Forward Industries, Inc.

Previous wording

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements, and the notes thereto, and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 (the “2025 Form 10-K”). The following discussion and analysis compares our condensed consolidated results of operations for the three and six months ended March 31, 2026 (the “2026 Quarter” and the “2026 Period”, respectively) with those for the three and six months ended March 31, 2025 (the “2025 Quarter” and the “2025 Period”, respectively). All dollar amounts and percentages presented herein have been rounded to approximate values.

Current wording

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements, and the notes thereto, and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 (the “2025 Form 10-K”). The following discussion and analysis compares our condensed consolidated results of operations for the three and nine months ended June 30, 2026 (the “2026 Quarter” and the “2026 Period”, respectively) with those for the three and nine months ended June 30, 2025 (the “2025 Quarter” and the “2025 Period”, respectively). All dollar amounts and percentages presented herein have been rounded to approximate values.

Previous wording

Forward-looking statements are based on our current expectations, estimates, projections and assumptions regarding our business, the economy, the regulatory environment for digital assets and other future conditions as of the date of this report. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are beyond our control. Our actual results, performance or achievements may differ materially from those contemplated by the forward-looking statements. We caution you therefore against placing undue reliance on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. The results anticipated by any or all of these forward-looking statements might not occur. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation: fluctuations in the price of SOL and other digital assets, which have been and may continue to be highly volatile; regulatory developments affecting digital assets, including potential classification of SOL or other crypto assets as securities under federal or state securities laws; risks related to cybersecurity threats, hacking, phishing and other malicious attacks that could result in the loss, theft or misappropriation of our digital assets; risks related to custody arrangements for our digital assets and the potential loss of private keys; smart contract vulnerabilities, coding errors, security flaws and exploits in blockchain protocols we interact with; risks associated with our participation in DeFi protocols, including liquidation risks, governance risks and protocol failures; concentration risk from our significant holdings in SOL and the Solana ecosystem; the rewards and costs associated with staking or validating transactions, which may fluctuate based on network conditions; operational risks related to our validator infrastructure and third-party service providers; risks related to our At-the-Market offering facility and our ability to access capital markets; competition from other digital asset treasury companies; risks related to our share repurchase program and its impact on liquidity; macroeconomic conditions and their impact on digital asset markets; failure to keep our Registration Statement on Form S-3 effective; our ability to service our debt and other risks and uncertainties described in Item 1A, “Risk Factors” of our 2025 Form 10-K, and in our other filings with the SEC. All forward-looking statements speak only as of the date on which they are made. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any suc…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Forward-looking statements are based on our current expectations, estimates, projections and assumptions regarding our business, the economy, the regulatory environment for digital assets and other future conditions as of the date of this report. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are beyond our control. Our actual results, performance or achievements may differ materially from those contemplated by the forward-looking statements. We caution you therefore against placing undue reliance on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. The results anticipated by any or all of these forward-looking statements might not occur. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation: fluctuations in the price of SOL and other digital assets, which have been and may continue to be highly volatile; regulatory developments affecting digital assets, including potential classification of SOL or other crypto assets as securities under federal or state securities laws; risks related to cybersecurity threats, hacking, phishing and other malicious attacks that could result in the loss, theft or misappropriation of our digital assets; risks related to custody arrangements for our digital assets and the potential loss of private keys; smart contract vulnerabilities, coding errors, security flaws and exploits in blockchain protocols we interact with; risks associated with our participation in DeFi protocols, including liquidation risks, governance risks and protocol failures; concentration risk from our significant holdings in SOL and the Solana ecosystem; the rewards and costs associated with staking or validating transactions, which may fluctuate based on network conditions; operational risks related to our validator infrastructure and third-party service providers; risks related to our At-the-Market offering facility and our ability to access capital markets; competition from other digital asset treasury companies; risks related to our share repurchase program and its impact on liquidity; macroeconomic conditions and their impact on digital asset markets; failure to keep our Registration Statement on Form S-3 effective or current; our ability to service our debt; risks related to margin calls, collateral requirements and potential forced liquidation of our digital assets under our loan agreements; risks related to our derivative activities, including written option contracts; our significant reliance on related parties for financing, asset management and other services; the impact of digital asset impairment charges on our results of operations; our ability to satisfy our investment commitments; our ability to liquidate digital assets …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Under our new treasury policy and strategy, the principal holding in our treasury reserve on the balance sheet will be allocated to digital assets, primarily SOL, fwdSOL (a Liquid Staking Token, or “LST”, developed by the Company in collaboration with Socean Labs Inc., doing business as Sanctum, on the Solana blockchain) and similar assets. We have selected SOL as our primary treasury asset because we believe it is earlier in its lifecycle, operationally superior, higher yield generating and underexposed as compared to Bitcoin and other digital assets, presenting a unique opportunity for Forward to become the largest Solana asset treasury operator in the industry. Our planned approach involves acquiring SOL, staking our holdings via our own validator, deploying SOL into various DeFi protocols to earn yield, fees or rewards, lending SOL to earn interest, pledging SOL as collateral to borrow other assets and generating revenue through strategic acquisitions, partnerships and deployments within the Solana ecosystem.

