Operations and Healthcare Operations. Corporate overhead is reported separately as Other. See Note 12**—**Segment Information for additional information.

Revenue Recognition

We recognize revenue in accordance with ASC 606,Revenue from Contracts with Customers. Revenue is recognized upon transfer of control of promised goods or services to customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. To achieve this core principle, we apply 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. We apply ASC 606 to the following revenue streams: media, advisory, asset management, and healthcare.

Media Revenue

Media revenue consists of revenue generated from events, digital, and print revenue streams.

Events Revenue: We host conferences and industry gatherings and generate revenue through ticket sales, sponsorships, exhibitor fees, and ancillary services related to our produced events. Revenue from our produced events is recognized when the event occurs, and performance obligations are satisfied. Amounts invoiced or collected in advance of the event are recorded as contract liabilities until the event is completed.

Event sponsorship contracts generally include a bundle of highly interrelated services, such as branding, marketing exposure, booth access, and attendee benefits. We have determined that these promised goods and services are not distinct within the context of the contract, as they are not separately identifiable and do not provide standalone value to the customer. Accordingly, each event sponsorship arrangement is accounted for as a single performance obligation. The transaction price is typically fixed and stated in the contract, and because the contracts include a single performance obligation, no allocation of consideration to individual activities is performed.

In addition to our produced events, we participate in certain international conferences through cooperation or joint venture arrangements with local co-organizers. These arrangements are evaluated under ASC 808,Collaborative Arrangements, as we and our partners are active participants that share risks and rewards. To the extent we provide services to these arrangements that are within the scope of ASC 606, such services are evaluated separately, including an assessment of whether we act as a principal or agent. For these international events, we generally do not control the underlying event operations or locally provided services prior to transfer to customers and therefore act as an agent. Accordingly, revenue is recognized on a net basis for services we provide, such as brand licensing, programming, and agreed-upon sales and marketing services. Revenue is recognized as the related services are performed or, for event-based services, at the time the event occurs, consistent with ASC 606-10-25.

Digital Revenue: We generate revenue through advertising, content syndication, and other services delivered through our online platforms. Digital revenue contracts may include multiple promised services, such as online advertising, newsletter placements, or other sponsored content. Revenue is recognized over the period in which the related digital content is delivered, or as advertising impressions occur, reflecting when the customer receives the benefit. Specifically, website and sponsored content revenue is recognized when the content is published or delivered, and advertising revenue is recognized over the period in which the public outreach is distributed and impressions are delivered. Amounts invoiced or collected in advance of delivery are recorded as contract liabilities and recognized as revenue as the related advertising services are performed.

Print Revenue: We derive print revenue from the sale of physical publications and print advertising. Revenue from the sale of physical publications is recognized upon delivery, when control of the publication transfers to the customer. Print advertising revenue is recognized over the advertising period. Amounts billed or collected in advance of publication or delivery are recorded as contract liabilities and recognized as revenue when the applicable publication is distributed.

Advisory Revenue

We generate advisory revenue through corporate subscription services, consulting engagements, and symposium sponsorships. Corporate subscription contracts provide customers with access to curated Bitcoin research, policy intelligence, and executive education content over a defined contract term, typically ranging from twelve to twenty-four months. These contracts represent a single stand-ready performance obligation satisfied ratably over the subscription period, and revenue is recognized on a straight-line basis over the contract terms in accordance with ASC 606-10-25. Amounts invoiced or collected in advance of the subscription period are recorded as contract liabilities and recognized as revenue as the performance obligation is satisfied.

Consulting revenue is derived from bespoke advisory engagements with corporate clients pursuing Bitcoin treasury and strategy initiatives. Each consulting engagement is evaluated to identify the distinct performance obligations within the contract. Where an engagement comprises a single deliverable or a series of related services that are substantially the same and have the same pattern of transfer, the arrangement is treated as a single performance obligation recognized at the point in time the service is delivered or, where services are rendered over a defined period, ratably over that period. Variable consideration, if any, is estimated using the most likely amount method and included in the transaction price to the extent it is probable that a significant reversal will not occur.

