NASDAQ: DGXX

A “mining pool” is a service operated
by a mining pool operator that pools the resources of individual miners to share their processing power over a network. Mining pools emerged
in response to the growing difficulty and network hashrate competing for bitcoin rewards on the bitcoin blockchain as a way of lowering
costs and reducing the risk of an individual miner’s mining activities. The mining pool operator provides a service that coordinates
the computing power of the independent mining enterprises participating in the mining pool. Mining pools are subject to various risks
such as disruption and down time. In the event that a pool utilized by the Corporation experiences down time or is not yielding returns,
results may be impacted.

The Corporation participates in a mining pool
that pays bitcoin rewards utilizing a “Full-Pay-Per-Share” payout of bitcoin based on a contractual formula, which calculates
payout primarily based on the hashrate provided by the Corporation to the mining pool as a percentage of total network hashrate of the
mining pool, along with other inputs. The Corporation is entitled to consideration even if a block is not successfully placed by the mining
pool operator. The Corporation transitioned its mining operations completely to mining pool participation in 2022, which it utilized throughout
the years ended December 31, 2024 and 2025.

Miners require significant amounts of electrical
power, and these energy requirements represent the Corporation’s largest operating expense. The Corporation’s operating and
maintenance expenses are therefore principally composed of electricity to power its computing equipment as well as cooling and lighting,
etc. Other site expenses include leasing costs for the facilities, internet access, equipment maintenance and software optimization, and
facility security, maintenance and management. Ultimately, the central production line of the Corporation is converting electrical power
into digital currencies through ‘mining’. Natural gas represents the largest operating cost associated with the generation
of electricity at the Corporation’s power plant.

The Corporation’s operation in the digital
currency mining industry requires extensive knowledge of cryptocurrency mining, cryptocurrency economics and blockchain technology. Further,
the Corporation’s focus on vertical integration with energy production and its focus on environmentally conscious development requires
specialized knowledge of the energy procurement industry, with a particular focus on green energy. For the year ended December 31, 2025,
the Corporation primarily recognized revenues with organizations in the digital currency space. The Corporation’s number of active
miners per self-mining and colocation agreements for the year ended December 31, 2025 was approximately nil and 9,700, respectively.

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All key components of the Corporation’s
facilities are monitored including the intake air temperature, hash board temperature, voltage, hashrate, air temperature, exhaust air
temperature and humidity. All parameters are monitored and changed remotely, as required. Parallel monitoring is performed by local on-site
staff who are responsible for implementing any necessary repairs to mining infrastructure. In the event that the Corporation’s remote
monitoring or any parallel monitoring identifies any malfunction or technical issue, personnel are dispatched to physically inspect and,
if necessary, repair defective components. The Corporation intends to maintain an inventory of all necessary components for repair, which
are kept at the same facility as such operations.

During April 2021, the Corporation was approved for an account with
Gemini. Gemini is a digital currency exchange and custodian that allows customers to buy, sell and store digital assets. Gemini was the
first crypto exchange and custodian in the world to complete a SOC 2 Type 1 and a SOC 2 Type 2 examination. While a SOC 2 Type 1 evaluates
the design and implementation of system controls at a point in time, a SOC 2 Type 2 evaluates whether these system controls have been
operating effectively over a period of time. A SOC 2 Type 2 examination is the highest level of security compliance an organization can
demonstrate, and Gemini completes this examination on an annual basis. As of March 31, 2026, the Corporation had holdings of approximately
51 bitcoins and 1,010 Ethereum in its Gemini account. Digital currencies are measured at fair value using the quoted price on the Gemini
exchange. Gemini serves as our principal market. The Corporation believes any price difference between the principal market and an aggregated
price to be immaterial.

The Corporation performs credit due diligence
in the normal course of business when beginning a relationship with counterparties, as well as during ongoing business activities. Gemini
maintains insurance coverage for the cryptocurrency held on behalf of the Corporation in its online hot wallet. The Corporation has not
been able to independently insure its mined digital currency. Given the novelty of digital currency mining and associated businesses,
insurance of this nature is generally not available, or uneconomical for the Corporation to obtain which leads to the risk of inadequate
insurance coverage.