Current wording

Under our new treasury policy and strategy, the principal holding in our treasury reserve on the balance sheet will be allocated to digital assets, primarily SOL, fwdSOL (a Liquid Staking Token, or “LST”, developed by the Company in collaboration with Socean Labs Inc., doing business as Sanctum, on the Solana blockchain) and similar assets. We have selected SOL as our primary treasury asset because we believe it is earlier in its lifecycle, operationally superior, has higher yield generation potential and is underexposed as compared to Bitcoin and other digital assets, presenting a unique opportunity for Forward to become the largest Solana asset treasury operator in the industry. Our planned approach involves acquiring SOL, staking our holdings via our own validator, deploying SOL into various DeFi protocols to earn yield, fees or rewards, lending SOL to earn interest, pledging SOL as collateral to borrow other assets and generating revenue through strategic acquisitions, partnerships and deployments within the Solana ecosystem.

Previous wording

We have identified the below critical accounting estimates. An accounting estimate is considered critical if both: (a) the nature of the estimate or assumption is material due to the levels of subjectivity and judgment involved, and (b) the impact of changes in the estimate and assumption has had or is reasonably likely to have a material effect on the condensed consolidated financial statements. This listing is not a comprehensive list of all our accounting policies. For further information regarding the application of these and other accounting policies, see Note 2 of the consolidated financial statements in our Annual Report on 2025 Form 10-K.

Current wording

We have identified the below critical accounting estimates. An accounting estimate is considered critical if both: (a) the nature of the estimate or assumption is material due to the levels of subjectivity and judgment involved, and (b) the impact of changes in the estimate and assumption has had or is reasonably likely to have a material effect on the condensed consolidated financial statements. This listing is not a comprehensive list of all our accounting policies. For further information regarding the application of these and other accounting policies, see Note 2 of the consolidated financial statements in our 2025 Form 10-K.

Previous wording

We account for some of our digital assets, specifically fwdSOL, as indefinite-lived intangible assets in accordance with ASC Subtopic 350-30. These digital assets are initially recorded at cost and subsequently measured at cost less any impairment losses. We perform an impairment analysis each reporting period or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized when the fair value of these digital asset is less than their carrying value at any time during the period. The impaired digital asset is written down to its fair value at the time of impairment, and the impairment loss cannot be reversed in future periods even if fair values subsequently increase.

Current wording

We account for some of our digital assets as indefinite-lived intangible assets in accordance with ASC Subtopic 350-30. These digital assets are initially recorded at cost and subsequently measured at cost less any impairment losses. We perform an impairment analysis each reporting period or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized when the fair value of these digital assets is less than their carrying value at any time during the period. The impaired digital asset is written down to its fair value at the time of impairment, and the impairment loss cannot be reversed in future periods even if fair values subsequently increase.

Previous wording

The determination of fair value requires significant judgment and involves the use of market prices from digital asset exchanges. We consider factors including trading volume, market liquidity, and the reliability of pricing sources when determining fair value. For fwdSOL, which may have limited trading activity, we may use alternative valuation methods including discounted cash flow analysis or other market-based approaches. Changes in market conditions, trading volumes, or the availability of reliable pricing information could materially affect our impairment assessments and results of operations.

Current wording

The determination of fair value requires significant judgment and involves the use of market prices from digital asset exchanges. We consider factors including trading volume, market liquidity, and the reliability of pricing sources when determining fair value. For digital assets which may have limited trading activity, we may use alternative valuation methods including discounted cash flow analysis or other market-based approaches. Changes in market conditions, trading volumes, or the availability of reliable pricing information could materially affect our impairment assessments and results of operations.

Previous wording

The increase in net revenues from the 2025 Quarter to the 2026 Quarter resulted from $9,334,000 in staking and other related revenue generated by our digital assets segment and $504,000 increase in design segment revenue, primarily attributable to the net increase in volume of work and projects with existing and new customers.