Symposium sponsorship revenue relates to exclusive, invitation-only leadership forums hosted by us, generally for the benefit of the Bitcoin for Corporations members. Symposium sponsorship contracts typically include a single performance obligation representing the sponsorship package delivered in connection with the event. Revenue is recognized at the point in time the symposium occurs, consistent with the recognition pattern applied to our other event-based revenue streams. Amounts received in advance of the symposium date are recorded as contract liabilities until the performance obligation is satisfied.

Asset Management Revenue

We provide continuous investment management services to both 210k Capital, LP (“210k Capital”) and UTXO Bitcoin Ecosystem Master Fund 1 LP (“Bitcoin Ecosystem”) (together, the “Funds”), which include portfolio management, risk monitoring, and consulting. These services represent a single performance obligation that is satisfied over time, consisting of a series of distinct services that are substantially the same and follow the same pattern of transfer. Although we receive two forms of compensation (i.e., management fees and performance fees, as described in more detail below), both relate to the same underlying service of managing the funds and are considered part of the same performance obligation.

Management Fee Income: We earn a management fee for acting as the investment manager for the Funds. The performance obligation is the management of the Funds. While the individual activities that comprise the performance obligation can vary day to day, the nature of the overall performance obligation to provide management services is the same and considered by us to be a series of services that have the same pattern of transfer to the customer and the same method to measure progress toward satisfaction of the performance obligation. The series of distinct services represents a single performance obligation that is satisfied over time. We recognize revenue ratably as the Funds receive and consume the benefits as they are provided by us.

We receive a management fee for our services of between 1.5% and 2.0% annually of the Net Asset Value (“NAV”) of a limited partner’s capital account for 210k Capital and receive a management fee for our services of generally 2.0% annually of the capital contributions of a limited partner’s capital account for Bitcoin Ecosystem.

Performance Fee Income: We recognize performance fee income based on each of the Funds investment performance. The performance-based income arises from our role as investment manager and General Partner of each of the Funds. The performance obligation is satisfied over time as we achieve specific benchmarks and thresholds through each of the Funds as detailed below.

For 210k Capital, performance fees are recognized only when the NAV of a limited partner’s capital account exceeds the highest NAV previously allocated to that account during any of the immediately preceding eight fiscal periods (the “High Water Mark”). If a limited partner experiences a net decrease in the NAV of its respective capital account as of the end of any fiscal year, the amount of the decrease after deduction of management fees, will be carried forward (the “Loss Carryforward”). This Loss Carryforward must be recovered in future periods before a performance allocation is earned.

Subject to the resolution of any Loss Carryforward and the application of the High Water Mark, we are entitled to receive from 210k Capital (i) 20% of the increase in NAV of any Class A limited partner’s capital account and (ii) 15% of the increase in NAV of any Class B limited partner’s capital account, calculated on an annual basis.

Performance fee income from 210k Capital is classified as variable consideration due to its dependency on the limited partner’s NAV. Given the constraint of the High Water Mark and any Loss Carryforward, variable consideration is not recognized until uncertainty is resolved. Once the thresholds are met, we recognize performance fee income.

For Bitcoin Ecosystem, performance fee income (“Carried Interest”) is determined under a distribution waterfall whereby: (i) limited partners first receive distributions equal to their capital contributions; (ii) thereafter, remaining returns are allocated 80% to limited partners and 20% to us until a 3.0x return threshold is reached; (iii) then 75%/25% until a 5.0x return threshold; and (iv) thereafter 70%/30% between limited partners and us.

Carried interest is earned based on Bitcoin Ecosystem distribution waterfall and is contingent upon the achievement of specified return thresholds. We treat carried interest as variable consideration and recognize it only to the extent it is probable that a significant reversal will not occur, with such assessment performed at each reporting period.

Revenue Outside the Scope of ASC 606 – Derivative Revenue

Income from put and call option contracts on Bitcoin that meet the definition of a derivative instrument is outside the scope of ASC 606 and is accounted for under ASC 815,Derivatives and Hedging. The income is presented as revenue in our condensed consolidated statements of comprehensive loss as we believe it would satisfy the definition (of that term) as included in the ASC master glossary. These derivative contracts are measured at fair value, with realized and unrealized changes in fair value recognized in earnings as they occur. See Note 8**—**Derivative Instruments for additional information regarding our derivative instruments.

