Exodus Movement, Inc.

Notes to the Consolidated Financial Statements

1. Nature of Business

Exodus Movement, Inc. (“Exodus” or “the Company” or “we”) was incorporated in Delaware in July 2016. In December

2025, the Company effected the redomestication of the Company from the State of Delaware to the State of Texas. The

Company operates in the FinTech subsector of the greater blockchain and digital asset industry. The Company has

developed an un-hosted self-custodial digital asset wallet on the Exodus Platform and contracts with third parties to provide

various services to users that utilize the Company’s wallet through the platform.

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company prepares its consolidated financial statements in conformity with U.S. GAAP. In the opinion of

management, all adjustments necessary in order to make the consolidated financial statements not misleading have been

included.

Use of Estimates

The preparation of these consolidated financial statements in conformity with U.S. GAAP requires us to make estimates

and assumptions that affect the amounts reported in the financial statements and footnotes. Actual results could differ

materially from those estimates. Significant estimates inherent in the preparation of the consolidated financial statements

include depreciation, the recoverability of long-lived assets, useful lives and impairment of long-lived tangible and

intangible assets, valuation of share-based compensation, valuation of equity warrants, reserves for litigation and other

contingencies and accounting for income taxes, among others.

Principles for Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned

subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Foreign Currency Translation and Transactions

Assets and liabilities of international subsidiaries whose functional currency is the local currency are translated at the rate

of exchange in effect on the consolidated balance sheet date; income and expenses are translated at the average exchange

rates prevailing during the period. The effects of these translation adjustments are presented in the consolidated statements

of shareholders’ equity and in the consolidated statements of operations and comprehensive (loss) income. Fluctuations in

the Company’s functional currency from our net investment in the Company’s subsidiaries expose us to foreign currency

translation risk, where changes in foreign currency exchange rates may adversely affect our results of operations upon

translation into U.S. Dollars.

Segment Reporting

Operating segments are defined as components of an entity for which separate financial information is available and that is

regularly reviewed by the Chief Executive Officer, also known as the Chief Operating Decision Maker (the “CODM”) in

deciding how to allocate resources to an individual segment and in assessing performance. The CODM reviews financial

information presented on a consolidated basis for purposes of making operating decisions, allocating resources and

evaluating financial performance. As such, the Company has determined that it operates asone operating segment andone

reportable segment. Segment expenses are provided to the CODM on the same basis as disclosed in the consolidated

statements of operations and comprehensive (loss) income which are used to evaluate company performance. The CODM

does not evaluate performance or allocate resources based on segment assets, and therefore such information is not

presented in the notes to the financial statements.

Revenue Recognition

The Company applies the provisions of Accounting Standards Codification ("ASC")Topic 606, Revenue from Contracts

with Customers (“ASC 606”), to determine the measurement of revenue and the timing of when it is recognized. Under

ASC 606, revenue is measured as the amount of consideration we expect to be entitled to, in exchange for transferring

products or providing services to our customers and is recognized when performance obligations under the terms of

contracts with our customers are satisfied. ASC 606 prescribes a five-step model for recognizing revenue from contracts

with customers: (1) identify contract(s) with the customer; (2) identify the separate performance obligations in the contract;

(3) determine the transaction price; (4) allocate the transaction price to the separate performance obligations in the contract;

and (5) recognize revenue when (or as) each performance obligation is satisfied. Our primary customers are Application

Programming Interface Providers ("API Providers") who pay for access to the Exodus Platform.

Exchange Aggregation, Fiat Onboarding, and Staking Revenue Earned Through an API Provider

The Company recognizes various amounts charged to API Providers which are based on user interactions conducted

through APIs as revenue. Currently, the Company has API agreements with providers of digital asset-to-digital asset

exchanges, fiat-to-digital asset conversions, and digital asset staking. Under the terms and conditions of the agreements, the

Company and the providers have integrated the APIs into the Exodus Platform. In consideration for the integration by the

Company of the APIs into the Exodus Platform software, API Providers pay us an API fee for certain user interactions with

the API Provider. These interactions are typically transactions of services between provider and a user, effected through the

API.

Exchange Aggregation—There are two main types of contracts with API Providers, transaction-based contracts and tiered

subscription contracts based on volume. The performance obligations under both types of contracts are such that the

Company allows the API Providers to provide software services which permit a user of Exodus’ un-hosted self-custodial

digital asset software wallet to exchange one digital asset for another digital asset (the “Exchange Services”). The API

Providers supply an application program interface to permit the Exchange Services to be integrated into the un-hosted self-

custodial wallet software (the “Exchange API”). Under the terms and conditions of the agreements, the Company and the

Exchange API Providers have integrated the Exchange APIs into the Exodus wallet.

For transaction-based contracts, revenue is recognized when a transaction occurs between a user and the API Provider. The

Company receives from the API Provider a set percentage, per the contract, of the transaction value. As the majority of our

revenue is transaction based, our revenue can vary significantly based on the volume of user transactions that occur each

day. Because revenue is recognized based on our estimates of the user transaction value (using pricing information from an

independent pricing source), network fees, and spread captured by the API Provider, any or all of which may differ from

the actual amounts, there is variable consideration. The Company calculates an expected variable percentage to apply to the

transaction when and as revenue generating activity (in the form of user transactions with API Providers) occurs, which is

used to calculate the amount recognized. Because a transaction-based contract between the Company and the API Provider

represents a series of distinct services, which occur daily, the variable consideration allocation exception allows the

Company in each case to allocate the consideration related to each individual user transaction to the period in which it is

earned, since the pricing formula is consistent throughout the period. The variability in transaction price no longer exists

after receipt of consideration. The transaction price is based on a percentage of the fair value of assets exchanged and is

settled in Bitcoin.

For tiered subscription contracts, revenue is recognized monthly when the API Provider is invoiced a U.S. dollar amount

based on the user transaction volume tier reached during the corresponding month. The invoice may be settled in an

amount of either Bitcoin or U.S. Dollar Coin ("USDC"), at the election of the API Provider, equivalent in value to the U.S.

dollar amount at time of payment. Because the contract is denominated in U.S. dollars and the amount invoiced to and due

from the API Provider is a U.S. dollar amount, even if settled in the form other than cash, the consideration is valued as of

the payment date and revenue is recognized based on the U.S. dollar amount. Because the transaction volume is not known

at the time of contract inception and remains uncertain until the contract period is complete, there is variable consideration.

The variable consideration is resolved each month given that the Company invoices its tiered subscription customers in

U.S. dollars based on actual volume tier reached.

The Company has concluded that the contracts do not contain any significant financing components, as either the period

between receipt of the funds and the satisfaction of performance obligations is largely within one year. Substantially all of

the contracts call for payment to be made in digital assets or USDC and have payment terms that are less than 30 days.

