NYSE: GPUS

·
RiskOn International, Inc. (“ROI”), which wholly owns BitNile.com, Inc. (“BNC”);

·
askROI, Inc. (“askROI”);

·
Ault Global Real Estate Equities, Inc. (“AGREE”);

·
Ault Aviation, LLC (“Ault Aviation”);

·
Circle 8 Holdco LLC (“Circle 8 Holdco”), which wholly owns Circle 8 Crane Services, LLC (“Circle
8”); and

·
TurnOnGreen, Inc. (“TurnOnGreen”), which wholly owns TOG Technologies, Inc. (“TOG Technologies”)
and Digital Power Corporation (“Digital Power”).

We were founded by Milton
C. (Todd) Ault, III, our Executive Chairman, and are led by Mr. Ault, William B. Horne, our Chief Executive Officer and Vice Chairman,
and Henry Nisser, our President and General Counsel. Together, they constitute the Executive Committee, which manages the day-to-day operations
of the Company. Our long-term objective is to maximize per share intrinsic value. All major investment and capital allocation decisions
are made for us by Mr. Ault and the Executive Committee.

We currently have the following
reportable segments, though it should be noted that we are in the process of transitioning our data centers away from Bitcoin mining to
operations dedicated to high-performance computing (“HPC”) and AI purposes:

·
Sentinum: crypto asset mining operations, colocation and hosting services for emerging AI ecosystems and other
industries, and our digital asset treasury activities;

·
Energy and Infrastructure (“Energy”): crane rental and lifting solutions provider for oilfield,
construction, commercial and infrastructure markets through Circle 8;

·
AGREE: hotel operations and other commercial real estate holdings;

·
Gresham: defense solutions with operations conducted by Enertec, Relec, Microphase and Giga-tronics;

·
TurnOnGreen: commercial electronics solutions with operations conducted by Digital Power, and electric vehicle
(“EV”) charging solutions through TOG Technologies.

·
Technology and Finance (“Fintech”): commercial lending and trading through Ault Lending; and

1

·
ROI: includes askROI, which operates OnlyBulls, a consumer-facing financial research and market intelligence
platform developed and operated by askROI as well as ROI’s own operations, which includes its ownership of 100% of Bitnile.com,
which is engaged in the development of an online predictions market platform.

We operate as a holding company
with operations conducted primarily through our subsidiaries, which are described below.

Recent Events and Developments

On December 9, 2024, we completed
the distribution of 650,000 shares of our 10% Series E Redeemable Perpetual Preferred Stock (the “Series E Preferred Stock”),
a $16.25 million stated value, to holders of Class A Common Stock and Series C Convertible Preferred Stock on an as-converted basis. Dividends
will accrue on the stated amount of $25.00 per share of the Series E Preferred Stock at a rate per annum equal to 10.00%.

On December 16, 2024, we completed
the distribution of approximately 5.0 million shares of our Class B common stock (the “Class B Common Stock”) to all holders
of our Class A Common Stock and Series C Convertible Preferred Stock on an as-converted basis. There is currently no public trading market
for the Class B Common Stock. While we may seek to have the Class B Common Stock listed for trading on the NYSE American within the foreseeable
future, there can be no assurance when, or if, such a listing will occur. The Class B Common Stock is identical to the currently outstanding
Class A Common Stock, with the exception that each such share carries 10 times the voting power of a share of Class A Common Stock. The
Class B Common Stock is convertible at any time into Class A Common Stock on a one-for-one basis.

On November 20, 2024, pursuant
to the approval provided by our stockholders at the annual meeting of stockholders held on June 28, 2024, we filed an Amendment to our
Certificate of Incorporation with the State of Delaware to effectuate a reverse stock split of our Class A Common Stock affecting the
issued and outstanding number of such shares by a ratio of one-for-thirty-five. The reverse stock split became effective on November 22,
2024. All share amounts in this Annual Report have been updated to reflect the reverse stock split.

On December 23, 2024, we completed
the distribution of 1.0 million shares of our Series F Exchangeable Preferred Stock (“Series F Preferred Stock”) to holders
of Class A Common Stock and Series C Convertible Preferred Stock on an as-converted basis. The Series F Preferred Stock has a $1.00 liquidation
preference and does not pay a dividend. Each share of Series F Preferred Stock will be exchangeable, at the option of its holder, for
(i) 10 shares of Class A Common Stock of Ault Capital and (ii) five shares of Class B Common Stock of Ault Capital, at any time beginning
on the later of (A) one year after issuance of the Series F Preferred Stock and (B) the date of the registration under the Securities
Act of all of the foregoing shares of Ault Capital Class A Common Stock and Ault Capital Class B Common Stock. Once the Series F Preferred
Stock has been exchanged into shares of Ault Capital Class A Common Stock and Class B Common Stock, our sole business will be our ownership
of (i) Sentinum, through which we operate our Bitcoin mining business as well as its HPC and AI operations and hold our digital assets
and (ii) Omnipresent, through which we are focused on the development, deployment, and commercialization of advanced robotics systems,
AI and data-driven automation technologies.

In December 2024, pursuant
to the November 2023 SPA we entered into with Ault & Company, Inc. (“Ault & Company”), we sold an aggregate of 3,020
shares of Series C Convertible Preferred Stock and warrants to purchase an aggregate of 25,509 shares of Class A Common Stock to Ault
& Company, for an aggregate purchase price of $3.0 million. As of the date of this Annual Report, Ault & Company has purchased
an aggregate of 50,000 shares of Series C Convertible Preferred Stock and warrants to purchase an aggregate of 422,337 shares of Class
A Common Stock, for an aggregate purchase price of $50.0 million.

On December 13, 2024 (the
“Closing Date”), Third Avenue Apartments LLC (“Third Avenue”), which was a subsidiary of AGREE, completed the
sale of its real property located at the southeast corner of 5th Street North and 3rd Avenue North in St. Petersburg, Florida (the “Property”).
The Property was sold on the Closing Date to Cats Mirror Lake, LLC (the “Buyer”) pursuant to a contract of sale, as amended,
entered into by Third Avenue and the Buyer. The sale price for the property was $13.0 million. In February 2025, Third Avenue filed a
certificate of elimination with the Delaware Secretary of State.

On December 21, 2024, we entered
into a securities purchase agreement (the “December 2024 SPA”) with Ault & Company, pursuant to which we agreed to sell
to Ault & Company, in one or more closings, up to 25,000 shares of Series G convertible preferred stock (“Series G Preferred
Stock”) and warrants to purchase up to 4.2 million shares of Class A Common Stock (the “Series G Warrants”) for a total
purchase price of up to $25.0 million. The December 2024 SPA provides that the financing may be conducted through one or more closings.
Through the date of this Annual Report, pursuant to the December 2024 SPA, we have sold to Ault & Company 960 shares of Series G Preferred
Stock and Series G Warrants to purchase 162,217 shares of Class A Common Stock, for a purchase price of $1.0 million.

2

Each share of Series G Preferred
Stock has a stated value of $1,000.00 and is convertible into shares of Class A Common Stock at a conversion price equal to the greater
of (i) $0.10 per share, and (ii) the lesser of (A) $6.74 or (B) 105% of the volume weighted average price of the Class A Common Stock
during the ten trading days immediately prior to the date of conversion. The conversion price is subject to adjustment in the event of
an issuance of Class A Common Stock at a price per share lower than the conversion price then in effect, as well as upon customary stock
splits, stock dividends, combinations or similar events. The holders of Series G Preferred Stock are entitled to cumulative cash dividends
at an annual rate of 9.5%, or $95.00 per share, based on the stated value per share. Dividends shall accrue for 10 years from the date
of issuance of such shares of Series G Preferred Stock and are payable monthly in arrears. For the first two years, we may elect to pay
the dividend amount in shares of Class A Common Stock rather than cash. The holders of the Series G Preferred Stock are entitled to vote
with the Class A Common Stock as a single class on an as-converted basis.

On February 5, 2025, we entered
into an exchange agreement with an institutional investor (“Orchid”), pursuant to which we issued to the investor a convertible
promissory note in the principal face amount of $1.9 million (the “February 2025 Convertible Note”), in exchange for the cancellation
of an outstanding term note we issued to the investor in April 2024. That note had an outstanding principal amount and accrued but unpaid
interest of $1.9 million. The February 2025 Convertible Note accrued interest at the rate of 15% per annum, unless an event of default
(as defined in the February 2025 Convertible Note) occurs, at which time the February 2025 Convertible Note would accrue interest at 18%
per annum. The February 2025 Convertible Note was to mature on May 5, 2025. The February 2025 Convertible Note was convertible into shares
of Class A Common Stock at a fixed conversion price of $4.00 per share. The February 2025 Convertible Note was exchanged for the Orchid
Exchange Note, as defined below.

On March 14, 2025, we entered
into an exchange agreement with Orchid Finance LLC pursuant to which we issued to Orchid a promissory note (the “Orchid Exchange
Note”) in the amount of $4.2 million in exchange for the cancellation of (i) a term note issued by us on May 16, 2024, with outstanding
principal and accrued but unpaid interest of $0.7 million, (ii) a term note issued by us on May 20, 2024, with outstanding principal and
accrued but unpaid interest of $1.5 million, and (iii) the February 2025 Convertible Note issued by us on February 5, 2025, with outstanding
principal and accrued but unpaid interest of $2.0 million. Between March 28, 2025 and July 9, 2025, we issued 3.7 million shares
of Class A Common Stock valued at $4.4 million in payment of all principal and accrued interest on the Orchid Exchange Note.

On March 21, 2025, we entered
into an exchange agreement pursuant to which we issued to SJC Lending LLC a convertible note in the amount of $4.9 million in exchange
for the cancellation of (i) a term note issued by us on January 14, 2025, with outstanding principal and accrued but unpaid interest of
$2.6 million, (ii) a promissory note issued by us on March 7, 2025, with outstanding principal and accrued but unpaid interest of $0.5
million, (iii) a promissory note issued by us on March 12, 2025, with outstanding principal and accrued but unpaid interest of $1.5 million,
and (iv) a promissory note issued by us on March 13, 2025, with outstanding principal and accrued but unpaid interest of $0.3 million.

On March 28, 2025, our majority
owned subsidiary, Avalanche International Corp. (“AVLP”), filed a petition for liquidation under Chapter 7 of the bankruptcy
laws. The filing placed AVLP under the control of the bankruptcy court, which oversaw its liquidation. As a result, AVLP is no longer
a subsidiary of ours.

On March 31, 2025, we entered
into a securities purchase agreement with an institutional investor pursuant to which we agreed to sell up to 50,000 shares of Series
B Convertible Preferred Stock (“Series B Preferred Stock”) for a total purchase price of up to $50.0 million. The securities
purchase agreement provides that the transaction shall be conducted through 49 separate tranche closings, provided, however, that the
investor has the ability, exercisable in its sole discretion, to purchase any number of shares of Series B Preferred Stock prior to the
dates of the tranche closings provided for in the securities purchase agreement. The initial tranche closing occurred on May 21, 2025,
which consisted of the sale and issuance to the investor of 2,000 shares of Series B Preferred Stock for an aggregate of $2.0 million.
The investor has purchased an additional 30,414 shares of Series B Preferred Stock through the date of this Annual Report. Of such 32,414
shares of Series B Preferred Stock, the investor has converted approximately 29,506.22 shares of Series B Preferred Stock into 50.3 million
shares of Class A Common Stock as of the date of this Annual Report. Pursuant to the securities purchase agreement, provided certain closing
conditions have been met, the investor shall purchase up to an aggregate of 4,800 shares of Series B Preferred Stock, with the investor
being required to purchase 100 shares per month. As of the date of this Annual Report, purchases by the investor have not been made in
accordance with the contractual monthly purchase schedule set forth in the securities purchase agreement. The Company continues to assess
the status of the arrangement and its rights thereunder.

Each share of Series B Preferred
Stock has a stated value of $1,000 and is convertible into shares of Class A Common Stock at a conversion price equal to the greater of
(i) $0.40 per share (the “Floor Price”), which Floor Price shall not be adjusted for stock dividends, stock splits, stock
combinations and other similar transactions and (ii) 75% of the lowest VWAP (as defined in the note) of our Class A Common Stock on any
trading day during the five trading days immediately prior to the date of conversion into shares of Class A Common Stock, but not greater
than $10.00 per share (the “Maximum Price”), which Maximum Price shall be adjusted for stock dividends, stock splits, stock
combinations and other similar transactions.

The holders of Series B Preferred
Stock are entitled to cumulative cash dividends at an annual rate of 15%, or $150 per share, based on the stated value per share. Dividends
shall accrue for as long as any shares of Series B Preferred Stock remain issued and outstanding and are payable monthly in arrears. For
the first two years, we may elect to pay the dividend amount in additional shares of Series B Preferred Stock rather than cash. The holders
of the Series B Preferred Stock are entitled to vote with the Class A Common Stock as a single class on an as-converted basis.

3

On April 1, 2025, we issued
to an accredited investor a convertible promissory note in the principal face amount of $1.65 million in consideration for an advance
we received of $1.5 million. The note accrues interest at the rate of 15% per annum, unless an event of default (as defined in the note)
occurs, at which time the note would accrue interest at 18% per annum. The note will mature on September 30, 2025. The note is convertible
into shares of Class A Common Stock at a conversion price equal to the greater of (i) the Floor Price and (ii) the lesser of 75% of the
VWAP (as defined in the note) of the Class A Common Stock during the five trading days immediately prior to (A) the date of issuance of
the note or (B) the date of conversion into shares of Class A Common Stock. During July 2025, we issued 920,265 shares of Class A Common
Stock valued at $0.7 million and during August 2025 we paid $1.0 million in payment of all principal and accrued interest on the note.

On April 8, 2025, we issued
to an accredited investor a convertible promissory note in the principal face amount of $110,000 in consideration for $100,000. The note
accrues interest at the rate of 15% per annum, unless an event of default (as defined in the note) occurs, at which time the note would
accrue interest at 18% per annum. The note will mature on September 30, 2025. The note is convertible into shares of Class A Common Stock
at a conversion price equal to the greater of (i) $0.45 and (ii) the lesser of (A) 75% of the VWAP (as defined in the note) of the Class
A Common Stock during the five trading days immediately prior to the date of issuance of the note or (B) 75% of the lowest daily VWAP
of the Class A Common Stock during the five trading days immediately prior to the date of conversion into shares of Class A Common Stock.
On June 16, 2025, we issued 60,526 shares of Class A Common Stock in payment of all principal and accrued interest.

On April 15, 2025, we issued
to two accredited investors convertible promissory notes in the aggregate principal face amount of $5.0 million in aggregate gross
consideration of $4 million in cash paid by the investors, prior to placement agent fees and expenses of approximately $0.5 million. The
notes were issued with an OID of 20%, or $1 million. The notes do not accrue interest unless an event of default (as defined in the notes)
occurs, at which time the notes would accrue interest at 20% per annum. The notes matured on September 30, 2025. The notes were convertible
into shares of Class A Common Stock at a conversion price equal to the greater of (i) $0.40 and (ii) 80% of the lowest closing price of
the Class A Common Stock during the five trading days immediately prior to the date of conversion into shares of Class A Common Stock.
Between June 18, 2025 and July 1, 2025, we issued 2.8 million shares of Class A Common Stock valued at $3.4 million. The remaining balance
of $1.6 million was paid on the maturity date.

On May 13, 2025, we entered
into an OID only term note agreement with an institutional investor with a principal amount of $1.4 million and an OID of $0.1 million.
The maturity date of the promissory note is May 27, 2025. All principal and accrued interest on this promissory note has been paid. Mr.
Ault entered into a personal guaranty agreement for the benefit of the investor.

On June 6, 2025, we entered
into a settlement agreement with our defense affiliate Gresham and Gresham’s senior secured lenders pursuant in its Chapter 11 bankruptcy
proceedings. On November 28, 2025, the United States Bankruptcy Court for the District of Arizona confirmed Gresham’s bankruptcy
plan. Under that plan, Gresham’s senior lenders released Gresham and us in exchange for a settlement payment. That payment was made
on October 1, 2025. Consequently, Gresham may be deemed to have emerged from bankruptcy on November 28, 2025.

On June 9, 2025, Sentinum
entered into a Hosting Services Agreement (the “Agreement”) with a data center hosting company (the “Service Provider”).
Under the Agreement, the Service Provider provides Sentinum with operations and asset management services and access to approximately
20 megawatts of energy capacity and other critical infrastructure to be used for Sentinum’s Bitcoin mining operations. The Agreement
has an initial term of one year with automatic one-year renewals unless either Sentinum or the Service Provider elects to terminate the
Agreement 90 days prior to the end of the current term. Sentinum deploys approximately 6,800 S19j miners (the “Miners”) at
the Service Provider’s data center.

Sentinum paid the Service
Provider a non-refundable fee of $10 per Miner for the setup, installation and configuration of the Miners (the “Initial Setup Fee”)
as well as an initial deposit of $0.8 million (the “Initial Deposit” and together with the Initial Setup Fee, the “Initial
Fees”). The Initial Fees shall be paid out of Bitcoin rewards and Bitcoin transaction fee awards (the “Earned BTC”)
that would otherwise be due to the customer until such time as 100% of the Initial Fees have been paid. Thereafter, Sentinum is entitled
to 70% of the Earned BTC and the Service Provider is entitled to 30%. The Agreement provides that, during periods of high demand on the
utility grid, the Service Provider has the option to curtail the electrical load to the facility and redirect the electrical load to the
utility grid. Upon any curtailment, the net profits from such energy sales shall be equally split between Sentinum and the Service Provider.

On July 31, 2025, we entered
into a securities purchase agreement (the “July 2025 SPA”) with Ault & Company, pursuant to which we agreed to sell to
Ault & Company, in one or more closings, up to 100,000 shares of Series H convertible preferred stock (“Series H Preferred Stock”)
for a total purchase price of up to $100 million. On November 7, 2025, we and Ault & Company entered into an amendment to the July
2025 SPA to extend its termination date. Under the amendment, the termination date will be extended to the later of (i) one year after
we have a sufficient number of authorized shares of Class A Common Stock to satisfy all conversion and share-reserve requirements under
the July 2025 SPA or (ii) December 31, 2027. Through the date of this Annual Report, pursuant to the July 2025 SPA, we have sold 4,000
shares of Series H Preferred Stock to Ault & Company.

4

Each share of Series H Preferred
Stock has a stated value of $1,000 and is convertible into shares of Class A Common Stock at a conversion price equal to the greater of
(i) $0.10 per share, and (ii) the lesser of (A) $0.79645 or (B) 105% of the volume-weighted average price of the Class A Common Stock
during the ten trading days immediately prior to the date of conversion. The conversion price is subject to adjustment in the event of
an issuance of Class A Common Stock at a price per share lower than the conversion price then in effect, as well as upon customary stock
splits, stock dividends, combinations or similar events. The holders of Series H Preferred Stock are entitled to cumulative cash dividends
at an annual rate of 9.5%, or $95.00 per share, based on the stated value per share. Dividends shall accrue for 10 years from the date
of issuance of such shares of Series H Preferred Stock and are payable monthly in arrears. For the first two years, we may elect to pay
the dividend amount in shares of Class A Common Stock rather than cash. The holders of the Series H Preferred Stock are entitled to vote
with the Class A Common Stock as a single class on an as-converted basis.

On August 29, 2025, we entered
into an At-the-Market Issuance Sales Agreement with Wilson-Davis, as sales agent to sell shares of our Class A Common Stock, having an
aggregate offering price of up to $125 million from time to time, through an “at the market offering” (the “First ATM
Offering”) as defined in Rule 415 under the Securities Act. On August 29, 2025, we filed a prospectus supplement with the SEC relating
to the offer and sale of up to $125 million of Class A Common Stock in the First ATM Offering. We sold 255,490,454 shares of our Class
A Common Stock under the First ATM Offering for gross proceeds of $125 million and then terminated the First ATM Offering. The offer and
sale of the shares of our Class A Common Stock were made pursuant to our effective “shelf” registration statement on Form
S-3 and an accompanying base prospectus contained therein (Registration Statement No. 333-288778) filed with the SEC on July 18, 2025,
and declared effective by the SEC on August 28, 2025.

On December 2, 2025, we issued
to JGB Capital, LP, JGB Partners, LP and JGB Capital Offshore Ltd. the Convertible Notes in the aggregate principal face amount of $12.8
million in consideration for an aggregate of $12.0 million paid to us. The Convertible Notes bear interest at 12.5% per annum, mature
on December 2, 2027, and are convertible into shares of our Class A Common Stock at a conversion price equal to the lower of (i) $0.3235
per share and (ii) 85% of the lowest daily volume-weighted average price during the three (3) trading days immediately preceding and including
the applicable conversion date, but not less than the Floor Price.

On December 19, 2025, we entered
into an At-the-Market Issuance Sales Agreement with Spartan Capital Securities, LLC (“Spartan”), as sales agent to sell shares
of our Class A Common Stock, having an aggregate offering price of up to $50 million from time to time, through an “at the market
offering” (the “Second ATM Offering”) as defined in Rule 415 under the Securities Act. On December 19, 2025, we filed
a prospectus supplement with the SEC relating to the offer and sale of up to $50 million of Class A Common Stock in the Second ATM Offering.
On January 16, 2026, we amended the At-the-Market Issuance Sales Agreement and filed a prospectus supplement to indicate that Spartan
will serve as the lead sales agent and to add Wilson-Davis as an additional sales agent.