Variable Interest Entities

We hold a variable interest in both 210k Capital and Bitcoin Ecosystem funds, which are considered variable interest entities (“VIE”). A company consolidates entities that meet the definition of a VIE if they are the primary beneficiary. The primary beneficiary is the party who has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and who has the right to receive benefits from that entity that could potentially be significant to the entity. We are not considered the primary beneficiary for either 210k Capital or Bitcoin Ecosystem funds and neither is consolidated by us. We hold investments in these non-consolidated VIEs totaling $0.2 million and have receivables totaling $0.9 million. Total assets held by the non-consolidated VIEs are approximately $116.5 million.

Recently Issued Accounting Pronouncements Not Yet Adopted

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. We are currently evaluating the impact this standard will have on our financial statements.

We currently believe there are no other issued and not yet effective accounting standards that are materially relevant to our interim unaudited condensed financial statements.

NOTE 3—BUSINESS COMBINATIONS

Acquisition of BTC Inc

On February 16, 2026, we entered into an Agreement and Plan of Merger (the “BTC Merger Agreement”) with BTC Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of ours (“BTC Merger Sub”), BTC Inc, and the stockholder representative party thereto.

On February 20, 2026 (the “Closing Date”), we completed the transaction contemplated by the BTC Merger Agreement (the “Closing”), pursuant to which BTC Merger Sub merged with and into BTC Inc, with BTC Inc surviving the merger as a wholly-owned subsidiary of ours (the “BTC Merger”). In connection with the Closing, we acquired all of the issued and outstanding securities of BTC Inc.

Concurrently with the BTC Merger, on February 20, 2026, we also completed the acquisition of UTXO (the “UTXO Acquisition”) through the exercise of a call option on UTXO equity interests that was held by BTC Inc and acquired as part of the BTC Merger. See below for further information regarding the UTXO Acquisition.

Upon consummation of the BTC Merger on the terms and conditions set forth in the BTC Merger Agreement, the holders of BTC Inc common and preferred stock received the right to receive 259,886,237 shares of our common stock (“Common Stock”), par value $0.001 per share (“BTC Merger Shares”) and we reserved 78,427,012 shares of Common Stock for issuance in connection with fully-vested BTC Inc stock options assumed by us (“BTC Stock Options” together with the BTC Merger Shares, the “BTC Consideration”).

Pursuant to the BTC Merger Agreement,24,835,418 shares of our Common Stock were withheld from the BTC Consideration and will be available to offset any post-closing adjustments to the BTC Consideration and to support indemnification obligations (the “BTC Holdback Shares”). Certain stockholders of BTC Inc will receive their pro rata portions of the BTC Holdback Shares subject to the conditions in accordance with the BTC Merger Agreement. All of the remaining 235,050,819 shares of our Common Stock to be issued are dependent upon us receiving a letter of transmittal from previous BTC Inc stockholders (“Letter of Transmittal Shares”). As of March 31, 2026, we have received letters of transmittal representing 218,372,167 shares of Common Stock and have issued shares of Common Stock to those former BTC Inc shareholders. As of March 31, 2026,16,678,652 Letter of Transmittal Shares remain subject to receipt and subsequent issuance of Common Stock.

Accounting for the BTC Merger

Prior to the Closing Date, we held a call option on the equity interests of BTC Inc, which was accounted for as a derivative instrument measured at fair value with changes in fair value recognized in earnings. On the Closing Date, the call option was remeasured to its acquisition date fair value and applied as consideration in the BTC Merger in accordance with ASC 805.

The components of consideration used to measure goodwill are as follows (in thousands):

Previously Held Call Option

Prior to the Closing Date, we held a call option on the equity interests of BTC Inc, which was accounted for as a derivative instrument in accordance with ASC 815,Derivatives and Hedging, and measured at fair value with changes in fair value recognized in change in fair value of call option – related party in the unaudited condensed consolidated statements of comprehensive loss. On December 31, 2025, the fair value of the call option was $199.1 million. During the period from January 1, 2026, through the Closing Date, we recognized a loss of $107.7 million in change in fair value of the call option, reducing the fair value to $91.3 million immediately prior to the Closing Date.