Fiat onboarding—Fiat on-ramps, powered by API Providers, such as Ramp network, facilitate an effortless exchange for

users to buy digital assets with fiat currency through bank transfer, credit or debit card and Apple Pay. Users can sell digital

assets for fiat currency and transfer to their bank account utilizing our off-ramp, which is currently powered by API

Providers such as MoonPay and Sardine. Exodus receives transaction-based fees from our third-party providers based on

volume of currency exchanged. As the majority of our revenue is transaction based, our revenue can vary significantly

based on the volume of user transactions that occur each day. Because revenue is recognized based on our estimates of the

user transaction value (using pricing information from an independent pricing source), network fees, and spread captured

by the API Provider, any or all of which may differ from the actual amounts, there is variable consideration. The Company

calculates an expected variable percentage to apply to the transaction when and as revenue generating activity (in the form

of user transactions with API Providers) occurs, which is used to calculate the amount recognized. Because a transaction-

based contract between the Company and the API Provider represents a series of distinct services, which occur daily, the

variable consideration allocation exception allows the Company in each case to allocate the consideration related to each

individual user transaction to the period in which it is earned, since the pricing formula is consistent throughout the period.

The variability in transaction price no longer exists after receipt of consideration. The transaction price is based on a

percentage of the fair value of assets exchanged and is settled primarily in USDC.

Staking revenue earned through an API Provider—By participating in blockchain validation through our third-party API

Provider, Everstake, users are able to earn rewards by staking supported digital assets held in their Exodus wallets.

According to the design of the underlying network staking protocols, the holder determines the amount of digital assets to

stake, retains full control and ownership of the digital assets and can unstake them at any time. Users of the Exodus

Platform are able to access the Staking app within the Exodus Platform and delegate certain digital assets to participate in

staking and receive the resulting rewards. Exodus receives a volume based tiered monthly subscription fee from Everstake.

Because the transaction volume is not known at the time of contract inception, the contract is based by epoch period or

daily period depending on the digital asset and their network validation rules. The Company has determined that the

variable consideration is resolved at the end of the period. Revenue is recognized on a monthly basis based on the

completion of the series of performance obligations during the period.

Consulting and Other Revenue Earned by Exodus or Through an API Provider

Consulting and other—The Company recognizes revenue from the provision of consulting and other services based on

contractual terms. Revenue from consulting and other primarily consists of transactions for non-fungible tokens. The

Company evaluates the transactions based on whether it controls the digital asset provided before it is transferred to the

users or whether it acts as an agent by arranging for other customers to provide the digital asset to the customer. The

Company does not control the digital asset being provided before it is transferred to the buyer, does not have inventory risk

related to the digital asset, and is not responsible for the fulfillment of the digital asset. The Company also does not set the

price for the digital asset. The Company’s API Provider agreements and user terms of service along with the self-custodial

nature of the product clarify that the responsibility for transactions flowing through the APIs are exclusively the

responsibility of the API Provider and the user. The Company has determined that for its transaction-based contracts it is

an agent solely for the purposes of ASC 606.

Concentration of Revenue

Revenue from API Providers exceeding 10% of total revenues for the years ended December 31, 2025 and 2024 were as

follows:

(1) Company did not have over 10% of revenue during the fiscal year 2025.

(2) Company did not have over 10% of revenue during the fiscal year 2024.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, money market mutual funds and treasury bills with an original maturity of

three months or less.

U.S. Dollar Coin

USDC is a stablecoin digital asset that is backed by U.S. dollars or other liquid assets and accounted for as a financial

instrument. USDC can be redeemed for one U.S. Dollar.

Concentration of Credit Risk

The Company maintains its cash and cash equivalents in checking accounts, various investment grade institutional money

market accounts, bank term deposits and licensed digital asset exchanges. Deposited funds held with financial institutions

may exceed the$250,000 limit insured by the Federal Deposit Insurance Corporation (“FDIC”). Generally, these deposits

may be redeemed upon demand and are maintained with financial institutions with reputable credit. The Company has not

experienced any losses on funds deposited to these accounts and, therefore, does not believe it is exposed to any significant

credit risk with respect to these accounts. The Company also holds cash at digital asset trading venues and performs a

regular assessment of these trading venues as part of its risk management process.

Accounts Receivable

The Company records accounts receivable at the invoiced amount. Accounts receivable are contractual rights to receive

payment in the form of digital assets, stable coin, or cash, and are recognized as an asset on the consolidated balance

sheets. Accounts receivable consists of earned but not yet received revenue accounted for in accordance ASC 606.

Accounts receivable that result in obtaining the right to receive a fixed amount of digital assets in the future are hybrid

instruments, consisting of a receivable host contract that is initially measured at the fair value of the underlying digital

assets and is subsequently carried at amortized cost, and an embedded forward feature based on the changes in the fair

value of the underlying digital asset. The embedded forward is bifurcated from the host contract and is subsequently

measured at fair value.

The Company applies ASC 326-20, Financial Instruments – Credit Losses, to record an allowance for doubtful accounts for

receivables based on expected credit losses. In determining expected credit losses, the Company considers historical loss

experience, the aging of its receivable balance, and the term between invoicing and when payment is due. Any accounts

receivable balance shall be charged off in the period in which trade receivables are deemed uncollectible. Recoveries of

trade receivables previously charged off shall be recorded when received. There have been no receivables charged off for

the periods presented.

Loans Receivable, Net

Loans receivable, net are recognized when the Company has a legally enforceable right to receive cash or other financial

assets under the terms of a written loan or promissory note. Loans receivable are initially recorded at the principal amount

advanced and are subsequently carried at amortized cost, net of any allowance for credit losses. The Company evaluates

loans receivable for expected credit losses in accordance with ASC 326, Financial Instruments—Credit Losses, and records

an allowance for credit losses when necessary based on management’s assessment of expected collectability.

Interest income is recognized using the effective interest method. Loan origination fees received, net of certain direct loan

origination costs, are deferred as an adjustment to the carrying value of the related loans and amortized into interest income

over the estimated life of the loans. Contractual exit fees associated with loans receivable are accounted for as adjustments

to yield and amortized into interest income using the effective interest method over the expected term of the loans. For

loans that provide for the capitalization of interest, accrued interest is added to the carrying value of the loan receivable in

accordance with the contractual terms and is not separately presented as accrued interest receivable.

Fair Value Measurements

Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with

the highest priority given to Level 1, as these are the most transparent or reliable:

•Level 1 – Quoted prices for identical instruments in active markets.

•Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar

instruments in markets that are not active; and model-derived valuations in which all significant inputs are

observable in active markets.

•Level 3 – Valuations derived from valuation techniques in which one or more significant inputs are not

observable.

Prices may fall within Level 1, 2 or 3 depending upon the methodology and inputs used to estimate fair value for each

specific security. In general, securities are priced using third-party pricing services. Securities not priced by pricing

services are submitted to independent brokers for valuation and, if those are not available, internally developed pricing

models are used to value assets using a methodology and inputs that market participants presumably would use to value the

assets. Prices obtained from third-party pricing services or brokers are not adjusted. Subsequent to the adoption of

Accounting Standards Update ("ASU") 2023-08, the fair value of each digital asset is based on quoted (unadjusted) prices

in the principal market for each digital asset. Such prices are based on Level 1 inputs in accordance with ASC 820 - Fair

Value Measurement.

