Nakamoto Inc.

Previous wording

The following discussion and analysis provide information which we believe relevant to an assessment and understanding of our financial condition and results of operations. The following discussion and analysis of our financial condition and results of operations is derived from and should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Form 10-Q (the “Financial Statements”), and also with our audited consolidated financial statements and notes thereto included in our Form 10-K.

Current wording

The following discussion and analysis provide information that we believe is relevant to an assessment and understanding of our financial condition and results of operations. The following discussion and analysis of our financial condition and results of operations is derived from and should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Form 10-Q (the “Financial Statements”), and also with our audited consolidated financial statements and notes thereto included in our Form 10-K.

Previous wording

This Quarterly Report on Form 10-Q for the three months ended March 31, 2026 (“Form 10-Q”) contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). All statements other than statements of historical facts contained in this Form 10-Q, including statements regarding the financial position, business strategy and the plans and objectives of management for our future operations, are forward-looking statements. These forward-looking statements are based on the beliefs of management, as well as assumptions made by and information currently available to us. When used in this Form 10-Q, the words “anticipate,” “believe,” “estimate,” “expect,” “forecasts,” “may,” “will,” “should,” “seek,” “scheduled,” “intend,” “plan,” and “expect” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements.

Current wording

This Quarterly Report on Form 10-Q for the three and six months ended June 30, 2026 (“Form 10-Q”) contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). All statements other than statements of historical facts contained in this Form 10-Q, including statements regarding the financial position, business strategy and the plans and objectives of management for our future operations, are forward-looking statements. These forward-looking statements are based on the beliefs of management, as well as assumptions made by and information currently available to us. When used in this Form 10-Q, the words “anticipate,” “believe,” “estimate,” “expect,” “forecasts,” “may,” “will,” “should,” “seek,” “scheduled,” “intend,” “plan,” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements.

Previous wording

Although we believe that the expectations reflected in the forward-looking statements are reasonable and the information included in this report is accurate, we cannot guarantee that the future results, level of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report to confirm these statements to actual results or changes in our expectations. We qualify all of our forward-looking statements by these cautionary statements.

Current wording

Although we believe that the expectations reflected in the forward-looking statements are reasonable and the information included in this report is accurate, we cannot guarantee that the future results, level of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report to reflect actual results or changes in our expectations, except as required by law. We qualify all of our forward-looking statements by these cautionary statements.

Previous wording

We hold Bitcoin on our balance sheet and, through our ecosystem-wide presence, seek to provide investors with exposure to Bitcoin’s global growth and to leverage our treasury to acquire and develop an ecosystem of Bitcoin companies across media, asset management and advisory. Additionally, we operate a healthcare and healthcare data company, focused on holistic pain management, but in March 2026 we announced our intention to exit this legacy business.

Current wording

We hold Bitcoin on our balance sheet and, through our ecosystem-wide presence, seek to provide investors with exposure to Bitcoin’s global growth and to leverage our treasury to acquire and develop an ecosystem of Bitcoin companies across media, asset management and advisory.

Previous wording

On February 20, 2026, we completed the acquisitions of both (i) 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 (the “BTC Merger”), and (ii) UTXO, a Tennessee limited liability company formed in 2019, which serves as the general partner and investment manager of multiple digital asset focused funds (the “UTXO Acquisition” and together with the BTC Merger, the “Acquisitions”). BTC Inc and UTXO each became wholly-owned subsidiaries of the Company on February 20, 2026. The Acquisitions represent a significant addition to our portfolio and advances our mission to develop an ecosystem of Bitcoin-native companies. The consideration for the Acquisitions consisted solely of shares of our common stock, par value $0.001 per share (our “Common Stock”) and assumed options to purchase shares of our Common Stock. In connection with the BTC Merger, holders of BTC Inc common and preferred stock received the right to receive 259,886,237 shares of our Common Stock, and we reserved 78,427,012 shares of our Common Stock for issuance upon the exercise of assumed BTC stock options, which were accelerated and converted into options to acquire shares of our Common Stock. In connection with the UTXO Acquisition, UTXO securityholders received the right to receive 26,481,860 shares of our Common Stock. BTC Inc and UTXO securityholders received or were entitled to receive, on a fully-diluted basis, 364,795,109 shares of our Common Stock.