On the Closing Date, the call option was remeasured to its acquisition date fair value and applied as consideration in the BTC Merger and, concurrently through the acquisition of BTC Inc’s call option on UTXO, the UTXO Acquisition. The $91.3 million acquisition date fair value of the call option has been allocated between the two transactions based on the relative fair value of the underlying BTC Inc and UTXO equity interests. Of the total, $45.1 million has been included in the consideration used to measure goodwill in the BTC Merger and $46.2 million has been allocated to the UTXO Acquisition.

The acquisition date fair value of the call option was measured based on the intrinsic value of the option at exercise. The acquisition date fair value of BTC’s equity interests of $128.6 million and the acquisition date fair value of UTXO’s interest of $52.8 million were determined by an independent third-party valuation specialist. As the call option was exercised on the Closing Date with no remaining time value, the intrinsic value approach is consistent with the fair value of the call option under ASC 820. The underlying equity valuations reflect significant unobservable (Level 3) inputs as defined in ASC 820.

Preliminary Purchase Price Allocation – BTC Inc

Our preliminary allocation of the acquisition price is based on our preliminary estimate of fair value for each of the acquired assets and liabilities. Such amounts are subject to revision as additional information about fair values of assets and liabilities becomes available. The following table summarizes the preliminary allocation of the fair value of consideration to the assets acquired and liabilities assumed as of the Closing Date for (in thousands):

The preliminary fair values and weighted-average useful lives of identifiable intangible assets acquired are as follows (in thousands):

The fair value measurements of intangible assets reflect significant unobservable (Level 3) inputs as defined in ASC 820. No residual value has been assigned to these intangible assets and they do not contain material renewal or extension provisions.

We recognized preliminary Goodwill of $70.8 million as a result of the BTC Merger. None of the goodwill recognized is expected to be deductible for income tax purposes. All of the goodwill has been assigned to the Media & Information Services reportable unit.

Revenue and Earnings of BTC Inc Since the Closing Date

The amounts of revenue and net loss of BTC Inc included in our unaudited condensed consolidated statement of comprehensive loss from the Closing Date through March 31, 2026, were as follows (in thousands):

Acquisition of UTXO Management GP, LLC

On February 20, 2026, concurrent with the Closing of the BTC Merger (see above), we completed the UTXO Acquisition. In connection with the Closing, we issued an aggregate of 26,481,860 shares of Common Stock (the “UTXO Consideration”), of which 2,648,186 shares were withheld from the UTXO Consideration to support indemnification obligations (the “UTXO Holdback Shares”). Certain equity holders of UTXO will receive their pro rata portion of the UTXO Holdback Shares subject to the conditions in and in accordance with the UTXO Merger Agreement.

Accounting for the UTXO Acquisition

Prior to the Closing Date, we held a call option on the equity interests of BTC Inc, and BTC Inc held a call option on the equity interests of UTXO. Concurrent with the Closing of the BTC Merger, we (through BTC Inc) exercised BTC Inc’s call option on UTXO to complete the UTXO Acquisition. The portion of the acquisition date fair value of our previously held call option on BTC Inc equity interests allocated to the UTXO Acquisition, together with the UTXO Consideration, constitutes the consideration used to measure goodwill in the UTXO Acquisition.

The components of consideration used to measure goodwill are as follows (in thousands):

Preliminary Purchase Price Allocation - UTXO

Our preliminary allocation of the acquisition price is based on our preliminary estimate of fair value for each of the acquired assets and liabilities. Such amounts are subject to revision as additional information about fair values of assets and liabilities becomes available. The following table summarizes the preliminary allocation of the fair value of consideration to the assets acquired and liabilities assumed as of the Closing Date (in thousands):

The preliminary fair values and weighted-average useful lives of identifiable intangible assets acquired are as follows (in thousands):

The fair value measurements of intangible assets reflect significant unobservable (Level 3) inputs as defined in ASC 820. No residual value has been assigned to these intangible assets and they do not contain material renewal or extension provisions.