Current wording

The increase in net revenues from the 2025 Quarter to the 2026 Quarter resulted from $7,345,000 in staking and other related revenue generated by our digital assets segment and $940,000 increase in design segment revenue, primarily attributable to the net increase in volume of work and projects with existing and new customers.

Previous wording

Our gross profit increased and gross margin increased from a negative 5.7% in the 2025 Quarter to 70.0% in the 2026 Quarter. The increase in both gross profit and gross margin resulted from the high margin staking revenue generated by our digital assets segment, which generated gross profit of $8,517,000 and gross margin of 91.2%. In the design segment, gross profit increased $734,000 and gross margin increased from a negative 5.7% in the 2025 Quarter to 15.3% in the 2026 Quarter driven by improved utilization and cost cutting measures implemented in January and June of 2025.

Current wording

Our gross profit increased and gross margin increased from a negative 24.9% in the 2025 Quarter to 62.2% in the 2026 Quarter. The increase in both gross profit and gross margin resulted from the high margin staking revenue generated by our digital assets segment, which generated gross profit of $5,977,000 and gross margin of 81.4%. In the design segment, gross profit increased $1,348,000 and gross margin increased from a negative 24.9% in the 2025 Quarter to 21.2% in the 2026 Quarter driven by improved utilization and cost cutting measures implemented in January and June of 2025.

Previous wording

Sales and marketing expenses increased primarily due to personnel costs, including $256,000 of non-cash share-based compensation expense, and increased marketing spend, both related to our new digital asset treasury strategy.

Current wording

Corporate sales and marketing expenses increased $412,000 primarily due to personnel costs, including $337,000 of non-cash share-based compensation expense, related to our new digital asset treasury strategy. Design sales and marketing expense increased $87,000 due to higher marketing spend.

Previous wording

Digital assets general and administrative expenses include $2,846,000 of asset management and related fees. Corporate general and administrative expenses increased $7,449,000 due to higher professional fees related to our services agreement with Galaxy, higher investor relations spending and higher personnel costs associated with hiring personnel necessary to execute our new digital assets treasury strategy, including $559,000 of non-cash share-based compensation expense. Design segment general and administrative expenses decreased $676,000 due to lower personnel costs related to staff reductions and other cost-cutting measures in response to the decline in revenues. Management continues to monitor the various components of general and administrative expenses and how these costs are affected by inflationary and other factors. We intend to adjust these costs as needed based on the overall needs of the business.

Current wording

Digital assets general and administrative expenses include $820,000 of asset management and related fees. Corporate general and administrative expenses increased $4,425,000 primarily due to a $2,755,000 increase in non-cash share-based compensation expense for management and directors, higher personnel costs associated with hiring personnel necessary to execute our new digital assets treasury strategy, and higher insurance premiums. Design segment general and administrative expenses decreased $251,000 primarily due to lower personnel costs related to staff reductions and other cost-cutting measures in response to the decline in revenues. Management continues to monitor the various components of general and administrative expenses and how these costs are affected by inflationary and other factors. We intend to adjust these costs as needed based on the overall needs of the business.

Previous wording

The loss on digital assets in the 2026 Quarter of $201,706,000 was driven by the reduction in the fair value of our digital assets resulting from the decline in the market value of SOL. The impairment charge of $85,093,000 relates to our holdings of fwdSOL and is also driven by the decline in market value of SOL. These amounts reflect the volatility inherent in digital asset holdings and the Company’s accounting policy that does not permit the reversal of impairment losses even if fair values subsequently increase. The derivative gain is the net impact of written SOL option contracts during the 2026 Quarter. The change in interest income, net is due to non-cash interest income of $114,000 related to loaned SOL plus an increase in cash interest income of $64,000 related to higher cash balances during the 2026 Quarter compared to the 2025 Quarter. Interest expense – related party of $59,000 represents interest expense on the $40,000,000 loan payable with Galaxy Digital LLC.

Current wording

The loss on digital assets in the 2026 Quarter of $49,753,000 was driven by the reduction in the fair value of our digital assets resulting from the decline in the market value of SOL. The impairment charge of $15,222,000 relates to our holdings of fwdSOL, which is also driven by the decline in market value of SOL, and ONyc. These amounts reflect the volatility inherent in digital asset holdings and the Company’s accounting policy that does not permit the reversal of impairment losses even if fair values subsequently increase. The net derivative loss is the net impact of written and purchased SOL option contracts during the 2026 Quarter. The increase in interest expense, net is primarily due to cash borrowings from Galaxy Digital LLC and was partially offset by higher interest income from digital asset lending and higher cash balances during the 2026 Quarter compared to the 2025 Quarter.