Investments

The Company determines the classification of investments at the time of purchase and evaluates such classification at each

balance sheet date. Investments over which the Company exercises significant influence, but does not control, are

accounted for using the equity method of accounting. Investments over which the Company does not exercise significant

influence are accounted for in accordance with ASC 321, Investments—Equity Securities("ASC 321").

As of December 31, 2025, the Company held (i) investments in Simple Agreements for Future Equity (“SAFEs”) and (ii)

one investment in an equity security. The SAFEs represent contractual rights to acquire equity interests upon the

occurrence of specified future events and do not provide the Company with voting rights, governance rights, or the ability

to exercise significant influence over the issuers. Accordingly, the SAFEs are accounted for as cost method investments

and are included within other long-term assets on the consolidated balance sheets. The Company’s investment in an equity

security is accounted for in accordance with ASC 321 which is measured at fair value. Changes in the equity security fair

value is recognized in other losses, net on the consolidated statement of operations and comprehensive (loss) income and

the equity security is included within other long-term assets on the consolidated balance sheets. The Company evaluates its

investments for impairment at each balance sheet date. An impairment loss is recognized when the carrying amount

exceeds estimated fair value and the decline in value is determined to be other than temporary.

Convertible Note Receivable

In November 2025, the Company entered into a$0.1 million convertible loan agreement with an unrelated third party. The

convertible note is accounted for as a note receivable within other long-term assets, in accordance with ASC 310 -

Receivables, on the Company's balance sheet and is recorded at amortized cost which approximates its fair value. The note

accrues interest at a rate of 0.50% per annum above the 12-month EURIBOR, with interest beginning to accrue on January

1, 2027. The convertible note has a contractual maturity date of October 31, 2027, unless earlier converted in accordance

with the terms of the agreement.

The convertible note includes conversion features that permit the outstanding principal and accrued interest to be converted

into equity, of the unrelated third party, upon the occurrence of specified events, including (i) a qualifying equity financing,

(ii) an exit event, or (iii) at the election of the Company, if no qualifying financing has occurred, upon maturity. The

conversion price component varies by each trigger event: in the event of a new financing round, it is the lowest fully-

diluted price per share multiplied by a 80.0% discount multiple subject to a contractual valuation cap of€15.0 million; for

an exit event, it is the lower of the cap-based fully-diluted ("FD") price or the actual FD price in the exit; and for

conversion on request, it is the cap-based FD price. As of December 31, 2025, the carrying amount of the convertible note

receivable was$0.1 million, and no allowance for credit losses was recorded.

Variable Interest Entity

The Company evaluates its involvement with legal entities to determine whether the entity is a variable interest entity

("VIE") and whether consolidation is required under applicable accounting guidance. An entity is considered a VIE when,

among other factors, (i) the equity investment at risk is not sufficient to permit the entity to finance its activities without

additional subordinated financial support or (ii) the equity holders at risk lack the characteristics of a controlling financial

interest. If the Company has a variable interest in a VIE, it assesses whether it is the primary beneficiary. The primary

beneficiary is the party that has both (i) the power to direct the activities that most significantly impact the VIE's economic

performance and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to

the VIE. In assessing whether it has the power to direct the activities that most significantly impact a VIE's economic

performance, the Company evaluates the substance of its contractual arrangements, governance rights, and decision-

making authority. Rights that are designed solely to protect the Company's interests, without providing substantive

decision-making ability, are not considered indicators of power. If the Company determines that it is not the primary

beneficiary of a VIE, the entity is not consolidated and the Company accounts for its involvement in accordance with other

applicable accounting guidance.

Fixed Assets, Net

Fixed assets are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of the respective

assets. Maintenance and repairs are charged to expense as incurred; major renewals and betterments are capitalized and

depreciated.

Digital Assets

Effective January 1, 2024, the company adopted ASU 2023-08, Improvements to Crypto Assets Disclosures. The Company

presents digital assets separately from other intangible assets, recorded as digital assets on the consolidated balance sheets.

The net activity from remeasurement of digital assets at fair value is reflected in the consolidated statements of operations

and comprehensive (loss) income within expense (income). Digital assets that are received as noncash consideration in our

revenue arrangements and sold for cash within seven days are presented as cash flows from operating activities in other

operating activities settled in digital assets and USDC, while other digital asset activity held longer than seven days is

reflected as cash flows from investing activities under disposal of digital assets held in the consolidated statements of cash

flows. The Company uses a mix of non-custodial and custodial services at multiple locations that are geographically

dispersed to store its digital assets. The Company has performed an analysis of the principal market. Refer to "Note 6 -

Intangible Assets", and "Note 13 - Fair Value Measurements", for additional information. The Company has ownership of

and control over its digital assets. The cost basis is calculated on a first-in first-out basis.

Software Development Cost

The Company applies ASC 985-20, Software-Costs of Software to Be Sold, Leased, or Marketed, in analyzing the

Company’s software development costs. ASC 985-20 requires the capitalization of certain software development costs

subsequent to the establishment of technological feasibility for a software product in development. Software development

costs associated with establishing technological feasibility are expensed as incurred. We apply ASC 350-40, Intangibles—

Goodwill and Other—Internal Use Software, in the review of certain system projects. These system projects generally

relate to software not hosted on our users’ systems (as defined in ASC 350-40), where the user has no access to source

code, and it is infeasible for the user to operate the software themselves without Exodus servers in place. In these reviews,

all costs incurred during the preliminary project planning stages are expensed as incurred. Amortization of capitalized

software development costs are included in technology, development and user support in the consolidated statements of

operations and comprehensive (loss) income. During the years ended December 31, 2025 and 2024, the Company recorded

$0.2 million and$0.3 million, respectively, insoftware development impairment which is presented as impairment on other

assetsin the consolidated statements of operations and comprehensive (loss) income.

Indefinite-Lived Intangible Assets

The Company applies ASC 350-30, Intangibles-Goodwill and Other, General Intangibles Other Than Goodwill, in

analyzing the Company’s indefinite-lived assets. Indefinite-lived assets, primarily the Company’s domain name, are not

amortized but are evaluated annually for impairment and whenever events or changes in circumstances indicate that the

carrying amount of the asset may exceed its fair value. If the carrying value of an indefinite-lived asset exceeds its fair

value, an impairment charge is recognized in an amount equal to that excess.