We recognized preliminary Goodwill of $22.7 million as a result of the UTXO Acquisition. None of the goodwill recognized is expected to be deductible for income tax purposes. All of the goodwill has been assigned to the Asset Management reportable unit.

Revenue and Earnings of UTXO Since the Closing Date

The amounts of revenue and net loss of UTXO included in our unaudited condensed consolidated statement of comprehensive loss from the Closing Date through March 31, 2026, were as follows (in thousands):

Acquisition-Related Costs

We incurred acquisition-related costs of $6.1 million during the three months ended March 31, 2026, related to both the BTC Merger and UTXO Acquisition, consisting primarily of advisory, legal, valuation, and due diligence fees, which are included in general and administrative expenses in the unaudited condensed consolidated statement of comprehensive loss.

Supplemental Pro Forma Information (Unaudited)

The following unaudited supplemental pro forma information presents our combined results of operations as though the BTC Merger and UTXO Acquisition had occurred on January 1, 2025. The pro forma results reflect adjustments directly attributable to the BTC Merger and UTXO Acquisition that are factually supportable, including additional amortization of acquired intangible assets, reversal of nonrecurring acquisition-related costs and reversal of the portion of the change in fair value of the call option allocated to the BTC Merger and UTXO Acquisition. The pro forma information is not necessarily indicative of results that would have been achieved had the BTC Merger and UTXO Acquisition been completed on January 1, 2025, nor is it indicative of future results (in thousands):

Pro forma net loss for the three months ended March 31, 2026, were adjusted to exclude (i) $6.1 million of acquisition-related costs incurred during the period, (ii) $107.7 million loss on change in fair value of the call option, and (iii) include intangible asset amortization expense prior to the BTC Inc and UTXO acquisitions of $1.4 million.

Pro forma net loss for the three months ended March 31, 2025, were adjusted to include $2.5 million of amortization expense associated with intangible assets acquired in the BTC Inc and UTXO acquisitions.

NOTE 4—DIGITAL ASSETS

Digital assets consisted of the following on March 31, 2026 (in thousands, except for digital asset units):

As of March 31, 2026,4,405 of our 5,064 Bitcoin were pledged as collateral in connection with an outstanding loan with a third-party lender (see Note 7 – Debt). The pledged Bitcoin cannot be rehypothecated, loaned, or sold by the lender under the terms of the collateral arrangement. The remaining Bitcoin is held with a third-party custodian. All of the Bitcoin is considered under our control.

The fair value of the pledged Bitcoin subject to this contractual sale restriction was approximately $300.5 million. The restriction remains in effect through the maturity of the loan on December 4, 2026. The restriction would lapse upon full repayment of the outstanding balance.

NOTE 5—INVESTMENTS

Treasury B.V.

On September 4, 2025, Nakamoto Holdings, our wholly-owned subsidiary, made an investment in Treasury B.V. through Stichting Administratiekantoor Treasury, which issued depository receipts representing underlying ordinary shares of Treasury (the “Minority Investment”), as previously disclosed in our Annual Report on Form 10-K.

We own approximately 31.9% of the outstanding equity interests in Stichting and, on a look-through basis, approximately 27.6% of Treasury B.V. Based on our ownership interest and governance rights obtained through the Minority Investment, we have concluded that we have the ability to exercise significant influence over Treasury’s operating and financial policies. Accordingly, we account for our investment under the equity method in accordance with ASC 323.

Under the equity method, we recognize our proportionate share of Treasury’s net income or loss on a one-quarter lag based on financial information provided by Treasury.

For the three months ended March 31, 2026, we recorded an equity method loss of $4.0 million in loss on investments in the unaudited condensed consolidated statements of comprehensive loss. In addition, we recorded a foreign currency translation loss of $0.1 million, which is included in other comprehensive loss.

As of March 31, 2026, the carrying amount of our investment is $10.9 million.

Metaplanet Inc.