Through April 12, 2026, we
have sold 91.6 million shares of our Class A Common Stock under the Second ATM Offering for gross proceeds of approximately $18.1 million.
The offer and sale of the shares of our Class A Common Stock are being made pursuant to our effective “shelf” registration
statement on Form S-3 and an accompanying base prospectus contained therein (Registration Statement No. 333-291595) filed with the SEC
on November 17, 2025, and declared effective by the SEC on December 11, 2025.

On February 13, 2026, we entered
into an At-the-Market Issuance Sales Agreement with Wilson Davis, as sales agent to sell shares of our 13.00% Series D Cumulative Redeemable
Perpetual Preferred Stock, par value $0.001 per share (the “Series D Preferred”), having an aggregate offering price of up
to $35.4 million from time to time, through an “at the market offering” (the “Series Preferred D ATM Offering”)
as defined in Rule 415 under the Securities Act. On February 13, 2026, we filed a prospectus supplement with the SEC relating to the offer
and sale of up to $35.4 million of Series D Preferred in the Series D Preferred ATM Offering.

Through the date of this Annual
Report, we have sold 2,909 shares of our Series D Preferred under the Series D Preferred ATM Offering for gross proceeds of approximately
$65,000. The offer and sale of the shares of our Series D Preferred are being made pursuant to our effective “shelf” registration
statement on Form S-3 and an accompanying base prospectus contained therein (Registration Statement No. 333-291595) filed with the SEC
on November 17, 2025, and declared effective by the SEC on December 11, 2025.

Corporate Information

We are a Delaware corporation,
initially formed in California in 1969 and reincorporated in Delaware in 2017. We are located at 11411 Southern Highlands Parkway, Suite
190, Las Vegas, NV 89141. Our phone number is (949) 444-5464 and our website address is www.hyperscaledata.com.

Our Corporate Structure

On certain dates in 2024,
2025 and 2026, we reorganized our corporate structure pursuant to a series of transactions by and among the Company and its directly and
indirectly owned subsidiaries as well as third parties. The purpose of the reorganization was to simplify our organizational and reporting
structure to more accurately reflect our business operations. As a result of the foregoing transactions, our corporate structure is currently
as follows:

5

We currently expect the divesture
of Ault Capital (the “Divestiture”) to occur in the second quarter of 2027. Upon the occurrence of the Divestiture, we would
be an owner and operator of data centers to support high-performance computing services, as well as a holder of digital assets. Until
the Divestiture occurs, we will continue to provide, through Ault Capital and its wholly and majority-owned subsidiaries and strategic
investments, mission-critical products that support a diverse range of industries, including an AI software platform, equipment rental
services, defense/aerospace, industrial, automotive, medical/biopharma and hotel operations. In addition, Ault Capital is actively engaged
in private credit and structured finance through Ault Lending.

On December 23, 2024, we issued
one million (1,000,000) shares of Series F Preferred Stock to all common stockholders and holders of the Series C Preferred Stock on an
as-converted basis. The Divestiture will occur through the voluntary exchange of the Series F Preferred Stock for shares of Class A Common
Stock and Class B Common Stock of Ault Capital (collectively, the “ACG Shares”). We remind our stockholders that only those
holders of the Series F Preferred Stock who agree to surrender such shares, and do not properly withdraw such surrender, in the exchange
offer through which the Divestiture will occur, will be entitled to receive the ACG Shares and consequently be shareholders of Ault Capital
upon the occurrence of the Divestiture. Therefore, if you do not own shares of our Series F Preferred Stock or you do not surrender your
shares of Series F Preferred Stock, you will not receive any ACG Shares of Ault Capital upon the Divestiture, you will have no ongoing
rights to the assets, operations, or future performance of Ault Capital and its subsidiaries, and the value of your investment will only
reflect the remaining business of Hyperscale Data, including Sentinum and Omnipresent.

Our Business Strategy

As principally a holding company,
our business strategy is designed to increase stockholder value. Under this strategy, we are focused on managing and financially supporting
our existing subsidiaries and partner companies, with the goal of pursuing monetization opportunities and maximizing the value returned
to stockholders. We have, are and will consider initiatives including, among others: public offerings, the sale of individual partner
companies, the sale of certain or all partner company interests in secondary market transactions, or a combination thereof, as well as
other opportunities to maximize stockholder value, such as activist trading. We anticipate returning value to stockholders after satisfying
our debt obligations, working capital needs and other senior capital commitments.

On October 7, 2019, we created
an Executive Committee which is comprised of our Executive Chairman, Chief Executive Officer and President. The Executive Committee meets
on a daily basis to address the Company’s critical needs and provides a forum to approve transactions which are communicated to
our Chief Financial Officer and Senior Vice President of Finance on a bi-weekly basis by our Chief Executive Officer.

Our Executive Committee approves
and manages our investment and trading strategy. The Executive Committee has decades of experience in financial, investing and securities
transactions. Led by our Founder and Executive Chairman, Milton C. (Todd) Ault, III, we seek to find undervalued companies and disruptive
technologies with a global impact. We use a traditional methodology for valuing securities that primarily looks for deeply depressed prices.
Upon making an investment, we often become actively involved in the companies we seek to acquire. That activity may involve a broad range
of approaches, from influencing the management of a target to take steps to improve stockholder value, to acquiring a controlling or sizable
but non-controlling interest or outright ownership of the target company in order to implement changes that we believe are required to
improve its business, and then operating and expanding that business. Mr. Ault relies heavily on William B. Horne, our Vice Chairman and
Chief Executive Officer, and Henry Nisser, our President and General Counsel, to provide analysis and guidance on all acquisition targets
and throughout the acquisition process.

6

From time to time, we engage
in discussions with other companies interested in our subsidiaries or partner companies, either in response to inquiries or as part of
a process we initiate. To the extent we believe that a subsidiary partner company’s further growth and development can best be supported
by a different ownership structure or if we otherwise believe it is in our stockholders’ best interests, we will seek to sell some
or all of our position in the subsidiary or partner company. These sales may take the form of privately negotiated sales of stock or assets,
mergers and acquisitions, public offerings of the subsidiary or partner company’s securities and, in the case of publicly traded
partner companies, transactions in their securities in the open market. Our plans may include taking subsidiaries or partner companies
public through rights offerings, mergers or spin-offs and directed share subscription programs. We will continue to consider these and
functionally equivalent programs and the sale of certain subsidiary or partner company interests in secondary market transactions to maximize
value for our stockholders.

Over the recent past, we have
provided capital and relevant expertise to fuel the growth of businesses in Bitcoin mining, generative AI and metaverse platform development,
crane services, defense/aerospace, industrial, automotive, medical/biopharma, consumer electronics and textiles. We have provided capital
to subsidiaries as well as partner companies in which we have an equity interest or may be actively involved, influencing development
through board representation and management support.

Our Principal Subsidiaries and their Businesses

The following is a brief summary of the businesses
in which we own a controlling interest, or whose financial statements we consolidated in this Annual Report:

Sentinum

Sentinum conducts data center
operations and Bitcoin mining through ACS.

Overview

Sentinum’s revenue is
currently generated primarily from mining Bitcoin for our own account. However, during 2024 we began the process of transitioning our
primary operations from Bitcoin mining to developing our Michigan data center, which constitutes a 617,000 square foot energy-efficient
facility located on a 34.5 acre site in southern Michigan (the “Michigan Facility”) to support the growing demand of enterprise,
HPC and AI cloud providers with high-density workloads.

ACS has entered into an agreement
to acquire approximately 48.5 acres of land, providing the Company opportunity to expand the Michigan Facility and continue to address
the surging demand for AI and high-performance computing. Upon the closing of this agreement, the Company will own approximately 83 acres,
more than doubling its current acreage in the area.

Through its wholly owned and
operated data centers, Sentinum’s mission is to support internal computing requirements and to empower AI-focused businesses and
other businesses requiring high-density power with reliable, scalable, and secure hosting solutions. We currently have data centers in
Michigan and Montana. The Michigan Facility’s design and available power provides Sentinum the ability to create bespoke solutions
enabling it to seize growth opportunities within the broader data center services market. The Michigan Facility’s design continues
to evolve to address prospective customer requirements, including cooling techniques such as direct to chip heat exchange and backup power
systems such as uninterruptible power supplies with batteries to store energy. Sentinum can provide a range of service options tailored
to a customer’s needs, including HPC and AI. HPC and AI are synonymous with applications requiring immense computational power to
process complex models and perform real-time inferences. These use cases are being adopted by a wide range of industries, such as healthcare,
energy, automotive, robotics and other autonomous systems. We are exploring the potential of working directly with end user companies
as well as companies with which we could collaborate to provide comprehensive solutions.

Sentinum’s attentiveness
to disruptive technologies such as HPC, AI and blockchain combined with the foundational elements of data centers, power infrastructure,
telecommunications and security enable it to support the internal operations for Bitcoin mining alongside non-mining solutions for third
party customers. The economies of scale created by Bitcoin mining operations provide a competitive advantage to Sentinum as it seeks to
add non-mining applications to its services portfolio. If successful in adding non-mining applications, it is highly likely that the Bitcoin
mining operations will be gradually phased out. Sentinum continues to evaluate opportunities to add HPC and AI applications. Sentinum
conducts preliminary engineering design sessions with prospects and provides site tours at its Michigan Facility for prospective customers
that we believe represent qualified opportunities. Sentinum continually monitors critical equipment supply chains and lead times in support
of preferred installation timelines requested by prospective customers. During April 2025, Sentinum completed the installation requirements
for deployment of a 250 kilowatts HPC customer.

7

Sentinum currently mines Bitcoin
using purpose-built computers (or “miners”) to solve complex cryptographic algorithms (or “verify” or “solve”
blocks) in the blockchain in exchange for rewards and fees denominated in the native token of that blockchain network, which is Bitcoin.
Sentinum’s miners provide computing power to a Bitcoin mining pool operator, in which all the participants’ machines mine
Bitcoin as a collective group, and Sentinum gets paid the expected value of both the block reward and transaction fees for doing so. The
mining pool operator receives block rewards and transaction fees paid in Bitcoin by the blockchain when the mining pool finds new blocks.
The reward and transaction fees are then shared by the pool participants based on their hash rate contributions to the pool, less a small
amount of fees.

We have determined that Bitcoin,
the only crypto asset that Sentinum mines, would likely not be considered a security under U.S. federal securities laws, in consultation
with outside counsel. We base our analysis on relevant case law, applying the frameworks established by the U.S. Supreme Court and taking
into consideration relevant guidance by the SEC and its staff. A particular crypto asset’s status as a “security”
in any relevant jurisdiction is subject to a high degree of uncertainty and if a regulator disagrees with our characterization of Bitcoin,
we may be subject to regulatory scrutiny, investigations, fines and penalties, which may adversely affect our business, operating results
and financial condition. A determination that Bitcoin that we own or mine is a “security” may adversely affect the value of
Bitcoin and our business.

In August 2025, we began to
acquire crypto assets for investment purposes. As of December 31, 2025, we held approximately 525 Bitcoin valued at $46.2 million, based
on the fair value as of such date. During the year ended December 31, 2025, our mining operations generated a loss from operations of
$14.2 million and revenue of $22.6 million. In comparison, during the year ended December 31, 2024, our mining operations generated a
loss from operations of $12.6 million and revenue of $31.5 million. As of December 31, 2025, the $46.2 million carrying value of our Bitcoin
represented 14.7% of our total assets of $313.7 million as of such date.

Digital Asset Treasury Strategy

On September 15, 2025, we
announced the launch of a $100 million Bitcoin treasury strategy as part of our transformation into a pure play AI data center and digital
asset company, which we refer to as our digital asset treasury strategy (“DAT”). The initiative will be funded by capital
raised through our previously announced at-the-market equity program and from Bitcoin generated from our mining operations. Contemporaneously,
we are accelerating the expansion of our Michigan Facility, where customer-installed NVIDIA graphics processing unit (“GPU”)
servers are enabling advanced AI and HPC workloads.

Through Sentinum, we have
mined Bitcoin for years, providing a foundation of operational expertise in digital assets. Building on this experience, we now plan to
hold Bitcoin as a primary treasury reserve asset, similar to the approach pioneered by MicroStrategy, while continuing to invest in Michigan
as our long-term infrastructure hub.

As part of the DAT, we publish
our crypto asset holdings weekly, reinforcing our commitment to transparency and accountability.

As of April 12, 2026, our
Bitcoin treasury, consisting of Bitcoin generated from mining operations and Bitcoin acquired in the open market, totaled approximately
$45.6 million, based on the price of Bitcoin as of April 12, 2026.

Sentinum Breakeven Analysis

Since commencement of Sentinum’s
mining operations in 2021, we have received approximately 3,316 Bitcoin for providing computing power to a Bitcoin mining pool operator
and from hosted mining operations, pursuant to the terms of a Master Services Agreement (“MSA”) with Core Scientific, Inc.
(“Core Scientific”). The MSA terminated on August 31, 2024. The Bitcoin received is available for sale in the ordinary course
of business. Historically, we have sold Bitcoin as it is mined to fund our operating expenses. We believe that holding Bitcoin represents
an attractive option to increase our liquid assets and in August 2025 we changed our corporate policy and we began holding all Bitcoin
that we mined. We believe that our integrated model with close control over our power sources and owning our Bitcoin mining data center
helps us to produce Bitcoin with attractive cost efficiency, since we are not burdened with additional costs that are typical in a third
party hosting relationship such as per miner operational fees and revenue sharing. This helps us to produce Bitcoin, excluding depreciation
of our miners which is a non-cash expense, at a cost that we believe is attractive versus the price of Bitcoin.

Our net cost of power was
between approximately $42 to $62 per megawatt-hour in 2024 to the present. During the years ended December 31, 2025 and 2024, we had an
average of approximately 10,000 and 16,000 miners in operation, respectively. In aggregate, these miners generated approximately 212 and
677 Bitcoin during the years ended December 31, 2025 and 2024, respectively, for providing computing power to a Bitcoin mining pool operator
and from hosted mining operations with Core Scientific. Alternatively, during the years ended December 31, 2025 and 2024, we generated
an average of 0.58 and 1.85 Bitcoin per day, respectively, from our mining operations. Due to the termination of our hosting agreement
with Core Scientific and the block reward halving that occurred during April 2024, the average Bitcoin mined from our operations has decreased
to approximately $0.58 per day during the year ended December 31, 2025.

8

During October 2025, Sentinum
purchased 4,092 S21+ and S21 Pro Bitcoin miners (the “S21 Miners”) for approximately $16 million. The S21 Miners operate at
a higher hashrate than the older model S19J Pro Bitcoin miners that were replaced. As a result, during the quarter ended March 31, 2026,
the average Bitcoin mined increased to approximately 0.76 Bitcoin per day.

The following table reflects
the actual costs that we incurred to mine one Bitcoin during the years ended December 31, 2025 and 2024.

Year Ended December 31,

2025

2024

Depreciation

$
42,416

$
21,354

Utilities and other costs

79,850

29,377

Hosting fees

-

17,938

$
122,266

$
68,669

Additionally, Sentinum’s
daily general and operating costs were approximately $8,247 and ($1,101), respectively, per Bitcoin mined during the years ended December
31, 2025 and 2024. Conversely, the price of Bitcoin ranged from approximately $38,500 to approximately $108,300 during the year ended
December 31, 2024 and from approximately $74,400 to approximately $126,300 during the year ended December 31, 2025, and was approximately
$71,100 as of April 8, 2026, according to Coin Market Cap.

On February 24, 2023, BNI
Montana entered into an asset purchase agreement with TypeX, LLC to acquire two land lease agreements and two corresponding power purchase
agreements in Montana. The lease and power agreements run for a period of 10 years, with a 10-year renewal option. Sentinum is building
out and developing fully operational data centers dedicated to Bitcoin mining operations on the properties (the “Montana Facilities”).
If we complete the initial phase of development of the Montana Facilities, which is currently on hold, then we would expect the Montana
Facilities to provide up to a combined 20 megawatts (“MWs”) of power, enabling up to 6,500 S19j Pro Antminers to operate.
Inclusive of costs previously incurred to acquire two land lease agreements and two corresponding power purchase agreements, the Montana
Facilities would cost approximately $7 million. Further, given the favorable cost differential for power between Montana and Michigan,
the increase in operating costs and depreciation from capitalized expenditures is expected to approximate the power cost savings. However,
while completion of the development of the Montana Facilities would not be expected to have a negative impact on our operating results,
we have currently placed this project on hold to focus on the development of our Michigan Facility to support HPC and AI applications.
During 2026, we anticipate large expenditures in our Michigan Facility to facilitate the transition of the facility to support HPC and
AI applications. Initially, these expenditures will likely increase Sentinum’s losses unless we are able to pass these costs on
to our future customers. These uncertainties make it impossible to predict when, if ever, Sentinum will achieve profitable operations.

Thus, if the price of Bitcoin,
level of difficulty to mine, the amount of the block reward or the amount of Bitcoin earned by miners for mining one block on the Bitcoin
blockchain remain constant, then Sentinum will not be profitable in 2026. While we do not expect that Sentinum will achieve profitability
during 2026, the expected cash generated from our Bitcoin mining operations (prior to any decision to hold or sell mined Bitcoin) is still
expected to exceed that of our operating costs given the significance of depreciation charges, which are expected to account for nearly
30% of Sentinum’s total costs of operations during 2026.

During the year ended December
31, 2025, Sentinum reported a loss from operations of approximately $14.2 million inclusive of depreciation and amortization of approximately
$10.3 million. During the year ended December 31, 2024, Sentinum reported a loss from operations of approximately $12.6 million inclusive
of depreciation and amortization and an impairment charge on our miners of approximately $25.4 million. As such, excluding capital expenditures,
Sentinum generated approximately $12.8 million in cash for the year ended December 31, 2024. During the year ended December 31, 2025,
Sentinum’s loss from operations, net of depreciation, resulted in a use of cash of $3.9 million. The use of cash during 2025 was
due to the Company’s accumulation of Bitcoin, which resulted in a decline in the fair value of its Bitcoin of $7.6 million. During
2024, the cash generated from Sentinum’s mining operations was used to pay for a portion of the costs we incurred. Beginning around
September 2025, consistent with the DAT strategy, we have not sold any Bitcoin mined and as a result we do not anticipate that our mining
operations will contribute cash in the near term.

9

Bitcoin and Bitcoin Mining Overview

Blockchain
and Bitcoin Overview

Many forms of crypto assets,
including Bitcoin, are a type of digital asset that function as a medium of exchange, a unit of account and/or a store of value (i.e.
a new form of digital money). Crypto assets operate by means of blockchain technology, which generally uses open-source, peer-to-peer
software to create a decentralized digital ledger that enables the secure use and transfer of crypto assets. We believe that Bitcoin and
the associated blockchain technology has potential advantages over traditional payment systems, including: the tamper-resistant nature
of blockchain networks; rapid-to-immediate settlement of transactions; lower fees; elimination of counterparty risk; protection from identify
theft; broad accessibility; and a decentralized nature that enhances network security by reducing the likelihood of a “single point
of failure.” However, since centralized exchanges, which operate intermediate processes for executing trades, storing coins and
initiating transactions, account for the majority of Bitcoin trading volume there remains the risk that a malicious actor may be able
to alter blockchains on which transactions of crypto asset reside and rely by constructing fraudulent blocks or preventing certain transactions
from completing in a timely manner, or at all. Additionally, cybersecurity risks from unauthorized third parties employing illicit operations
such as hacking, phishing and social engineering, could introduce a level of counterparty risk, in other words a risk that a party is
unable to fulfill its contractual obligations. Recently, crypto assets, and Bitcoin in particular, have gained widespread mainstream attention
and have begun to experience greater adoption by both retail and institutional holders and the broader financial markets. For example,
Bitcoin’s aggregate market value had appreciated to $2.27 trillion in September 2025 compared to $828 billion in December 2023.
All figures are derived from Coin Market Cap. As Bitcoin, and blockchain technologies more generally, have entered the mainstream, prices
of Bitcoin have reached all-time highs, albeit with periodic price decreases, and the broader ecosystem has continued to develop. While
we expect the value of Bitcoin to remain volatile, we believe this increase in its aggregate market value signals institutionalization
of Bitcoin and wider adoption of crypto asset. For example, in January 2024, the SEC approved the listing and trading of Bitcoin exchange-traded
funds, of which, as of April 8, 2026, approximately 40 are trading with over $96 billion of Bitcoin assets held (https://etfdb.com/themes/bitcoin-etfs/#complete-list&sort_name=assets_under_management&sort_order=desc&page=1).

Bitcoin is a decentralized
asset that enables near instantaneous transfers. Transactions occur via an open-source, cryptographic protocol platform which uses peer-to-peer
technology to operate with no central authority. The online network hosts the public transaction ledger, known as the blockchain, and
each crypto asset is associated with a source code that comprises the basis for the cryptographic and algorithmic protocols governing
the blockchain. In a crypto asset network, every peer has its own copy of the blockchain, which contains records of every historical transaction
— effectively containing records of all account balances. Each account is identified solely by its unique public key (making it
effectively anonymous) and is secured with its associated private key (kept secret, like a password). The combination of private and public
cryptographic keys constitutes a secure digital identity in the form of a digital signature, providing strong control of ownership.

