USBC Inc.
11/06/2026 | Press release | Distributed by Public on 11/06/2026 08:17
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with our financial statements and the related notes in Part I, Item 1 of this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2026. Unless otherwise indicated or the context otherwise requires, references to "USBC," "we," "us," "our," and the "Company" refer to USBC, Inc.
The discussion contains forward-looking statements within the meaning of the federal securities laws, which statements are subject to considerable risks and uncertainties and are based on the beliefs of management, as well as assumptions made by, and information currently available to, management. All statements other than statements of historical facts are forward-looking statements. These statements relate to future events or to our future financial performance, tokenized deposit program development, digital asset treasury strategy, anticipated events and trends affecting our business, the broader economy and other future conditions, and our interpretation of applicable state and federal securities laws and other laws and regulations relating to digital assets. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Investors should not consider non-GAAP financial measures referred to in this discussion in isolation or as substitutes for financial information presented in compliance with GAAP. Explanation of non-GAAP financial measures and reconciliation to the most directly comparable GAAP financial measure is included in this Management's Discussion and Analysis of Financial Condition and Results of Operations. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed in this report and as set forth in the section entitled "Risk Factors" in Part I, Item 1A, of our Transition Report on Form 10-K for the transition period from October 1, 2025 to December 31, 2025, filed with the SEC on March 25, 2026, as updated in the section entitled "Risk Factors" contained in Part II, Item 1A of this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2026.
Quarterly Overview
USBC, Inc. ("USBC" or the "Company") is a publicly traded financial technology company focused on the development of transformative financial services, including digital assets and banking solutions. A key focus of USBC is the further development of the USBC tokenized deposit program offering, a U.S. dollar-denominated tokenized deposit that operates on blockchain technology and incorporates digital identity. The USBC tokenized deposit offering combines the regulatory protections of traditional bank deposits with the efficiency and programmability of blockchain-based payments. Upon commercial launch, USBC will operate a U.S. dollar-denominated tokenized deposit network (the "USBC Network"). Each USBC tokenized deposit on the USBC Network is an on-chain representation of a U.S. dollar deposit held at an issuing bank, initially Vast Bank, N.A., a national bank chartered by the Office of the Comptroller of the Currency, headquartered in Tulsa, Oklahoma. USBC continues to advance subsequent phases of the product delivery strategy in preparation for a future public launch. USBC has also implemented a Bitcoin treasury strategy to bolster pre-launch development and research across its various divisions. With a focus on identity, inclusion, innovation, and risk management, USBC is dedicated to creating long-term stockholder value in a rapidly evolving financial landscape.
On August 6, 2025, following the closing of a strategic controlling-interest acquisition by Goldeneye 1995 LLC (an affiliate of our Chairman and Chief Executive Officer, Greg Kidd), the Company changed its corporate name to USBC, Inc. and its ticker symbol to "USBC" on the NYSE American. Until August 2025, the Company operated under the name Know Labs, Inc. and was primarily focused on non-invasive diagnostic and sensor technologies. Our corporate evolution reflects a strategic pivot to a financial services and digital assets platform.
On March 27, 2026, we completed the divestiture of our legacy non-invasive sensor technology business pursuant to a Stock Purchase Agreement entered into by and among USBC, Inc., its wholly owned subsidiary, Particle, Inc., and Particle Acquisition Corporation, an entity controlled by Ronald P. Erickson, former Chairman, President and CEO of Know Labs, Inc. (the "Buyer"). As part of the divestiture transaction, we agreed to provide the Buyer with limited operating capital to fund a portion of its operating expenses until the Buyer secures permanent equity financing. As of September 30, 2026, we had advanced $450,000 of the total amount committed under the credit facility, which was scheduled to mature on September 23, 2026, with an option to extend the maturity date for one additional period of one hundred eighty (180) days upon prior written notice. Pursuant to the terms of the note, the maturity date was extended 180 days, and will mature on March 22, 2027. Additional information regarding the Stock Purchase Agreement and our commitment to extend a short-term secured line of credit to the Buyer in connection with the divestiture transaction is incorporated by reference from the Current Report on Form 8-K filed on April 2, 2026.
Our tokenized deposit program offering is being developed as an integrated platform comprising a permissioned blockchain ledger, a digital identity layer, wallet and consumer-facing mobile and web applications, a bank operations console, and developer portal designed to support future third-party developer integrations. Following the successful completion of Phase 1 of the delivery strategy in June 2026, the Company initiated Phase 2 of its delivery strategy. Phase 2 expands testing to additional invited participants, builds upon the core technical infrastructure established during Phase 1 and focuses on further advancing the platform toward full market launch through continued product development, operational integration with Vast Bank, ecosystem expansion, and regulatory and operational readiness activities. The principal milestone for Phase 2 is to achieve operational readiness to support an initial commercial launch, subject to the outcome of the pilot program and receipt of any required bank board, regulatory and bank partner approvals.
We continue to execute under the Affiliate Services Agreement with Vast Holdings, Inc. ("Vast"), pursuant to which Vast provides strategic, operational and administrative services that support the further development of the tokenized deposit platform. As of September 30, 2026, we have incurred approximately $6.2 million in reimbursements to Vast for actual development-related costs under the $10.5 million cap contained in the Agreement which expires on December 31, 2026.
Recent Developments
On August 21, 2026, we appointed Daniel J. Beck to serve as the Company's Chief Financial Officer, effective August 27, 2026. In connection with his appointment, Mr. Beck will receive an annual base salary of $400,000 and, on October 1, 2026, was granted options to purchase 2,500,000 shares of the Company's common stock under the USBC, Inc. 2021 Amended and Restated Equity Incentive Plan, with an exercise price equal to $0.54, the market price per share at the time of issuance. The option will vest over four years, with 25% vesting on the first anniversary of the date of issuance and the remaining 75% vesting ratably over the following three years, subject to Mr. Beck's continued employment through the applicable vesting dates.