Previous wording

The income tax benefit in the 2026 Quarter resulted from the reversal of income tax expense recorded in the first quarter of fiscal 2026 resulting from the recently completed section 382 tax study, partially offset by taxable income generated in the 2026 Quarter for which NOLs may not be available to offset. In the 2025 Quarter, we reported no income tax provision or benefit due to the existence of significant net operating loss carryforwards.

Current wording

The income tax benefit in the 2026 Quarter resulted from changes to our forecasted full year taxable income in the 2026 Quarter. In the 2025 Quarter, we reported no income tax provision or benefit due to the existence of significant net operating loss carryforwards.

Previous wording

Consolidated basic and diluted loss per share from continuing operations were $2.98 and $1.65 for the 2026 Quarter and the 2025 Quarter, respectively.

Current wording

Consolidated basic and diluted loss per share from continuing operations were $0.80 and $2.17 for the 2026 Quarter and the 2025 Quarter, respectively.

Previous wording

The increase in net revenues from the 2025 Period to the 2026 Period resulted from $26,715,000 in staking and other related revenue generated by our digital assets segment and was partially offset by a $66,000 decline in design segment revenue, primarily attributable to the loss of a major design customer in December 2024 and partially offset by the net increase in volume of work and projects with other customers.

Current wording

The increase in net revenues from the 2025 Period to the 2026 Period resulted from $34,060,000 in staking and other related revenue generated by our digital assets segment and an $874,000 increase in design segment revenue, primarily attributable to the net increase in volume of work and projects with customers.

Previous wording

Our gross profit increased and gross margin increased from 12.3% in the 2025 Period to 75.4% in the 2026 Period. The increase in both gross profit and gross margin resulted from the high margin staking revenue generated by our digital assets segment, which generated gross profit of $24,500,000 and gross margin of 91.7%. In the design segment, gross profit increased $467,000 and gross margin increased from 12.3% in the 2025 Period to 18.5% in the 2026 Period driven by improved utilization and cost cutting measures implemented in January and June of 2025.

Current wording

Our gross profit increased and gross margin increased from 3.3% in the 2025 Period to 72.2% in the 2026 Period. The increase in both gross profit and gross margin resulted from the high margin staking revenue generated by our digital assets segment, which generated gross profit of $30,476,000 and gross margin of 89.5%. In the design segment, gross profit increased $1,816,000 and gross margin increased from 3.3% in the 2025 Period to 19.3% in the 2026 Period driven by improved utilization and cost cutting measures implemented in January and June of 2025.

Previous wording

Sales and marketing expenses increased $839,000 due to increased outside marketing spend and marketing personnel costs related to our new digital asset treasury strategy, including $256,000 of non-cash share-based compensation expense, which was partially offset by a $42,000 reduction in design segment marketing expenses, driven by cost reduction efforts, including lower personnel costs and lower marketing spend.

Current wording

Sales and marketing expenses increased due to a $1,251,000 increase in outside marketing spend and marketing personnel costs related to our new digital asset treasury strategy, including $593,000 of non-cash share-based compensation expense, coupled with a $45,000 increase in design segment marketing spend.

Previous wording

Digital assets general and administrative expenses include $1,107,000 of asset management and related fees. Corporate general and administrative expenses increased $3,722,000 due to higher professional fees related to our services agreement with Galaxy, higher investor relations spending and higher personnel costs associated with hiring personnel necessary to execute our new digital assets treasury strategy, including $542,000 of non-cash share-based compensation expense. Design segment general and administrative expenses decreased $263,000 due to lower personnel costs related to staff reductions and other cost-cutting measures in response to the decline in revenues. Management continues to monitor the various components of general and administrative expenses and how these costs are affected by inflationary and other factors. We intend to adjust these costs as needed based on the overall needs of the business.

Current wording

Digital assets general and administrative expenses include $3,666,000 of asset management and related fees. Corporate general and administrative expenses increased $11,889,000 due to higher professional fees related to our services agreement with Galaxy, an increase of $3,266,000 in non-cash share-based compensation for management and directors, higher personnel costs associated with hiring personnel necessary to execute our new digital assets treasury strategy and higher insurance premiums. Design segment general and administrative expenses decreased $943,000 primarily due to lower personnel costs related to staff reductions and other cost-cutting measures in response to the decline in revenues. Management continues to monitor the various components of general and administrative expenses and how these costs are affected by inflationary and other factors. We intend to adjust these costs as needed based on the overall needs of the business.