No single entity owns or operates
the network. The infrastructure is collectively maintained by a decentralized public user base. As the network is decentralized, it does
not rely on either governmental authorities or financial institutions to create, transmit or determine the value of the currency units.
Rather, the value is determined by market factors, supply and demand for the units, the prices being set in transfers by mutual agreement
or barter among transacting parties, as well as the number of merchants that may accept the crypto asset. Since transfers do not require
involvement of intermediaries or third parties, there are only nominal transaction costs in direct peer-to-peer transactions. For example:

·
In terms of conventional peer-to-peer transactions, there either are no fees or they are de minimis (Source:
https://www.kraken.com/en-us);

·
For purposes of traditional networks, there are nominal fees associated with any transaction (Source: https://bitinfocharts.com/bitcoin);
and

·
As of April 8, 2026, the 90-day simple average Bitcoin network transaction fee is $0.293 per transaction,
which is still low compared to conventional transaction fees charged by banks and other more traditional financial institutions (https://bitinfocharts.com/bitcoin).

The network fee is separate
and distinct from the pool fee we pay Luxor Technology (“Luxor”) for its services in acting as a pool operator, discussed
below. The network fee is applicable to anyone who transacts on the blockchain.

Given that block space is
limited, mining fees can and often do fluctuate significantly from transaction to transaction as a result of “congestion.”
However, this congestion does not negate any of the statements made immediately above.

Units of Bitcoin can be converted
to fiat currencies, such as the U.S. dollar, at rates determined on various exchanges, such as Binance, Coinbase, Bybit, Kraken, Gemini
and others. Bitcoin prices are quoted on various exchanges and fluctuate with extreme volatility.

We believe that Bitcoin, the
only crypto asset we provide computing power to a mining pool operator for mining purposes, offers many advantages over traditional, fiat
currencies, though many of these factors also present potential disadvantages and may introduce additional risks, including:

·
Acting as a fraud deterrent, as crypto assets are digital and cannot be counterfeited or reversed arbitrarily
by a sender;

·
Immediate settlement;

·
Elimination of counterparty risk;

·
No trusted intermediary required;

10

·
Lower fees;

·
Identity theft prevention;

·
Widespread accessibility;

·
Transactions are verified and protected through a confirmation process, which prevents the problem of double
spending;

·
Decentralized — no central authority (government or financial institution); and

·
Not recognized universally and not bound by government imposed or market exchange rates.

However, crypto assets may
not provide all of the benefits they purport to offer.

Limitations
on Bitcoin Mining

In addition to competition,
there are two principal factors that may affect Bitcoin mining companies: (i) limitations on the supply of Bitcoin; and (ii) the market
price of Bitcoin.

The blockchain’s method
for creating new Bitcoins is mathematically determined in a manner such that the supply of Bitcoins grows at a limited rate pursuant to
a pre-set schedule. Specifically, the number of Bitcoins awarded for solving a new block is automatically halved for every 210,000 blocks
that are solved. The current fixed reward for solving a new block is 3.125 Bitcoins per block, which was reduced from 6.25 Bitcoins in
April 2024 and will be reduced further to 1.5625 Bitcoins per block in approximately March 2028. This deliberately controlled rate of
Bitcoin creation means that the number of Bitcoins in existence will never exceed 21 million and that Bitcoin cannot be devalued through
excessive production unless the Bitcoin network’s source code and the underlying protocol for Bitcoin issuance is altered. This
also means, however, that our revenue prospects will decline unless the price of a Bitcoin increases commensurately or we acquire more
miners.

We only participate in mining
pools that mine Bitcoin. Our ability to generate revenue from these mining operations will be dependent on the price of Bitcoin. The price
of Bitcoin has experienced substantial volatility, including fluctuation patterns which may reflect “bubble” type volatility,
meaning that high or low prices at a given time may not be indicative of the current or future value of Bitcoin. The price of a Bitcoin
may be subject to rapidly changing investor and market sentiment, and may be influenced by factors such as technology, regulatory developments
and media coverage. Further, Bitcoin’s value may be based on various factors, including their acceptance as a means of exchange
or purchasing power by consumers and vendors, volume, liquidity and transferability and market demand. Bitcoin’s current price reflects,
in part, the belief by some that Bitcoin could become a widely accepted form of currency; however, if this prediction turns out to be
incorrect its price could decrease dramatically, as would our prospects for future revenue and profits. See “Risk Factors –
Risks Related to Our Bitcoin Operations” for more information on the risks we face due to our mining of Bitcoin and its speculative
and volatile nature.

Bitcoin
Mining and Mining Pools

As a participant in a Bitcoin
mining pool, we use specialized miners to solve cryptographic math problems necessary to record and “publish” crypto asset
transactions to blockchain ledgers. Generally, each crypto asset has its own blockchain, which consists of software code (also known as
a protocol), which is run by all the computers on the network for such blockchain. Within this code, transactions are collated into blocks,
and these blocks must meet certain requirements to be verified by the blockchain software, added to the blockchain or ledger of all transactions
and published to all participants on the network that are running the blockchain software. After a transaction is verified, it is combined
with other transactions to create a new block of data for the blockchain. For proof-of-work blockchains, the process of verifying valid
blocks requires computational effort to solve a cryptographic equation, and this computational effort protects the integrity of the blockchain
ledger. This process is referred to as “mining.” As a reward for verifying a new block, miners receive payment in the form
of the native crypto asset of the network, in our case Bitcoin. This payment is comprised of a block reward (i.e., the automatic issuance
of new Bitcoin) and the aggregated transaction fees for the transactions included in the block (paid in existing crypto asset tokens by
the participants to the transactions). The block reward payments and the aggregated transaction fees provide the incentive for miners
to contribute hash rate to the network.

A “hash” is the
actual cryptographic function run by the miners, and is a unique set of numbers and letters derived from the content of the block. The
protocol governing the relevant blockchain sets certain requirements for the hash. Miners compete to be the first to generate a valid
hash meeting these requirements and, thereby, secure payment for solving the block. Hash rate is the speed at which miners can complete
the calculation, and therefore is a critical measure of performance and computational power. A high rate means a miner may complete more
calculations over a given period and has a greater chance to solve a block. An individual miner has a hash rate total of its miners seeking
to mine a specific crypto asset, and the blockchain-wide hash rate for a specific crypto asset, in our case Bitcoin, can be understood
as the aggregate of the hash rates of all of the miners actively trying to solve a block on that blockchain at a given time.

11

The protocols governing Bitcoin
are coded to regulate the frequency at which new blocks are verified by automatically adjusting what is known as the “mining difficulty,”
which is the level of computational activity required before a new block is solved and verified. For example, on the Bitcoin blockchain
the protocol is coded such that a new block is solved and verified approximately every ten minutes. As such, to the extent the hash power
on the network is increased or decreased due to, for example, fluctuations in the number of active miners online, mining difficulty is
correspondingly increased or decreased to maintain the preset interval for the verification of new blocks.

On Bitcoin networks, the rewards
for solving a block are also subject to periodic incremental halving. Halving is a process designed to control the overall supply and
reduce the risk of inflation in Bitcoin using a proof-of-work consensus algorithm. After a predetermined number of blocks are added to
the blockchain, the mining reward is cut in half, hence the term “halving.” The last halving for Bitcoin occurred on April
20, 2024. Transaction fees are variable and depend on the level of activity on the network. Generally, transaction fees increase during
times of network congestion, as miners will prefer transactions with higher fees, and therefore a higher fee can reduce the time to process
a transaction, and decrease when there are fewer transactions on the network.

As the total amount of available hash rate
has increased on the Bitcoin network, it has become increasingly difficult for any individual miner to independently solve a block and
as a result “mining pools” have emerged as an efficient way for miners to pool resources. Mining pools aggregate the hash
rate of various miners participating in the mining pool. In this way the mining pool operator, rather than an individual miner, validates
the block and receives the block reward and related transaction fees. The mining pool is organized by a third party, in our case, Luxor.
All of the approximately 11,000 miners currently in operation at our Michigan and Montana facilities provide hash rate to the Luxor mining
pool. In consideration for receiving a percentage of the earned block rewards and transaction fees, Luxor administers the pool and ensures
that the participants in the pool receive their share of the block reward and related transaction fees, generally pro-rata to their contributed
hash rate. Mining pools offer miners more predictable and consistent revenue compared to mining individually. We participate in mining
pools by providing what the industry refers to as “hashrate” to the pool. Hashrate is defined as the computing power that
our mining equipment produces when helping to validate a block that the mining pool is trying to solve. We use the FPPS, or Full Pay-Per-Share,
method when mining with Luxor. Pursuant to the “Full Pay-Per-Share” model, both the block reward and the mining service charge
are settled according to the theoretical profit. It includes the calculation of a standard transaction fee within a certain period and
distributes it to mining pool participants according to their hash power contributions in the pool. It increases the mining pool participants’
earnings by sharing transaction fees. Standard transaction fees are calculated using a certain period which are then distributed to miners
according to their hash power contributions in the pool. Luxor currently charges us a 0.68% mining fee.

We provide computing power
to the mining pool, which is run by the mining pool operator with which we contract, which in turn provides transaction verification services.
Based on the terms of the agreement, in our judgment, the mining pool operator is considered the principal in providing mining pool services.
We recognize revenue, net of certain transaction fees from the mining pool operator, which are not considered material. Our current mining
pool agreement is cancelable at any time by either party without penalty. Revenue received for providing computing power would be directly
impacted positively or negatively should we start and stop providing computing power to the mining pool operator within a given reporting
period.

Our Strategy

Own and
Operate Our Mining Facilities

We have in the past invested
heavily in purchasing, building and operating our mining facilities, though we have no intention of acquiring more miners. By owning and
operating our miners at facilities that offer competitive advantages, including access to reliable, low-cost, renewable power, we expect
to have greater control over the timing of the deployment of our miners. We also may enhance our ability to intelligently and quickly
adapt our operating model and reap savings compared to paying for outsourced operations and infrastructure.

Reliable,
Low-Cost, Renewable Power

Power represents our highest
variable direct cost for our mining operations, with electrical power required to operate the miners. We believe the combination of increased
mining difficulty, driven by greater hash rates, and the periodic adjustment of reward rates, such as the halving of Bitcoin rewards,
will drive the increasing importance of power efficiency in Bitcoin mining over the long term. As a result, we are focused on deploying
our miners at locations with access to reliable, renewable power sources, as successfully doing so should enable us to reduce our power
costs.

12

Miners require considerable amounts of electrical
energy to perform their functions and mine Bitcoin; consequently, a critical aspect of operating in the crypto asset mining industry is
obtaining a reliable supply of electricity at a relatively low and stable cost. To this end, in January 2021, ACS purchased the Michigan
Facility. Since the purchase of the Michigan Facility, we have invested in infrastructure improvements and began both ramping up the power
capacity and installing miners. To date, we have increased the power load from 1.5 MWs to approximately 30 MWs. Currently, we have approximately
4,300 S19 XP Antminers and 3,900 S21+ Antminers in operation at our Michigan Facility but it is our intention to dedicate all the power
capacity at the Michigan Facility to our AI hyperscale data center operations. If successful, we expect to either sell any idle miners
in the secondary market or relocate any idle miners to a third party hosting facility, which could be between 15,000 and 18,000 miners.

We have also invested in a
data center through BNI Montana. We have completed the build-out at one of the two sites at the Montana Facilities, which provides up
to 10 MWs of power. If we complete the build-out of the second site, which is currently on hold pending the transition of our Michigan
Facility to support HPC and AI applications, the Montana Facilities will provide up to a combined 20 MWs of power and allow us to operate
approximately 6,500 miners. We believe that the capacity of the Montana Facilities can be significantly expanded, and we have begun an
electrical load study in collaboration with the local utility to explore potential power upgrades. However, given the current price of
Bitcoin and the level of difficulty to mine, at this time we have no plans to expand the capacity at the Montana Facilities, which has
the capacity to operate approximately 3,250 S19j Pro Antminers. We presently have approximately 3,100 S19j Pro Antminers mining at the
Montana Facilities.

We continue to evaluate other
sites, locations, and partnerships for additional and alternative support of future mining operations. While we have not at present entered
into any other agreements, we continue to explore and evaluate additional facilities that would enable us to expand our mining operations
as needed.

Our Bitcoin
Mining Operations

Currently, we have approximately 4,300 S19
XP Antminers and 3,900 S21+ Antminers in operation at our Michigan Facility and approximately 3,100 S19j Pro Antminers in operation at
our Montana facility. Additionally, approximately 11,500 S19j Pro Antminers, 300 S19 XP Antminers and 200 S21+ Antminers are not in operation,
primarily because of the termination of our hosting agreement with Core Scientific on August 31, 2024, and, to a lesser extent, due to
units currently undergoing repairs. Antminers in operation have an aggregate mining production capacity of approximately 1.83 exahashes
per second.

Our strategy includes identifying
clean power for our Bitcoin mining operations. Management has considered the issues surrounding the environmental impact of our Bitcoin
mining operations and concluded that the environmental impact of our mining operations is not material. The basis for this conclusion
was that Indiana Michigan Power, the regulated utility that provides power to our Michigan Facility, reported that in 2023 it generated
more than 87% of its energy from emission-free sources, including solar, wind, hydro and nuclear. The power source for our Montana Facilities,
Basin Electric Power Cooperative, reported that approximately 28% of its power was from emission-free sources, primarily wind and hydro.
Since we are only mining Bitcoin at our Michigan Facility, approximately 87% of our mining operations are being generated from emission-free
sources. If we resume operations at our Montana Facilities, more than 75% of power used in our mining operations would be generated from
emission-free sources. In addition to our continued expansion investments at the Michigan Facility, we also seek out new locations to
support our Bitcoin mining business. We consider sites with a variety of offerings, including purchasing the site (as we have done in
Michigan), but also leasing buildings and facilities (as we have done with the Montana Facilities), hosting relationships and strategic
partnerships. At this time, we have not entered into any new mining agreements at locations other than the Michigan Facility and the Montana
Facilities. We mine Bitcoin only.

Coins that are mined are held
in a custodial account. We securely store our Bitcoin at Gemini Trust Company, LLC (“Gemini”), a regulated, audited and insured
crypto asset custodian. Gemini is a fiduciary and qualified custodian under the New York Banking Law and is licensed by the New York State
Department of Financial Services. Additionally, Gemini holds numerous money transmitter licenses or the statutory equivalent and has obtained
System and Organization Controls (“SOC”) 1 Type 2 and SOC 2 Type 2 certifications from its independent third-party auditor,
Deloitte and Touche LLP. A SOC 1 report evaluates controls that are applicable to internal control over financial reporting whereas a
SOC 2 report evaluates a security framework that authenticates an organization’s ability to securely handle customer data. Further,
Gemini has insurance coverage against the theft of crypto assets that results from a direct security breach or hack of Gemini’s
systems, or theft by a Gemini employee.

The custody arrangements require
that we mine to a custodial wallet address where the private key is held by the custodian and all keys for the wallet are held in cold
storage. This provides a layer of protection in both the transaction and liquidation phases of the operations by using multi-factor and
multi-person approval processes, to include know your customer and anti-money laundering (“AML”) procedures of the receiving
party. We will either hold the Bitcoin or may choose to convert those assets into fiat currency depending on financial needs and plans.
When we opt to convert the Bitcoin we sell or exchange our Bitcoin through Gemini, the custodian of our digital wallet. When we elect
to make a sale or exchange our Senior Vice President - Finance submits a request to Gemini’s execution department to exchange Bitcoin
for U.S. dollars. Gemini sends an approval email to both our CEO and CFO to approve. Once approved by either our CEO or CFO, Gemini executes
the sale/exchange on its trading platform at current market prices, less commissions, and deposits the U.S. dollars into our bank account.

13

Beyond the foregoing, our
custody agreement with Gemini provides that:

·
Gemini provides a unique custody account in which all our blockchain assets are held, which are segregated
from all others’ assets and are verifiable through the blockchain; and

·
Gemini charges us fees in Bitcoin, which is deducted from our digital assets on the last business day of every
month.

Currently, we retain Bitcoin
generated from our mining activities as a treasury asset rather than converting it into fiat currency on a daily basis. We may periodically
convert Bitcoin into cash to fund operating expenses or capital expenditures, but we are actively holding Bitcoin as part of our treasury
strategy.

Regulation

The laws and regulations applicable
to crypto asset are evolving and subject to interpretation and change. Governments around the world have reacted differently to crypto
assets; certain governments have deemed them illegal, and others have allowed their use and trade without restriction, while in some jurisdictions,
such as in the United States, many crypto assets are subject to extensive, and in some cases overlapping, unclear and evolving regulatory
requirements, which generally does not apply to Bitcoin. As crypto assets have grown in both popularity and market value, the U.S. Congress
and a number of U.S. federal and state agencies, including the Financial Crimes Enforcement Network (“FinCEN”), the SEC, the
Commodity Futures Trading Commission (“CFTC”), Financial Industry Regulatory Authority (“FINRA”), the Consumer
Financial Protection Bureau, the Department of Justice (“DOJ”), the Department of Homeland Security, the Federal Bureau of
Investigation (“FBI”), the Internal Revenue Service (“IRS”) and state financial regulators, have been examining
the operations of crypto asset networks, crypto asset users and crypto asset exchange markets, with particular focus on the extent to
which crypto assets can be used to launder the proceeds of illegal activities or fund criminal or terrorist enterprises and the safety
and soundness and consumer-protective safeguards of exchanges or other service-providers that hold, transfer, trade or exchange crypto
assets for users.

Many of these state and federal
agencies have issued consumer advisories regarding the risks posed by crypto assets to investors. In addition, federal and state agencies,
and other countries have issued rules or guidance about the treatment of crypto asset transactions or requirements for businesses engaged
in activities related to crypto assets. Depending on the regulatory characterization of the Bitcoin we mine, the markets for Bitcoin in
general, and our activities in particular, may be subject to one or more regulators in the United States and globally. Ongoing and future
regulatory actions may alter, perhaps to a materially adverse extent, the nature of crypto asset markets and our crypto asset operations.
Additionally, U.S. state and federal, and foreign regulators and legislatures have taken action against crypto asset businesses or enacted
restrictive regimes in response to adverse publicity arising from hacks, consumer harm, or criminal activity stemming from crypto asset
activity. There is also increasing attention being paid by U.S. federal and state energy regulatory authorities as the total load of crypto
mining grows and potentially alters the supply and dispatch functionality of the wholesale grid and retail distribution systems. Many
state legislative bodies are also actively reviewing the impact of crypto mining in their respective states. For example, in May 2023,
Montana enacted S.B. 178 which established a right-to-mine for digital assets and prevents local governments from enacting any ordinance,
resolution, or rule that selectively targets digital asset miners. In addition to Michigan and Montana, other states are also considering
or have enacted laws aimed at regulating crypto mining. For example, in 2022, New York placed a two-year moratorium on certain cryptocurrency
mining companies that use fossil fuels, which expired in November 2024.

Environmental

The perceived threat of climate
change continues to attract considerable attention in the United States and around the world. Numerous proposals have been made and could
continue to be made at the international, national, regional and state levels of government to monitor and limit emissions of greenhouse
gases (“GHGs”). These efforts have included consideration of cap-and-trade programs, carbon taxes, GHG disclosure obligations
and regulations that directly limit GHG emissions from certain sources. In addition, President Biden identified addressing climate change
and the energy transition as priorities under his Administration. He has issued executive orders and regulatory directives related to
climate change, and has recommitted the United States to long-term international goals to reduce emissions. In recent years, the U.S.
Congress has considered legislation to reduce emissions of GHGs and has included climate change considerations in its funding bills. For
example, the Inflation Reduction Act of 2022, which appropriates significant federal funding for renewable energy initiatives, was signed
into law in August 2022 and could accelerate the transition away from fossil fuels. These laws, initiatives, and associated regulations
or other national or regional commitments to reduce GHG emissions could adversely affect fossil fuel consumption, require the installation
of emissions control technologies, and increase the expense associated with the purchase of emissions reduction credits or allowances
to comply with current or future emissions reduction programs.

14

At the federal level, the
Environmental Protection Agency (“EPA”) has also adopted rules that, among other things, establish construction and operating
permit reviews, emissions control standards, and monitoring and annual reporting for GHG emissions from certain large stationary sources.
In November 2021, the Biden Administration released “The Long-Term Strategy of the United States: Pathways to Net-Zero Greenhouse
Gas Emissions by 2050,” (the “2050 Plan”) which establishes a roadmap to net zero emissions in the United States by
2050 through, among other things, improving energy efficiency, decarbonizing energy sources via electricity, hydrogen and sustainable
biofuels, eliminating subsidies provided to the fossil fuel industry, reducing non-CO2 GHG emissions and increasing the emphasis on climate-related
risks across government agencies and economic sectors. Additionally, from time to time the EPA has proposed, revised, and adopted rules
establishing new source performance standards for certain pollutants from coal-fueled electric generating plants.

We note that the implementation
of the rule depends, in part, on the widespread development, adoption, and availability of carbon capture and storage technology and solutions,
which may not be certain at this time. While many of the Biden Administration’s initiatives are being rolled back or are scheduled
to be rolled back under the Trump Administration, including the abandonment of the 2050 Plan, there are no assurances that they will be
rolled back or that future administrations will not look to reimpose such restrictions. While no final rules have been published to date
and none are currently anticipated under the Trump Administration, any future proposed rule and any other new agency action or rulemaking
that applies to our facilities could increase our compliance costs or otherwise materially restrict our operations. Currently, it is unclear
how future legislation and regulation will affect our Bitcoin mining operations. The course of future legislation and regulation in the
United States remains difficult to predict, and potential increased costs associated with new legislation or regulation cannot be predicted
at this time.