Definite-Lived Intangible Assets

The Company applies ASC 350-30, Intangibles-Goodwill and Other, General Intangibles Other Than Goodwill, in

analyzing the Company’s definite-lived assets. The Company's intangible assets consist primarily of technology in

development, an assembled workforce, and trade names. These intangible assets were capitalized at fair market value and

are being amortized over their estimated useful lives.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets, currently consisting of indefinite-lived intangible assets and definite-lived

intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of the asset

may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of

an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an

asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying

amount of the asset exceeds the fair value of the asset. Significant management judgment is required to determine the fair

value of our long-lived assets and measure impairment, which includes projected cash flows. Fair value is determined by

using various valuation techniques, including discounted cash flow models, sales of comparable properties and third-party

independent appraisals. Changes in estimated fair value could result in an impairment of the asset. There were no material

impairment charges recorded for the periods reported. The Company performs its annual impairment test of long-lived

assets as of December 31 and determined thatno impairment existed for the Company’s long-lived assets the years ended

December 31, 2025 and 2024.

Share-based Compensation

Under the Company’s share-based compensation plans, certain team members, members of the Company’s Board, and its

consultants have received grants of restricted stock units (“RSUs”) for Exodus Movement Class A common stock.

The Company accounts for RSUs as equity classified awards. For RSUs, the expenseis measured based on the grant-date

fair value and is recognized over the requisite service period for each vesting tranche of awards expected to vest, with

forfeitures estimated based on historical experience and future expectations. Share-based compensation is included in

expenses (income) on the consolidated statements of operations and comprehensive (loss) income.

Warrant Valuations

During fiscal year 2025, in connection with certain agreements, the company issued warrants to purchase shares of its

common stock. The company measures the fair value of the warrants using the Black-Scholes option pricing model as of

the issuance date. Exercisable warrants are equity based and recorded as a reduction in additional paid-in capital.

The material factors incorporated in the Black-Scholes model in estimating the fair value of the options and warrants

granted for the periods presented were as follows:

•Expected dividend yield -The expected dividend is assumed to be zero as we have never paid dividends and have

no current plans to pay any dividends on our common stock.

•Expected stock-price volatility - The expected volatility is derived from the historical volatility of the Company's

stock as there are no other publicly traded companies within our industry that we consider to be comparable over a

period approximately equal to the expected term.

•Risk-free interest rate - The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant

for zero coupon U.S. Treasury notes with maturities approximately equal to the expected term.

•Expected term - The expected term represents the period that the awards are expected to be outstanding. Our

historical warrant exercise experience does not provide a reasonable basis upon which to estimate an expected

term because of a lack of sufficient data. Therefore, we estimate the expected term by using the simplified method

provided by the SEC. The simplified method calculates the expected term as the average of the time-to-vesting

and the contractual life of the options.

•Fair value per share - The fair value per share is the fair price or theoretical value for a call or a put option based

on six variables such as volatility, type of option, underlying stock price, time, strike price and risk-free rate.

(Loss) Earnings Per Share

The Company computes net (loss) income per share using the two-class method required for participating securities. The

two-class method requires income available to common shareholders for the period to be allocated between common stock

and participating securities based upon their respective rights to receive dividends as if all income for the period had been

distributed. The Company’s Class A and Class B common stock were deemed participating securities. Basic net (loss)

income per share is computed using the weighted-average number of outstanding shares of common stock during the

period. Diluted net (loss) income per share is computed using the weighted-average number of outstanding shares of

common stock and, when dilutive, potential shares of common stock outstanding during the period. Potential shares of

common stock consist of incremental shares issuable upon the exercise of stock options, warrants, and vesting of RSUs.

Income Taxes

The Company applies the provisions of ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities are

determined based on differences between the financial statement carrying amounts and tax bases of assets and liabilities

and are measured using the enacted tax rates that are expected to apply to taxable income in the years in which those

temporary differences are expected to be recovered or settled. The effect of a change in tax rates is recognized in the

statements of operations and comprehensive (loss) income in the period that includes the enactment date. The Company

records valuation allowances to reduce its deferred tax assets to the amount that is more likely than not be realized.

In accordance with ASC 740, the Company recognizes, in its consolidated financial statements, the impact of the

Company's tax positions that are more likely than not to be sustained upon examination. The Company will determine

whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related

appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met

the more-likely-than-not recognition threshold, the Company presumes that the position will be examined by the

appropriate taxing authority with full knowledge of all relevant information. Upon determination that a tax position meets

the more-likely-than-not recognition threshold, it is measured to determine the amount of benefit to recognize in the

financial statements. The Company recognizes interest and penalties for uncertain tax positions in income tax expense.

On July 4, 2025, the “One Big Beautiful Bill Act” (P.L. 119‑21) was enacted into law. The legislation reinstates and extends

several provisions of the 2017 Tax Cuts and Jobs Act, including permanent 100% bonus depreciation, enhanced

Section 179 expensing, full research and development expense deduction for domestic expenditures and modification to the

international tax framework. We are currently assessing its impact on our consolidated financial statements. The primary

impact of the legislation is the acceleration of deductions related to research and development costs incurred in the U.S.,

which did not have a material impact on the Company’s effective tax rate for the year ended December 31, 2025.

Asset Acquisitions

When an acquisition does not meet the definition of a business combination because either: (i) substantially all of the fair

value of the gross assets acquired is concentrated in a single identifiable asset, or group of similar identified assets, or (ii)

the acquired entity does not have an input and a substantive process that together significantly contribute to the ability to

create outputs, we account for the acquisition as an asset acquisition. In an asset acquisition, goodwill is not recognized, but

rather, any excess purchase consideration over the fair value of the net assets acquired is allocated on a relative fair value

basis to the identifiable net assets as of the acquisition date and any direct acquisition-related transaction costs are

capitalized as part of the purchase consideration. Purchase consideration is allocated to the tangible and intangible assets

acquired and liabilities assumed based on the estimated fair values as of the acquisition date, which are measured in

accordance with fair value measurement accounting principles. The determination of fair value requires management to

make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly

subjective in nature. For information on the acquisition that we completed during the year ended December 31, 2025 that

we accounted for as asset acquisitions, see "Note 6 - Intangible Assets.”

On November 10, 2025, the Company acquired substantially all of the assets of Gratitud Interna Ltd., a Latin American

crypto payments platform. The aggregate purchase price was$2.7 million excluding transaction costs of$0.1 million, of

which$1.5 million was paid in cash and$1.2 million was delivered in newly issued Class A shares. The Company issued

55,825 shares of Class A common stock, based on the 60-day volume-weighted average price of the Company’s Class A

common stock as of that date. This asset purchase expanded our payments capabilities by adding technology in

development, an assembled workforce, and a trade name supporting crypto-based merchant transactions in the Latin

America market.