On September 11, 2026, we drew an additional fixed-rate borrowing of $3.0 million under the Master Loan Agreement ("MLA") we entered into with Payward Interactive, Inc. on March 18, 2026, increasing the aggregate principal amount outstanding under the MLA to $21.0 million. We previously drew an initial fixed-rate borrowing of $5.0 million on March 20, 2026, followed by additional draws of $5.0 million on April 27, 2026 and June 1, 2026, and additional draws of $3.0 million on July 28, 2026, and September 11, 2026. Under the MLA, we may, from time to time, borrow fiat currency or digital assets on the terms set forth therein in an aggregate principal amount of up to $40.0 million (increased from $25.0 million on October 12, 2026) for up to a twelve-month term, subject to execution of one or more individual loan term sheets. Borrowings under the MLA bear interest at 8.5% per annum and mature on the anniversary of each draw (September 11, 2027 for the Fifth Draw) unless earlier terminated in accordance with the terms of the MLA. The MLA contains customary conditions, initial collateral requirements, collateral maintenance and liquidation mechanics, and early return and recall rights. Borrowings under the MLA are solely secured by Bitcoin collateral held in custody with Payward Financial, Inc. and are subject to collateral maintenance requirements based on specified margin ratios.
Under the terms of the MLA, the required initial margin ratio is 150% of the outstanding borrowings at the time of each loan draw, which is equivalent to a maximum loan-to-value ratio of approximately 66.7%. If the margin ratio declines to 130% or lower, the Lender may issue a margin call requiring us to either post additional Bitcoin collateral or partially repay outstanding borrowings within 24 hours in order to restore compliance with the required margin ratio. Under the MLA, if the margin ratio declines to 120% or lower and we do not timely cure the deficiency in accordance with the terms of the MLA, the Lender may exercise its contractual rights with respect to the collateral, including liquidation rights. In addition, under the MLA, we may request the release of excess collateral if the margin ratio exceeds 170% for two consecutive days, subject to the terms and conditions of the MLA. The fair value of pledged Bitcoin collateral is determined by the Lender based on the applicable Bitcoin market spot rate. Under the MLA, the "applicable Bitcoin market spot rate" is defined as the spot rate, as of the applicable date or time of determination, for the applicable digital currency published on CFBenchmarks.com, the website of CF Benchmarks Ltd., which publishes digital asset reference rates, or such other reference spot rate as may be mutually agreed by the parties to the MLA from time to time. When a valuation is required to be determined by the Lender under the MLA, the applicable Bitcoin market spot rate at the applicable time of determination is used by the Lender to determine the fair value of the pledged Bitcoin collateral. The "applicable date or time of determination" refers to the date and time at which the Lender is required to determine the fair value of the pledged Bitcoin collateral pursuant to the collateral valuation and maintenance provisions of the MLA, (e.g., at the point in time when the Lender is required to value the collateral or assess a collateral ratio for a margin-related event under the MLA).
The collateral valuation and maintenance provisions of the MLA provide that, prior to each loan advance, we must pledge Bitcoin collateral sufficient to satisfy the Required Margin Ratio specified in the applicable Loan Term Sheet. Thereafter, the Margin Ratio is determined based on the fair value of the pledged Bitcoin collateral and the Total Loan Balance. The Lender continuously monitors the collateral ratio of the MLA against the CF Benchmarks reference price feed to assess compliance with the collateral requirements under the MLA. If the Margin Ratio falls to or below the applicable Collateral Call Margin Ratio, the Lender may issue a collateral call requiring the Borrower to restore the Required Margin Ratio. If the Margin Ratio falls to or below the applicable Liquidation Ratio, the Lender may liquidate the pledged Bitcoin collateral in accordance with the terms of the MLA. The MLA also permits the Borrower to request the return of excess pledged Bitcoin collateral when the applicable Collateral Return Margin Ratio specified in the applicable Loan Term Sheet has been satisfied. The obligations under the MLA are prepayable at our option at any time after three months from the date of the initial loan draw without penalty. The MLA has an initial one-year term and automatically renews for successive one-year terms unless terminated in accordance with its terms. We may terminate the MLA at any time, and either party may terminate the MLA upon 30 days' written notice, provided that any outstanding loans remain in effect until repaid or otherwise terminated in accordance with the MLA.
On October 12, 2026, the Company entered into a Second Addendum to Master Loan Agreement (the "Second Addendum") with the Lender, amending its previously disclosed MLA. The Second Addendum increases the aggregate borrowing commitment under the MLA from $25.0 million to $40.0 million, subject to the terms and conditions of the MLA and the execution of individual loan term sheets. The Second Addendum replaces the previous addendum to the MLA in its entirety, without affecting the existing outstanding borrowings, which remain subject to their respective terms and conditions. In connection with the Second Addendum, we also amended our account control agreement with Payward Financial, Inc. to permit cross-collateralization of borrowings under the MLA and certain digital asset derivative obligations, allowing collateral to be applied across agreements upon specified defaults. As of October 12, 2026, $21.0 million was outstanding and $19.0 million remained available for borrowing, subject to borrowing conditions and collateral requirements. See the Current Report on Form 8-K filed on October 14, 2026.
As of October 31, 2026, a decline of approximately 26% in the value of pledged Bitcoin collateral, assuming no repayment or additional collateral posting, would have reduced the collateral coverage ratio to the 130% collateral call margin ratio. No collateral calls, mandatory repayments, or liquidation events had occurred under the MLA as of October 31, 2026.
Proceeds from the MLA are being used primarily to fund further development costs of the tokenized deposit program offering, including costs paid to our affiliate, Vast Holdings, Inc. ("Vast") under the terms of the Affiliate Services Agreement (the "Agreement") we simultaneously entered into on March 18, 2026. Pursuant to the terms of the Agreement, we reimburse Vast's wholly-owned subsidiary, Vast Bank, for the costs of performing certain strategic, operational and administrative services that support the development of our tokenized deposit platform, subject to the reimbursement cap of $10.5 million contained in the Agreement. As of September 30, 2026, we had reimbursed approximately $6.2 million in development-related costs in accordance with the terms of the Agreement, leaving approximately $4.3 million in available reimbursement capacity through the Agreement's expiration on December 31, 2026. The Agreement may be terminated by us without cause upon 60 days' prior written notice. Either party may terminate the Affiliate Services Agreement immediately upon written notice if the other party breaches the Agreement and fails to cure such breach within 15 days after written notice. Either party may also terminate the Agreement if a state or federal regulatory authority requests or directs the terminating party to terminate the Agreement, or criticizes or challenges the terminating party's actions under the Agreement during a regulatory examination or otherwise.