Competition

Our business environment is
constantly evolving, and cryptocurrency miners can range from individual enthusiasts to professional mining operations with dedicated
data centers. We compete with other companies that focus all or a portion of their activities on cryptocurrency mining activities at scale.
We face significant competition in every aspect of our business, including, but not limited to, the ability to raise capital, obtaining
the lowest cost of electricity, obtaining access to energy sites with reliable sources of power, and evaluating new technology developments
in the industry.

At present, the information
concerning the activities of these enterprises may not be readily available as the vast majority of the participants in this sector do
not publish information publicly or the information may be unreliable. Published sources of information include “bitcoin.org”
and “blockchain.info”; however, the reliability of that information and its continued availability cannot be assured and the
contents of these sites are not incorporated into this Annual Report.

A number of public companies
(traded in the U.S. and internationally) and private companies may be considered to compete with us, including the following companies:

·
Argo Blockchain PLC;

·
Bit Digital, Inc.;

·
Bitdeer Technologies Group;

·
Bitfarms Ltd.;

·
Cipher Mining Inc.;

·
CleanSpark, Inc.;

·
Core Scientific, Inc.;

·
Digi Power X Inc.;

·
Hive Digital Technologies Ltd..;

·
Hut 8 Corp.;

·
IREN Limited;

·
MARA Holdings, Inc.;

·
Northern Data AG;

·
Riot Platforms, Inc.;

15

·
Strategy Inc.;

·
Stronghold Digital Mining, Inc.; and

·
TeraWulf Inc.

Intellectual
Property

We do not currently own, and
do not have any current plans to seek, any patents in connection with our existing and planned blockchain and cryptocurrency related operations.
We do expect to rely upon trade secrets, trademarks, service marks, trade names, copyrights and other intellectual property rights and
expect to license the use of intellectual property rights owned and controlled by others.

Blockchain
Background

Blockchain technology first
came to public attention in 2008 as the database technology that underpins Bitcoin, the world’s first cryptocurrency. Blockchains
are generally open-source, peer-to-peer software programs that act as decentralized digital ledgers, each comprising a series of data
“blocks” that are linked and secured using cryptography in a “chain.” The blockchain program consists of a software
protocol with several functions. The software protocol is run by multiple computer systems or “nodes.” For many blockchain
networks, each node has its own copy of the blockchain ledger, which contains a historical record of every transaction. The digital ledger
continuously grows as new blocks are added to it to record the most recent transactions in a linear, chronological order. The same information
is stored across a network of computers all over the world, and this record makes it possible to track the ownership and transfer of cryptocurrency
from the creation of the blockchain to its current state, and effectively records of all account balances (as one can identify what account
holds what value through the decentralized ledger).

We do not operate a complete
node; rather, as noted above under the heading “Bitcoin Mining and Mining Pools,” we provide computing power to a pool operator.

The blockchain protocol allows
users to submit transactions to the network for confirmation. However, a transaction will not be accepted by the protocol if the inputs
to the transaction have previously been used in another transaction. This prevention of “double spending” is a key security
feature of blockchain networks.

Another key function of the
blockchain that protects the integrity of the network is the hashing process, which acts as a tamper-evident seal that confirms the validity
of the new block and all earlier blocks. Hashing is the process of a block being posted to the network. Hashing results from miners, who
are responsible for receiving broadcast transactions, processing those transactions into new blocks and updating the blockchain with the
new blocks through hashing. The hashing process ties every new block to the existing block on the blockchain to ensure each is a continuous
record of verified transactions.

The hashing algorithm on a
proof-of-work blockchain network is a mathematical transformation function with two key properties. The first important function of hashing
is that the algorithm accepts any alphanumeric dataset as an input and produces a unique output code. The smallest change in the dataset
results in a significant change in the unique code. Any tampering of the dataset can be detected by re-hashing the data and checking for
a change in the unique code. Any user that runs the hash algorithm on the same data will derive the same unique code. Consequently, the
data on the distributed ledger can be run through a series of hash algorithms to create a unique code, which would reveal if any changes
to the ledger have been made.

Second, whenever a new set
or “block” of transactions is added to the ledger, it is appended with the code from the prior state of the ledger before
it is hashed. Thus, the hash created from the new block will incorporate the hash from the previous block. An alteration made to an earlier
block would make the hashes of all subsequent blocks invalid, as the discrepancy would be easily detected by future miners through the
protocols governing the blockchain. If a hacker were to attempt to make a change to an earlier block and broadcast it along with following
blocks to the other nodes on the network, that broadcast would be discarded in favor of one from a different node which complied with
the requirements of the protocol.

Thus, in addition to creating
new blocks, miners “vote” with their computer power, expressing their acceptance of valid blocks by working on adding them
to the blockchain, and rejecting invalid blocks by refusing to work on them. If a miner’s proposed block is added to the blockchain
by a majority of the nodes on the network, it is considered part of the blockchain. The nodes on the network synchronize with each other
to ensure that once a block is accepted by the majority, the new block will eventually be added to all the nodes. Consequently, the historical
state of the ledger can be changed if control of more than 50% of the network is obtained; however, in the case of widely held cryptocurrencies
with non-trivial valuations, it may be economically prohibitive for any actor or group of actors acting in concert to obtain computing
power that consists of more than 50% of the network.

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Unlike proof-of-work networks,
in which miners expend computational resources to compete to validate transactions and are rewarded cryptocurrency in proportion to the
amount of computational resources expended, in a proof-of-stake network, miners (sometimes called validators) risk or “stake”
assets to compete to be randomly selected to validate transactions and are rewarded cryptocurrency in proportion to the amount of assets
staked. Any malicious activity, such as mining multiple blocks, disagreeing with the eventual consensus or otherwise violating protocol
rules, results in the forfeiture or “slashing” of a portion of the staked assets. Proof-of-stake is viewed by some as more
energy efficient and scalable than proof-of-work.

Blockchain technology enables
the secure use and transfer of digital assets. “Digital asset” is a broad term that encompasses additional applications, including
ownership, transaction tracking, identity management, and smart contracts. A digital asset can represent physical or virtual assets, a
value, or a use right/service (e.g., computer storage space).

Whereas digital assets can
take many forms and be used for a variety of functions, cryptocurrencies are a type of digital asset that primarily function as a medium
of exchange, a unit of account, and/or a store of value. Cryptocurrencies allow anyone who holds a compatible wallet, anywhere in the
world, to hold and transfer that cryptocurrency without the need for an intermediary or trusted third party. Units of a cryptocurrency
may exist only as data on the internet, and often are not issued or controlled by any single institution, authority or government. Whereas
most of the world’s money currently exists in the form of electronic records managed by central authorities such as banks, units
of a non-government cryptocurrency exist as electronic records in a decentralized blockchain database. Because cryptocurrencies have no
inherent intrinsic value, the value of cryptocurrencies is determined by the value that various market participants place on them through
their transactions. Bitcoin, Ethereum and other cryptocurrencies have historically exhibited high price volatility relative to more traditional
asset classes.

Private entities also issue
digital assets called “stablecoins” whose prices are pegged to those of an underlying fiat currency, a commodity or other
financial instrument or other physical asset and are therefore less susceptible to volatility. Stablecoins can be backed by fiat money,
physical assets, or other crypto assets. Government institutions are also reportedly testing and considering issuing Central Bank Digital
Currencies (“CBDC’s”). While stablecoins or CBDC’s may exhibit less price volatility than other cryptocurrencies,
both rely on a central authority to establish the value of the asset, and therefore represent an exception to the general discussion of
the design of cryptocurrencies in this Annual Report.

Each cryptocurrency has a
source code that comprises the basis for the cryptographic and algorithmic protocols, which govern the blockchain. The source code is
commonly open-source and therefore can be inspected by anyone, and is maintained on an ongoing basis through contributors proposing amendments
to the protocol, which are peer reviewed and adopted by consensus among participants on the blockchain network. These protocols govern
the functioning of the network, including the ownership and transfer of the cryptocurrency, and are executed on the decentralized peer-to-peer
blockchain infrastructure. The peer-to-peer infrastructure on which a blockchain operates is not owned or operated by a single entity.
Instead, the infrastructure is collectively maintained by a decentralized user base. Each peer user is generally known as a “node”
or “miner,” and each miner processes transactions on the network in accordance with the protocols of the relevant cryptocurrency.

As a result, these cryptocurrencies
do not rely on either governmental authorities or financial institutions to create, transmit or determine the value of units of cryptocurrency.
Rather:

·
the creation of units of cryptocurrency generally is governed by the source code, not a central entity;

·
the transmission of a cryptocurrency is governed by the source code and processed by the decentralized peer-to-peer
network of nodes or miners; and

·
the value of a cryptocurrency is generally determined by the market supply of and demand for the cryptocurrency,
with prices set in transfers by mutual agreement or barter, as well as through acceptance directly by merchants in exchange for goods
and services.

Cryptocurrencies may be open-source
projects with no official developer or group of developers that control the network. However, certain networks’ development may
be overseen informally by a core group of developers that may propose quasi-official releases of updates and other changes to the network’s
source code. The release of updates to a blockchain network’s source code does not guarantee that the updates will be automatically
adopted. Users and miners must accept any changes made to the source code by downloading the proposed modification of the network’s
source code. A modification of the network’s source code is effective only with respect to the users and miners that download it.
If a modification is accepted by only a percentage of users and miners, a division in the network will occur such that one network will
run the pre-modification source code and the other network will run the modified source code. Such a division is known as a “fork.”
Consequently, a modification to the source code becomes part of a blockchain network only if accepted by participants collectively having
most of the processing power on the network.

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Each “account”
on a blockchain network is identified by its unique public key, and is secured with its associated private key (which the account holder
must keep secret, like a password). Cryptocurrencies are treated as bearer assets, because possession of the private key generally determines
who controls or owns a cryptocurrency. Protecting private keys from unwarranted access and theft is critically important, as once the
private key is taken, in most circumstances, control over the related cryptocurrency is gone. The combination of private and public cryptographic
keys constitutes a secure digital identity in the form of a digital signature. As long as the private key is kept private (i.e., confidential
to the owner of the account) it provides strong control of ownership.

Omnipresent Robotics, LLC

Overview

Omnipresent is a wholly owned
subsidiary of Hyperscale Data formed in January of 2025 focused on the development, deployment, and commercialization of advanced robotics
systems, AI and data-driven automation technologies. Omnipresent’s activities are anticipated to span robotics hardware, sensing
systems, autonomous navigation, and software platforms designed to enable real-world machine intelligence across industrial, commercial,
and service environments.

We anticipate that Omnipresent
will enter the commercialization phase during 2026, with initial deployments and customer engagements beginning in key verticals including
hospitality, security, and enterprise automation to follow thereafter. We expect that Omnipresent will enter into contracts with third
parties within the foreseeable future that will enable it to conduct its business as described below.

We expect that Omnipresent
will, once executed agreements with these entities are in place, lead it to become a practical, revenue-generating robotics company in
the real-world environment. Omnipresent would operate out of our Michigan Facility. With approximately 617,000 square feet of existing
infrastructure and approximately 20 additional acres available for expansion, the Michigan Facility provides a foundation for robotics
deployment. Located approximately 90 miles from Chicago and within proximity to leading universities and engineering talent, we believe
the site is ideally positioned for robotics training, development and advanced assembly.

As the U.S. robotics industry
continues to expand, we anticipate announcing partnerships across the robotics ecosystem. We believe a large-scale facility like our Michigan
Facility, particularly with its access to high-performance NVIDIA GPU infrastructure, can play a meaningful role in future robotics operations.
We believe that Omnipresent Robotics represents a key step in our strategy to build a diversified technology platform spanning AI infrastructure,
blockchain systems and real-world automation.

Omnipresent is being developed
as a robotics and AI infrastructure platform that combines physical robotic systems with data generation and AI model training capabilities.
The Michigan Facility, including its planned robotics and AI Center of Excellence, a large-scale, controlled environment where engineers
and developers can test robotics systems, is expected to serve as a centralized testing, training, and data monetization hub for humanoid
robotics and large-scale AI systems, with a focus on generating high-value datasets for leading AI developers.

The robotics industry broadly
encompasses autonomous and semi-autonomous machines capable of performing physical tasks using sensing, perception, and decision-making
systems. Existing industry participants develop solutions including unmanned aerial vehicles, autonomous ground systems, and AI-powered
perception software for industrial inspection, infrastructure monitoring, and defense-related applications.

We believe that Omnipresent
is positioned to expand beyond traditional robotics applications by integrating large-scale AI models, data collection, and real-world
operational environments into a unified platform.

Core Capabilities

Omnipresent’s capabilities
are anticipated to include: (i) Robotics Hardware Systems, consisting of design, integration, and deployment of robotic platforms, including
mobile robots, service robots, and specialized autonomous systems, (ii) AI and Perception Systems, consisting of computer vision, sensor
fusion, and real-time decision-making software enabling robots to interpret and interact with physical environments, (iii) Autonomous
Navigation, consisting of technologies supporting movement and operation in dynamic or GPS-constrained environments, and (iv) Data Collection
and Analytics, consisting of the capture and processing of operational data generated through robotic activity for training and optimization
of AI models

Strategic Focus: AI-Driven Robotics and Data
Monetization

Omnipresent’s long-term
strategy is to position itself as a data-centric robotics platform, where physical robotic operations generate high-value datasets used
to train, validate, and improve AI systems, including large language models (“LLMs”) and multimodal AI systems. Unlike traditional
robotics companies that primarily generate revenue from hardware sales or service contracts, Omnipresent intends to monetize real-world
interaction data, movement and autonomy datasets, human-robot interaction datasets, and multimodal training data (vision, language, motion).

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The Planned Capabilities at the Michigan Facility

We intend to establish our
Michigan Facility as a large-scale humanoid robotics and AI testing environment. The Michigan Facility is expected to support: (i) Humanoid
Robotics Testing, where Omnipresent would evaluate robots performing real-world tasks such as navigation, manipulation, and human interaction,
(ii) AI Model Integration, which would involve the deployment of LLMs and multimodal AI systems into physical robotic platforms, (iii)
Movement and Autonomy Testing, consisting of training and validation of robotic locomotion, dexterity, and spatial awareness, (iv) Simulation-to-Reality
Training, which involves bridging simulated AI training environments with real-world operational data, and (v) Continuous Data Capture,
i.e., the collection of structured and unstructured datasets for AI model training and refinement.

Robotics and AI Center of Excellence

We currently expect to allocate
approximately 100,000 square feet of the Michigan Facility to create a dedicated Robotics and AI Center of Excellence. This Center of
Excellence is intended to provide a large-scale, controlled environment where engineers and developers can test robotics systems, including
humanoid robots and other autonomous machines, under real-world operating conditions.

We further expect that this
facility will enable the testing of robotics systems integrated with LLMs and multimodal AI platforms, training of robotic systems to
exhibit human-like behaviors, including interaction, decision-making, and responsiveness, and the evaluation of robotic movement, dexterity,
and operational performance in dynamic environments

We believe that dedicating
significant square footage to robotics testing and training infrastructure will support the advancement of robotics systems capable of
operating effectively alongside humans in commercial and industrial settings.

Commercial Model

We intend to commercialize
the Michigan Facility, including the Robotics and AI Center of Excellence, as a robotics Testing-as-a-Service platform, including (i)
charging customers on a per-hour or usage-based model for access to robotics testing environments, (ii) providing data generation and
engineering services for AI and robotics companies, and (iii) offering integrated compute and robotics infrastructure, leveraging the
Company’s AI data center capabilities. We expect that significant volumes of operational data will be generated through robotic
testing activities conducted at the Michigan Facility, which data may include movement data, visual data, environmental interaction data,
and human-robot interaction datasets.

We further intend to aggregate,
process, and monetize this data, including through licensing or sale to third parties engaged in AI development. Target customers are
expected to include leading participants in the global AI ecosystem, including companies developing LLM’s and AI infrastructure
and other enterprises operating in the LLM and advanced AI markets.

Competitive Positioning

We believe our strategy will
differentiate us from traditional robotics companies by combining physical robotics infrastructure, AI data center compute capabilities
and large-scale data generation and monetization. This integrated approach positions Omnipresent at the intersection of robotics hardware,
AI model development, and data infrastructure.

Growth Strategy

Our growth strategy includes
expanding robotics deployments across commercial and industrial environments, scaling the Michigan Facility into a centralized hub for
AI and robotics training, partnering with AI developers and enterprises requiring real-world datasets, integrating robotics with our broader
AI data center infrastructure, and developing recurring revenue streams through usage-based robotics and data services

Risks and Considerations

The Company’s robotics
and AI initiatives are subject to several risks, including, but not limited to: (i) technological uncertainty given that humanoid robotics
and real-world AI integration remain emerging fields, (ii) the need for the requisite financing as robotics infrastructure and testing
environments require significant investment, (iii) risks surrounding commercial adoption, (iv) regulatory considerations, and (v) customer
concentration risk, particularly with respect to dependence on large AI customers, which could impact revenue stability. See “Risk
Factors Related to Omnipresent Robotics” for further information.

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Ault
Capital Group

Ault Blockchain

Overview

The Ault Blockchain protocol
is our blockchain infrastructure and digital asset ecosystem business. The Ault Blockchain network is operated by the Ault DAO, a Wyoming
decentralized autonomous organization, which can generally be described as a blockchain-based, member-governed entity operating without
central leadership, using smart contracts to automate rules and decisions. Ault Capital indirectly owns Ault DAO LLC, the Wyoming limited
liability company that serves as the legal and corporate entity of record for the Ault DAO. The Ault DAO has formally granted Ault Capital,
through Ault DAO LLC, the rights to sell node licenses (as described below, the “Node Licenses”) to network participants.
We launched the Ault Blockchain Mainnet in March 2026. In the cryptocurrency context, a Mainnet, which is shorthand for “main network,”
is a fully developed, operational, and public blockchain where real cryptocurrency transactions occur and digital assets hold real-world
value.

Through Ault Blockchain, our
goal is to build a compliance-oriented blockchain network and ecosystem designed to support financial market applications and, over time,
technology and AI services. The business is organized around three core elements: (i) the Ault Blockchain network itself, which processes
transactions and hosts decentralized applications, (ii) the Node License program, through which participants acquire infrastructure rights
and earn newly distributed tokens, and (iii) the Ault DAO, the on-chain governance body through which licensed participants collectively
govern the network’s direction. The Ault DAO operates on a two-tier participation model: (i) voting on proposals requires node ownership
and completion of know-your-customer (“KYC”) identity verification, whereas (ii) submitting proposals requires full membership
in the Ault DAO, which, in addition to the requirements in (i) above, also requires formal acknowledgement of the Ault DAO Constitution
(as further described below, the “Constitution”). KYC verification is a baseline requirement for all governance participation.

Corporate Structure

The Ault Blockchain network
is operated by the Ault DAO. The corporate structure supporting the Ault DAO is as follows: Ault Capital owns Ault DAO LLC through its
subsidiary Ault Markets, Inc., which is the sole member of Ault DAO LLC. Ault DAO LLC holds contracts, engages vendors, and provides administrative
and compliance support to the ecosystem. The Ault DAO has formally granted Ault Capital, through Ault DAO LLC, the rights to sell community
node licenses (the “Community Node Licenses”) to network participants. Community Node Licenses are purchased rights that allow
an individual to operate a specific node within a blockchain network and earn rewards for supporting that network.

There is an important distinction
that is used throughout this Annual Report. Ault DAO LLC is legally and functionally separate from the Ault DAO, which is the on-chain
governance body through which licensed node holders vote on decisions affecting the Ault Blockchain. The Ault DAO holds no membership
interest, equity, or economic rights in Ault DAO LLC, and the treasury governed by Ault DAO members is entirely separate from Ault DAO
LLC’s balance sheet and assets. References in this filing to “Ault DAO LLC” refer to the Wyoming limited liability company,
whereas references to the “Ault DAO” refer to the on-chain governance body.

Blockchain Background

A blockchain is a shared digital
record-keeping system with no single controlling authority. Validators, who use specialized computers in a blockchain network responsible
for verifying transactions, ensuring network security, and maintaining the integrity of the ledger as well as full node operators - individuals
or entities that manage the hardware and software (a node) required to support a blockchain network, thereby ensuring that the node stays
online to validate transactions, stores the blockchain ledger, and propagate data, and are therefore crucial for maintaining network security
and decentralization - maintain complete copies of the ledger and verify that new transactions comply with the network’s rules,
a process governed by a defined set of rules called a consensus mechanism. Not all participants in a blockchain network maintain a full
copy of the ledger; on the Ault Blockchain, licensed Mining Nodes (the “Licensed Mining Nodes”), for example, perform services
off-chain and do not hold a full record of blockchain stake. Because no single entity controls the ledger, blockchains can enable transactions
and agreements to be executed and recorded without relying on a bank, clearinghouse, or other intermediary.

Applications that run on a
blockchain are typically built using self-executing software programs called smart contracts. A smart contract is a program stored on
the blockchain that automatically carries out the terms of an agreement when specified conditions are met, without requiring a human intermediary.
Smart contracts are the foundation for a broad category of applications commonly referred to as decentralized applications, which can
range from digital asset trading platforms to lending protocols to governance systems.

The Ault Blockchain is a Layer
1 network, meaning it is a foundational, standalone blockchain with its own security, transaction processing, and governance rules, as
distinct from networks that are built on top of an existing blockchain. The network uses a hybrid architecture that combines two types
of participation. Validators participate in a proof-of-stake consensus process, meaning they commit AULT tokens (the “AULT Tokens”)
as economic collateral to qualify for and perform block production, and earn transaction fees in return. Licensed Mining Nodes perform
off-chain work, meaning work that occurs outside the core consensus process, specifically verifiable randomness generation at launch,
and earn newly distributed AULT Tokens in return. This separation is designed to allow the network to scale to a large number of node
participants without creating bottlenecks in the consensus layer. Unlike proof-of-work networks such as Bitcoin, the Ault Blockchain’s
consensus mechanism does not require energy-intensive computation; the proof-of-work component of the network is limited to the lightweight
micro-proof-of-work performed by Licensed Mining Nodes in connection with verifiable randomness generation, which is computationally minimal
by design.