Recently Issued Accounting Pronouncements Pending Adoption

Targeted Improvements to the Accounting for Internal-Use Software

In September 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-06, “Intangibles — Goodwill

and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use

Software”. The amendments in ASU 2025-26 (i) remove all references to prescriptive software development “project

stages,” (ii) refocus the capitalization threshold such that an entity begins capitalizing when (a) management authorizes and

commits to funding the project and (b) it is probable that the project will be completed and used for its intended function

(subject to evaluation of significant development uncertainty). The amendments in ASU 2025-26 do not (i) amend the

accounting for external-use software under Subtopic 985-20, (ii) change the types of internal-use software costs eligible for

capitalization (e.g., data conversion, training, maintenance costs generally remain expensed), or (iii) modify when

capitalization ceases (i.e., when the software is substantially complete and ready for its intended use). The amendments in

ASU 2025-26 are effective for annual periods beginning after December 15, 2027, and for interim periods within those

annual periods. Early adoption is permitted, but only as of the beginning of an annual reporting period. Entities may elect a

prospective, retrospective, or modified retrospective transition approach. The Company is currently evaluating the impact

of adopting the standard on the consolidated financial statements.

Expense Disaggregation Disclosures

In November 2024, the FASB issued ASU 2024-03, "Expense Disaggregation Disclosures". ASU 2024-03 aims to enhance

disclosures regarding a public business entity’s expenses, specifically addressing investor requests for more detailed

information on the types of expenses included in commonly presented expense captions such as cost of sales, selling,

general and administrative expenses, and research and development. The amendments in ASU 2024-03 require additional

transparency on the breakdown of expenses, including purchases of inventory, team member compensation, depreciation,

amortization, and depletion. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after

December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The

amendments may be applied either prospectively to financial statements issued for reporting periods after the effective

date, or retrospectively to any or all prior periods presented in the financial statements. The Company is currently

evaluating the impact of ASU 2024-03 on its financial reporting and will adopt the standard in accordance with the

required effective date. Subsequent to December 31, 2024, in January 2025 the FASB issued ASU 2025-01 which clarifies

the disclosure requirements for public business entities adopting ASU 2024-03. ASU 2025-01 specifies that all public

business entities should initially adopt the disclosure requirements presented in ASU 2024-03 in the first annual reporting

period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after

December 15, 2027. The Company is currently evaluating the impact of adopting the standard on the consolidated financial

statements.

Recently Adopted Accounting Pronouncements

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax

Disclosures”, which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in

the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated

between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal,

state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state

and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15,

2024. As of December 31, 2025, the Company has adopted ASU 2023-09, which was applied on a prospective basis. This

guidance only impacts footnote disclosures and will not impact our consolidated financial statements.

Improvements to Crypto Assets Disclosures

In December 2023, the FASB issued ASU 2023-08, "Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60)"

which provides an update to existing crypto asset guidance and requires an entity to measure certain crypto assets at fair

value. In addition, this guidance requires additional disclosures related to crypto assets once it is adopted. As of January 1,

2024, the Company hasadopted ASU 2023-08. As a result of adopting the amendments, the Company’s cumulative-effect

adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period, or as of January

1, 2024, amounted to$38.3 million, which consisted of$48.7 million of fair value adjustments offset by a$10.4 million tax

impact related to the fair value adjustments. The Company includes realized and unrealized gains and losses innet (loss)

income on the consolidated financial statements which is presented separately from changes in the carrying amount of

other intangible assets.

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07,“Segment Reporting (Topic 280): Improvements to Reportable

Segment Disclosures”, which is intended to improve reportable segment disclosure requirements, primarily through

enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after

December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is

permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. Upon

transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant

segment expense categories identified and disclosed in the period of adoption. ASU 2023-07 further permits disclosure of

more than one measure of segment profit or loss and extends the full disclosure requirements of ASC 280 to companies

with single reportable segments. This guidance only impacts footnote disclosures and will not impact our consolidated

financial results of operations. The Company adopted ASU 2023-07 on December 31, 2024 on a retrospective basis.

3. Revenue Recognition

The following table presents the Company’s revenues disaggregated by geography, based on the addresses of the

Company’s customers for the years ended December 31, 2025 and 2024:

(1)Saint Vincent and Grenadines did not have over 10% of revenue during the fiscal year 2024, prior year balances provided for comparability purposes.

(2)No other individual country accounted for more than 10% of total revenue.

The following table presents the Company’s revenues disaggregated by products and services for the years ended

December 31, 2025 and 2024:

(1)Other includes$0.4 million and$1.5 million related to non-fungible token revenue for the years ended December 31, 2025 and 2024, respectively.

The following table presents the Company's contract balances as of December 31, 2025 and 2024:

4. Prepaid Expenses

The Company prepays certain expenses due to the nature of the service provided or to capture certain discounts. The table

below shows a breakout of these prepaid expenses for the periods presented:

5. Loans Receivable, Net

Term Facility and Delayed-Draw Term Facility

On November 18, 2025, the Company entered into a loan agreement with W3C Corp., pursuant to which the Company

agreed to provide up to$70.0 million of secured financing, consisting of (i) a term loan facility with aggregate

commitments of up to$60.0 million (the “Term Facility”) and (ii) a delayed-draw term loan facility with aggregate

commitments of up to$10.0 million (the “Delayed-Draw Term Facility” and collectively with the Term Facility, the

“Facilities”). The Facilities are secured by substantially all of the assets of W3C Corp. and certain of its subsidiaries,

subject to customary exceptions. As of December 31, 2025, no amounts were outstanding under the Delayed-Draw Term

Facility.

Borrowings under the Term Facility bear interest at a rate of 12.0% per annum, compounded monthly, while borrowings

under the Delayed-Draw Term Facility bear interest at a rateof 6.0% per annum, compounded quarterly. In each case,

accrued interest is capitalized and added to the outstanding principal balance. The loan agreement also provides for a one-

time upfront fee equal to 2.0% of the Term Facility and an exit fee of up to$7.2 million, which is reduced by the aggregate

amount of upfront fees paid and capitalized interest at the time of repayment.

Accordingly, interest income associated with the Facilities reflects both contractual interest accrued on outstanding

borrowings and the amortization of upfront and exit fees, which are accounted for as adjustments to loan yield. For the year

ended December 31, 2025, the Company recognized interest income related to the Facilities of$2.1 million. Based on the

Company’s current expectation that amounts outstanding under the Term Facility will be repaid in connection with the

consummation of the acquisition, the effective interest rate on the Term Facility is higher than the stated contractual rate

due to the amortization of upfront and exit fees, while the effective interest rate on the Delayed-Draw Term Facility

approximates its stated contractual rate.

The Facilities mature on the earlier of(i) consummation of the acquisition and (ii) the date falling twelve months after the

initial borrowing under the term loan facility, subject to extensions in certain circumstances as provided in the loan

agreement.

Covenants

The Facilities contain customary affirmative and negative covenants, including limitations on additional indebtedness,

liens, asset sales, acquisitions and distributions, as well as a minimum liquidity covenant. The Facilities also include

customary events of default, including non-payment, breach of covenants and insolvency events, which could result in the

acceleration of amounts outstanding. As of December 31, 2025, the Company was in compliance with all applicable

covenants.