Upon termination by us, we are responsible for certain reasonable, pre-approved third-party termination costs, subject to specified limitations. Specified limitations mean that we are not responsible for internal overhead, lost profits, unamortized internal costs, or severance or other employee-related termination payments unless expressly approved in advance in writing by us. These provisions are intended to ensure that, if we terminate the Bank Services, Vast Bank is reimbursed for certain unavoidable third-party costs that arise directly from the termination, while limiting our responsibility to documented, reasonable costs that were anticipated by the parties or approved in advance. Certain reasonable, pre-approved third-party termination costs mean that, in the event we terminate the Agreement with respect to the Bank Services, we shall be responsible for reimbursing Vast Bank for reasonable, documented, unavoidable, and non-cancelable third-party costs actually incurred by Vast Bank solely as a direct result of such termination, to the extent such costs were either expressly contemplated by this Agreement or approved in advance in writing by us. Examples of these costs include non-cancelable implementation fees, subscription commitments, software licensing fees, platform access fees, onboarding and integration costs, or other contractual obligations payable to third-party service providers that are directly attributable to the terminated services.
On July 1, 2026, the Company entered into a Consulting Agreement with Hard Yaka Ventures Management Co., LLC ("Hard Yaka") (an affiliate of our Chairman and Chief Executive Officer, Greg Kidd), pursuant to which Hard Yaka will contribute capital to the Company to facilitate the continued development of the tokenized deposit program. Through September 30, 2026, we received capital contributions of $2,984,840 from Hard Yaka, recorded in additional paid-in capital (see Note 13).
On June 12, 2026, our Board of Directors approved a proposal to effect a reverse stock split of our outstanding common stock (the "Reverse Split") at a ratio ranging from 1-for-2 to 1-for-5. Our Board's primary purpose for approving and recommending the Reverse Split is to make our common stock more attractive to investors, provide for a stronger investor base, and to increase the per share price and bid price of our common stock to maintain compliance with the NYSE American continued listing requirements. On June 15, 2026, Goldeneye, the holder of approximately 92.2% of the voting power of our outstanding common stock, approved the Reverse Split by written consent in lieu of a special meeting of stockholders. The Reverse Split will not reduce the number of authorized shares of our common stock, and no fractional shares will be issued. We will determine the exact ratio and timing of the Reverse Split, which may be effected, if at all, within twelve (12) months following June 15, 2026. On June 22, 2026, we filed a preliminary Information Statement on Schedule 14C with the SEC, and a definitive Information Statement on Schedule 14C with the SEC on July 13, 2026. On July 20, 2026, we commenced mailing the Definitive Information Statement to stockholders of record in accordance with Rule 14c-2 under the Securities Exchange Act of 1934, as amended. The Reverse Split will not become effective until the applicable Rule 14c-2 notice period has expired and the effective date of the Reverse Split has been determined. Once effective, the Reverse Split will have the effect of decreasing the number of shares of our common stock issued, but will have no effect on the number of shares of common stock we are authorized to issue. As of the date of this report, the Reverse Split has not been effected.
On March 10, 2026, we initiated Phase 1 of our multi-phase delivery strategy for how we will bring the USBC tokenized deposit program offering to market in collaboration with Vast Bank, the initial issuing bank for the tokenized deposit program offering. Phase 1 was conducted with a limited group of internal users who elected to participate in an expanded employee pilot program ahead of the public launch of the branded platform. The principal milestone of Phase 1 was completion of technical readiness testing to support subsequent phases of the delivery strategy, including testing of customer onboarding and identity recovery, ACH funding, spending functionality, treasury conversion, messaging and activity logging. Phase 1 was not a consumer offering and was not available to the public, and testing activities during Phase 1 were conducted exclusively with company-provided funds for internal evaluation purposes. The results of Phase 1 served to inform our evaluation of the timing and scope of subsequent phases of the delivery strategy and when the tokenized deposit product offering may become available to retail customers.
As part of these ongoing product enhancements, we have developed USBC Pay, that supports merchant payments and settlement on the USBC tokenized deposit platform. USBC Pay represents the payment functionality of the USBC tokenized deposit platform and is intended to expand the use of tokenized deposits for everyday payment transactions as we advance through future phases of our product delivery strategy. USBC Pay is designed to enable eligible users to initiate blockchain-based U.S. dollar payment transactions between consumers and merchants directly through the USBC ledger without touching legacy card rails or ACH for point-of-sale transactions. We have developed the initial version of the USBC Pay functionality for iOS and Android devices and continue to focus on enhancements for the functionality.
We continue to advance iterative product enhancements, operational readiness, and subsequent phases of the delivery strategy in preparation for a future public launch, which remains subject to regulatory, operational, market, board, and bank partner considerations. The timing, cost and success of future phases of our strategy is subject to uncertainty in how successful we will be in executing Phase 2 of the strategy within anticipated parameters. Phase 3 is intended to support the initial commercial launch of the tokenized-deposit product through selected distribution partners. Phase 4 is intended to support broader commercialization through additional product functionality, integrations and distribution channels.
Following public launch and subject to applicable legal, regulatory and onboarding requirements, developers and partners are expected to be able to integrate the USBC Network into mobile and web-based applications, enabling eligible customers to access and transfer tokenized deposits through supported digital interfaces.
On January 20, 2026, we formalized our collaboration with Uphold HQ Inc. ("Uphold") and Vast Bank, N.A. ("Vast Bank"), which will serve as the initial issuing bank for the U.S. Bank Coin ("USBC") tokenized-deposit program offering. Uphold is a financial technology company that provides modern infrastructure for on-chain payments, banking and investment services. Vast Bank is a federally regulated financial institution that will serve as the initial issuing bank for customer deposit accounts underlying the tokenized-deposit program. USBC will serve as the network operator, Vast Bank will serve as the issuing bank for customer deposit accounts, and Uphold will provide platform integration and customer access services. We continue to advance technical, operational, and regulatory readiness in connection with subsequent phases of the delivery strategy and any future broader launch of the USBC tokenized-deposit program offering.