20

The Ault Blockchain is also
built to be compatible with the Ethereum Virtual Machine (“EVM”), the computing standard used by the Ethereum network, one
of the most widely adopted blockchain platforms in the world. EVM compatibility means that software developers can build and deploy applications
on our network using the same tools, programming languages and standards they would use on Ethereum, without needing to rewrite their
code.

The AULT Token

The native digital asset of
the Ault Blockchain is the AULT Token. A digital token is a unit of value or utility created and tracked on a blockchain. The AULT Token
serves three primary functions within the network: (i) paying transaction fees for all activity on the network; (ii) staking, meaning
that validators commit AULT Tokens as economic collateral to participate in block production; and (iii) participation in the governance
of the Ault Blockchain through the Ault DAO.

The total supply of AULT Tokens
is fixed at 100 billion, all minted at genesis. Approximately 99.9999% of total supply is allocated to what we refer to as the Emissions
Supply, which is distributed to network participants over a ten-year schedule under a fixed mathematical formula. Of that Emissions Supply,
95% is allocated to Licensed Mining Node rewards and 5% is allocated to staking rewards for validators and their delegator (a delegator
is a token holder who participates in proof-of-stake networks by assigning its stake to a validator to earn rewards without managing technical
infrastructure). The Emissions Supply follows a declining schedule with approximately 9.4% annual decay, beginning at approximately 41
million Ault Tokens per day during the first year following the emission and declining to approximately 17 million such tokens per day
by the tenth year. The emissions schedule is fixed by protocol and cannot be changed without a governance vote of the Ault DAO. We do
not sell AULT tokens; rather, they are earned solely through active network participation. There can be no assurance that the AULT Token
will ever have monetary value or generate any financial return.

Block production on the Ault
Blockchain is performed by validators, who are selected from the top one hundred nodes ranked by staked AULT Tokens. To qualify as a validator,
a node must self-bond a minimum of ten thousand AULT Tokens. Validators earn transaction fees and priority tips from the blocks they produce,
and earn a commission on staking rewards distributed to their delegators. Validator participation carries economic risk in that they are
subject to slashing, meaning a protocol-enforced reduction of their staked AULT Tokens, in the event of downtime beyond defined thresholds,
double-signing, or censorship of transactions. Slashing events reduce the staked position of both the validator and its delegators in
proportion to their respective stakes.

Node License Program

A Node License is a right
to operate a Licensed Mining Node, which is a software program that performs defined off-chain services for the network and earns AULT
Token emissions through a work credit system. Each epoch, approximately every one minute, a set of licensed nodes is randomly selected
to submit what we refer to as a Verifiable Random Function output, gated by a lightweight proof-of-work computation. Nodes whose outputs
are accepted contribute to the network’s randomness beacon and earn work credits for that epoch. Daily emissions are then distributed
to Licensed Mining Nodes pro-rata based on accumulated work credits. All licenses have an equal probability of selection in each epoch;
what determines a node’s earnings over time is uptime and output correctness, not computational power or hardware resources.

Node Licenses are priced at
$1,500 per license at issuance and are non-transferable for two years from the date of issuance. The total number of Node Licenses is
fixed at one million. Of those, five hundred thousand are Project Nodes issued to Ault Capital as part of the contractual terms under
which Ault Capital was granted the rights to sell Community Nodes on behalf of the Ault DAO, and are not available for public sale. The
remaining 500,000 are Community Nodes available for sale or distribution. Each Node License confers one governance vote in the Ault DAO,
provided the holder has completed the requisite KYC identity verification, subject to a per-member cap of two hundred thousand votes regardless
of total licenses held. The non-transferability period and voting cap are structural features designed to limit concentration of governance
power during the network’s early phase.

Following the expiration of
the two-year non-transferability period, Node Licenses may be transferred subject to certain conditions. Any transferee must satisfy KYC
identity verification and receive whitelist approval before a transfer may be completed. Node Licenses may be revoked in limited circumstances,
including in the event of a chargeback or payment fraud in connection with the original license purchase. In the event of revocation,
any AULT Tokens already earned and distributed to the node prior to revocation are not subject to a clawback. Purchasers of Node Licenses
should be aware that they are agreeing to the terms of the Constitution, which includes a limitation of liability provision under which
members waive claims against us arising from Ault DAO membership, and a dispute resolution provision requiring binding arbitration administered
by the American Arbitration Association, where the venue is New York City but the court must apply Wyoming substantive law.

We anticipate the scope of
services performable by Licensed Mining Nodes may expand in future phases, subject to governance approval and protocol upgrades, to include
oracle services, data indexing, and distributed AI computation. Any expansion of node functionality beyond its current scope requires
an amendment to the Constitution and, where applicable, a protocol upgrade approved by network validators. There can be no assurance that
any such expansion will occur on any particular timeline or at all.

21

Revenue and Token Distributions

The Ault Blockchain segment
currently generates revenue through the sale of Community Node Licenses at a list price of $1,500 per license. There are no ongoing service
fees or subscription charges associated with a license after issuance. The total number of Node Licenses is fixed at one million, structured
as follows: (i) five hundred thousand Project Nodes were issued to Ault Capital as part of the contractual terms under which Ault Capital
was granted the rights to sell Community Nodes on behalf of the Ault DAO, and are not available for sale, and (ii) five hundred thousand
Community Nodes are available for sale or distribution to third parties. The five hundred thousand Community Nodes represent the maximum
number of licenses available for sale at the current list price. There can be no assurance that all available licenses will be sold or
that the list price will remain unchanged.

Investors should be aware
that we and some of our subsidiaries are among the potential purchasers of Community Node Licenses. Sentinum, our data center and Bitcoin
mining subsidiary, has acquired approximately one hundred thousand Community Node Licenses. Any Node License purchases by Sentinum or
any of our other subsidiaries constitute related-party transactions and will be disclosed in accordance with applicable financial reporting
and related-party disclosure requirements. To the extent Sentinum or any other of our subsidiaries or affiliates holds Community Node
Licenses, it will receive AULT Token emissions through the work credit system on the same terms as any other Community Node holder; the
quantity of tokens received will depend on the uptime, correctness, and selection frequency of those nodes over the ten-year emissions
schedule.

In addition to Node License
sale revenue, Ault Capital, as the contractual recipient of five hundred thousand Project Nodes, will receive AULT Token emissions distributed
by the protocol to those nodes in accordance with the work credit system described above. The quantity of such tokens received will depend
on the uptime, correctness, and selection frequency of the Project Nodes over the ten-year emissions schedule. These token distributions,
whether received by Ault Capital through Project Nodes or by Sentinum or other affiliates through Community Node holdings, are not revenue
in the traditional sense and their economic value, if any, will depend entirely on whether and at what price AULT Tokens may be exchanged
in the future. Neither Ault DAO LLC nor any affiliate of ours makes any representation that AULT Tokens distributed to Project Nodes or
Community Nodes will ever have monetary value or be available for sale or exchange at any particular price or at all.

Ault Capital, Sentinum, and
other subsidiaries or affiliates of ours may also participate in the network as validators or delegators. Validators earn transaction
fees and a commission on staking rewards distributed by the protocol, as described in the AULT Token section above. Delegators earn staking
rewards in proportion to their delegated stake net of validator commission. To the extent Ault Capital, Sentinum, or any of our other
affiliates operates as a validator, delegates AULT Tokens to a validator, or otherwise participates in staking, it may receive distributions
of AULT Tokens or transaction fees through those activities. There can be no assurance that validator or staking activity will generate
meaningful returns or that any affiliate will elect to participate.

Governance

The Ault Blockchain protocol
is governed by the Ault DAO, whose structure and procedures are set out in a formal governing document called the Constitution. Governance
authority includes the ability to propose and vote on changes to protocol parameters, allocate treasury funds, and amend the Constitution
itself. The DAO operates on two tiers of participation. Voting on proposals is open to any node holder who has completed KYC identity
verification, without requiring full DAO membership. Submitting proposals requires full DAO membership, which in addition to KYC verification
requires formal acknowledgement of the Constitution. This structure ensures that all governance participants are identified while keeping
the voting process broadly accessible to verified node holders.

Governance proposals are submitted
by Ault DAO members and voted on by KYC-verified node holders through an on-chain process. A proposal requires a stake of five hundred
thousand AULT Tokens to submit, a default voting window of ten days, a quorum of 20% of eligible Community Nodes, and a simple majority
to pass. Any proposal may be blocked regardless of the number of affirmative votes if votes cast as “No With Veto” reach or
exceed 33.4% of participating voting power, providing a minority protection mechanism intended to prevent any coordinated group from imposing
changes that would harm the broader network.

Ault DAO LLC, as the legal
entity supporting the Ault DAO, performs a compliance screening function; it may decline to post a proposal for a vote if the proposal
appears to violate applicable law or present a material risk to the network. Ault DAO LLC may not override or negate the outcome of a
completed Ault DAO vote; the only veto mechanism is the on-chain process available to voting members described above. Gas fees, which
are transaction fees paid to blockchain validators (miners or stakers) to process transactions and execute smart contracts on a network,
collected by the network are split 90% to validators and delegators and 10% to the Ault DAO community pool, which is the on-chain treasury
governed by Ault DAO members and used to fund grants, liquidity programs, and network development.

Investors should note that
we and our affiliates, taken together, hold or may hold a majority of all outstanding Node Licenses, comprising the 500,000 Project Nodes
issued to Ault Capital and any Community Nodes acquired by our affiliates. Notwithstanding this aggregate holding, we and all of our affiliated
entities intend that the combined voting power exercised by us, collectively, in any Ault DAO governance vote will not exceed 49.9% of
the total outstanding Node License votes, regardless of the number of Node Licenses held, such that unaffiliated node holders retain meaningful
collective governance authority and no governance outcome can be determined solely by the affiliated group. This voluntary limitation
is intended to apply to our company and any and all of our affiliates.

22

Ecosystem Strategy

Our strategy for Ault Blockchain
is to build a network and application ecosystem serving institutional and retail participants in digital asset markets and technology
services. The network is designed to launch with core infrastructure and to expand through a phased series of application modules. Planned
applications include Ault Markets, a marketplace for tokenized real-world assets and derivatives intended to bridge traditional financial
infrastructure with decentralized settlement; a spot decentralized exchange for permissionless trading of digital assets on the network,
consisting of: (i) OnlyBulls, a financial data interface and integrated digital asset wallet intended to serve as the primary user gateway
to the Ault ecosystem, (ii) Ault Lending, an on-chain borrowing and lending protocol, and (iii) askROI, a distributed AI analytics platform.
None of these applications has been launched as of the date of this Annual Report, and there can be no assurance that any planned application
will be deployed on the anticipated timeline or at all.

We also intend to pursue cross-chain
connectivity, meaning the ability for users to move supported digital assets between the Ault Blockchain and other networks, and to develop
relationships with institutional custodians and compliance service providers to support adoption by institutional market participants.
Developer grants and ecosystem partnerships are planned as early-stage adoption mechanisms funded through the Ault DAO community pool.

Tokenization and Real-World Assets

Tokenization is the process
of representing ownership rights in a real-world asset (an “RWA”) as a digital token on a blockchain. A tokenized asset is
a blockchain-based record that corresponds to an underlying interest in a physical or financial asset, such as equity securities, debt
instruments, real estate, commodities, or other instruments. Tokenization does not change the legal nature of the underlying asset; rather,
it creates a digital representation of that asset that can be transferred, tracked, and settled on a blockchain as opposed to through
traditional intermediaries such as brokers, custodians, or clearinghouses. RWAs is the term commonly used in blockchain markets to refer
to the class of traditional financial and tangible assets that are represented on-chain through tokenization.

The Ault Blockchain was designed
from the outset to support tokenized RWA applications. Several architectural features of the network are specifically relevant to this
use case. The network’s KYC requirement for governance participation reflects a broader design philosophy of identity-verified participation,
which is a foundational requirement for any compliant tokenized asset ecosystem. EVM compatibility allows issuers and developers to deploy
tokenized asset contracts using established smart contract standards widely used for on-chain asset representation. The network’s
target transaction confirmation time of approximately one second is intended to support the settlement speed demands of financial market
applications.

Our strategic intent for the
Ault Blockchain is to position the network as infrastructure for compliant tokenized RWA activity. We intend to develop application layer
capabilities that would allow verified participants to issue, transfer, and settle tokenized representations of financial instruments
on the network. The scope of intended asset classes includes, but may not be limited to, equities, debt instruments, commodities, and
structured products. These application capabilities are in the planning and development stage and have not been initiated as of the date
of this Annual Report. There can be no assurance that any particular capability will be developed or made available on any specific timeline,
or that the regulatory approvals and legal structures necessary to support any given asset class will be obtained.

The Ault Blockchain is a permissionless
network at the application layer, meaning any developer may deploy smart contracts or applications on the network without prior approval
from Ault DAO LLC or any affiliate of ours. We do not vet, endorse, or control applications deployed by third parties on the network.
See “Risk Factors” for a discussion of regulatory risks specific to tokenized asset activities on the network.

Competition

The Ault Blockchain operates
in the market for Layer 1 blockchain infrastructure and digital asset services, competing primarily with other public blockchain networks
for developer adoption, application deployment, and network participants. The competitive landscape includes established general-purpose
networks, purpose-built financial blockchain networks, emerging Layer 1 and Layer 2 platforms, and private or permissioned blockchain
networks deployed by financial institutions, various consortia, and enterprise technology providers. Private and permissioned chains in
particular may appeal to institutional participants who prefer a closed network with defined participants and centralized governance over
a public network. We believe the primary competitive factors in this market are network security and reliability, transaction throughput
and settlement speed, developer tooling and ecosystem depth, regulatory posture and compliance infrastructure, and the breadth of applications
available to end users.

23

We believe the Ault Blockchain’s
primary points of differentiation consist of the following: (i) its compliance-oriented design, including the KYC requirement for Node
License purchases and Ault DAO governance participation; (ii) its focus on financial market applications and RWA tokenization; and (iii)
and its hybrid architecture combining proof-of-stake consensus with a distributed licensed node program. We compete for developer talent,
application partnerships, node license purchasers, and institutional relationships with other networks and digital asset businesses. See
“Risk Factors” for a discussion of competitive risks.

Regulation

The Ault Blockchain operates
across multiple regulatory jurisdictions. The United States, the European Union, the United Kingdom, the Middle East, and the Asia-Pacific
region each maintains distinct and evolving regulatory frameworks applicable to blockchain networks, digital assets, and decentralized
governance structures. We monitor regulatory developments across these jurisdictions as part of our ongoing compliance efforts.

In the United States, the
primary federal regulators with oversight of digital asset markets are the SEC, the CFTC, the Financial Crimes Enforcement Network (“FinCEN”),
and the Office of Foreign Assets Control (“OFAC”). The SEC has asserted jurisdiction over digital assets it characterizes
as securities under the Securities Act and the Exchange Act. The CFTC has asserted jurisdiction over digital assets it characterizes as
commodities.

The regulatory framework for
digital assets in the United States continues to evolve, with recent developments reflecting increased coordination among federal regulatory
agencies and a growing focus on establishing clearer jurisdictional boundaries and market structure. These developments may contribute
to a more consistent and transparent regulatory environment over time; however, the classification, treatment, and regulatory requirements
applicable to digital assets remain subject to ongoing interpretation and potential change.

FinCEN has issued guidance
applying anti-money laundering and KYC requirements to certain participants in digital asset markets. OFAC administers and enforces economic
and trade sanctions programs. We apply KYC and OFAC screening to Node License purchasers and to participants in the Ault DAO’s governance.
We operate Ault DAO LLC under Wyoming’s statutory framework for decentralized autonomous organizations formed as limited liability
companies, which provides a defined legal structure for the Ault DAO’s contracting and administrative operations.

In the European Union, the
Markets in Crypto-Assets Regulation (“MiCA”), entered into force in 2023 and applies uniformly across all EU member states.
MiCA establishes a comprehensive licensing and disclosure framework for crypto asset service providers and issuers of asset-referenced
tokens and e-money tokens. The AULT Token is not intended to be structured as an asset-referenced token or e-money token under MiCA. In
the United Kingdom, the Financial Conduct Authority has established a registration regime for crypto asset businesses and the UK government
has indicated its intention to develop a broader regulatory framework for digital assets.

In the Middle East, the United
Arab Emirates has developed licensing frameworks for virtual asset service providers through the Dubai Virtual Assets Regulatory Authority
and the Financial Services Regulatory Authority of the Abu Dhabi Global Market. Other Gulf Cooperation Council jurisdictions maintain
varying regulatory positions on digital asset activities. In the Asia-Pacific region, Singapore regulates digital payment token service
providers through the Monetary Authority of Singapore under the Payment Services Act. Hong Kong has established a licensing regime for
virtual asset trading platforms. Japan regulates cryptocurrency exchanges and certain digital asset activities under the Payment Services
Act and the Financial Instruments and Exchange Act. China has prohibited most digital asset trading and mining activities for persons
within its jurisdiction.

We intend for our activities
and the controlled access points of the network, including Node License sales and Ault DAO governance participation, to operate in compliance
with applicable law across the jurisdictions in which we operate. See “Risk Factors” for a detailed discussion of regulatory
risks specific to this business.

Intellectual Property

We do not currently own, and
do not have any current plans to seek, patents in connection with our Ault Blockchain operations. We expect to rely on trade secrets,
trademarks, service marks, trade names, and other intellectual property rights in connection with this business and expect to license
intellectual property rights owned and controlled by others, including open-source software frameworks used in the network’s development.

Precious Metals Treasury Management

Overview

As part of our evolving treasury
management strategy, we have initiated a program focused on the acquisition and storage of physical precious metals, specifically silver
and gold, to diversify our balance sheet holdings and mitigate risks associated with currency fluctuations and inflation. In the current
economic environment, where inflation has persisted above longer-term targets and contributed to concerns over the ongoing devaluation
of the U.S. dollar's purchasing power, we view physical precious metals as a prudent hedge. These commodities have historically served
as reliable stores of value over many generations, providing a tangible counterbalance to fiat currency risks and macroeconomic uncertainties.
This operation will function as an integral component of our overall treasury management system, treating these commodities as strategic
assets.

24

Operations

To execute this program, we
intend to partner with precious metals miners and mints, enabling us to source high-quality bullion directly from producers. Acquisitions
are expected to be conducted on a systematic basis through a dollar-cost averaging approach, whereby we would make periodic purchases
throughout each month to average out costs over time and reduce exposure to short-term market volatility.

All acquired metals would
be stored in secure, audited physical vaults managed by reputable third-party custodians, ensuring compliance with industry standards
for inventory verification, security, and insurance. To further enhance transparency and risk management, we will require our vaulting
and storage partners to maintain rigorous chain of custody protocols, including serialized tracking from acquisition to storage, multi-layered
security measures such as 24/7 surveillance and segregated client holdings to prevent commingling.

Further, independent third-party
audits will be conducted on a regular basis by accredited firms specializing in precious metals assurance, providing detailed reports
on inventory accuracy, purity verification, and overall compliance with international standards like those from the London Bullion Market
Association (“LBMA”) or equivalent bodies.

These holdings will be accounted
for on our balance sheet at fair market value, with the assets marked to market quarterly based on prevailing market prices (such as LBMA
or equivalent benchmarks), and any resulting unrealized gains or losses recognized to reflect current economic conditions and support
transparent financial reporting.

Strategic
Alignment

This initiative aligns with
our broader financial objectives of enhancing long-term shareholder value through the strategic allocation of hard assets to our balance
sheet, positioning us to better navigate periods of inflation, currency pressures, and economic volatility by incorporating time-tested
stores of value into our treasury reserves.

Ault Lending

Ault Lending provides commercial
loans to companies throughout the U.S. to provide them with operating capital to finance the growth of their businesses. The loans range
in duration from six months to three years. Ault Lending’s loans are made or arranged pursuant to a California Financing Law license
(Lic.no. 60 DBO77905).

Ault Lending acquires controlling
or non-controlling interests in and actively manages businesses that we generally believe (i) are undervalued and have disruptive technologies
with a global impact, (ii) operate in industries with long-term macroeconomic growth opportunities, (iii) have the potential for positive
and stable cash flows, (iv) face minimal threats of technological or competitive obsolescence, and (v) have strong management teams largely
in place. We offer investors a unique opportunity to own a diverse group of leading middle-market businesses in the niche-industrial and
branded-consumer sectors.

Ault Lending uses a traditional
methodology for valuing securities that primarily looks for deeply depressed prices. Upon making an investment, we often become actively
involved in the companies we seek to acquire, whether in its entirety or merely a controlling or non-controlling interest. That activity
may involve a broad range of approaches, from influencing the management of a target to take steps to improve stockholder value, to acquiring
a controlling or non-controlling interest or outright ownership of the target company in order to implement changes that we believe are
required to improve its business, and then operating and expanding that business.