During the three months ended March 31, 2026, we recognized a total realized and unrealized loss on our investment of Metaplanet stock of $3.9 million, which is included in loss on investments on the unaudited condensed consolidated statements of comprehensive loss. This amount includes a foreign currency remeasurement gain of $0.1 million.

During the three months ended March 31, 2026, we sold 5.0 million shares of Metaplanet stock, at a weighted-average fair value of $2.26 per share, generating net cash proceeds of $11.1 million after fees. This transaction resulted in a realized loss of $7.5 million.

We account for our investment in Metaplanet stock at fair value, with the changes in fair value recognized in net income in accordance with ASC 321, as the shares have a readily determinable fair value based on quoted market prices on the Tokyo Stock Exchange.

As of March 31, 2026, we held 3.0 million shares of Metaplanet stock with a fair value of $5.5 million.

NOTE 6—INTANGIBLE ASSETS AND GOODWILL

Definite-lived Intangible Assets

Our definite-lived intangible assets consist of trade names, customer relationships, and management contracts, all of which are subject to amortization over their estimated useful life.

The following table presents the gross carrying amount, accumulated amortization, and net carrying amount of intangible assets as of March 31, 2026 (in thousands):

Amortization expense for intangible assets was $1.1 million for the three months ended March 31, 2026, and is included in depreciation and amortization expense in the unaudited condensed consolidated statements of comprehensive loss.

Estimated aggregate amortization expense for intangible assets as of March 31, 2026, is as follows (in thousands):

Indefinite-lived Intangible Assets

Our indefinite-lived intangible assets consist of a domain name with a carrying amount of $3.0 million as of March 31, 2026. The asset is not subject to amortization and is evaluated for impairment annually or more frequently if events or changes in circumstances indicate that it may be impaired. There was no impairment recognized during the three months ended March 31, 2026.

The changes in the carrying amount of goodwill for the three months ended March 31, 2026, are as follows (in thousands):

Goodwill recognized during the three months ended March 31, 2026, relates to acquisitions described in Note 3—Business Combinations.

We evaluate goodwill for impairment annually on November 1, or more frequently if events or changes in circumstances indicate that the asset may be impaired. No impairment losses were recognized during the three months ended March 31, 2026.

NOTE 7—DEBT

Our outstanding debt consists of the Kraken Loan Agreement as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

On January 30, 2026, we entered into the First Amendment to the Master Loan Agreement (“MLA Amendment”), which amends the previous Master Loan Agreement, dated as of December 3, 2025 (the “Master Loan Agreement”) by and between Nakamoto Holdings and Payward Interactive, Inc (the “Lender”). The MLA Amendment amends the Master Loan Agreement to permit the funding of a designated trading wallet maintained at the Lender (the “Trading Wallet”) and to clarify that the Trading Wallet shall serve as collateral for both the obligations under the Master Loan Agreement and obligations (if any) resulting from trading activity conducted through such wallet.

On February 5, 2026, we pledged an additional 688 Bitcoin as collateral under the Kraken Loan Agreement to satisfy collateral maintenance requirements (see Note 4—Digital Assets). There have been no other material changes to the terms or balances of the Kraken Loan Agreement during the three months ended March 31, 2026.

NOTE 8—DERIVATIVE INSTRUMENTS

We write covered calls and call spreads to convert the implied volatility embedded in Bitcoin options markets into recurring premium income. We also purchase protective puts and put spreads to reduce our mark-to-market exposure to adverse Bitcoin price movements over defined time horizons. These instruments are not designated as hedging instruments and are carried at fair value, with changes in fair value recognized in earnings within derivative revenue.

The following table presents the fair value of our Bitcoin derivative instruments as of March 31, 2026 (in thousands):

For the three months ended March 31, 2026, we recognized a net gain of $1.1 million related to Bitcoin option contracts within derivative revenue on the unaudited condensed consolidated statements of comprehensive loss.

NOTE 9—FAIR VALUE MEASUREMENTS

We measure certain assets and liabilities at fair value on a recurring basis in accordance with ASC 820,Fair Value Measurements.