Vast Bank, USBC and Uphold (the "Parties") shall each be entitled to a proportionate revenue share under the terms set forth in the Tri-Party Agreement. Deposit Revenue shall be calculated monthly based on the anticipated yield attributable to the tokenized deposit balances allocated to each asset category as determined by Vast in its sole discretion. The anticipated yield for each category shall be multiplied by the portion of Tokenized Deposit Balances allocated to such category to determine total Deposit Revenue for the applicable period. USBC, as the revenue share agent, is responsible for preparing and delivering a monthly revenue share statement to each of the Parties to enable payment of the proportionate revenue share, net of allocated program expenses incurred in operating and supporting the tokenized deposit network, such as costs related to payments and other transaction types, risk management, and third-party processing. Except as otherwise provided in the Tri-Party Agreement, each of the Parties shall bear and pay all direct costs and expenses incurred by it or on its behalf, or assessed against it or on its behalf, in performing its obligations under the Tri-Party Agreement. See the Tri-Party Agreement filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on January 26, 2026.
The Tri-Party Agreement has an initial term of one (1) year following the general commercial launch of the tokenized deposit program on the Uphold platform and automatically renews for successive one (1) year terms unless timely notice of non-renewal is provided by either Party. The Tri-Party Agreement may also be terminated upon the occurrence of specified events, including an uncured material breach, insolvency or bankruptcy, certain force majeure events, or if a governmental authority directs a party to cease or materially limit its performance, and provides for an orderly transition or wind-down of the program following termination.
The Tri-Party Agreement between Uphold, Vast Bank, and USBC provides that the non-binding memorandum of understanding signed by USBC, Vast Bank, and Uphold in October 2025 was terminated in its entirety as of the effective date of January 20, 2026. Additional information regarding the strategic partnership agreement by and among USBC, Vast Bank and Uphold is incorporated by reference from the Current Report on Form 8-K filed on January 26, 2026.
RESULTS OF OPERATIONS
Results of Operations
Our operating results for the three and nine months ended September 30, 2026 reflect the strategic transition to our digital asset treasury and financial technology development initiatives following the Goldeneye capital investment completed on August 6, 2025. Operating results for periods prior to August 6, 2025, reflect the Company's prior focus on non-invasive diagnostic and sensor technologies.
We did not generate any operating revenue during the nine months ended September 30, 2026, or 2025. During the nine months ended September 30, 2026, we continued to focus on financial technology development activities, and we expect any future operating revenues to be generated from financial technology network services, including the planned USBC tokenized deposit program offering.
Although we expect to continue to incur operating losses in the near term, we believe our potential future revenue opportunities and available liquidity sources, including our digital asset treasury holdings, existing borrowing arrangements and access to equity financing, subject to market conditions and applicable restrictions, provide us with flexibility to pursue our digital asset treasury and financial technology development initiatives.
Third Quarter 2026 Highlights. For the three months ended September 30, 2026, we reported net income of $4.9 million, compared with a net loss of $12.4 million in the prior-year period, driven by a $25.7 million non-cash gain on the change in fair value of digital assets as the price of Bitcoin increased by 43% during the quarter. The gain was partially offset by SG&A expenses of $14.8 million (including $6.6 million of non-cash stock-based compensation), a $3.3 million other derivative loss, net, a $0.9 million provision for credit losses and $1.4 million of income tax expense. As of September 30, 2026, we held cash and cash equivalents of $3.5 million and digital assets of $82.7 million, of which 479 Bitcoin with a fair value of $40.1 million were pledged as collateral, and had $21.0 million of borrowings outstanding under the MLA.
Three Months Ended September 30, 2026 compared to September 30, 2025
The following table sets forth key components of our results of operations for the three months ended September 30, 2026, and 2025. Amounts are rounded to the nearest thousand.
(in thousands)
| Three Months Ended September 30, 2026 | |||||||||||||||||
| 2026 | 2025 | $ Variance | |||||||||||||||
| Operating expenses- | |||||||||||||||||
| Research and development expenses | $ | - | $ | 294 | $ | (294) | |||||||||||
| Selling, general and administrative expenses | 14,791 | 11,524 | 3,267 | ||||||||||||||
| Total operating expenses | 14,791 | 11,818 | 2,973 | ||||||||||||||
| Operating loss | (14,791) | (11,818) | (2,973) | ||||||||||||||
| Other Income (Expense), Net: | |||||||||||||||||
| Interest income | 20 | 49 | (29) | ||||||||||||||
| Interest expense | (386) | - | (386) | ||||||||||||||
| Loss on debt settlements, net | - | (214) | 214 | ||||||||||||||
| Change in fair value of digital assets | 25,724 | (823) | 26,547 | ||||||||||||||
| Other derivative income (loss), net | (3,330) | 283 | (3,613) | ||||||||||||||
| Provision for credit losses | (925) | - | (925) | ||||||||||||||
| Total other income (expense), net | 21,103 | (705) | 21,808 | ||||||||||||||
| Income (loss) before income taxes | 6,312 | (12,523) | 18,835 | ||||||||||||||
| Income tax expense (benefit) | 1,367 | (173) | 1,540 | ||||||||||||||
| Net income (loss) | $ | 4,945 | $ | (12,350) | $ | 17,295 | |||||||||||
Research and Development. The Company did not have R&D expenses for the three months ended September 30, 2026, a decrease of $294,000 compared to the comparable prior-year period. In February 2026, we completed our evaluation of the legacy non-invasive sensor technology business and the associated divestiture transaction closed on March 27, 2026.
Selling, General and Administrative. SG&A expense was $14,791,000 for the three months ended September 30, 2026, compared to $11,524,000 for the comparable prior-year period, an increase of $3,267,000. The significant increase in SG&A expense compared to the prior-year period was primarily attributable to operational expenses for tokenized deposit program offering development of $2.3 million (including $1.9 million incurred under agreements with affiliated service providers), and professional fees and other public company and advisory costs of $1.8 million associated with our strategic transition, partially offset by decreases in non-cash stock-based compensation expense of $0.9 million.