Previous wording

The loss on digital assets in the 2026 Period of $761,919,000 was driven by the reduction in the fair value of our digital assets resulting from the decline in the market value of SOL. The impairment charge of $118,137,000 relates to our holdings of fwdSOL and is also driven by the decline in market value of SOL. These amounts reflect the volatility inherent in digital asset holdings and the Company’s accounting policy that does not permit the reversal of impairment losses even if fair values subsequently increase. The derivative gain is the net impact of written SOL option contracts during the 2026 Period. The change in interest income, net is due to non-cash interest income of $594,000 related to loaned SOL plus an increase in cash interest income of $245,000 related to higher cash balances during the 2026 Period compared to the 2025 Period.

Current wording

The loss on digital assets in the 2026 Period of $811,672,000 was driven by the reduction in the fair value of our digital assets resulting from the decline in the market value of SOL. The impairment charge of $133,359,000 relates to our holdings of fwdSOL, which is also driven by the decline in market value of SOL, and ONyc. These amounts reflect the volatility inherent in digital asset holdings and the Company’s accounting policy that does not permit the reversal of impairment losses even if fair values subsequently increase. The net derivative loss is the net impact of written and purchased SOL option contracts during the 2026 Period. The change in interest income/(expense), net is due to higher interest income from digital asset lending and higher cash balances during the 2026 Period compared to the 2025 Period and was offset by an increase in interest expense related to borrowing from Galaxy Digital LLC.

Previous wording

Consolidated basic and diluted loss per share from continuing operations were $8.95 and $2.47 for the 2026 Period and the 2025 Period, respectively.

Current wording

Consolidated basic and diluted loss per share from continuing operations were $10.02 and $4.65 for the 2026 Period and the 2025 Period, respectively.

Previous wording

At March 31, 2026, we had negative working capital of approximately $33.0 million. At April 30, 2026, our cash balance was approximately $20.0 million. The Company believes this negative working capital position does not raise substantial doubt about its ability to continue as a going concern because of our significant digital asset holdings, access to our ATM facility, and our ability to liquidate digital assets as needed to meet our obligations.

Current wording

At August 3, 2026, our cash balance was approximately $4,500,000. At June 30, 2026, we had negative working capital of approximately $105,655,000. The Company believes this negative working capital position does not raise substantial doubt about its ability to continue as a going concern because of our significant digital asset holdings, access to our ATM facility, and our ability to liquidate digital assets as needed to meet our obligations.

Previous wording

In connection with the Loan Agreement, from March through May 2026, the Company executed eight separate Loans in an aggregate amount of $80,000,000, all of which remains outstanding as of the filing date of this report. These Loans have a weighted average interest rate of 2.7% and maturity dates ranging from 7 days to 1 year, with $55,000,000 of these Loans having evergreen provisions allowing them to remain outstanding until repayment is requested by Galaxy LLC per the terms of the Loan Agreement. The Loans are secured by the Company’s fwdSOL, which Galaxy LLC has the right to sell, pledge or rehypothecate per the terms of the Loan Agreement.

Current wording

In connection with the Loan Agreement, the Company executed separate Loans, of which $120,000,000 remains outstanding as of August 3, 2026. These Loans have a weighted average interest rate of 2.6% and maturity dates ranging from 7 days to 1 year, with $102,500,000 of these Loans having evergreen provisions allowing them to remain outstanding until repayment is requested by Galaxy LLC per the terms of the Loan Agreement. The Loans are secured by the Company’s SOL and/or fwdSOL, which Galaxy LLC has the right to sell, pledge or rehypothecate per the terms of the Loan Agreement.

Previous wording

On April 27, 2026, the Company invested approximately $2.2 million, through a combination of primary and secondary share purchases, as part of a $5.0 million equity round at a $25.0 million post-money valuation in On Re Ltd, a private tokenized reinsurance company on the Solana blockchain which is incorporated in England and Wales. A small portion of the investment remains subject to regulatory approval from the Bermuda Monetary Authority. In connection with the investment, the Company also committed to purchase up to $25.0 million of the ONyc token, which is built natively and trades exclusively on the Solana blockchain, and which will meaningfully expand On Re’s reinsurance underwriting capacity. The Company’s obligation to fund this commitment is subject to the terms and conditions set forth in the applicable investment documentation. If the Company fails to fund this commitment within thirty days of the applicable deadline, lead co-investors would have the right to acquire the Company’s equity stake in On Re at the original subscription price of approximately $2.2 million. The Company has evaluated this commitment in the context of its liquidity planning and believes it has adequate resources to fund this obligation, subject to market conditions.