Current wording

On February 20, 2026, we completed the acquisitions of both (i) 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 (the “BTC Merger”), and (ii) UTXO, a Tennessee limited liability company formed in 2019, which serves as the general partner and investment manager of multiple digital-asset-focused funds (the “UTXO Acquisition” and together with the BTC Merger, the “Acquisitions”). BTC Inc and UTXO each became wholly owned subsidiaries of the Company on February 20, 2026. The Acquisitions represent a significant addition to our portfolio and advance our mission to develop an ecosystem of Bitcoin-native companies. The consideration for the Acquisitions consisted solely of shares of our common stock, par value $0.001 per share (our “Common Stock”) and assumed options to purchase shares of our Common Stock. In connection with the BTC Merger, holders of BTC Inc common and preferred stock received the right to receive 6,497,156 shares of our Common Stock, and we reserved 1,960,675 shares of our Common Stock for issuance upon the exercise of assumed BTC stock options, which were accelerated and converted into options to acquire shares of our Common Stock. In connection with the UTXO Acquisition, UTXO securityholders received the right to receive 662,047 shares of our Common Stock. BTC Inc and UTXO securityholders received or were entitled to receive, on a fully-diluted basis, 9,119,878 shares of our Common Stock.

Previous wording

The transformation from a healthcare company to a Bitcoin operating company affects the comparison of our results in 2026 to 2025. The table below shows the segments included in each period:

Current wording

The transformation from a healthcare company to a Bitcoin operating company affects the comparison of our results in 2026 to 2025. Throughout the first half of 2025, we operated solely as a healthcare company. We did not begin our transformation into a Bitcoin operating company until the Nakamoto Merger in August 2025, and we did not acquire our Media & Information Services and Asset Management businesses until February 2026. Following the shutdown of our healthcare operations in the second quarter of 2026, the results of those operations have been reclassified to discontinued operations for all periods presented, and all of our operating results for the three and six months ended June 30, 2025 are reported within discontinued operations. Accordingly, our results of continuing operations for the 2026 periods are not comparable to the corresponding periods in 2025. See Note 11 — Discontinued Operations. The table below shows the segments included in the three and six months ended June 30, 2026:

Previous wording

The following tables set forth our summary consolidated results of operations in dollars for the periods presented. The period-to-period comparisons of our historical results are not necessarily indicative of the results that may be expected in the future. The results of operations for the three months ended March 31, 2026, and March 31, 2025, have been derived from the Financial Statements included elsewhere in this Quarterly Report on Form 10-Q. Amounts may not foot due to rounding.

Current wording

The following tables set forth our summary consolidated results of operations in dollars for the periods presented. The period-to-period comparisons of our historical results are not necessarily indicative of the results that may be expected in the future. The results of operations for the three and six months ended June 30, 2026, and June 30, 2025, have been derived from the Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

A discussion of our operating results for our Media & Information Services, Asset Management, Bitcoin Operations, Healthcare Operations and Other segments is below. Prior to the Nakamoto Merger in August 2025, we operated a single segment consisting of Healthcare Operations. All operating expenses prior to the Nakamoto Merger are reflected in Healthcare Operations. Beginning in 2025 after the Nakamoto Merger, we established our Bitcoin Operations segment and began separately tracking other corporate expenses, which are included in Other segment results. Following the Acquisitions in the first quarter of 2026, we began operating additional segments consisting of Media & Information Segments and Asset Management.

Current wording

A discussion of our operating results for our Media & Information Services, Asset Management, Bitcoin Operations and Other segments is below. Beginning in 2025 after the Nakamoto Merger, we established our Bitcoin Operations segment and began separately tracking other corporate expenses, which are included in Other segment results. Following the Acquisitions in the first quarter of 2026, we began operating additional segments consisting of Media & Information Services and Asset Management.

Previous wording

A summary of operating results for the three months ended March 31, 2025, follows and includes a reconciliation of our Operating loss (GAAP) to Adjusted operating income (loss) (non-GAAP). Our Adjusted operating income (loss) removes depreciation and amortization from our operating loss.

Current wording

A summary of operating results for the three months ended June 30, 2026, follows and includes a reconciliation of our Operating income (loss) (GAAP) to Adjusted operating income (loss) (non-GAAP). Our Adjusted operating income (loss) removes the change in fair value of digital assets, impairment of goodwill, (gain) loss on investments, depreciation and amortization and transaction-related compensation expenses, in each case as applicable, from our operating loss.