Other Income/(Expense), Net. Other income, net for the three months ended September 30, 2026 was $21,103,000, compared to $(705,000) for the comparable prior-year period, an increase of $21,808,000. The significant increase in other income, net compared to the prior-year period was primarily driven by changes in fair value of digital assets of $25.7 million, partially offset by provision for credit losses of $0.9 million, and other derivative income (loss), net of $(3.3) million, generated from option premiums collected under our Bitcoin treasury trading strategy.
Income tax expense (benefit). Income tax expense was $1,367,000 for the three months ended September 30, 2026, compared to an income tax benefit of 173,000 for the comparable prior-year period, an increase of $1,540,000. The change compared to the prior-year period was primarily related to the tax effect of the change in fair value of digital assets, driven by volatility in digital asset markets, which caused a significant increase in the fair value of Bitcoin, net of the benefit of the deferred tax asset.
Net Income (Loss). We reported a net income of $4,945,000 for the three months ended September 30, 2026, compared with a net loss of $12,350,000 for the comparable prior-year period, an increase of $17,295,000. The change compared to the prior-year period primarily reflects the change in fair value of digital assets of $26.5 million, partially offset by other derivative income (loss), net of $3.3 million, operational expenses for tokenized deposit program offering development of $2.3 million, professional fees and other public-company and advisory costs of $1.8 million, provision for credit losses of $0.9 million, and a deferred income tax expense of $1.4 million.
Nine Months Ended September 30, 2026 compared to September 30, 2025
The following table sets forth key components of our results of operations for the nine months ended September 30, 2026, and 2025.
(in thousands)
| Nine Months Ended September 30, | |||||||||||||||||
| 2026 | 2025 | $ Variance | |||||||||||||||
| Operating expenses- | |||||||||||||||||
| Research and development expenses | $ | 276 | $ | 951 | $ | (675) | |||||||||||
| Selling, general and administrative expenses | 42,613 | 14,329 | 28,284 | ||||||||||||||
| Total operating expenses | 42,889 | 15,280 | 27,609 | ||||||||||||||
| Operating loss | (42,889) | (15,280) | (27,609) | ||||||||||||||
| Other Income (Expense), Net: | |||||||||||||||||
| Interest income | 45 | 52 | (7) | ||||||||||||||
| Interest expense | (620) | (1,650) | 1,030 | ||||||||||||||
| Loss on debt settlements, net | - | (214) | 214 | ||||||||||||||
| Change in fair value of digital assets | (3,987) | (823) | (3,164) | ||||||||||||||
| Other derivative income (loss), net | (1,102) | 283 | (1,385) | ||||||||||||||
| Provision for credit losses | (3,456) | - | (3,456) | ||||||||||||||
| Total other expense, net | (9,120) | (2,352) | (6,768) | ||||||||||||||
| Loss before income taxes | (52,009) | (17,632) | (34,377) | ||||||||||||||
| Income tax benefit | (10,609) | (173) | (10,436) | ||||||||||||||
| Net loss | $ | (41,400) | $ | (17,459) | $ | (23,941) | |||||||||||
Research and Development. R&D expenses were $276,000 for the nine months ended September 30, 2026, a decrease compared to $951,000 for the comparable prior-year period. In February 2026, we completed our evaluation of the legacy non-invasive sensor technology business and the associated divestiture transaction closed on March 27, 2026.
Selling, General and Administrative. SG&A expense was $42,613,000 for the nine months ended September 30, 2026, compared to $14,329,000 for the comparable prior-year period, an increase of $28,284,000. The significant increase in SG&A expense compared to the prior-year period was primarily attributable to increases in non-cash stock-based compensation expense of $10.9 million, operational expenses for tokenized deposit program offering development of $11.6 million (including $8.2 million incurred under agreements with affiliated service providers), professional fees and other public company and advisory costs of $7.1 million associated with our strategic transition, partially offset with decreases in non-cash stock-based expenses for services of $1.1 million.
Other Expense, Net. Other expense, net for the nine months ended September 30, 2026 was $9,120,000, compared to $2,352,000 for the comparable prior-year period, an increase of $6,768,000. The significant increase in other expense, net compared to the prior-year period was primarily driven by the change in fair value of digital assets of $3.2 million and a $3.5 million provision for credit losses, and derivative loss, net of $1.4 million generated from option premiums collected under our Bitcoin treasury trading strategy, partially offset by a $1.0 million reduction in interest expense as a result of higher non-cash financing-related charges in the prior year period, primarily related to repricing and extensions of convertible securities.
Income tax benefit. Income tax benefit was $10,609,000 for the nine months ended September 30, 2026, compared to 173,000 for the comparable prior-year period, an increase of $10,436,000. The increase in the income tax benefit compared to the prior-year period was primarily related to the tax effect of net operating losses related to the continued development of the tokenized deposit program, and the change in fair value of digital assets, driven by volatility in digital asset markets, which caused a significant decline in the fair value of Bitcoin, net of the benefit of the deferred tax asset.
Net Loss. We reported a net loss of $41,400,000 for the nine months ended September 30, 2026, compared with a net loss of $17,459,000 for the comparable prior-year period, an increase of $23,941,000. The significant increase in the net loss compared to the prior-year period primarily reflects the change in fair value of digital assets of $3.2 million, provision for credit losses of $3.5 million, operational expenses for tokenized deposit program offering development of $11.6 million, non-cash stock-based compensation expense of $10.9 million, professional fees and other public company and advisory costs of $7.1 million, partially offset by a deferred income tax benefit of $10.6 million.
Known Trends and Uncertainties
We anticipate that our future operating results will be heavily influenced by the following factors:
•Financing dependence: We expect to require additional liquidity sources in the near term to fund the shortfall in net operating revenue as we continue investing in the further development of the tokenized deposit program offering, which sources may include equity or debt financings, potential sales of Bitcoin, Bitcoin-collateralized financing arrangements, and related-party funding or other investor financing.
•Digital-asset market volatility: Changes in the market price of Bitcoin could cause material non-cash gains or losses in our results of operations each period.
•Integration of bank and technology partners: Our future results will depend on successful technical and regulatory integration with partner banks and technology providers supporting our tokenized deposit platform offering. Delays or changes in bank and developer partner strategy could affect timing of launches and revenue realization.
