Nakamoto Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2025 (UNAUDITED)

NOTE 1—BASIS OF PRESENTATION AND OTHER INFORMATION

The accompanying unaudited condensed financial statements of Kindly MD, Inc. (the “Company,” “Kindly MD,” “we,” “us,” or “our”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q of Regulation S-X. They do not include all the information and footnotes required by GAAP for complete financial statements. The December 31, 2024 balance sheet data was derived from audited financial statements but do not include all disclosures required by GAAP. The interim unaudited condensed financial statements should be read in conjunction with those financial statements included in the Form 10-K, as filed with the Securities and Exchange Commission on March 28, 2025. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial statements, consisting solely of normal recurring adjustments, have been made. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

Reclassifications

Certain reclassifications within 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 to the results of operations and cash flows in all periods presented.

Recently Adopted Accounting Pronouncements

In August 2023, the FASB issued ASU 2023-05, “Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement,” which requires a newly-formed joint venture to apply a new basis of accounting to its contributed net assets, resulting in the joint venture initially measuring its contributed net assets at fair value on the formation date. ASU 2023-05 is effective for all joint venture formations with a formation date on or after January 1, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted for joint ventures formed before the effective date. The adoption of ASU 2023-05 did not have a material impact on the Company’s interim unaudited condensed financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which enhances the transparency and decision usefulness of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted. The Company is currently evaluating the impact this standard will have on its financial statements.

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. The Company is currently evaluating the impact this standard will have on its financial statements.

The Company currently believes there are no other issued and not yet effective accounting standards that are materially relevant to its interim unaudited condensed financial statements.

NOTE 2—DISAGGREGATION OF REVENUES

The Company’s revenues are disaggregated based on revenue type, including (i) patient care services related to medical evaluation and treatment, (ii) product retail sales, and (iii) service affiliate agreements.

The Company’s net revenues for the three months ended March 31, 2025 and 2024 are disaggregated as follows:

The Company earned $85,273 in reimbursements from insurance payers during the three months ended March 31, 2025, a 145.6% increase from the $34,772 in reimbursements from insurance payers earned during the three months ended March 31, 2024.

NOTE 3—PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at March 31, 2025 and December 31, 2024:

Depreciation expense for the three months ended March 31, 2025 and 2024, was $17,771 and $24,901, respectively.

NOTE 4—CAPITALIZED SOFTWARE

Capitalized software consisted of the following at March 31, 2025 and December 31, 2024:

Capitalized costs for in-process internal-use software development primarily consist of direct and contracted labor and related expenses for developing internal systems and tools, and cloud-based solutions, including the Company’s Enterprise Data Management (“EDM”) system. These costs are not amortized until it is available for its intended use.

NOTE 5—LEASES

Operating Leases

The following was included in the condensed balance sheets at March 31, 2025 and December 31, 2024:

The components of lease expense consisted of the following for the three months ended March 31, 2025 and 2024:

Cash payments included in the measurement of operating lease liabilities were $52,326 and $35,961 for the three months ended March 31, 2025 and 2024, respectively.

Estimated future minimum payments of operating leases for the next five years consists of the following as of March 31, 2025:

Finance Leases

The following was included in the condensed balance sheets at March 31, 2025, and December 31, 2024:

Estimated future minimum payments of finance leases for the next five years consists of the following as of March 31, 2025:

NOTE 6—NOTES PAYABLE

Estimated future minimum principal payments of notes payable for the next five years consists of the following as of March 31, 2025:

NOTE 7—STOCKHOLDERS’ EQUITY

Preferred Stock

As of March 31, 2025 and December 31, 2024, the Company was authorized to issue 10,000,000 preferred shares. As of March 31, 2025 and December 31, 2024, the Company hadno preferred shares issued and outstanding.

Common Stock

As of March 31, 2025 and December 31, 2024, the Company was authorized to issue 100,000,000 common shares. As of March 31, 2025 and December 31, 2024, the Company had 6,050,148 common shares issued. As of March 31, 2025 and December 31, 2024, the Company had 6,022,148 and 6,029,648 common shares outstanding, respectively.

Potential Common Stock Equivalents

As of March 31, 2025, there were 2,862,745 potential common share equivalents from stock options and warrants excluded from the diluted loss per share calculations as their effect is anti-dilutive.

Treasury Stock

During the three months ended March 31, 2025, the Company repurchased 7,500 shares in treasury at a cost of $9,557. As of March 31, 2025, the Company held 28,000 shares in treasury at a total cost of $31,702.

Stock Options

Below is a table summarizing the changes in stock options outstanding during the three months ended March 31, 2025:

Stock-based compensation expense of $8,308 and $7,616 was recorded during the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the remaining unrecognized compensation cost related to non-vested options is $50,483.

As of March 31, 2025, the outstanding stock options have a weighted-average remaining contractual life of 6.48 years and a total intrinsic value of $2,365.

Warrants

Below is a table summarizing the changes in warrants outstanding during the three months ended March 31, 2025:

As of March 31, 2025, the outstanding warrants have a weighted-average remaining contractual life of 4.18 years and a total intrinsic value of $0.

NOTE 8—SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date of this filing and has determined that there are no material subsequent events that require disclosure.