Previous wording

A summary of operating results for the three months ended March 31, 2026, follows and includes a reconciliation of our Operating income (loss) (GAAP) to Adjusted operating income (loss) (non-GAAP). Our Adjusted operating income (loss) removes the change in fair value of digital assets, loss on investments, depreciation and amortization, transaction-related compensation and transaction-related general and administrative expenses from our operating loss.

Current wording

A summary of operating results for the six months ended June 30, 2026, follows and includes a reconciliation of our Operating income (loss) (GAAP) to Adjusted operating income (loss) (non-GAAP). Our Adjusted operating income (loss) removes the change in fair value of digital assets, impairment of goodwill, (gain) loss on investments, transaction-related general and administrative expenses, depreciation and amortization and transaction-related compensation expenses, in each case as applicable, from our operating loss.

Previous wording

Our revenue is seasonal and concentrated around the timing of our conferences or events. In an average year, we host four conferences globally. In the three months ended March 31, 2026, there were no conferences and events. Our flagship annual Bitcoin Conference took place in April 2026; all revenue earned by this conference will be reflected during the three months ended June 30, 2026. We recorded $0.5 million of media revenue since the BTC Merger in the three months ended March 31, 2026, which primarily consisted of digital revenue. We also recorded $0.4 million of advisory revenue in the three months ended March 31, 2026, which primarily relates to subscription revenue for our Bitcoin for Corporations membership program.

Current wording

Our revenue is seasonal and concentrated around the timing of our conferences or events. In an average year, we produce four conferences globally. In the three months and six months ended June 30, 2026, we hosted our flagship annual Bitcoin Conference. All revenue earned by this conference is reflected during the three months ended June 30, 2026.

Previous wording

Our Asset Management business began on February 20, 2026, when we acquired UTXO. UTXO is a fund manager focused generally on investments in the broader Bitcoin ecosystem. We generate revenue from management and performance fees associated with 210k Capital, LP fund (“210k Capital”) and the UTXO Bitcoin Ecosystem Master Fund 1 LP fund (“Bitcoin Ecosystem”). Revenues are generally tied to the assets under management and the performance of those assets. Our assets under management at March 31, 2026, was approximately $109.5 million.

Current wording

Our Asset Management business began on February 20, 2026, when we acquired UTXO. UTXO is a fund manager focused generally on investments in the broader Bitcoin ecosystem. We generate revenue from management and performance fees associated with 210k Capital, LP fund (“210k Capital”) and the UTXO Bitcoin Ecosystem Master Fund 1 LP fund (“Bitcoin Ecosystem”). Revenues are generally tied to the assets under management and the performance of those assets. Our total assets under management on June 30, 2026, were approximately $103.0 million.

Previous wording

Management fees for 210k Capital are between 1.5% and 2.0% annually of the net asset value of a limited partner’s capital account and are paid monthly. Management fees for Bitcoin Ecosystem are generally 2.0% annually of the capital contributions of a limited partner’s capital account and are paid quarterly. Performance fees are earned when returns exceed specified benchmarks and are recognized once they become fixed and determinable and not subject to reversal.

Current wording

Management fees for 210k Capital are up to 2.0% annually of the net asset value of a limited partner’s capital account and are paid monthly. Management fees for Bitcoin Ecosystem are generally 2.0% annually of the capital contributions of a limited partner’s capital account and are paid quarterly. Performance fees are earned when returns exceed specified benchmarks and are recognized once they become fixed and determinable and not subject to reversal.

Previous wording

We recorded $0.2 million of operating revenue since the UTXO Acquisition in the three months ended March 31, 2026, which consisted of management fees. Our operating expenses for the three months ended March 31, 2026, was $0.7 million, of which $0.3 million related to amortization costs associated with intangible assets from the UTXO Acquisition.

Current wording

We recorded $0.5 million of revenue in the three months ended June 30, 2026, which primarily consisted of management fees. Our operating expenses for the three months ended June 30, 2026, were $26.1 million, of which $24.6 million related to goodwill impairment charges. We also recorded $0.8 million related to amortization costs associated with intangible assets from the UTXO Acquisition.