On occasion, to mitigate third-party risk, the
Corporation will hold a portion of its digital currencies in cold storage solutions that are not connected to the internet. The Corporation’s
digital assets that are held in cold storage are stored in safety deposit boxes at a bank branch. The wallets in which the Corporation
stores its cryptocurrency assets are not multi-signature wallets; however, the Corporation secures the 24-word seed phrase, which facilitates
recovery of the wallets should the wallets become lost, stolen or damaged, by partitioning the seed phrase in multiple parts, and securing
each part in a separate location. Each part of the seed phrase is stored in either a safe or safety deposit box. The Corporation replicates
this security protocol by taking the same 24-word seed phrase, partitioning this into several parts and storing each part in a secure
location in a separate safe or safety deposit box than was used for the first copy of the seed-phrase. This duplication ensures that the
digital currencies held via cold storage solutions will be recoverable by the Corporation, should the Corporation’s cold wallets
become lost, stolen or damaged. During the year-ended December 31, 2025, and as of the date of this Annual Report, all of the Corporation’s
cryptocurrency assets are currently held in its Gemini wallets.

The vast majority of mining is now undertaken
by mining pools, whereby miners organize themselves and pool their processing power over a network and mine transactions together. Rewards
are then distributed proportionately to each miner based on the work/hashpower contributed. Mining pools became popular when mining difficulty
and block time increased. While the rewards for successfully solving a block become considerably lower in the case of pooling, rewards
are earned on a far more consistent basis, reducing the risk to miners with smaller computational power. As of the date of this Annual
Report, the Corporation participates in one mining pool in order to smooth the receipt of rewards. Mining pools generally exist for each
well-known cryptocurrency.

High Performance Computing (HPC) and Miner
Manufacturers and Suppliers

The Corporation currently relies upon a limited
number of suppliers from which it purchases its HPC related equipment and miners. HPC equipment is very sophisticated and may be subject
to substantial price variations depending on market conditions. The prices of mining machines are negotiated on an individual basis, although
the price at which a manufacturer is willing to sell miners often fluctuates with the price of the cryptocurrency that is able to be mined
by the miners and, as such, may be subject to meaningful changes in price during periods of pricing volatility for cryptocurrencies.

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Sources of Energy

The Corporation’s operations use a blend
of renewable energy, zero-carbon electricity, and non-renewable sources. Currently, 89% of the electricity consumed by the Corporation’s
grid-based power across its two New York State sites is sourced from zero-carbon generation. Additionally, more than 50% of the total
energy consumed at these sites is derived from renewable sources.

The Corporation’s current carbon-neutrality
efforts and initiatives include:

● 100% Carbon Neutral by 2026: The Corporation is targeting carbon
neutrality across all operations by the end of 2026 through a combination of zero-carbon electricity procurement, operational efficiency
improvements, and the use of high-quality, verified carbon offsets where necessary. While the original goal was 2025, the timeline has
been adjusted to align with updated projections on New York State’s renewable energy deployment, which is slightly behind pace.
The Corporation remains on track to meet its long-term target of using 100% renewable energy by 2030

● Community Solar Leadership: The Corporation is the anchor subscriber
to a 5 MW community solar project located in Grand Island, NY, just 15 miles from its East Delevan facility. This project will generate
enough clean electricity to power more than 2,500 homes annually. Our participation directly supports the development of new renewable
assets, adds clean energy to the grid, and helps reduce overall electricity costs and price volatility.

● Digigreen Initiative: An internal program focused on implementing
sustainable, environmentally responsible, and economically sound practices. This initiative helps position the Corporation as an industry
leader in reducing and eliminating its carbon footprint without sacrificing profitability.

● Crypto Climate Accord: As a signatory to this private sector-led
initiative, the Corporation is working collaboratively with other crypto stakeholders to rapidly decarbonize the cryptocurrency industry.

● Proof of Green: The Corporation is developing internal measurement
and reporting frameworks to track energy sourcing, emissions intensity, and carbon reduction progress across operations. These tools
will enable regular environmental accountability reporting and provide strategic guidance to directors and shareholders on carbon reduction
opportunities.

● Grid Support & Load Flexibility: The Corporation’s
operations are capable of dynamically adjusting load in response to grid conditions, supporting system reliability during peak demand
periods. This flexibility enables participation in demand response and other grid-balancing programs, further contributing to overall
reductions in grid carbon intensity.

Revenues

For a description of our revenues for each of
the two years in the period ended December 31, 2025, see Item 7 “Management’s Discussion and Analysis of Financial Condition
and Results of Operations.”

Seasonality

Mining machines are energy intensive and produce
a high amount of heat. Typically, machines operate more efficiently in the colder seasons when operators do not need to utilize as many
cooling methods. Additionally, dry seasons may lead to a shortage in power supply, and periods of high heat can result in energy grid
stress, which can negatively impact the Corporation’s business operations if it experiences power supply interruption or reduces
its energy consumption. The Corporation has previously, and may again in the future, voluntarily curtailed its energy consumption burden
to assist the energy needs of the local communities in which it does business. Results of the Corporation’s business operations
are largely influenced by the market value of bitcoins, and bitcoin volatility is tied to, among other things, its halving schedule and
the other risks described in