Ault Lending believes that
private company operators and corporate parents looking to sell their business units may consider us an attractive purchaser because of
our ability to:

·
provide ongoing strategic and financial support for their businesses, including professionalization of our subsidiaries at scale;

·
maintain a long-term outlook as to the ownership of those businesses;

·
sustainably invest in growth capital and/or add-on acquisitions where appropriate; and

·
consummate transactions efficiently without being dependent on third-party transaction financing.

25

In particular, we believe
that our outlook on length of ownership and active management on our part may alleviate the concern that many private company operators
and parent companies may have with regard to their businesses going through multiple sale processes in a short period of time. We believe
this outlook enhances our ability to develop a comprehensive strategy to increase the earnings and cash flows of each of our businesses.

Finally, it has been our experience
that our ability to acquire businesses without the cumbersome delays and conditions typical of third-party transactional financing is
appealing to sellers of businesses who are interested in confidentiality, speed and certainty to close.

We believe our management
team’s strong relationships with industry executives, accountants, attorneys, business brokers, commercial and investment bankers,
and other potential sources of acquisition opportunities offer us substantial opportunities to assess small businesses available for acquisition.
In addition, the flexibility, creativity, experience and expertise of our management team in structuring transactions allows us to consider
non-traditional and complex transactions tailored to fit a specific acquisition target.

In terms of the businesses
in which we have a controlling interest as of December 31, 2025, we believe that these businesses have stable management teams, operate
in strong markets with defensible market niches, and maintain long-standing customer relationships.

Ault Lending provides funding
to businesses through loans and investments. Ault Lending offers a variety of loan types including commercial loans, convertible notes
and revolving lines of credit. Ault Lending is engaged in providing commercial loans to companies throughout the United States to provide
them with operating capital to finance the growth of their businesses. The loans are primarily short-term, ranging from six to 12 months,
but may be of longer duration. These terms are subject to change as market needs dictate, and Ault Lending anticipates offering additional
products in the future.

Ault Lending uses its considerable
financial experience, data analytics, and a credit scoring model to assess the creditworthiness of each small business borrower applicant.
If the business meets Ault Lending’s criteria, Ault Lending sets the initial interest rate according to its credit and financial
models. The final interest rate offered to the borrower will be determined by Ault Lending’s interpretation of the marketplace.
In order to borrow from Ault Lending, borrowers must display characteristics indicative of durable business and financial situations.
These include factors such as revenue, time in business, number of employees, and financial and credit variables. In order to qualify,
business borrower applicants must be approved through Ault Lending’s underwriting process, which analyzes credit and financial data
of both the business and the business owner. Ault Lending takes into account several business factors (including revenue, age of business,
cash flows, and other variables). The underwriting process determines the loan amount to approve, how loans will be priced, and whether
to include a blanket lien, as well as additional factors (including length of loan, estimated default rates by type and grade, and general
economic environment).

Our Executive Committee, which
is comprised of our Executive Chairman, Chief Executive Officer and President, acts as the underwriting committee for Ault Lending and
must approve all lending transactions. The Executive Committee has decades of experience in financial, investing and securities transactions.
Under its business model, Ault Lending generates revenue through origination fees charged to borrowers and interest generated from each
loan. Ault Lending may also generate income from appreciation of investments in marketable securities as well as any shares of common
stock underlying convertible notes or warrants issued to Ault Lending in any particular financing.

As noted above, we will from
time to time, through Ault Lending, engage in discussions with other companies interested in our subsidiaries or partner companies, either
in response to inquiries or as part of a process we initiate. To the extent we believe that a subsidiary partner company’s further
growth and development can best be supported by a different ownership structure or if we otherwise believe it is in our stockholders’
best interests, we will seek to sell some or all of our position in the subsidiary or partner company. These sales may take the form of
privately negotiated sales of stock or assets, mergers and acquisitions, public offerings of the subsidiary or partner company’s
securities and, in the case of publicly traded partner companies, transactions in their securities in the open market. Our plans may include
taking subsidiaries or partner companies public through rights offerings, mergers or spin-offs and directed share subscription programs.
We will continue to consider these and functionally equivalent programs and the sale of certain subsidiary or partner company interests
in secondary market transactions to maximize value for our stockholders.

During 2026, we anticipate
providing significant new funding to expand Ault Lending’s loan and investment portfolio. Ault Lending loans are made or arranged
pursuant to a California Financing Law license (Lic.no. 60 DBO77905).

Gresham

Overview

Gresham designs, manufactures
and distributes purpose-built electronics equipment, automated test solutions, power electronics, supply and distribution solutions, as
well as radio, microwave and millimeter wave communication systems and components for a variety of applications with a focus on the global
defense industry and the healthcare market. Gresham has two subsidiaries, Microsource and Gresham Holdings. Gresham Holdings has three
subsidiaries: Relec and Enertec, which are both wholly owned, and Microphase, which is majority owned.

26

Gresham’s operations
consist of three business segments:

•
Radio Frequency Solutions ("RF Solutions"): Consists of Microphase, which is located in Connecticut.
Microphase, a BAE Systems Silver Supplier for 2024 and 2025, designs and manufactures custom RF filters, microwave, and millimeter-wave
hardware products for defense, aerospace, and telecommunication applications, generating revenue primarily through production contracts
for custom engineered components and radar filters.

•
Precision Electronic Solutions: Consists of two subsidiaries and one division. The subsidiaries are Enertec,
located in Israel, and Microsource, located in California. Enertec develops and supplies advanced command & control, test and calibration
systems for use in failsafe military and medical applications. Microsource develops and manufactures sophisticated tunable Yttrium iron
garnets (synthetic ferrimagnetic oxide ceramic filters), oscillators, and low-jitter clock sources for radar used in fighter aircraft
and Close In Weapon Systems. Microsource also supplies electronic warfare test systems through the GIGA-tronics division.

•
Power Electronics & Displays: Consists of one subsidiary, Relec, located in the United Kingdom, is a reseller
of advanced video display solutions and power conversion systems that distribute and supply continuous, dependable, clean low voltage
power.

Gresham is focused on products
that are getting “designed-in” for use in military systems such as fighter jets, ships, armored vehicles and missile defense
systems, which Gresham’s management believes provide a recurring revenue stream for years to come and reduce competition because
the cost of replacing designed in products is prohibitive for both the competition and the customer.

Gresham was incorporated in
California on March 5, 1980 as GIGA-tronics Incorporated, and changed its name to Gresham Worldwide, Inc. effective March 1, 2024.

Gresham Holdings Acquisition

On September 8, 2022, Gresham
acquired Gresham Holdings. Pursuant to the acquisition, Gresham acquired all of the outstanding shares of capital stock of Gresham Holdings.

In connection with the consummation
of the acquisition, Gresham Holdings was deemed to be the accounting acquirer in the acquisition based on an analysis of the criteria
outlined in Accounting Standards Codification 805 “Business Combinations.” While Gresham was the legal acquirer in
the acquisition, because Gresham Holdings was deemed the accounting acquirer, the historical financial statements of Gresham Holdings
became the historical financial statements of the combined company upon the consummation of the acquisition.

Gresham operates both within
the United States and at three locations abroad. A summary of Gresham’s locations and high-level review of its operations at each
facility is provided in the table below:

Name

Location

Nature of Business

Corporate Headquarters

San Jose , California

Offices

Microsource

GIGA-tronics Division

San Jose , California

Offices, research and development, engineering, fabrication, sourcing, assembly, tuning and testing

Microphase Corporation*

Shelton, Connecticut

Offices, research and development, engineering, fabrication, sourcing, assembly, tuning and testing

Enertec Systems 2001 Ltd.

Karmiel, Israel

Offices, research and development, engineering, fabrication, sourcing, assembly, tuning and testing

Relec Electronics Ltd.

Wareham, Dorset

United Kingdom

Offices and warehouse operations

__________

*75.35% owned

Gresham’s Voluntary Reorganization under
Chapter 11

27

On August 14, 2024 (the “Petition
Date”), Gresham (the “Debtor”), filed a voluntary petition (the “Bankruptcy Petition”) for reorganization
under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court (the “Bankruptcy
Court”) for the District of Arizona, Case No. 2:24-bk-06732-SHG (the “Chapter 11 Case”). Since the Petition Date through
the date that Gresham emerged from bankruptcy proceedings on November 28, 2025, the Debtor operated its and its subsidiaries’ businesses
as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions
of the Bankruptcy Code and orders of the Bankruptcy Court.

The filing of the Bankruptcy
Petition constituted an event of default that accelerated Gresham’s obligations under certain debt instruments:

•
Senior Secured Convertible Note, dated as of October 11, 2023, in the original principal amount of $2,000,000
issued by Gresham to Walleye Opportunities Master Fund, Ltd;

•
Senior Secured Convertible Note, dated as of October 11, 2023, in the original principal amount of $2,000,000
issued by Gresham to Arena Investors, LP;

•
Senior Secured Convertible Promissory Note, dated as of December 31, 2022, in the original principal amount
of $4,382,740 issued by Gresham to us;

•
10% Senior Secured Convertible Promissory Note, dated as of December 31, 2022, in the original principal amount
of $6,750,000 issued by Gresham to Ault Lending;

•
12% Senior Secured Subordinated Convertible Promissory Note, dated as of October 31, 2023, in the original
principal amount of $1,000,000 issued by Gresham to Ault Lending; and

•
12% Senior Secured Subordinated Convertible Promissory Note, dated as of August 14, 2024, in the original
principal amount of $2,804,007.52 issued by Gresham to Ault Lending.

The debt instruments set forth
above provided that as a result of the Bankruptcy Petition, the principal and interest due thereunder became immediately due and payable.
Any efforts to enforce such payment obligations under the debt instruments set forth above were automatically stayed as a result of the
Bankruptcy Petition, and the creditors’ rights of enforcement in respect of the debt instruments set forth above are subject to
the applicable provisions of the Bankruptcy Code. We agreed not to enforce remedies, subject to the terms and conditions of a forbearance
agreement.

The Debtor requested relief
from the Bankruptcy Court that would enable the Debtor and its subsidiaries (collectively, the “Debtors”) to maintain business-as-usual
operations and uphold their commitments to their stakeholders, including the Debtors’ employees, customers, and vendors during the
restructuring process, subject to the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy
Code, which was granted. While the Chapter 11 Case was pending, the Debtors made no interest payments due under the majority of the Debtor’s
debt instruments.

On June 6, 2025, we entered
into a settlement agreement with Gresham and its senior secured lenders pursuant in its Chapter 11 bankruptcy proceedings. On August 29,
2025, the United States Bankruptcy Court for the District of Arizona confirmed Gresham’s bankruptcy plan. Under that plan,
Gresham’s senior lenders released Gresham and us in exchange for a settlement payment. That payment was made on September
30, 2025. Gresham substantially consummated its bankruptcy plan and emerged from bankruptcy on November 28, 2025.”

Industry Background

Gresham’s operations
focus exclusively on the market for electronic solutions that support the defense and aerospace industries and other mission critical
applications, including medical technology, transportation, and telecommunication. The essential nature of these applications provides
a degree of insulation from volatility associated with other segments of the global economy while accounting for stability and steady
growth of the addressable market opportunities available in segments that it serves. Demand for purpose-built solutions to meet these
requirements continues unaffected, and in many instances increases, in times of global crisis. Total defense spending in the three countries
in which Gresham currently operates was estimated to exceed approximately $1.125 trillion in 2024, driven primarily by continued increases
in U.S. defense expenditures, which reached approximately $997 billion for the year, according to the Stockholm International Peace Research
Institute. Globally, military expenditure reached an estimated $2.7 trillion in 2024, representing a 9.4% year-over-year increase and
the highest level on record, reflecting sustained geopolitical tensions and increased procurement activity across North America, Europe,
the Middle East, and Asia. Gresham currently supports defense contractors and military programs in more than 15 additional countries,
providing exposure to a broad and expanding global defense market. Industry forecasts indicate that global defense spending will continue
to grow, with total expenditures projected to reach approximately $2.4–$2.6 trillion annually in 2025–2026, implying a continued
multi-year expansion trend supported by modernization programs, supply chain localization, and heightened security priorities among NATO
and allied nations. The United States is expected to remain the largest defense spender globally over this period, accounting for a significant
portion of total global expenditures and continuing to drive demand for advanced electronic systems, power solutions, and RF technologies,
according to the International Institute for Strategic Studies.

28

The current conflict with
Iran, the war in the Ukraine, military reprisals taken by Israel in response to various actions taken in recent years by terrorist organizations
sponsored by Iran and tensions with China and in the Middle East have intensified interest and investment in defense platforms throughout
the United Kingdom and Europe.

Gresham believes that the
increasing emphasis on electromagnetic spectrum operations and close coordination of air, land, sea, space and cyber operations will fuel
an increase in defense modernization, force protection and situational awareness, all of which will drive increased spending in procurement
of components and systems to enable electronic warfare, countermeasures and unattended solutions. The global defense electronics market
was estimated at approximately $231.8 billion in 2024 and is projected to grow to approximately $244.4 billion in 2025 and $257.6 billion
in 2026, reflecting a compound annual growth rate of approximately 5% to 6%. Growth in this sector is driven by increased global defense
spending, modernization of radar and sensor systems, expansion of electronic warfare capabilities, and rising demand for advanced communications
and power solutions. The drive for greater connectivity and analytics will, in Gresham’s management’s belief, in turn increase
demand for radio frequency (“RF”) communications, power electronics and electronic control solutions content in new major
military platforms, which are the core offerings of Gresham’s operating units.

Thousands of companies compete
in this market to deliver electronics solutions to meet defense and other mission critical applications. However, Gresham’s operating
units have longstanding relationships with dominant defense contractors in the United States, the United Kingdom, Israel and other countries
that hold contracts for major defense platforms with very long life cycles. Gresham’s customers typically have unique needs, and
they engage with Gresham in funding development contracts for custom solutions. Once a solution is proven in its application, Gresham
typically realizes a secure, recurring revenue stream for products, services and/or repairs for many years (sometimes decades) until the
technology becomes outdated. Because Gresham is often sole-sourced for developmental projects, it is unlikely that a competitor will replace
such a designed-in product as the cost and re-qualification time to do so is often prohibitive. These relationships enable Gresham to
narrow the field of competition considerably and grow based on repeat business with relatively low selling costs. As technology evolves,
prime contractors may, over subsequent years, migrate to systems other than those Gresham produces.

Gresham Business Strengths

Gresham has the following
core strengths that its management believes gives it a competitive advantage:

•
Developing and producing classified military products requiring a Sensitive Compartmented Information Facility
and personnel with appropriate security clearances. These products are designed-in to military systems such as fighter jets, military
ships and vehicles.

•
Military grade quality (AS9100), ultra-reliable technology offerings with elegant designs and precision “high
touch” manufacture that stand the test of time, narrow the field of competition and command enhanced operating margins.

•
Enduring relationships with “blue chip” customers in the defense market provide stable revenue
growth and reduce sales cost.

•
Substantial backlog of orders totaling $31 million as of December 31, 2025 with definite delivery dates for
solutions engineered into long life cycle platforms that provide revenue base for years to come. Global operations expand our market opportunities,
extend our operational reach and diversify our business base.

Gresham Business Strategies

Gresham’s goal is to
become the supplier of choice for larger companies in the defense industry and provide solutions for mission critical applications in
health care.

Gresham’s near-term
business strategies are focused on developing synergies as a result of the acquisition of Gresham Holdings:

Gresham incurred major overhead
expenses being a public company with very limited sales and more recently expending resources borrowed from us and incurred in connection
with its filing for bankruptcy under Chapter 11 of the Bankruptcy Code, which occurred on August 14, 2024. Gresham is combining the overhead
functions, shrinking its leased facilities and focusing on cost reductions across all subsidiaries; Gresham is prioritizing vertical integration
across its portfolio to drive supply chain alignment, leverage shared engineering capabilities, and expand cross-subsidiary business opportunities.

29

•
Gresham is consolidating duplicate functions, thereby reducing the costs of sales, human resources, information
technologies, quality management and contracts administration; and

•
Gresham has consolidated Northern California operations into a smaller shared facility in San Jose, CA with
additional engineering resources provided by Digital Power Corporation, thereby reducing operating costs and increasing business development
opportunities.

Gresham’s long-term
business strategies include the following key elements:

•
maintain, strengthen and expand relationships with current customers, by increasing on-time delivery, diversifying
solutions offered and maximizing quality of solutions;

•
designing and developing new technology for advanced radar systems being used in next generation defense and
aerospace technology.

•
acquire designed-in products or companies. Gresham believes there are many small well run, profitable defense
contractors whose principal owner is nearing retirement which could be attractive acquisition targets;

•
attract new customers through building business development, marketing and sales infrastructure to raise market
awareness and identify opportunities early in the design process;

•
take advantage of the cross-selling opportunities among Gresham’s operating subsidiaries to leverage
current resources; and

•
enhance Gresham’s geographic footprint by increasing marketing outreach, forming alliances with leading
companies located in areas beyond its current reach and acquiring businesses that expand reach into other geographies.

Gresham Business Operations

Gresham conducts its business
through its subsidiaries. After the Gresham Holdings acquisition, Gresham aligned the operations of its subsidiaries as follows:

RF Solutions

Microphase focuses on designing,
engineering, assembling, tuning and testing components, integrated assemblies and subsystems that detect, filter, analyze and process
radio frequency, microwave and millimeter wave signals for defense applications.

Precision
Electronic Solutions

In the Precision Electronic
Solutions group, Enertec, the GIGA-tronics Division and Microsource focus on designing, engineering, developing and producing turnkey
precision electronic solutions for mission critical applications primarily focused on defense customers and large global healthcare customers.

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Power
Electronics and Display Solutions

Relec distributes power electronics
and displays for mission critical applications to customers in health care, transportation, telecommunications and industrial businesses.

Competition

The defense electronic technology
solutions industry is highly fragmented and characterized by intense competition. Competition includes thousands of companies located
throughout the world, many of which have advantages in terms of labor and component costs, and many of which offer products superior or
comparable in quality to Gresham’s products. Each operating subsidiary confronts a different set of competitors depending on solutions
offered, vertical markets targeted and geographic scope of operations. Gresham also faces competition from current and prospective customers
who may decide to design and manufacture power electronics, communications components and precision electronic solutions needed to satisfy
their internal programmatic requirements.

Consolidation in the defense
technology solutions market, including through mergers, acquisitions and/or strategic alliances among major primes to whom Gresham sells
its products has the potential to intensify the competitive pressures that Gresham faces. Many of Gresham’s existing and potential
competitors may be better positioned than it is to acquire other companies, technologies or products. Gresham competes favorably on the
basis of multiple factors, including product quality and reliability, technological capabilities, service, past performance, design flexibility
and ability to develop and implement complex, integrated solutions customized to its customers’ needs, and cost-effectiveness. Focusing
on products with relatively low volumes and high margins enables Gresham’s operating subsidiaries to compete favorably on price
against larger companies with much higher indirect cost structures (overhead and G&A) and cumbersome internal bureaucracies. Finally,
the fragmentation of the defense technology market also creates opportunities to grow through acquiring competitors and/or potential competitors.

Many competitors have substantially
greater financial and marketing resources and geographic presence than Gresham does. However, cost-effective designs, elegant engineering,
a collaborative/consultative approach to managing customer relations and a long history of delivering high quality, ultra-reliable, custom
designed components and subsystems have enabled Gresham to compete effectively and carve out a defensible niche position against competitors
with more resources.

RiskOn International, Inc.

Overview

RiskOn International, Inc.
(“ROI”), operates primarily through its wholly owned subsidiary, BitNile.com, Inc. (“BNC”). BNC is engaged in
the development of an online predictions market platform (the “Platform”). A predictions market is an online marketplace in
which registered users take positions on the probable outcome of future real-world events such as elections, sporting competitions and
macroeconomic data releases and receive settlements determined by verified actual results. The Platform is located at BitNile.com and
is intended to be accessible via any internet-connected device using any standard web browser, without requiring downloads or dedicated
applications.

The Platform represents a
fundamental repositioning of BNC’s business. BNC has discontinued its prior sweepstakes gaming operations and is currently developing
the BitNile.com platform as a predictions market. The Platform is currently in alpha testing and is accessible only to a limited number
of users in jurisdictions where such access is permitted under applicable law. BNC intends to expand availability of the Platform upon
completion of its technical build-out and satisfactory compliance with applicable regulatory requirements. The Platform will be available
only in jurisdictions where predictions market operations are permitted under applicable federal and state law in the U.S., and elsewhere
under applicable national law.

BNC’s planned Platform
features include:

•
Predictions markets: The Platform will enable users to take positions on the outcome of real-world events
across multiple categories, which may include political and electoral events, sports and competitive events, and macroeconomic or financial
data releases. Users who correctly anticipate an outcome will receive a settlement based on the terms of the applicable market contract.

•
Market discovery and tracking: The Platform is designed to allow users to browse available event markets,
monitor open positions, and review the settlement history of completed markets, providing transparency into market activity and outcomes.

•
Account management: Registered users will be able to maintain an account balance, fund positions, and withdraw
settled proceeds through the Platform, subject to applicable verification, regulatory, and geographic eligibility requirements. Access
to the Platform will be restricted to users located in jurisdictions where the Platform’s operations are authorized under applicable
law.

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Business
Strategy

The predictions market industry
in the United States is an emerging and rapidly developing segment of the broader financial technology market, driven by increased public
interest in event-driven financial products and a developing federal regulatory framework that has begun to provide greater clarity for
domestic operators. BNC’s business strategy is centered on establishing the Platform as a predictions market destination for retail
participants seeking to express views on real-world event outcomes.