Previous wording

We launched our Bitcoin Operations strategy with the closing of the Nakamoto Merger on August 14, 2025. In February 2026, we began an actively managed Bitcoin derivatives program that is designed to (i) generate recurring volatility income from a portion of our Bitcoin and (ii) hedge a portion of our downside exposure to Bitcoin price risk. In the three months ended March 31, 2026, our revenues from this strategy totaled $1.1 million.

Current wording

We launched our Bitcoin Operations strategy with the closing of the Nakamoto Merger on August 14, 2025. In February 2026, we began an actively managed Bitcoin derivatives program that is designed to (i) generate volatility income from a portion of our Bitcoin and (ii) mitigate a portion of our downside exposure to Bitcoin price risk. Refer to Note 2 — Summary of Significant Accounting Policies , Note 8 — Derivative Instruments, and Note 9 — Fair Value Measurements to the Financial Statements included in this Quarterly Report on Form 10-Q for further information on our derivatives.

Previous wording

For the three months ended March 31, 2026, we had total operating expenses of $111.0 million, which primarily were driven by a loss on the change in fair value of digital assets and a loss on our investments. The loss on the change in fair value of our digital assets was $102.5 million as the price of Bitcoin declined from $87,519 on December 31, 2025, to $68,220 per Bitcoin on March 31, 2026. Our loss on investments was $7.9 million, which consisted of losses of $3.9 million from our investment in Metaplanet and a $4.0 million loss from our share of Treasury B.V.’s results.

Current wording

For the six months ended June 30, 2026, we had total operating expenses of $162.5 million, which primarily were driven by a loss on the change in fair value of digital assets and a loss on our investments. The loss on the change in fair value of our digital assets was $151.1 million as the price of Bitcoin declined from $87,519 on December 31, 2025, to $58,532 per Bitcoin on June 30, 2026. Our loss on investments was $10.0 million, which primarily consisted of a $5.8 million loss from our share of Treasury B.V.’s results and a $3.9 million loss from our investment in Metaplanet.

Previous wording

Our other results consist primarily of our corporate overhead. We began separately tracking our corporate overhead upon the Nakamoto Merger on August 14, 2025. In the three months ended March 31, 2026, other revenues totaled $0.2 million that related to Bitcoin advisory and consulting services. Compensation for the three months ended March 31, 2026, totaled $3.9 million, of which approximately $0.8 million related to the prior Nakamoto Merger. General and administrative expenses for the three months ended March 31, 2026, totaled $8.7 million, of which approximately $6.1 million was related to one-time transaction related expenses associated with the Acquisitions.

Current wording

In the six months ended June 30, 2026, other revenues totaled $0.4 million that related to Bitcoin advisory and consulting services. Compensation totaled $7.2 million, of which approximately $1.7 million related to the prior Nakamoto Merger. General and administrative expenses for the six months ended June 30, 2026, totaled $12.1 million, of which approximately $6.1 million was specifically transaction-related expenses associated with the Acquisitions.

Previous wording

Non-operating expense for the three months ended March 31, 2026, was $112.6 million compared to $0.0 million for the three months ended March 31, 2025. We had the following significant items impacting our non-operating income:

Current wording

Non-operating expense was $3.5 million for the three months ended June 30, 2026, and $115.7 million for the six months ended June 30, 2026. We had the following significant items impact our non-operating income (expense):

Previous wording

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

Current wording

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

Previous wording

As of March 31, 2026, we held approximately 659 unencumbered Bitcoin worth approximately $44.9 million, based on the $68,220 price of Bitcoin on March 31, 2026, had cash and cash equivalents of $35.3 million and held an investment in a publicly traded stock of $5.5 million. Based on the foregoing, we have determined that our sources of liquidity will be sufficient to meet our cash needs for the one-year period from the issuance of these Financial Statements. However, our liquidity position may be materially impacted by volatility in the market price of Bitcoin. For example, a decline in the price of Bitcoin could materially reduce the value of our liquid assets and our ability to fund operations, satisfy obligations or pursue strategic opportunities. Our ability to monetize Bitcoin holdings may also be affected by market liquidity, trading volumes, counterparty availability, custody arrangements, cybersecurity risks, regulatory developments, tax and accounting treatment, and disruptions affecting digital asset markets or service providers.