Credit Risk and Allowance for Credit Losses

As of December 31, 2025, the Company concluded that no allowance for credit losses was required based on the secured

nature of the receivables, the short-term expected duration of the arrangements, and the Company’s assessment of the

creditworthiness of the counterparty.

Seller Promissory Note

On November 18, 2025, the Company entered into a secured promissory note with the seller of W3C Corp., a related party

(the “Seller Note”), pursuant to which the Company extended a loan in the principal amount of$10.0 million. The Seller

Note bears interest at a rate of 6.0% per annum, compounded quarterly, with accrued interest capitalized and added to the

outstanding principal balance. The Seller Note is secured by a pledge of the seller’s equity interests in W3C Corp.

All outstanding principal and accrued interest under the Seller Note are due and payable upon the earlier of the

consummation of the acquisition or the occurrence of specified termination events. Upon consummation of the acquisition,

the outstanding principal and accrued interest are expected to be settled through a non-cash offset against the purchase

consideration otherwise payable to the seller.

Interest income associated with the Seller Note is recognized in interest income. For the year ended December 31, 2025,

the Company recognized$0.1 million of interest income related to the Seller Note. Based on the short-term expected

duration of the arrangement, the secured nature of the Seller Note, and the anticipated settlement through offset at closing,

the Company determined that no allowance for credit losses was required as of December 31, 2025.

6. Intangible Assets

Indefinite-Lived Intangible Assets

Indefinite-lived assets were$2.1 million as of December 31, 2025 and 2024, respectively. Indefinite-lived assets primarily

consist of purchased domain names. In the second quarter of 2024, the Company purchased a domain name for$0.2

million. The Company considers these assets to be indefinite-lived, resulting in no recognition of amortization.

Definite-Lived Intangible Assets, Net

During the fourth quarter of 2025, the Company recognized definite-lived assets in connection with the Gratitud Interna

Ltd. asset purchase. The components of the intangible assets are as follows:

Technology in development, assembled workforce, and trade name each have a useful life of 3 years, respectively. As of

December 31, 2025, the acquired technology is being developed and will not be placed in service until it is ready for its

intended use. Further, the weighted average remaining amortization period for definite-lived intangibles in use is 2.83

years. During 2025, amortization expense for definite-lived intangible assets was$0.1 million and is included within

general and administrative expenses on the consolidated statements of operations and comprehensive (loss) income. The

Company had no definite-lived intangible assets as of December 31, 2024.

Expected future amortization expense for definite-lived intangible assets in use are as follows:

Digital Assets

The tables below outline the fair value of our digital assets based on publicly available rates as of the dates presented as

well as the cost:

The following table summarizes the digital asset activities as of December 31, 2025 and 2024:

(1)Additions primarily relate to revenue generated from customers and staked assets.

(2)Disposals primarily relate to payment of liabilities pertaining to vendor invoices and payroll payments. Disposals of digital assets to cash are primarily used for

operational purposes.

(3)The Company recognized cumulative realized gains from exchange of digital assets of$9.6 million and cumulative realized losses from exchange of digital assets of

$1.9 million for the year ended December 31, 2024, which are included in loss (gain) on digital assets, net on the consolidated statements of operations and

(4)The Company recognized cumulative realized gains from exchange of digital assets of$11.7 million and cumulative realized losses from exchange of digital assets of

$13.8 million for the year ended December 31, 2025, which are included in loss (gain) on digital assets, net on the consolidated statements of operations and

The following table summarizes other operating activities settled in digital assets and USDC:

Gain on sale of Future Token Interests

During the second quarter of fiscal year 2025, the Company sold its right to receive 6,666,667 of its 13,333,334 Magic

Eden tokens from Eden Protocol Limited. A gain on sale of future token interests of$2.0 million was recognized as a result

of the sale and is presented in the consolidated statements of operations and comprehensive (loss) income. The right to

receive future Magic Eden token interests represents an embedded derivative that had a fair value of zero as of

December 31, 2025 and 2024.

7. Fixed Assets, Net

Fixed assets, net, consisted of the following:

Depreciation expense was$0.2 million forboth years ended December 31, 2025 and 2024.

8. Software Assets, Net

Costs incurred are used to develop internal software applications and consist of mainly compensation and benefits. We

capitalize software development costs upon the establishment of technological feasibility. For the years ended

December 31, 2025 and 2024, we capitalized$2.1 million and$3.5 million, respectively, of software development costs.

When the software is ready for use, these capitalized costs are amortized on a straight‑line basis over the estimated useful

life, estimated to bethree years.

Software assets, net, consisted of the following:

The following summarizes the future amortization expense as of December 31, 2025.

Amortization expense was$3.5 million and$5.1 million for the years ended December 31, 2025 and 2024, respectively.

9. Debt

On November 17, 2025, the Company entered into a Loan Term Sheet under its Amended and Restated Master Digital

Currency Loan Agreement with Galaxy Digital LLC, pursuant to which the Company borrowed$60.0 million (the “Galaxy

Loan”). The borrowing is structured as an evergreen, callable loan, under which Galaxy may recall, and the Company may

elect to repay, all or a portion of the outstanding principal with 30 days’ notice.

The Galaxy Loan bears a Borrow Fee of 9.0%, per annum, and interest expense recognized on the Galaxy Loan for the year

ended December 31, 2025 was$0.6 million. Interest expense is recorded on the consolidated statement of operations and

comprehensive (loss) income. As of December 31, 2025, the Galaxy Loan was paid in full.

10. Shareholders’ Equity

The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting

and conversion rights. Each share of Class A common stock is entitled toone vote per share. Each share of Class B

common stock is entitled toten votes per share and is convertible intoone share of Class A common stock. During 2025

and 2024, Class B shareholders elected to convert their shares to Class A. Total conversions from Class B to Class A shares

were 826,316 and 3,181,149 for the years ended December 31, 2025 and 2024, respectively.

In October 2025, holders of our Class A common stock have the ability to tokenize their shares on the Solana blockchain

through our co-transfer agent, Superstate. The tokenized common stock is recorded and maintained by the co-transfer agent

and represents the same ownership interests as the corresponding shares of Class A common stock reflected in the

company’s official share register.

In December 2024, our Class A common stock was listed for quotation on the NYSE American under the symbol

“EXOD”.

In April 2024, our Class A common stock was listed for quotation on the OTCQX under the symbol “EXOD”. OTC

Markets approval was received in April 2024.

In January 2024, our Class A common stock was listed for quotation on the OTCQB under the symbol “EXOD”. OTC

Markets approval was received in January 2024 and in January the initial qualifying deposit was made and initial trades

have occurred.