The following table presents the fair value hierarchy of our assets and liabilities measured at fair value as of March 31, 2026 (in thousands):

Level 1 inputs consist of quoted prices in active markets for identical assets.

There were no transfers between levels of the fair value hierarchy during the three months ended March 31, 2026.

The following table presents the changes in Level 3 assets measured at fair value for the three months ended March 31, 2026 (in thousands):

The fair value of our notes payable approximates our carrying value as the interest rates are consistent with current market rates.

NOTE 10—REVENUE FROM CONTRACTS WITH CUSTOMERS

Our revenues are disaggregated based on revenue type, including (i) media, (ii) advisory services, (iii) asset management, (iv) healthcare services, and (v) derivatives.

Our net revenues for the three months ended March 31, 2026, and March 31, 2025, are disaggregated as follows (in thousands):

Contract Liabilities

Contract liabilities represent consideration received from customers in advance of the Company’s satisfaction of performance obligations and are recognized as revenue when control of the promised goods or services is transferred to customers.

The following table presents the changes in contract liabilities for the three months ended March 31, 2026 (in thousands):

Contract liabilities in the acquisition represent deferred revenue from the acquired business and were recorded in connection with the acquisition of BTC Inc. See Note 3—Business Combinations for further details. The $0.7 million of revenue recognized during the three months ended March 31, 2026, related to contract liabilities assumed in the BTC Merger.

Remaining Performance Obligations

As of March 31, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $24.7 million. The Company expects to recognize approximately $23.1 million of this revenue over the next 12 months and the remainder thereafter over the contractual terms of the underlying arrangements, which generally range from 1 –2 years.

NOTE 11 –RELATED PARTY TRANSACTIONS

As described in Note 3 – Business Combinations, we acquired BTC Inc and UTXO during February 2026. BTC Inc and UTXO were considered related parties of Nakamoto as David Bailey, our Chief Executive Officer and Chairman of the Board of Directors and Tyler Evans, our Chief Investment Officer, each had significant influence over BTC Inc and UTXO through their prior ownership of and leadership positions within BTC Inc and UTXO. In connection with the review and approval of the BTC Inc and UTXO acquisitions, our Board of Directors formed a special committee comprised only of independent and disinterested directors of our Board.

As discussed further in Note 2 – Summary of Significant Accounting Policies, we earn management and performance fees from management services provided to both 210k Capital and Bitcoin Ecosystem funds. In the first three months ended March 31, 2026, we earned management fees from both Funds totaling $0.2 million. As of March 31, 2026, we have an investment in the Bitcoin Ecosystem fund of $0.2 million and have receivables totaling $0.9 million from both Funds. As of March 31, 2026, we have an outstanding obligation to our Chief Investment Officer for $0.6 million related to a distribution declared by UTXO prior to the UTXO Acquisition.

NOTE 12—SEGMENT INFORMATION

During the three months ended March 31, 2026, we updated our reportable segments that were primarily driven by acquisitions completed during the period (see Note 3**—**Business Combinations). We now operate four reportable segments: Media & Information Services, Asset Management, Bitcoin Operations and Healthcare Operations.

We evaluate segment performance based on operating income (loss), which represents operating revenues less operating expenses attributable to each segment.

Prior period segment information has not been recast to reflect the current segment structure as the impact is not considered comparable.

The following table represents segment results for the three months ended March 31, 2026 (in thousands):

The following table represents segment results for the three months ended March 31, 2025 (in thousands):

The following table reconciles our segment operating loss to net loss before provision for income taxes for the three months ended March 31, 2026, and March 31, 2025 (in thousands):

The following table represents assets by segment as of March 31, 2026, and December 31, 2025 (in thousands):

The following table reconciles our total assets by reportable segment to total consolidated assets as of March 31, 2026, and December 31, 2025 (in thousands):

NOTE 13—SUBSEQUENT EVENTS

Authorized Reverse Stock Split

On May 8, 2026, our stockholders approved an amendment to our Certificate of Incorporation to combine outstanding shares of our Common Stock, into a lesser number of outstanding shares, by a ratio of not less than 1-for-20 and not more than 1-for-50, with the exact ratio to be set within this range by our Board in their sole discretion.