Current wording

In Fiscal 2026, the Company invested approximately $1,901,000, through a combination of primary and secondary share purchases, as part of a $5.0 million equity round at a $25.0 million post-money valuation in On Re Ltd (“On Re”), a private tokenized reinsurance company on the Solana blockchain which is incorporated in England and Wales. An additional $266,000 of the investment remains subject to regulatory approval from the Bermuda Monetary Authority. In connection with the investment, the Company also committed to purchase up to $25.0 million of the ONyc token, which is built natively on and trades exclusively on the Solana blockchain, and which is expected to meaningfully expand On Re’s reinsurance underwriting capacity. As of August 3, 2026, the Company has invested approximately $20.6 million of the committed $25 million.

Previous wording

During the 2026 Period, cash used in operating activities of $12,728,000 resulted from a net loss of $868,733,000, non-cash net digital asset revenue of $25,093,000, an increase in prepaid expenses and other current assets of $1,673,000, and a decrease in accounts payable and related party payables of $530,000 partially offset by the loss on digital assets of $761,919,000, the digital asset impairment charge of $118,137,000, an increase in accrued expenses and other liabilities $2,009,000, non-cash charges for depreciation, amortization and share-based compensation of $864,000, and the net change in other operating assets and liabilities of $372,000.

Current wording

During the 2026 Period, cash used in operating activities of $16,079,000 resulted from a net loss of $937,692,000 non-cash net digital asset revenue of $31,107,000, and an increase in prepaid expenses and other current assets of $1,028,000, partially offset by the loss on digital assets of $811,672,000 the digital asset impairment charge of $133,359,000, other non-cash charges of $8,294,000 and the net change in other operating assets and liabilities of $423,000.

Previous wording

During the 2025 Period, cash used in operating activities of $972,000 resulted from a net loss of $2,160,000, a decrease in accrued expenses and other current liabilities of $153,000 and net cash used in discontinued operations of $92,000, partially offset by non-cash expenses of $462,000 related to depreciation, amortization, share-based compensation, credit loss expense and goodwill impairment and a decrease in accounts receivable and contract assets of $912,000 and the net change in other operating assets and liabilities of $59,000.

Current wording

During the 2025 Period, cash used in operating activities of $2,199,000 resulted from a net loss of $3,010,000, the gain on sale of the OEM segment of $1,406,000, the gain on the change in fair value of the warrant liability of $160,000, a decrease in accrued expenses and other current liabilities of $261,000, partially offset by non-cash expenses of $589,000 related to depreciation, amortization, share-based compensation, credit loss expense and goodwill impairment charges, a decrease in accounts receivable and contract assets of $1,634,000, the net change in other operating assets and liabilities of $19,000 and the net cash provided by discontinued operations of $396,000.

Previous wording

Cash provided by investing activities in the 2026 Period consisted of proceeds from the sale of digital assets of $338,068,000, offset by purchases of digital assets of $335,977,000 and purchases of property and equipment of $3,000. Cash used in investing activities in the 2025 Period of $7,000 resulted from purchases of property and equipment.

Current wording

Cash used in investing activities in the 2026 Period consisted of purchases of digital assets of $386,292,000, purchase of marketable equity securities of $2,300,000, purchase of investment of $1,901,000, premiums paid on derivatives, net of $1,208,000, and purchases of property and equipment of $3,000, offset by proceeds from the sale of digital assets of $337,990,000.

Previous wording

Cash used in financing activities in the 2026 Period consisted of share repurchases of $58,022,000, fees associated with financing activities of $230,000 and deferred financing costs associated with our ATM of $144,000, partially offset by proceeds from loans payable of $40,000,000, net proceeds from the ATM of $7,457,000 and proceeds from stock options exercised of $45,000. There was no cash used in or provided by financing activities in the 2025 Period.

Current wording

Cash provided by financing activities in the 2026 Period consisted of net proceeds from loans payable – related party of $105,000,000, net proceeds from the ATM of $7,882,000 and proceeds from stock options exercised of $45,000, partially offset by share repurchases of $69,863,000, fees associated with financing activities of $230,000 and deferred financing costs associated with our ATM of $243,000.