Share-Based Compensation

Options and Equity Grants Issued

The 2019 Equity Incentive Plan adopted in September 2019 (the “2019 Plan”) permitted the Company to grant non-

statutory stock options, incentive stock options, and other equity awards to Exodus team members, directors, and

consultants. The exercise price for options issued under the 2019 Plan is determined by the Board, but will be (i) in the case

of an incentive stock option granted to an employee or consultant who owns stock representing more than 10% of the

voting power of all classes of stock of Exodus, no less than 110% of the fair market value per share on the date of grant; or

(ii) granted to any other team member or consultant, no less than 100% of the fair market value per share on the date of

grant. The contractual life for all options issued under the 2019 Plan is 10 years. The 2019 Plan authorized grants to issue

up to 3,000,000 options (prior to the 2021 Equity Incentive Plan) that are convertible into shares of authorized but unissued

Class B common stock. As of December 31, 2025, there were 545,142 shares of Class B common stock options

outstanding.

In August 2021, the Company adopted the 2021 Equity Incentive Plan, as amended and restated (the "Plan"). The Plan

permits the Company to grant non-statutory stock options, incentive stock options and other equity awards, such as

restricted stock units, to Exodus team members, directors, and consultants. The exercise price for options issued under the

2021 Plan is determined by the board of directors, but will be (i) in the case of an incentive stock option granted to an team

member who owns stock representing more than 10% of the voting power of all classes of stock of Exodus, no less than

110% of the fair market value per share on the date of grant; or (ii) granted to any other team member or consultant, no less

than 100% of the fair market value per share on the date of grant. The contractual life for all options issued under the 2021

Plan is 10 years. The Plan initially authorized grants to issue up to 2,780,000 awards that are convertible into shares of

authorized but unissued Class A common stock. Pursuant to the terms of the Plan, the Company may increase our share

pool by 5% of our outstanding shares of capital stock each year. As of December 31, 2024, a total of 6,662,936 shares of

Class A common stock were reserved for issuance under the Plan. In August 2025, the Company added 1,453,470

additional shares to the share pool in accordance with the Evergreen provision, bringing the total number of shares reserved

for issuance under the Plan to 8,116,406 as of December 31, 2025. As of December 31, 2025, there were 2,543,468

restricted stock units that are authorized and outstanding with a fair value of$37.6 million.

Upon the approval of the Amended Plan, the Company can no longer grant non-statutory stock options, incentive stock

options, or other equity awards to Exodus team members, directors, or consultants under the 2019 Plan.

The terms of our share-based compensation are governed by the plan pursuant to which such awards were issued.

The following table summarizes stock option activities for 2025:

The following table summarizes RSU activities for 2025:

Share-based compensation for the years ended December 31, 2025 and 2024 is recorded on the Company’s consolidated

statements of operations and comprehensive (loss) income as follows:

As of December 31, 2025, total unrecognized share-based compensation expense was$13.8 million. This compensation

expense is expected to be recognized over a weighted-average period of 1.6 years.

Warrants

During the year ended December 31, 2025, the Company issued warrants to purchase 100,000 shares of its common stock

to a third-party; no cash was received or paid in connection with the issuance. The fair value of the warrants was recorded

to general and administrative expense on the consolidated statements of operations and comprehensive (loss) income and a

corresponding increase to additional paid-in capital. For the year ended December 31, 2025, the expense related to the

issuance of the warrants was$2.0 million usingthe Black-Scholes option-pricing model, based on the following weighted-

average assumptions:

11. Income Taxes

The (loss) income before income tax (benefit) expense for the years ended December 31, 2025 and 2024, are as follows:

The current and deferred tax components of the income tax provision for the years ended December 31, 2025 and 2024, are

as follows:

The reconciliation of the U.S. federal statutory income tax rate to the Company's effective income tax rate as of

December 31, 2025 and 2024, was as follows:

*Percentage variances not considered meaningful.

Effective Tax Rate

Income tax benefit was$9.3 million in 2025 compared to an expense of$17.9 million for the same period in 2024. The

effective tax rate during 2025 was 45.0% compared to 13.6% in 2024. In 2025 and 2024, state and local income taxes in

California and Nebraska comprise the majority of the domestic state and local income taxes, net of federal tax. For the year

ended December 31, 2025, the change from the statutory tax rate to the effective rate was primarily due to a benefit related

to stock option exercises net of non-deductible executive compensation, U.S. Foreign Derived Intangible Income and

research and development tax credits partially offset by nondeductible expenses. For the year ended December 31, 2024,

the change from the statutory tax rate to the effective rate was primarily due to a benefit related to stock option exercises,

net of non-deductible executive compensation, and U.S. Foreign Derived Intangible Income partially offset by change in

valuation allowance.

Significant components of deferred tax assets and liabilities as of December 31, 2025 and 2024, were as follows:

Valuation Allowance

At each reporting date, management considers new evidence, both positive and negative, that could affect its view of the

future realization of deferred tax assets. On the basis of this evaluation, only the portion of the deferred tax asset that is

more likely than not to be realized was recognized. However, if the Company is not able to generate sufficient taxable

income through the reversal of deferred tax liabilities or from its operations in the future, then a valuation allowance to

reduce the Company’s deferred tax assets may be required, which would increase the Company’s expenses in the period

the allowance is recognized. As of December 31, 2025, the Company’s US net deferred tax liability was primarily

comprised of basis differences in digital assets partially offset by deferred tax assets related to intangible assets, net

operating loss carryforwards, tax credit carryforwards and share-based compensation. Reversals of deferred tax liabilities

are available to utilize US deferred tax assets. Based upon the historical cumulative income of its foreign subsidiaries,

management does not expect to realize the full benefit of this deferred tax asset before it will expire. A valuation allowance

of$0.3 million and$0.4 million was reflected against the Company’s gross deferred tax asset balance related to foreign net

operating losses as of December 31, 2025 and 2024, respectively.

On July 4, 2025, One Big Beautiful Bill Act ("OBBB") was signed into law in the United States. OBBB includes

significant changes to U.S. federal tax law, such as an elective deduction for domestic research and experimental

expenditures, and changes to the tax rate on income from non-U.S. sources and subsidiaries. OBBB did not have a material

impact on our current year effective tax rate. The OBBB allowed for the acceleration of deductions in 2025 with a

corresponding reduction of deferred tax assets.

As of December 31, 2025, Exodus had federal and state net operating losses of$5.0 million and$0.3 million, respectively.

The federal net operating loss carries forward indefinitely. Generally, California, Nebraska and other U.S. states have a

twenty-year carryforward for net operating losses. Exodus had federal R&D tax credit carryforward of$0.5 million. If not

utilized, the federal R&D credits will expire in in 2045. For the year ended December 31, 2025, Exodus had foreign net

operating loss carryforwards of$2.5 million which, if unused, will expire in various years beginning 2027.

Open Periods

Exodus is subject to taxation in the United States, Canada, Netherlands, Italy and Switzerland. As of December 31, 2025,

tax years 2022 to 2025 are subject to examination by tax authorities. With limited exceptions as of December 31, 2025,

Exodus is no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before 2022.