The strategic priorities for
the development and growth of the Platform include: (i) completing the technical build-out and launching the Platform to registered users
in compliance with applicable regulatory requirements; (ii) establishing sufficient market depth and liquidity across the initial set
of available event categories; (iii) developing a user acquisition strategy appropriate to the Platform’s regulatory and geographic
operating parameters; and (iv) pursuing integrations with third-party data providers that supply verified real-world event outcomes to
the Platform’s settlement system.

Competition

BNC will face competition
from both established predictions market platforms and new entrants as the industry continues to develop. It will compete with Kalshi,
Inc., a federally regulated designated contract market, meaning a trading facility formally authorized by the CFTC, the federal agency
that oversees commodity and derivatives markets in the United States, to offer event contracts to domestic retail users. BNC will also
compete with offshore platforms such as Polymarket, which does not currently serve United States users due to regulatory constraints,
as well as a number of smaller forecasting and prediction platforms operating under varying frameworks across multiple jurisdictions.
Certain competitors, including Kalshi, have already obtained formal CFTC regulatory authorization, which may provide those competitors
with a structural advantage in accessing the domestic retail market. BNC’s ability to compete effectively will depend on the regulatory
pathway available to BNC, the breadth and liquidity of markets offered, the quality and reliability of the user experience and BNC’s
ability to attract and retain users in a market that includes well-capitalized participants. There can be no assurance that BNC will compete
successfully with established platforms or achieve sufficient scale to sustain its operations.

Regulatory
Environment

As the predictions market
industry continues to develop, regulatory considerations represent one of the most significant factors shaping the competitive landscape
and BNC’s operating strategy.

Present Regulatory Challenges

The regulatory classification
of predictions market platforms in the United States remains subject to significant uncertainty. Predictions markets may, depending on
their structure and the nature of the contracts offered, be subject to regulation as event contracts under the Commodity Exchange Act
(the “CEA”), administered by the CFTC; as gambling or gaming activities under applicable state law; or under a combination
of federal and state frameworks. In 2024, a federal court affirmed the right of Kalshi, Inc. to offer election-related event contracts
as a CFTC-regulated designated contract market, resolving a specific area of uncertainty at the federal level. However, that ruling does
not establish a comprehensive framework applicable to all predictions market operators or contract types, and the CFTC retains broad authority
to determine which contracts are permissible and under what conditions.

Data privacy and user verification
requirements also present ongoing compliance obligations. Platforms that accept user funds and settle financial positions are subject
to KYC and AML requirements, which refer to the regulatory obligations to verify the identity of users and monitor for suspicious financial
activity. BNC intends to implement a user verification process consistent with applicable law prior to accepting live user positions on
the Platform.

Future Regulatory Challenges

As the predictions market
industry matures, additional regulatory questions are likely to emerge. At the state level, certain jurisdictions may independently characterize
predictions markets as gambling or gaming activities subject to state licensing requirements, separate and apart from any federal commodity
law analysis. Payment processing and banking access may draw increased regulatory scrutiny as the volume of funds flowing through predictions
market platforms grows. Emerging contract structures and digital settlement formats may require additional guidance from federal and state
regulators to determine their proper classification. BNC intends to monitor regulatory developments across all jurisdictions in which
the Platform operates and to seek required authorizations before expanding into new markets or contract categories. There can be no assurance
that BNC will obtain all required authorizations, that the regulatory environment will not change in ways adverse to BNC’s business
model, or that BNC will not be subject to regulatory inquiry or enforcement action, any of which could materially and adversely affect
BNC’s business, financial condition, and results of operations.

32

askROI

askROI, Inc. (“askROI”)
is a company that has developed and maintains an AI productivity platform. Artificial intelligence refers to computer systems designed
to perform tasks that typically require human intelligence, such as reading and understanding text, answering questions, summarizing information,
writing content, and carrying out complex analytical tasks. The askROI platform makes a range of AI tools available to individual users,
business professionals, and entrepreneurs through a website at askroi.com and through free applications available for download on the
Apple App Store and Google Play Store. As of March 2026, the platform had surpassed 1.3 million cumulative downloads since its commercial
launch in April 2025. The platform is built and maintained by MeetKai, Inc. (“MeetKai”), a third-party technology development
company; askROI retains ownership of the platform’s intellectual property.

The central feature of the
askROI platform is the ability for users to choose from and interact with multiple LLMs within a single application. An LLM is a type
of AI system trained on large volumes of text that can read questions written in plain English, generate written responses, summarize
documents, produce original content, assist with writing and coding, and perform detailed research and analysis. Rather than offering
access to only one such system, askROI makes a selection of leading AI models from multiple providers available within the platform, and
each user decides which model to use for a given task. Users may switch between models at any time, including in the middle of an active
conversation, and the conversation continues without interruption so that the user does not lose the context of what has already been
discussed. The platform may retain information from prior conversations to provide more relevant and personalized responses over time.
The platform is designed so that new AI models can be added as they become available, allowing users to access the latest AI systems without
needing to change applications. askROI does not build or train the AI models it offers; it provides the interface and tools that allow
users to access and work with models built by third-party AI companies.

In addition to AI model access,
the platform includes a set of productivity tools. Users may upload their own documents, including files such as PDFs, spreadsheets, and
presentations, so that the AI can read and reference those materials when answering questions or producing analysis. The platform also
supports images and voice: Users may ask the platform to analyze or generate images, convert spoken words to text, or work with visual
content alongside written prompts. For users who need to run calculations or analyze data, the platform includes the ability to write
and run Python code, which is a widely used computer programming language suited to data analysis and financial modeling, directly within
the AI interface. The platform also supports team use through shared group chat environments where multiple users can work together, share
files, search past conversations, and receive AI-generated responses within a shared workspace.

The platform additionally
supports AI agents. An AI agent is a program that can carry out a series of steps on its own to complete a task, with limited need for
the user to direct each step individually. askROI has developed AI agent capabilities focused on automating customer service and business
workflow tasks, and has deployed these agents within the Hyperscale Data family of companies. Users may also connect the platform to outside
tools and data sources, allowing the AI to draw on information from those sources when generating responses.

OnlyBulls (onlybulls.com)
is a consumer-facing financial research application developed and operated by askROI. OnlyBulls is described separately in this Annual
Report.

Business Strategy

askROI’s strategy is
focused on making AI tools accessible to a broad range of individual users and professionals, rather than targeting a single industry
or customer type. The platform is available at no cost to download, with additional features available through a paid subscription model.
askROI believes that offering users a choice of AI models from multiple providers, rather than locking them into a single AI system, makes
the platform more useful and more durable over time as the AI technology market continues to change rapidly.

Key elements of askROI’s
strategy include the following. askROI intends to continuously add new AI models to the platform as leading systems are released by third-party
AI providers, so that users can always access the most capable tools available without switching platforms. askROI plans to expand the
platform’s features over time, including through further development of AI agent capabilities, additional tools for working with
documents and data, and expanded connections to outside services and applications. askROI also intends to build additional purpose-built
consumer applications on top of the platform, as it has done with OnlyBulls, to serve users in specific markets with tailored product
experiences. Ongoing development will continue in partnership with MeetKai, guided by user feedback and real-world usage data.

33

Competition

The market for AI productivity
applications is highly competitive and changing quickly. askROI competes with AI tools and applications offered by large technology companies
and by the companies that built the underlying AI models, many of which have far greater financial resources, established customer relationships,
and brand recognition than askROI does. Some of these competitors have begun offering users the ability to choose between multiple AI
models within their own platforms, which may reduce one of askROI’s points of differentiation.

askROI believes its primary
competitive advantages consist of: (i) the ability for users to choose directly from a range of AI models provided by multiple companies
within a single platform; (ii) a broad set of productivity tools that go beyond basic AI chat, including document analysis, data tools,
team workspaces, and AI agents, and (iii) wide distribution through the Apple App Store and Google Play, which has enabled organic growth
to result in more than 1.3 million downloads since April 2025. askROI’s ability to maintain its competitive position will depend
on its continued ability to add new AI models quickly, expand its feature set, and build user loyalty before larger and better-funded
competitors replicate its offerings.

Regulatory Environment (Present and Future)

The rules and laws that apply
to AI technology are changing rapidly in the United States, member states of the European Union, and other countries. Governments are
developing new requirements related to how AI systems operate, how user data is protected, and what disclosures must be made to users
about AI-generated content. For example, the European Union’s Artificial Intelligence Act, which has begun to take effect in phases,
creates different compliance requirements depending on how an AI system is used and the level of risk it poses. Several U.S. states have
also passed or are considering laws related to AI systems and consumer data privacy.

Because askROI does not build
the underlying AI models it offers but instead provides a platform through which users interact with models built by other companies,
there is legal uncertainty about whether askROI would be treated as an AI developer, a company that deploys AI tools built by others,
or both under applicable law. This distinction may affect what compliance obligations apply to askROI. askROI follows regulatory developments
through industry groups and outside advisors and uses data encryption, access controls, and data management policies to protect user information.
Future changes in applicable law could require askROI to modify features, increase its compliance spending, or limit the availability
of the platform in certain markets, any of which could adversely affect its business.

askROI – OnlyBulls

Overview

OnlyBulls (onlybulls.com)
is a consumer-facing financial research and market intelligence platform developed and operated by askROI. The platform is built primarily
around market data, charting, and portfolio monitoring tools, with an integrated AI-powered research assistant as one component of the
broader product experience. OnlyBulls is designed for individual investors and retail market participants who want a single mobile-first
application for tracking securities and digital assets, conducting independent research, and managing a self-custody digital asset wallet.
The platform does not function primarily as an AI product; rather, it uses AI as one tool within a broader set of financial research and
monitoring capabilities focused on publicly available market information.

The OnlyBulls platform currently
provides users with the following capabilities: (i) access to real-time and historical financial market data and interactive price charts,
(ii) the ability to create and manage personalized watchlists of securities and digital assets of interest, and (iii) an integrated AI-powered
research assistant that enables users to conduct independent investment research using natural language queries. The platform does not
currently offer the ability to purchase, sell, or otherwise execute trades in securities. OnlyBulls is designed and operated as a research,
monitoring, and market intelligence tool and does not function as a broker-dealer or investment adviser.

Market data and pricing information
displayed on the OnlyBulls platform are sourced through one or more third-party market data providers that aggregate and distribute equity,
options, foreign exchange and digital asset pricing information. Interactive charting functionality is delivered through an integration
with one or more third-party financial charting and data visualization platforms. askROI does not control the underlying data infrastructure
of these providers and relies on each provider's continued service availability and compliance with applicable data licensing arrangements.
askROI may add, replace, or remove data and charting providers over time as it evaluates service quality, pricing, and coverage.

The AI research assistant
embedded within OnlyBulls is powered by the askROI platform and operates on the same LLM (a type of AI system trained on large volumes
of text data that can interpret questions and generate written analysis) infrastructure described above. Users may direct queries to the
research assistant regarding publicly available market data, company fundamentals, sector conditions, macroeconomic trends, and other
investment-relevant topics. Outputs generated by the research assistant are intended to support users’ own independent analysis
and are not intended to constitute, and should not be construed as, personalized investment advice.

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DeFi Self-Custody Digital Asset Wallet

In addition to its market
intelligence features, OnlyBulls includes a fully functional decentralized finance, or DeFi, self-custody digital asset wallet. Decentralized
finance refers to financial services and applications, such as asset swaps, transfers, and holdings management, that operate through software
on a blockchain without reliance on a traditional bank or centralized financial intermediary. A self-custody wallet is one in which the
user, and not any third party, holds effective control over the digital assets held within it.

The OnlyBulls wallet is built
on an embedded wallet architecture, which means the wallet is integrated directly into the application and users do not need to install
separate software or manage a traditional seed phrase. A seed phrase is a sequence of words historically used as a master backup for self-custody
wallets; embedded wallet infrastructure replaces this model with modern authentication methods such as email login, social login, biometric
verification and passkeys. The private key underlying the wallet, which is the unique cryptographic code that authorizes transactions,
is managed through a combination of hardware-secured environments and distributed key management techniques provided by Privy, Inc. (“Privy”),
askROI’s wallet infrastructure provider, such that no single party, including askROI or Privy, ever holds the complete key. Users
access and control their wallet through their authenticated login credentials rather than through direct management of a private key or
seed phrase.

Users are solely responsible
for maintaining access to the authentication credentials they use to access their wallet, including their email account, linked social
media login, passkey, or any multi-factor authentication method configured on their account. askROI does not independently custody user
assets and cannot restore access to a wallet or recover digital assets on a user’s behalf in the event that authentication credentials
are lost, compromised, or otherwise rendered inaccessible. Users who wish to hold their private key directly may export it through a key
export function, after which the user assumes full responsibility for that key and all risks associated with its storage and safekeeping.

Users of the OnlyBulls wallet
may exchange one digital asset for another directly within the platform through an integration with one or more decentralized exchange
aggregators. A decentralized exchange aggregator is a service that sources available liquidity from multiple digital asset trading venues
simultaneously in order to execute asset swaps at competitive rates without routing transactions through a single centralized intermediary.
These swap transactions are settled on the applicable blockchain network and are subject to network transaction fees, commonly referred
to as gas fees, as well as the availability of liquidity across the venues accessed by the applicable aggregator.

Users may also convert traditional
fiat currency, such as U.S. dollars, into digital assets through on-ramp and off-ramp services and vice versa. An on-ramp service allows
a user to purchase digital assets using traditional payment methods; an off-ramp service allows a user to convert digital assets back
into traditional currency. These conversion services are provided through arrangements with one or more third-party payment and conversion
service providers. The identity and number of these providers may change over time as askROI evaluates service quality, compliance posture,
fee structures, and geographic availability.

Circle 8

Description of the Business

Headquartered in Houston,
Circle 8 is a premier lifting services provider serving clients in Texas, Oklahoma, Louisiana and New Mexico with five strategically located
branches in Texas and Oklahoma. Its modern fleet consists of 47 mobile all-terrain cranes, with lifting capacities of up to 350 tons that
provide services across the Eagle Ford, Permian, Delaware and Haynesville basins. Circle 8’s fleet consists of Grove, Liebherr,
Xuzhou Construction Machinery Group and other leading original equipment manufacturers (“OEMs”). In 2025, Circle 8 continued
its fleet optimization strategy by selectively disposing of certain underutilized and maintenance-intensive cranes. Management conducted
a detailed review of fleet utilization, maintenance costs and market demand and elected to sell specific units that were not achieving
targeted utilization levels or required disproportionate maintenance expenditures. This disciplined approach allowed the Company to improve
overall fleet utilization, reduce maintenance costs and redeploy capital toward more productive assets within the fleet.

Circle 8 provides experienced
professionally certified operators to deliver customized solutions to lifting clients in oil field services, construction, commercial,
refining / marketing and wind energy markets. Circle 8 maintains an industry leading safety record. Safety personnel hold certifications
and undergo in-house training.

Competitive Advantage

Circle 8’s operating
experience and the mid-sized diverse fleet that it has developed serves the oil service and petrochemical industries, providing full-service
lifting solutions with an industry leading safety record. Key strengths of Circle 8 include:

·
Leading lifting solutions platform

○
Leading provider of comprehensive lifting solutions to diversified end markets, including oil & gas and
with expanding operations in infrastructure, plant turn-around and commercial/industrial construction; and

○
Leading market position with five branches strategically located throughout Texas and Oklahoma.

35

·
Industry leading safety record, commitment and policy

○
Safety is a core value and Circle 8 is a market leader in employee training and practices; and

○
Dedicated team focused on safety programs.

·
Proven strength of management, recently enhanced and augmented

○
Proven ability to navigate a secular downturn by maintaining strong customer relationships and scale operations
to capture additional market share;

○
Seasoned industry leaders who have positioned Circle 8 for future growth; and

○
Additional advisory team to supplement full time management with strategic industry knowledge, contacts and
corporate transaction capability.

·
High quality fleet with the opportunity to expand creates a barrier to entry. Circle 8’s fleet of 47
cranes, as of the date of this Annual Report, represent all-terrain cranes with a combined average age of 10 years and capacity of up
to 350 tons.

·
Diversified blue-chip customers

○
Entrenched provider to leading, well-capitalized oil and gas industry operators in Texas, New Mexico, Louisiana
and Oklahoma;

○
Diverse customer base with minimal customer concentration risk; and

○
Longstanding relationships enable company to easily scale up operations with customers’ demands in the
oilfield (upstream), commercial, construction, refining & marketing (downstream) and wind energy markets.

·
Compelling utilization and financial profile

○
Recently downsized underutilized cranes to return to pre-pandemic fleet utilization over 160%; and

○
Substantial upside remains as Circle 8 efficiently relocates and repurposes its fleet across geographies and
end markets.

Industry

Over the past twelve months,
the U.S. lifting solutions and equipment rental industry has continued to evolve through consolidation, capital investment and shifting
end-market demand. In 2025, Herc Holdings completed the acquisition of H&E Equipment Services in a transaction valued at approximately
$5.3 billion, further strengthening Herc’s position among the largest equipment rental companies in North America and highlighting
the continued consolidation occurring among large national rental operators.

Despite this consolidation
activity among national equipment rental companies, the lifting solutions industry remains highly fragmented, consisting of a small number
of large national rental platforms alongside numerous regional and locally owned crane and lifting service companies. Regional providers
such as Circle 8 continue to play an important role in delivering specialized lifting expertise, certified operators and project-specific
lifting solutions that large national rental companies often do not provide.

Demand for lifting solutions
during 2025 remained supported by activity in infrastructure construction, petrochemical and refining projects, energy development, and
industrial facility expansion. Federal infrastructure spending programs and continued investment in domestic energy production have helped
sustain demand for lifting services across many U.S. markets. At the same time, certain segments of commercial construction have experienced
slower growth due to elevated interest rates, higher borrowing costs and tighter capital markets.

Looking forward over the next
twelve months, the industry faces heightened uncertainty related to geopolitical developments and global energy market volatility. Recent
developments involving Iran and Venezuela have the potential to influence global oil supply and pricing dynamics. Higher oil prices may
stimulate drilling, infrastructure development and refinery maintenance activity in North America, which historically increases demand
for crane and lifting services. However, geopolitical instability or economic disruptions could also delay or reduce capital investment
in construction and industrial projects.

In addition to geopolitical
uncertainty, equipment procurement costs continue to be influenced by global supply chain conditions, tariffs and foreign currency fluctuations.
A significant portion of mobile cranes used in the United States are manufactured in Europe, particularly in Germany. Tariffs on imported
heavy equipment and the relative strength of the Euro against the U.S. dollar have contributed to increased purchase costs for new cranes
and replacement components. These factors may continue to influence fleet replacement cycles and capital investment decisions across the
industry.

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Despite these near-term uncertainties,
long-term demand for lifting solutions remains supported by structural growth drivers including U.S. infrastructure investment, liquid
natural gas export facility development, petrochemical plant expansions, renewable energy projects and continued growth in large-scale
industrial and data center construction.

Sales and Marketing

Led by Arnold Mabee and Brett
Rhuland, the sales force is highly specialized in lifting solutions sales to oil services customers, seeking long term purchase orders
and master service agreements. Circle 8 plans to continue the extensive training program which involves OEM training sessions on operations
and maintenance to ensure the entire sales force knows the fleet inside and out.

Circle 8 will be working with
continuing management to implement a back-office content resource management system that will be heavily focused on data collection so
that it can continue to improve margin and help streamline scheduling, operations and fleet management to optimize utilization.

Competitive Business Strategy

The oil services’ lifting
solutions demand has historically been one of the leading sub-segments of the industry for profitability due to high utilization rates
that coincide with the continuous workstreams of extraction. Circle 8 plans to expand this business line in both topline sales through
optimizing service and quality operations with a strong safety record.

While the oil and gas sector
remains an important component of Circle 8’s operations, Circle 8 has undertaken strategic initiatives to diversify its end markets
and customer base in order to reduce exposure to cyclical fluctuations in upstream energy activity. Management has focused on expanding
Circle 8’s business development efforts into additional sectors that require complex lifting solutions and experienced operators.

These diversification efforts
include pursuing projects in refinery and petrochemical maintenance, plant turn-around work, industrial facility construction, infrastructure
development and renewable energy projects such as wind energy installation and maintenance. These markets provide opportunities for long-duration
projects, recurring maintenance work and infrastructure development that complement Circle 8’s traditional oilfield lifting services.

Circle 8 has also focused
on securing master service agreements and strengthening relationships with customers operating across these diversified sectors. These
agreements provide greater visibility into future project opportunities and allow Circle 8 to deploy its fleet across a wider range of
lifting applications.

In addition, Circle 8 continues
to invest in operational systems, fleet management processes and scheduling capabilities designed to improve equipment utilization and
operational efficiency. These initiatives allow Circle 8 to allocate cranes more effectively across geographic markets and industry sectors
while seeking to maximize fleet productivity.

Management believes that expanding
into infrastructure, industrial construction, plant maintenance and renewable energy projects will help stabilize revenue streams, reduce
dependence on oilfield activity cycles and allow Circle 8 to maximize utilization of its fleet.

In addition to expanding the
existing business, Circle 8 will seek to make additional forays into infrastructure construction, refinery and manufacturing plant turn-around
projects and industrial facility construction as additional equipment becomes available and market opportunities develop.

Customers

With a focus on the oil services
sub-segment of the lifting solutions business in the Eagle Ford, Haynesville, Permian, Delaware and Anadarko basins, Circle 8 has a diversified
base of blue-chip customers in Texas and Oklahoma. While about a third of its sales are expected to be made up from six of the largest
players in the industry, the remaining two thirds of sales will be highly diversified, leading to minimal concentration risk. With its
longstanding relationships with blue-chip customers and incoming fleet units, Circle 8 believes it has the ability to scale up sales with
these customers locally and most likely into other adjacent areas.