•Regulatory developments: Evolving federal and state treatment of digital assets, stablecoins, and related financial-technology services could adversely affect our business model and accounting policies.
Liquidity and Capital Resources
As of September 30, 2026, we had cash and cash equivalents (excluding restricted cash) of $3.5 million and working capital of $(24.2) million. The negative working capital position was primarily driven by the $21.0 million loan payable and costs incurred during the nine months ended September 30, 2026, to develop the tokenized deposit program. Operational expenses for the tokenized deposit program offering development were $11.6 million (including $8.2 million incurred under agreements with affiliated service providers) and professional fees of $7.1 million associated with our development initiatives.
We have historically incurred recurring losses and had an accumulated deficit of $231.9 million as of September 30, 2026. We recorded a net loss of $41.4 million for the nine months ended September 30, 2026, a significant increase compared to a net loss of $17.5 million recorded for the comparable prior-year period. The increase in net loss was primarily attributable to increases in non-cash stock-based compensation expense of $10.9 million, operational expenses for tokenized deposit program offering development of $11.6 million (including $8.2 million incurred under agreements with affiliated service providers), professional fees and other public company and advisory costs of $7.1 million associated with our strategic transition, unrealized loss of $4.0 million to reflect the decline in the fair value of digital assets during the 2026 period, and partially offset with an increase in the tax benefit recognized due to net operating losses as a result of continued development of the tokenized deposit program, and decreases in non-cash stock-based expenses for services of $1.1 million. We continue to hold the underlying digital assets as of September 30, 2026 and currently intend to continue holding such digital assets for the foreseeable future.
Our liquidity position as of September 30, 2026 was supported by borrowings under the MLA, capital contributions from Hard Yaka, and our Bitcoin treasury holdings. As of September 30, 2026, we had $21.0 million outstanding under the MLA and held $82.7 million in digital assets, a portion of which were pledged as collateral. Additional potential liquidity sources include financing under the Note and our ATM equity offering program, subject to applicable terms and conditions. We view our Bitcoin holdings as long-term strategic reserves rather than trading assets although we may convert Bitcoin to cash periodically to fund operations and pledge it as collateral under certain financing arrangements that provide capital to support product development and other general corporate purposes
During the nine months ended September 30, 2026, our liquidity was primarily utilized to fund operating expenses and working capital requirements. Management believes that existing liquidity and digital asset holdings, together with available financing under the MLA, the Note with Goldeneye 1995 LLC (as described below), and capital contributions from Hard Yaka (as described below), are sufficient to fund our operations for at least 12 months after issuance of these consolidated financial statements. Management expects that we will supplement our cash resources with additional liquidity sources as we continue executing our business plan. These sources may include sales of Bitcoin, potential Bitcoin-collateralized financing arrangements, related-party funding or other investor financing, and other debt or equity financings.
We previously entered into a Master Loan Agreement (the "MLA") with Payward Interactive, Inc. (the "Lender") on March 18, 2026, pursuant to which we may, from time to time, borrow fiat currency or digital assets on the terms set forth therein in an aggregate principal amount of up to $25 million for up to a twelve-month term, subject to the execution of one or more individual loan term sheets (the "Facility"). On October 12, 2026, the aggregate borrowing commitment increased from $25.0 million to $40.0 million, leaving $19.0 million of additional borrowing capacity as of that date, subject to applicable borrowing conditions, collateral requirements and execution of individual loan term sheets. The amended collateral arrangements also provide for cross-collateralization of borrowings and certain digital asset derivative obligations. The MLA provides us with an additional source of liquidity to fund our operations and strategic initiatives, primarily the further development and future launch of the tokenized deposit program offering. As of October 31, 2026, the aggregate principal amount outstanding under the MLA is $21.0 million. The loan is collateralized by 479 Bitcoin which we pledged to the counterparty in an amount of approximately $36.9 million based on the price of Bitcoin as of October 31, 2026.
On July 1, 2026, the Company entered into a Consulting Agreement with Hard Yaka Ventures Management Co., LLC ("Hard Yaka"), an affiliate of the Company's Chairman and Chief Executive Officer, to support the continued development of the tokenized deposit program. During the nine months ended September 30, 2026, the Company received approximately $3.0 million in capital contributions from Hard Yaka.
On September 25, 2026, the Company entered into an unsecured promissory note (the "Note") with Goldeneye 1995 LLC, pursuant to which Goldeneye may make advances to the Company from time to time in an aggregate principal amount of up to $22.0 million. Each advance made under the Note will constitute part of a single term loan, and amounts repaid or prepaid may not be reborrowed. Borrowings under the Note bear interest at a rate of 8.5% per annum, payable quarterly beginning December 31, 2026, and mature on September 25, 2029, unless earlier repaid in accordance with the terms of the Note. The Note contains customary representations, warranties, covenants and events of default. Upon the occurrence and continuation of an event of default, amounts outstanding under the Note may become immediately due and payable and the interest rate may increase to 11.5% per annum, as provided in the Note. There are no borrowings under this Note as of September 30, 2026.
Non-GAAP Financial Measure
Adjusted EBITDA is a non-GAAP financial measure used by our management to better help evaluate our financial performance and provide more useful information to investors and others in understanding our operating results. This measure removes the effect of certain non-cash items, non-recurring items, unrealized gains or losses or other similar non-cash items that are included in our net loss that otherwise do not contribute directly to management's evaluation of its operating results.
Adjusted EBITDA is defined as net income (loss) excluding interest expense, stock-based compensation expense, non-cash changes in the fair value of digital assets, income taxes, provision for credit losses, and any other items that management has determined are not reflective of our operating performance because the amount of such non-cash adjustments in any specific period may not directly correlate to the underlying performance of our business operations. Adjusted EBITDA should be viewed independently of our reported GAAP net loss as this metric is meant to be considered in addition to, not as a substitute for or in isolation from, our net loss prepared in accordance with GAAP.