Uncertain Tax Positions

A reconciliation of unrecognized tax benefits was as follows:

The liability for uncertain tax position is a component of other long-term liabilities. As of December 31, 2025, there were

no unrecognized tax benefits that, if recognized, would affect the annual effective tax rate. As of December 31, 2024, there

were$0.3 million of unrecognized tax benefits that would affect the effective tax rate if recognized. The Company

recognizes interest and penalties related to unrecognized tax benefits in income tax (benefit) expense. During the year

ended December 31, 2025, the Company didnot recognize interest and penalties. During the year ended December 31,

2024, the Company recognized less than$0.1 million in interest and penalties.

Supplemental Disclosure of Income Taxes Paid

Cash paid for income taxes consisted of the following:

12. Commitments and Contingencies

Legal Proceedings

The Company is subject to a number of claims and proceedings that generally arise in the ordinary course of business, the

outcome of which cannot be predicted with certainty. The Company does not believe that the liabilities from such ordinary

course claims and proceedings will have a material adverse effect on the Company’s consolidated financial position, results

of operations or cash flows. If the Company believes the losses are probable and can be reasonably estimated, reserves will

be established. For matters where a reserve has not been established, the ultimate outcome or resolution cannot be predicted

at this time or the amount of ultimate loss, if any, cannot be reasonably estimated. Litigation is subject to many

uncertainties and there can be no assurance as to the outcome of the individual litigated matters. It is possible that certain of

the actions, claims, inquiries or proceedings could be decided unfavorably to the Company or any of its subsidiaries

involved. Accordingly, it is possible that an adverse outcome from such a proceeding could exceed the amount accrued in

an amount that could be material to the Company’s consolidated financial condition, results of operations or cash flows in

any particular reporting period.

Office of Foreign Assets Control ("OFAC") Matter

As previously disclosed, in December 2018, we received an administrative subpoena issued by OFAC seeking information

regarding potential transactions with individuals in Iran. In response, we conducted a comprehensive review that covered

all countries and territories subject to U.S. trade embargoes administered by OFAC. We submitted a voluntary self-

disclosure and subpoena response regarding potential violations to OFAC, and took remedial action designed to prevent

similar activity from occurring in the future. Additionally, in March 2021, we received a second administrative subpoena

issued by OFAC seeking information regarding potential transactions with certain North Korean cyber actors, to which we

responded and was resolved without any separate findings of misconduct or enforcement action.

For the year ended December 31, 2025, we reached a settlement agreement with OFAC to fully resolve the matter

regarding individuals in Iran. Under the terms of the agreement, we agreed to pay a civil monetary penalty of$2,473,360,

and to invest an additional$630,000 in sanctions compliance controls. In November 2025, the civil monetary penalty was

paid in full. The settlement does not constitute an admission of liability or admission of willful or intentional wrongdoing

by the Company and reflects the Company’s full cooperation and remedial actions taken throughout the investigation.

13. Fair Value Measurements

The Company’s financial assets are summarized below as of December 31, 2025 and 2024, with fair values shown

according to the fair value hierarchy:

(1)These investments are recorded at cost.

The Company invests in held to maturity treasury bills. As of December 31, 2025, the Company heldno treasury bills. As

of December 31, 2024, the Company held treasury bills with a maturity of greater than three months in other current assets

in the amount of$30.5 million, and the Company held treasury bills with a maturity of less than three months in cash and

cash equivalents in the amount of$0.7 million. The discount rates ranged from 1.1% to 2.4% as of December 31, 2024.

Assets and Liabilities Not Measured and Recorded at Fair Value

The Company’s financial instruments, including USDC, are carried at cost, which approximates their fair value. If these

financial instruments were recorded at fair value, they would be based on Level 1 inputs. The Company also holds notes

receivable that are recorded at amortized costs which approximates their fair value. The fair value of these instruments is

not readily determinable due to their non-marketable nature and is therefore not included in the fair value hierarchy.

14.(Loss) Earnings Per Share

The following table sets forth the computation of basic and diluted net (loss) income per share of common stock for the

years ended December 31, 2025 and 2024:

Diluted (loss) earnings per share includes the dilutive effect of common stock equivalents and is computed using the

weighted-average number of common stock and common stock equivalents outstanding during the reporting period.

Diluted (loss) earnings per share for the year ended December 31, 2025 excluded common stock equivalents because the

effect of their inclusion would be anti-dilutive or would decrease the reported loss per share.

The following table sets forth securities outstanding that could potentially dilute the calculation of diluted earnings per

share:

15. Variable Interest Entity

In November 2025, the Company entered into a definitive agreement to acquire W3C. W3C is a Delaware corporation that

serves as a holding company for Monavate Holdings Limited ("Monavate") and Baanx.com Ltd. ("Baanx"), and their

respective subsidiaries (collectively, the "W3C Group"). As of December 31, 2025, W3C owns and operates Monavate and

Baanx businesses and the acquisition of the W3C Group has not closed. In connection with the proposed acquisition, the

Company entered three financing arrangements with W3C consisting of: (i) a term loan facility of$60.0 million; (ii) a

delayed draw term loan facility of$10.0 million and (iii) a seller promissory note of$10.0 million. For further details on

these arrangements, refer to "Note 5 – Loans Receivable, Net".

We concluded that W3C is a variable interest entity. The Company evaluated whether it is the primary beneficiary of W3C,

as aligned with the procedures described in "Note 2 – Summary of Significant Accounting Policies", and concluded that it

is not the primary beneficiary as it does not have the power to direct the activities that most significantly impact W3C’s

economic performance. Therefore, W3C is not consolidated in the Company’s consolidated financial statements.

The Company's maximum exposure to loss was$81.0 million and represents the carrying values of loan receivables and

related capitalized and accrued interest recorded in the Company's consolidated balance sheets as of December 31, 2025.

The Company does not have any contractual requirement to provide additional financial support to W3C beyond amounts

currently funded and has not provided any financial support to W3C during the year ended December 31, 2025, other than

amounts advanced under the loan agreements.

16. Segment Reporting

The Company hasone reportable segment: revenues. Factors that management used to identify the Company’s reportable

segment include the Company’s integrated business model, shared customer base, centralized corporate functions, and

uniform service offerings in determining that the business operates as a single segment. A description of the types of

products and services from which the reportable segment derives its revenues as well as the accounting policies applicable

to the reportable segment can be found in "Note 2 – Summary of Significant Accounting Policies". Entity-wide information

can be found in "Note 3 – Revenue Recognition". The chief operating decision maker, who is the chief executive officer,

assesses the performance of the Company using consolidated net (loss)income for the reportable segment and decides how

to allocate resources based on revenues, technology, development and user support, general and administrative expenses,

and net (loss) income which are reported under identical captions in the consolidated statements of operations and

comprehensive (loss) income. No additional measures of segment assets, profit, or loss are used in internal management

reporting. The Company does not have intra-entity sales or material intra-entity transfers for consideration in the segment

analysis. Information about reported segment revenue and profit as well as significant segment expenses can be found in

the consolidated statements of operations and comprehensive (loss) income.