Competition

Due to the highly skilled
nature and competitive nature of the lifting solutions business, the sector typically consists of companies like Circle 8 that provide
full service lifting solutions on rental or contract basis, including the manpower required to operate the equipment or companies that
require extensive lifting solutions straight purchasing the equipment and hiring crane operators directly.

The full-service lifting solutions
business is highly fragmented and local with only a few national service providers. In Circle 8’s existing subsegment of the lifting
solutions business to the petrochemical industry, the competition is not as strong as it is in others as the contract terms are usually
longer term and driven by maintaining strong customer relationships. The diversification strategy for Circle 8 into other subsegments
will be faced with competition that is largely driven based on availability, quality (including safety record), reliability and price.

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Environmental and Safety Regulations

Circle 8’s equipment,
facilities and operations are subject to comprehensive and frequently changing federal, state and local environmental and occupational
health and safety laws, which may vary locally. These laws regulate (1) the handling, storage, use and disposal of hazardous materials
and waste and, if any, the associated cleanup of properties affected by pollutants; (2) air quality (emissions); and (3) wastewater. While
lifting solutions’ operations generally do not raise significant environmental risks, Circle 8 uses petroleum products, solvents
and other hazardous substances for fueling and maintaining its fleet and vehicles. Circle 8 has made, and will continue to make, capital
and other expenditures to comply with environmental requirements. Circle 8 does not currently anticipate any material adverse effect on
its business, financial condition or competitive position as a result of its efforts to comply with such requirements.

In the future, federal, state
or local governments could enact new or more stringent laws or issue new or more stringent regulations concerning environmental and worker
health and safety matters, reporting and disclosure obligations, or effect a change in their enforcement of existing laws or regulations,
that could affect operations and increase operational and compliance expenditures. Also, in the future, contamination may be found to
exist at Circle 8’s facilities or off-site locations where waste has been sent. There can be no assurance that Circle 8, or various
environmental regulatory agencies, will not discover previously unknown environmental non-compliance or contamination. Circle 8 could
be held liable for such newly discovered non-compliance or contamination. It is possible that changes in environmental and worker health
and safety laws or liabilities from newly discovered non-compliance or contamination could have a material adverse effect on Circle 8’s
business, financial condition and results of operations.

AGREE

AGREE is actively invested
across a diverse range of commercial real estate asset classes, with a particular focus on hospitality and in the future, multifamily
properties. AGREE strategically targets the middle market segment in geographic areas that present strong fundamentals and offer relative
value, such as emerging or overlooked markets with growth potential. AGREE’s core objective is to deliver attractive, risk-adjusted
returns through a combination of ground-up development, targeted capital investments, and operational enhancements that unlock long-term
value.

In the hospitality sector,
AGREE brings a hands-on, value-driven approach that goes beyond traditional ownership. Recognizing the unique dynamics of hospitality
real estate—which blends real estate investment with service-based business operations—AGREE prioritizes both physical improvements
and elevated guest experiences to drive performance. By focusing on midscale to upper-midscale hotels in underpenetrated markets, AGREE
positions its hospitality assets to capture stable demand from business and leisure travelers alike.

A key component of AGREE’s
hospitality platform is AGREE Madison, a wholly owned subsidiary that operates four recently renovated hotel properties in the Midwest.
These include the Hilton Garden Inn Madison West, Residence Inn Madison West, Courtyard Madison West, and Hilton Garden Inn Rockford.
AGREE operates a total of 526 keys collectively across the four-property portfolio. Each property has undergone substantial upgrades since
acquired to enhance both aesthetic appeal and operational efficiency, ensuring they meet modern traveler expectations while maintaining
cost discipline. Through AGREE Madison, the firm exercises direct oversight of day-to-day operations, ensuring alignment with its broader
investment philosophy of value creation through active management.

TurnOnGreen

TurnOnGreen, Inc., a Nevada
corporation, through its wholly owned subsidiaries Digital Power and TOG Technologies (collectively, “TurnOnGreen”), is an
emerging provider of premium power electronic and electric vehicle (“EV”) charging solutions. TurnOnGreen designs, develops,
manufactures and sells highly engineered, feature-rich, high-grade power conversion systems and power solutions for mission-critical,
life-sustaining, and lifesaving applications across a variety of sectors, particularly those operating in demanding and harsh environments.
TurnOnGreen serves a broad range of markets, including defense and aerospace, medical and healthcare, industrial applications, telecommunications,
e-Mobility, and original equipment manufacturer (“OEM”) solutions. TurnOnGreen’s products are highly adaptive, featuring
customized firmware meticulously configured to meet the specific requirements and challenges of its customers’ applications. Approximately
17% of TurnOnGreen’s revenue is generated by core power technologies to deliver comprehensive EV charging infrastructure and subscription-based
charging network management services for residential, fleet, hospitality, workplace, healthcare, municipal and educational environments
including universities and schools.

Digital Power offers a broad
range of rugged power solutions for the defense and aerospace market. These solutions feature the ability to withstand harsh environments.
For more than 50 years, Digital Power has provided rugged products and custom power solutions designed end-to-end for military and aerospace
applications. Digital Power offers a wide variety of units designed to comply with the most demanding United States and international
military standards.

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In addition, Digital Power
provides a comprehensive range of integrated power system solutions that are designed to meet the diverse and precise needs of its customers
with the highest levels of efficiency, flexibility and scalability. Digital Power designs, develops and manufactures custom power systems
to meet performance and/or form-factor requirements that cannot be met with standard power products. These power system solutions are
designed to function reliably in harsh environments associated with defense and aerospace applications, while also being utilized for
applications ranging from industrial and telecommunications equipment to medical instrumentation. TurnOnGreen believes that Digital Power’s
power products are highly adaptive and feature digital power management and software configurations that allow them to achieve higher
power efficiency to meet the requirements of both its customers and its OEMs. In addition to Digital Power’s custom power system
solutions, it also provides a wide range of industry-standard power products. These products include their alternating current (“AC”)
into a stable direct current (“DC”) voltage open-frame product series, which TurnOnGreen believes to be among the industry’s
leading power switchers in terms of power efficiency. The open-frame products are deployed in highly compact form factors and modular
power series that support configurable multiple DC outputs. Additionally, Digital Power offers high-power and high-voltage laser power
supplies tailored to meet the unique requirements of medical, dental, and industrial pulsed energy systems. Digital Power’s expertise
also encompasses high-performance and high-power data-center power supplies, semiconductor fabrication equipment power source supplies,
desktop power supplies, and a comprehensive range of value-added customized AC/DC and DC/DC ruggedized power supply and system solutions.

Digital Power’s power
products serve a wide range of applications across several critical industries. In the defense and aerospace industry, typical applications
include mobile and ground communications systems, naval power conversion, automated test and simulation equipment for weapon systems,
combat and airborne power supplies, radar array power sources, tactical gyro position and navigation systems and active protection systems
for tactical vehicles. In the industrial and telecommunications industry, typical applications include packaging equipment, laboratory
and diagnostic equipment, industrial laser drivers, data center computing infrastructure and turbomachinery control solutions. In the
medical and healthcare industry, typical applications include portable oxygen concentrators, patient monitoring systems, pulsed laser
drivers for dental and surgical treatments, DNA sequencers, medical beds, and ultrasound systems.

TOG Technologies provides
EV drivers and site hosts with convenient, reliable, and high-speed charging solutions. TOG Technologies designs, manufactures, resells,
owns, operates and supplies Level 2 AC and direct current fast charging (“DCFC”) equipment for residential, commercial, and
fleet applications. Its Level 2 charging systems are deployed at single-family homes, multi-family residences, hospitality and healthcare
facilities, retail properties, municipalities, schools, workplaces and fleet depots. Its DCFC systems are designed for high-traffic urban,
suburban, corridor, destination, and fleet locations where rapid charging and high utilization are essential. TOG Technologies also offers
a charger-as-a-service model in which customers receive charging hardware bundled with access to the TOG Technologies network.

Compliance with Material Government (Including
Environmental) Regulations

Sentinum

Sentinum is subject to various
federal, state, local and non-U.S. laws and regulations relating to environmental protection and remediation of hazardous substances and
wastes. Sentinum continually assesses compliance status and management of environmental matters to ensure our operations are in compliance
with all applicable environmental laws and regulations. Investigation, remediation, and operation and maintenance costs associated with
environmental compliance and management of sites are a normal, recurring part of operations. While Sentinum’s regulatory compliance
costs are currently not considered material, it is possible that costs incurred to ensure continued environmental compliance could have
a material impact on results of operations, financial condition or cash flows if new areas of soil, air and groundwater contamination
are discovered and/or expansions of work scope are prompted by the results of ongoing monitoring.

The Michigan Facility is subject
to a final corrective measures plan with the EPA. The seller performed remedial activities at the Michigan Facility relating to historical
soil and groundwater contamination and Sentinum is responsible for ongoing monitoring and final remediation plans. We estimate the cost
of the environmental remediation obligation is approximately $0.4 million and reflects our best estimate of probable future costs for
remediation based on the current assessment data and regulatory obligations. Future costs will depend on many factors, including the extent
of work necessary to implement monitoring and final remediation plans and ACS’s time frame for remediation. We may incur actual
costs in the future that are materially different than this estimate and such costs could have a material impact on results of operations,
financial condition, and cash flows during the period in which they are recorded.

Gresham

Gresham must meet applicable
regulatory, environmental, emissions, safety and other requirements where specified by the customer and accepted by it or as required
by local regulatory or legal requirements. The products that Gresham markets and sells in Europe may be subject to the 2003 European Directive
on Restriction of Hazardous Substances (“RoHS”), which restricts the use of six hazardous materials in the manufacture of
certain electronic and electrical equipment, as well as the 2002 European Directive on Waste Electrical and Electronic Equipment (“WEEE”),
which determines collection, recycling and recovery goals for electrical goods. In July 2006, our industry began phasing in RoHS and WEEE
requirements in most geographical markets with specific emphasis on consumer-based products. Gresham believes that RoHS and WEEE-compliant
components may be subject to longer lead-times and higher prices as the industry transitions to these new requirements. REACH Registration,
Evaluation, Authorization and Restriction of Chemicals Registration, is a European Union regulation dating from December 18, 2006. REACH
addresses the production and use of chemical substances, and their potential impacts on both human health and the environment.

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In addition to these requirements
for Gresham’s dealings with customers in the EU, similar regulatory mandates from the United States, the United Kingdom and Israel
apply to all Gresham operating subsidiaries. Gresham has structured operations to comply with these requirements and has experienced little
to no impact on lead times or prices. Given the applicability of these requirements to all competitors alike, Gresham believes that compliance
has had no impact on the competitive position of any operating subsidiary.

Some of Gresham’s products
are subject to the International Traffic in Arms Regulation (“ITAR”), which is administered by the United States Department
of State. ITAR controls not only the export of certain products specifically designed, modified, configured or adapted for military systems,
but also the export of related technical data and defense services and foreign production. Gresham obtains required export licenses for
any exports subject to ITAR. Compliance with ITAR may require a prolonged time period. If the process of obtaining required export licenses
for products subject to ITAR is delayed, it could have a materially adverse effect on Gresham’s business, financial condition, and
operating results. Any future restrictions or charges may be imposed by the United States or any other foreign country. In addition, from
time to time, Gresham enters into defense contracts to supply technology and products to foreign countries for programs that are funded
and governed by the United States Foreign Military Financing program.

Gresham is also subject to
heightened government scrutiny of its operations pursuant to certain of its contracts.

Gresham’s businesses
are heavily regulated in most of its markets. Gresham transacts with numerous U.S. Government agencies and entities, including but not
limited to the U.S. Department of Defense (“DoD”), branches of the U.S. military and the Department of Homeland Security.
Similar government authorities exercise similar regulatory oversight in Gresham’s non-U.S. markets.

Government
Contracts

The governments of the U.S.,
U.K. and Israel may terminate any of Gresham’s applicable operating subsidiaries’ government contracts at their convenience,
as well as for default based on its failure to meet specified performance requirements. If the U.S. Government terminated any of Gresham’s
contracts for convenience, Gresham generally would be entitled to receive payment for work completed and allowable termination or cancellation
costs. If any of Gresham’s government contracts were to be terminated for default, generally the U.S. government would pay only
for the work that has been accepted and could require Gresham to pay the difference between the original contract price and the cost to
re-procure the contract items, net of the work accepted from the original contract. The U.S. Government can also hold Gresham liable for
damages resulting from the default. Similar provisions apply to Gresham’s contracts with other governments and to Gresham’s
subcontractors with major defense contractors who provide systems or military platforms directly to the government.

Power
Electronics

In all of Gresham’s
markets in the U.S., Gresham’s commercial power electronics offerings must comply with safety, energy use and operational performance
regulations and standards (IEC/EN/UL/CSA) issued and administered by international standards organizations. In the U.S., the Department
of Energy, the Environmental Protection Agency and the Federal Communications Commission mandate and enforce compliance with these standards.
Outside the U.S., various government agencies in the U.K., the EU and Israel mandate and enforce compliance with these international requirements
for safety, energy use and operational performance. In commercial markets, Gresham’s suppliers bear most of the expense of compliance
with international standards as a standard cost of business. Given the universal application of these requirements, the costs of compliance
do not create any competitive disadvantage because all competitors must comply to sell into the market.

Environmental

Gresham must meet applicable
regulatory, environmental, emissions, safety and other requirements where its customer specifies, or as applicable local regulations or
laws require. The products that Gresham markets and sells in Europe also may be subject to the 2003 European Directive on Restriction
of Hazardous Substances (“RoHS”), which restricts the use of six hazardous materials in the manufacture of certain electronic
and electrical equipment, as well as the 2002 European Directive on Waste Electrical and Electronic Equipment (“WEEE”), which
determines collection, recycling and recovery goals for electrical goods. In July 2006, Gresham’s industry began phasing in RoHS
and WEEE requirements in most geographical markets with specific emphasis on consumer-based products. Gresham believes that RoHS and WEEE-compliant
components may be subject to longer lead-times and higher prices as the industry transitions to these new requirements. REACH (Registration,
Evaluation, Authorization and Restriction of Chemicals Registration) is a European Union regulation dating from 18 December 2006. REACH
addresses the production and use of chemical substances, and their potential impacts on both human health and the environment.

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These regulatory mandates
apply to all of Gresham’s operating subsidiaries. Gresham has structured operations to comply with these requirements and has experienced
little to no impact on lead times or prices. Give the applicability of these requirements to all competitors alike, compliance has had
no impact on the competitive position of any operating subsidiary.

Non-U.S. Sales

Gresham’s non-U.S. sales
are subject to both U.S. and non-U.S. governmental regulations and procurement policies and practices, including regulations relating
to import-export control, tariffs, investment, exchange controls, anti-corruption, and repatriation of earnings. Non-U.S. sales are also
subject to varying currency, political and economic risks.

TurnOnGreen

TurnOnGreen’s businesses
are heavily regulated in many of the markets in which it operates. TurnOnGreen develops and supplies power electronics products primarily
used for power conversion. As a result, TurnOnGreen must comply with numerous standards governing electronic safety designed to protect
the health of humans and animals. TurnOnGreen serves diverse markets including automotive, defense and aerospace, medical and healthcare
as well as industrial and telecommunications, each of which is subject to its own set of safety regulations and standards.

Government
Contracts. The U.S. Government, and other governments, may terminate any of TurnOnGreen’s government contracts at their convenience,
or for default based on a failure to meet specified performance requirements. If any of TurnOnGreen’s U.S. Government or foreign
government contracts were terminated for convenience, TurnOnGreen would generally be entitled to receive payment for work completed and
allowable termination or cancellation costs. If a government contract were terminated for breach or default, the U.S. Government or foreign
government would generally pay only for work that has been accepted and may require TurnOnGreen to pay the difference between the original
contract price and the cost to re-procure the contract items, net of the work accepted from the original contract. The U.S. Government
or foreign government may also hold TurnOnGreen liable for damages resulting from the default.

Medical
Device Power Supplies. TurnOnGreen’s medical power supplies must incorporate one or more means of protection (“MOP”)
to prevent electrical shock. A MOP may include safety insulation, protective earth, defined creepage distance, air gaps (clearance), or
other protective impedances. These protections may be used in various combinations such that if one protection fails, another remains
in place. TurnOnGreen’s medical power supplies must comply with standards that distinguish between operators and patients, resulting
in classifications known as “means of operator protection” and “means of patient protection.” Patient protection
requirements are more stringent because patients may be physically connected to equipment through an applied part and may be unconscious
when a fault occurs.

Environmental.
TurnOnGreen is subject to various federal, state, local and non-U.S. laws and regulations relating to environmental protection, including
those governing the discharge, treatment, storage, disposal, and remediation of hazardous substances and wastes. TurnOnGreen continually
assesses its compliance status and environmental management practices to ensure its operations comply with applicable environmental laws
and regulations. Investigation, remediation, and operation and maintenance costs associated with environmental compliance and site management
are a normal and recurring part of TurnOnGreen’s operations.

Non-U.S.
Sales. TurnOnGreen’s non-U.S. sales are subject to both U.S. and non-U.S. governmental regulations and procurement policies,
including regulations relating to import and export controls, tariffs, foreign investment, exchange controls, anti-corruption laws, and
the repatriation of earnings. Non-U.S. sales are also subject to currency, political and economic risks.

Other Compliance Matters

In addition, TurnOnGreen is
subject to the local, state, national, and international laws and regulations of the jurisdictions in which it operates, including those
governing commerce, intellectual property, trade, health and safety, contracts, privacy and communications, consumer protection, web services,
taxation, corporate governance and securities laws. These laws and regulations may change over time. Unfavorable changes in existing or
new laws and regulations could increase TurnOnGreen’s cost of doing business and impede its growth.

Research and Development

During the years ended December
31, 2025 and 2024, we spent approximately $4.8 million and $11.0 million, respectively, on research and development.

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Human Capital Resources

We are committed to attracting
and retaining the brightest and best talent, so investing in human capital is critical to our success. The employee traits we value include
industriousness, intellectual curiosity, growth mindset and deeply caring about the quality of work. The human capital measures and objectives
that we focus on in managing our business include employee safety, talent acquisition and retention, employee engagement, development
and training, diversity and inclusion, and compensation and pay equity. None of our employees is represented by a collective bargaining
unit or is a party to a collective bargaining agreement. We believe that our relationship with our employees is good.

The following description
provides an overall view of our Company. Since we are a holding company, however, every statement may not be applicable to every subsidiary,
particularly since some are located in foreign countries.

Employee Profile

As of December 31, 2025, we
had 612 employees located in the U.S., Israel and the U.K., of whom 57 were engaged in engineering and product development, 36 in sales
and marketing, 448 in general operations and 71 in general administration and finance. All but 50 of these employees are employed on a
full-time basis. None of our employees is currently represented by a trade union. We consider our relations with our employees to be good.

As of December 31, 2025, approximately
27% of our current workforce is female, 73% male, and our average tenure is 5.2 years, an increase of 49% from an average tenure
of 3.5 years as of December 31, 2024.

Talent

A core tenet of our talent
system is to both develop talent from within and supplement with external hires. This approach has yielded loyalty and commitment in our
employee base which in turn grows our business, our products, and our customers, while adding new employees and external ideas supports
a continuous improvement mindset and our goals of a diverse and inclusive workforce.

We believe we materially comply
with all applicable state, local and international laws governing nondiscrimination in employment in every location in which we operate.
All applicants and employees are treated with the same high level of respect regardless of their gender, ethnicity, religion, national
origin, age, marital status, political affiliation, sexual orientation, gender identity, disability or protected veteran status.

Employee Engagement and Development

Our employee engagement efforts
include our frequent and transparent “all-hands” meetings and executive communications, through which we aim to keep our employees
well-informed and to increase transparency. We believe in continual improvement and use employee feedback to drive and improve processes
that support our customers and ensure a deep understanding of our employees’ needs. We plan to conduct annual confidential employee
surveys as we believe that ongoing performance feedback encourages greater engagement in our business and improves individual performance.
Our employees will participate in a 360-degree evaluation process to identify critical capabilities for development and establish new
stretch goals.

Pay Equity

Our employee compensation
strategy supports three primary objectives: attract and retain the best team members; reflect and reinforce our most important values;
and align team member interests with stockholder interests in building enduring value. We believe people should be paid for what they
do and how they do it, regardless of their gender, race or other personal characteristics. To deliver on that commitment, we benchmark
and set pay ranges based on market data and consider factors such as an employee’s role and experience, the location of their job,
and their performance. We also regularly review our compensation practices, both in terms of our overall workforce and individual employees,
to ensure our pay is fair and equitable.

Total Rewards

As part of our compensation
philosophy, we believe that we must offer and maintain market competitive total rewards programs for our employees in order to attract
and retain superior talent. In addition to healthy base wages, additional programs include annual bonus opportunities, healthcare and
insurance benefits, paid time off, family leave, family care resources and flexible work schedules. We established a Company matched 401(k)
plan during 2021.

Health and Safety

The success of our business
is fundamentally connected to the well-being of our people. Accordingly, we are committed to the health, safety and wellness of our employees.
We provide our employees and their families with access to a variety of flexible and convenient health and welfare programs, including
benefits that support their physical and mental health by providing tools and resources to help them improve or maintain their health
status; and that offer choice where possible so they can customize their benefits to meet their needs and the needs of their families.

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