Current wording

As of June 30, 2026, approximately 3,805 of our 4,467 Bitcoin are held as collateral for the June Loan and can be sold to paydown the June Loan when it matures. As of June 30, 2026, we held approximately 662 unencumbered Bitcoin worth approximately $38.7 million, based on the $58,532 price of Bitcoin on June 30, 2026, and had cash and cash equivalents of $19.1 million. Based on the foregoing, we have determined that our sources of liquidity will be sufficient to meet our cash needs for the one-year period from the issuance of these Financial Statements. However, our liquidity position may be materially impacted by volatility in the market price of Bitcoin. For example, a decline in the price of Bitcoin could materially reduce the value of our liquid assets and our ability to fund operations, satisfy obligations or pursue strategic opportunities. Our ability to monetize Bitcoin holdings may also be affected by market liquidity, trading volumes, counterparty availability, custody arrangements, cybersecurity risks, regulatory developments, tax and accounting treatment, and disruptions affecting digital asset markets or service providers.

Previous wording

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 exposures to adverse Bitcoin price movements over defined time horizons.

Current wording

We write covered calls and call spreads to generate option premiums and potential economic returns from changes in option values. We also purchase protective puts and put spreads to reduce our mark-to-market exposure to adverse Bitcoin price movements over defined time horizons.

Previous wording

During the three months ended March 31, 2026, our net cash used in operating activities was $23.3 million as compared to $0.9 million during the three months ended March 31, 2025. The increase in net cash used in operating activities is primarily due to an increase in cash overhead expenses and BTC Inc and UTXO acquisition related expenses.

Current wording

During the six months ended June 30, 2026, our net cash used in operating activities was $26.5 million as compared to $2.8 million during the six months ended June 30, 2025. The increase in net cash used in operating activities is primarily due to an increase in cash overhead expenses and BTC Inc and UTXO acquisition-related expenses.

Previous wording

During the three months ended March 31, 2026, our net cash provided by investing activities was $36.6 million as compared to net cash used by investing activities of $0.2 million during the three months ended March 31, 2025. The increase in cash provided by investing activities was primarily due to the sale of $20.5 million of Bitcoin and the partial sale of our investment in Metaplanet for $11.1 million.

Current wording

During the six months ended June 30, 2026, our net cash provided by investing activities was $34.3 million as compared to net cash used of $2.5 million during the six months ended June 30, 2025. The increase in cash provided by investing activities was primarily due to the sale of $21.7 million of Bitcoin and the partial sale of our investment in Metaplanet of $11.1 million.

Previous wording

During the three months ended March 31, 2026, our net cash used by financing activities was $0.6 million as compared to net cash used of $0.1 million during the three months ended March 31, 2025. The increase in cash used by financing activities was due to an increase in share repurchases made during the three months ended March 31, 2026.

Current wording

During the six months ended June 30, 2026, our net cash used in financing activities was $9.8 million as compared to net cash provided of $9.0 million during the six months ended June 30, 2025. The increase in net cash used in financing activities was due primarily to a paydown of our notes payable in the six months ended June 30, 2026. The $9.0 million of net cash provided by financing activities in the six months ended June 30, 2025, primarily reflects proceeds from the exercise of warrants.

Previous wording

Our digital assets, our investment in Metaplanet and our derivative assets and liabilities are all recorded at fair value. The fair value of a financial instrument is the amount we would receive to sell an asset, or pay to transfer a liability, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Changes in the fair value of these instruments are recorded within operating expenses in our Financial Statements.

Current wording

Our digital assets, certain of our equity investments and our derivative assets and liabilities are all recorded at fair value. The fair value of a financial instrument is the amount we would receive to sell an asset, or pay to transfer a liability, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Changes in the fair value of these instruments are recorded within operating expenses in our Financial Statements.

Previous wording

Refer to Note 4 – Digital Assets, Note 8 – Derivative Instruments and Note 9 – Fair Value Measurements to the Financial Statements included in this Quarterly Report on Form 10-Q for further information on our financial instruments at fair value.

Current wording

Refer to Note 4 — Digital Assets, Note 5 — Investments, Note 8 — Derivative Instruments and Note 9 — Fair Value Measurements to the Financial Statements included in this Quarterly Report on Form 10-Q for further information on our financial instruments at fair value.

Previous wording

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act.

Current wording

We are an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act.