The following table reconciles Adjusted EBITDA to net loss, the most closely comparable GAAP financial measure, for the three and nine months ended September 30, 2026 and the comparable prior-year period:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net Income (Loss) | $ | 4,944,823 | $ | (12,350,204) | $ | (41,398,520) | $ | (17,457,841) | |||||||||||||||
| Plus (Subtract): Change in fair value of digital assets | (25,723,528) | 823,062 | 3,986,911 | 823,062 | |||||||||||||||||||
| Plus: Stock-based compensation | 6,585,718 | 6,262,704 | 17,797,817 | 6,856,385 | |||||||||||||||||||
| Plus (Subtract): Income tax expense (benefit) | 1,366,932 | (172,843) | (10,608,685) | (172,843) | |||||||||||||||||||
| Plus: Provision for credit losses | 924,563 | - | 3,455,833 | - | |||||||||||||||||||
| Plus: Interest expense | 386,042 | - | 619,792 | 1,649,710 | |||||||||||||||||||
| Adjusted EBITDA | $ | (11,515,450) | $ | (5,437,281) | $ | (26,146,852) | $ | (8,301,527) | |||||||||||||||
Operating Activities
Net cash used in operating activities during the nine months ended September 30, 2026 was $23,508,621, which was primarily attributable to the net loss for the nine months ended September 30, 2026 of $41,398,520, adjusted for non-cash adjustments of $15,846,759. Non-cash adjustments during the nine months ended September 30, 2026 were primarily comprised of stock-based compensation expense of $17,797,817, the unrealized loss related to the change in the fair value of digital assets of $3,986,911, and net losses on derivatives of $1,101,541, partially offset by the deferred income tax benefit of $10,608,685.
The net operating cash outflows primarily reflect operating expenses incurred with the Company's strategic transition to development of the tokenized deposit program offering following the August 2025 Goldeneye capital investment.
Investing Activities
Net cash used in investing activities during the nine months ended September 30, 2026 was $450,000, reflecting the secured financing disbursed in connection with the divestiture of the sensor technology business completed on March 27, 2026. For further details, see the section entitled "Divestiture Transaction" below.
Financing Activities
Net cash provided by financing activities during the nine months ended September 30, 2026 was $23,994,500, which was primarily attributable to proceeds from loan draws under the MLA collateralized by a portion of our Bitcoin holdings, and funding from Hard Yaka. For additional information on the impact of the private placement transaction completed on August 6, 2025 on the Company's liquidity position, see "Liquidity and Capital Resources."
Capital Requirements and Future Liquidity
We expect to continue incurring operating losses as we fund the further development of our tokenized deposit program offering. Our ability to sustain operations and execute our strategy depends on our ability to leverage our existing financing sources and capacity to raise additional capital through equity or debt financings, monetize Bitcoin holdings, including through potential sales, or obtain other sources of liquidity, including potential Bitcoin-collateralized financing arrangements, or related-party or other investor financing.
Future capital needs will depend on, among other things:
•technology development expenditures, public company costs, and other expenditures associated with the continued development and launch of our tokenized deposit program offering;
•regulatory and compliance costs associated with financial technology activities, and
•any acquisitions or strategic investments.
Based on our current projections, management believes we have adequate resources to meet our obligations for at least the next twelve months. As we continue to execute our business strategy, management may supplement cash on hand with additional liquidity sources, which could include digital asset sales, financing arrangements, or other debt or equity financings. Continuation of operations beyond that period will depend on market conditions for additional capital and the financial performance of our tokenized deposit program offering.
Contractual Obligations and Commitments
Our contractual cash obligations as of September 30, 2026 are summarized in the table below:
| Less Than | ||||||||||||||||||||
|
Contractual Cash Obligations
|
Total | 1 Year | 1-3 Years | |||||||||||||||||
|
Loan payable (1)
|
$ | 22,814,750 | $ | 22,814,750 | $ | - | ||||||||||||||
| Operating leases | 181,838 | 181,838 | - | |||||||||||||||||
| $ | 22,996,588 | $ | 22,996,588 | $ | - | |||||||||||||||
(1) On March 20, 2026, we entered into a term sheet for a one year fixed-term loan of $5.0 million bearing interest at a rate of 8.5% per annum under the MLA maturing on March 18, 2027. On April 27, 2026, we drew the Second Draw under the MLA. The Second Draw increases the aggregate principal amount outstanding under the MLA to $10.0 million and bears interest at a rate of 8.5% per annum maturing on April 27, 2027. On June 1, 2026, we drew the Third Draw under the MLA. On July 28, 2026, we drew the Fourth Draw under the MLA. On September 11, 2026, we drew the Fifth Draw under the MLA. The Fifth Draw increases the aggregate principal amount outstanding under the MLA to $21.0 million and bears interest at a rate of 8.5% per annum maturing on September 11, 2027. The obligations under the MLA are prepayable at our option at any time after three months from the date of the initial loan draw without penalty.
Divestiture Transaction
On March 27, 2026 (the "Closing Date"), we completed the divestiture of our legacy non-invasive sensor technology business pursuant to a Stock Purchase Agreement entered into by and among the Company, its wholly-owned subsidiary, Particle, Inc., a Nevada corporation ("Particle"), Particle Acquisition Corporation, a Nevada corporation (the "Buyer"), and our former Chairman, President and CEO, Ronald P. Erickson, an individual and principal officer of the Buyer. Effective as of the Closing Date of the divestiture of the legacy sensor business, Mr. Erickson concluded his service as a member of the Board of Directors and as President of the Science Division.
Critical Accounting Policies Involving Significant Estimates
The following discussion relates to critical accounting policies for our company which involve significant estimates. The preparation of financial statements in conformity with United States generally accepted accounting principles, or GAAP, requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation.
Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require management's difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management's current judgments.
We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements:
Valuation of Digital Assets
We hold Bitcoin as the principal component of our Consolidated Balance Sheets. Digital assets such as Bitcoin are initially recorded at cost and subsequently measured at fair value, with changes in fair value recognized in the line item in the Consolidated Statements of Operations, change in fair value of digital assets.
Because active quoted prices exist only on certain trading platforms, we use observable Level 1 inputs when available and Level 2 inputs (such as composite or volume-weighted prices) when market liquidity or trading restrictions make Level 1 data less representative. The determination of fair value requires judgment, particularly during periods of volatility or when exchanges experience constrained trading volumes.
The large majority of our Bitcoin holdings are custodied by third-party institutional custodians under multi-signature cold-storage arrangements designed to mitigate security risk.
Digital assets - receivable, net
When we pledge collateral to a third-party entity, we first evaluate whether to derecognize such digital assets based on an evaluation of relevant control and asset derecognition considerations. If we conclude derecognition is appropriate, we derecognize the digital asset collateral that we no longer control and recognize a right to receive back in the future such pledged digital assets.
In accordance with ASU 2023-08, digital asset receivable is recorded at the fair value of the underlying digital assets. Throughout the period that the digital asset receivable is outstanding, the receivable will be measured at fair value of the underlying loaned digital asset with changes recorded in changes in fair value of digital assets in current period earnings.
Allowance for Credit Losses
We apply the current expected credit loss ("CECL") model under ASC 326, Financial Instruments - Credit Losses, to estimate expected credit losses on financial assets measured at amortized cost and certain off-balance sheet credit exposures. This standard requires us to recognize lifetime expected credit losses upon origination of a financial asset or at the time an off-balance sheet commitment is made, rather than when losses are probable, and to incorporate forward-looking information into the estimate. The CECL model represents a critical accounting policy because it requires significant management judgment in the selection of inputs, assumptions, and methodologies.
Digital asset receivable. We consider and account for counterparty credit risk using the principles in Topic 326 - Financial Instruments - Credit Losses ("Topic 326") to measure any credit impairment. The digital asset receivable is presented net of any allowance for credit losses if deemed material. We utilize the probability of default ("PD") loss given default ("LGD") approach to estimating the allowance for credit loss ("ACL") at origination and subsequent reporting periods. In order to apply the PD LGD approach, management considers the lifetime of the digital asset receivable, the reasonable and supportable forecast period, and the PD LGD. As of September 30, 2026, we recorded an allowance for credit loss of $3.1 million as an offset to the digital asset receivable balance in our Consolidated Balance Sheets, based on management's estimate of expected credit losses.
Note receivable. We are a party to certain off-balance sheet financing commitments that are subject to credit loss estimation under ASC 326. The ACL is estimated using a loss given default / expected exposure methodology that incorporates management's assessment of expected draw timing, obligor credit quality, collateral recovery values, and current and forecasted economic conditions. As of September 30, 2026, we recorded an allowance for expected credit losses of $360,000 on the fully funded $450,000 note receivable. The estimate of expected credit losses for the funded note receivable considers, borrower credit quality, collateral values, and current and forecasted economic conditions.
Accounting for Derivatives & Trading Activities
As part of our Bitcoin yield generation strategy trading activities, we enter into option derivative contracts on our Bitcoin holdings. We enter into short-term arrangements that result in obtaining the right to receive or obligation to deliver a fixed amount of Bitcoin crypto assets in the future. Derivatives are instruments that derive their value from changes in an underlying reference outside of our control. Derivatives may be traded on an exchange (exchange-traded) or they may be privately negotiated contracts, which are usually referred to as over the counter ("OTC") derivatives. We account for these derivatives in accordance with ASC 815, Derivatives and Hedging.
Stock-Based Compensation
Estimating the fair value of stock-based awards requires significant judgment, including assumptions regarding expected volatility, risk-free interest rates and expected term. Changes in these inputs may materially affect compensation expense. See Note 11 - Equity Incentive Plans for additional information regarding our stock-based compensation accounting. We account for stock-based awards under ASC 718, Compensation - Stock Compensation. The fair value of stock options and warrants is estimated using the Black-Scholes-Merton option-pricing model, which requires assumptions regarding expected volatility, risk-free interest rates, expected term, and dividend yield. For restricted stock awards, fair value is based on the closing market price of our common stock on the grant date.
We recognized incremental stock-based compensation expense of $964,930 during the nine months ended September 30, 2026 related to the repricing of 82,000,000 stock options from an exercise price of $1.10 per share to $0.37 per share during the nine months ended September 30, 2026, in accordance with ASC 718.
Because volatility and expected-term assumptions involve significant judgment, changes in these inputs could materially affect compensation expense recognized under the Amended and Restated 2021 Equity Incentive Plan (see "Executive Compensation" in Part III, Item 11 of Amendment No. 1 to our Transition Report on Form 10-K for the transition period from October 1, 2025 to December 31, 2025 filed with the SEC on April 27, 2026).
Convertible Instruments and Derivatives
Evaluating embedded conversion and redemption features requires judgment, including volatility estimates and discount-rate assumptions that may result in non-cash gains or losses. All legacy convertible notes and promissory notes were repaid, converted, or otherwise extinguished in connection with the Goldeneye private placement transaction that closed on August 6, 2025. Accordingly, there was no convertible instruments activity during the nine months ended September 30, 2026. See Notes 3 and 5 to our financial statements included in Item 1 of this report for additional information on our accounting for convertible instruments and embedded derivatives prior to August 6, 2025. When we historically issued convertible debt or equity instruments that may have contained embedded conversion or redemption features, we evaluated whether those features required bifurcation and separate accounting as derivatives under ASC 815. Determining the fair value of embedded derivatives involves the use of valuation models incorporating market-based assumptions, such as the volatility of our stock price, expected term, and discount rates. Future volatility or interest rate changes could have resulted in material non-cash gains or losses each period.
Going Concern
In accordance with ASC 205-40, management evaluates the Company's ability to continue as a going concern for a period of one year after the date the financial statements are issued. Management's assessment considered the Company's projected cash requirement during the evaluation period and available sources of liquidity, including cash and cash equivalents, digital assets available for monetization or use as collateral, available borrowing capacity under its Bitcoin-collateralized Master Loan Agreement, the Note with Goldeneye, the Consulting agreement with Hard Yaka, anticipated cash generated from the Company's Bitcoin treasury strategy, and available capacity under its At-The-Market ("ATM") equity program. In November 2026, the Company analyzed its cash requirements and operations through November 2027 and determined that, based upon its available cash and cash equivalents, digital assets, available financing arrangements, projected cash generated from its Bitcoin treasury strategy, and available capacity under its ATM program, management concluded that no substantial doubt about its ability to continue as a going concern. Management will continue to monitor its liquidity position, operating performance, and capital resources as it executes its operating plan. The Company's business model remains dependent on external financing and the value of digital assets, both of which are subject to market volatility and investor sentiment.
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