OTC: MGTI

Additional
paid-in capital
419,815
421,538

Accumulated
deficit
(426,737 )
(426,518 )

Total
stockholders’ deficit
(2,281 )
(2,488 )

Total
Liabilities and Stockholders’ Deficit
$ 106
$ 764

The
accompanying notes are an integral part of these financial statements.

F-2

MGT
CAPITAL INVESTMENTS, INC.

STATEMENTS
OF OPERATIONS

(Dollars
in thousands, except per-share amounts)

2025
2024

For
the years ended December 31,

2025
2024

Revenue

Bitcoin
mining
$ 29
$ 143

Hosting
services
58
179

Total
revenue
87
322

Operating
expenses

Cost
of revenue
89
395

General
and administrative
795
1,051

Total
operating expenses
884
1,446

Operating
loss
(797 )
(1,124 )

Other
non-operating income (expense)

Interest
expense
(143 )
(303 )

Change
in fair value of warrant derivative liability
-
4,150

Change
in fair value of derivative liability
-
2,976

Accretion
of debt discount

(6
)
(199 )

Gain
on sale of property and equipment
676
-

Gain
on settlement of debt
-
15

Other
income
51
6

Total
non-operating income
578
6,645

Net
(loss) income
$ (219 )
$ 5,521

Per-share
data

Basic
and diluted, net (loss) income per share
$ (0.00 )
$ 0.00

Basic
and diluted, weighted average number of common shares outstanding
3,009,164,054
1,278,102,597

The
accompanying notes are an integral part of these financial statements.

F-3

MGT
CAPITAL INVESTMENTS, INC.

STATEMENTS
OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR
THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(Dollars
in thousands, except per-share amounts)

Shares
Amount
Shares
Amount
Capital
Deficit
Deficit

Preferred
Stock
Common
Stock
Additional
Paid-In
Accumulated
Total
Stockholders’

Shares
Amount
Shares
Amount
Capital
Deficit
Deficit

Balance
at January 1, 2024
-
$ -
849,170,903
$ 849
$ 422,332
$ (432,039 )
$ (8,858 )

Cashless
exercise of warrants and extinguishment of related warrant derivative liability
-
-
103,500,000
104
(41 )
-
63

Issuance
of shares in respect of lease agreement
-
-
62,000,000
62
214
-
276

Conversion
of convertible note into Common Stock
-
-
126,000,000
126
287
-
413

Issuance
of Common Stock in connection with exchange agreement
-
-
600,000,000
600
(571 )
-
29

Issuance
of Common Stock in connection with
-
-
750,000,000
750
(713 )
-
37

Issuance
of Preferred Stock in connection with exchange agreement
650,000
1
-
-
30
-
31

Net
income
-
-
-
-
-
5,521
5,521

Balance
at December 31, 2024
650,000
$ 1
2,490,670,903
$ 2,491
$ 421,538
$ (426,518 )
$ (2,488 )

Balance

650,000
$ 1
2,490,670,903
$ 2,491
$ 421,538
$ (426,518 )
$ (2,488 )

Issuance
of common stock to a director, officer & employee
-
-
700,000,000
700
(624 )
-
76

Issuance
of common stock in connection with note exchange agreement
-
-
500,000,000
500
(450 )
-
50

Conversion
of preferred stock into common stock
(650,000 )
(1 )
650,000,000
650
(649 )
-
-

Issuance
of Preferred Issuance of common stock
-
-
300,000.000
300
-
-
300

Net
loss
-
-
-
-
-
(219 )
(219 )

Net
Income (loss)
-
-
-
-
-
(219 )
(219 )

Balance
at December 31, 2025
-
$ -
4,640,670,903
$ 4,641
$ 419,815
$ (426,737 )
$ (2,281 )

Balance
-
$ -
4,640,670,903
$ 4,641
$ 419,815
$ (426,737 )
$ (2,281 )

The
accompanying notes are an integral part of these financial statements.

F-4

MGT
CAPITAL INVESTMENTS, INC.

STATEMENTS
OF CASH FLOWS

(Dollars
in thousands, except per-share amounts)

2025
2024

For
the Years Ended December 31,

2025
2024

Cash
Flows From Operating Activities

Net
(loss) income
$ (219 )
$ 5,521

Adjustments
to reconcile net (loss) income to net cash used in operating activities

Depreciation
39
194

Interest
-
211

Gain
on sale of property and equipment
(676 )
-

Change
in fair value of warrant derivative liability
-
(4,150 )

Change
in fair value of derivative liability
-
(2,976 )

Non-cash
stock-based compensation
20
-

Accretion
of debt discount
6
199

Loss
on settlement of debt
-
15

Change
in operating assets and liabilities

Accounts
receivable
45
(28 )

Prepaid
expenses and other current assets
(3 )
-

Accounts
payable
(74 )
163

Accounts
payable - related party
-
30

Accrued
expenses
(84 )
276

Security
deposit
(45 )
-

Net
cash used in operating activities
(991 )
(547 )

Cash
Flows From Investing Activities

Proceeds
from sale of property
1,350
-

Net
cash provided by investing activities
1,350
-

Cash
Flows From Financing Activities

Proceeds
from issuance of stock under lease agreement
100
420

Proceeds
from sale of stock under equity purchase agreement
300
-

Proceeds from loans payable
26
125

Repayment
of loans payable
(688 )
-

Net
cash provided by (used in) financing activities
(262 )
545

Net
change in cash and cash equivalents
97
(2 )

Cash
and cash equivalents, beginning of year
6
8

Cash
and cash equivalents, end of year
$ 103
$ 6

Supplemental
disclosure of cash flow information

Cash
paid for interest
$ 143
$ 92

Cash
paid for income tax
$ -
$ -

Non-cash
investing and financing activities

Conversion
of Series D Preferred stock into shares of common stock
$ 1
$ -

Issuance
of common stock to a director
$ 56
$ -

Cashless
exercise of warrants and extinguishment of related warrant derivative liability
$ -
$ 63

Issuance
of Common Stock in respect of lease agreement
$ -
$ 276

Issuance
of Common Stock in connection with exchange agreement
$ -
$ 29

Issuance
of Common Stock in connection with note exchange agreement
$ 50
$ 37

Issuance
of Preferred Stock in connection with exchange agreement
$ -
$ 31

Conversion
of convertible note into common stock
$ -
$ 413

The
accompanying notes are an integral part of these financial statements.

F-5

MGT
CAPITAL INVESTMENTS, INC.

NOTES
TO THE FINANCIAL STATEMENTS

(Dollars
in thousands, except share and per–share amounts)

Note
1. Organization and Basis of Presentation

Organization
and Business

MGT
Capital Investments, Inc. (“MGT” or the “Company”) has historically operated in the Bitcoin mining and hosting
industry. During the year ended December 31, 2025, the Company’s operations consisted of both hosting services for third-party
miners and self-mining activities at its facility in LaFayette, Georgia. Revenue was generated from (i) a fixed-fee hosting contract
with one customer and (ii) the mining of Bitcoin using Company-owned machines, the proceeds of which were converted to U.S. dollars shortly
after receipt.

During
the year, the Company’s mining activity also included the use of approximately 115 third party-owned miners that management considered
abandoned. The Company offered third-party owners of miners a hosting service whereby MGT operated and maintained miners for a fixed
monthly fee. All miners, both Company-owned and hosted, were housed in a modified shipping container on property owned by the Company
in Georgia. On March 15, 2025, the Company’s lease with its primary hosting customer expired and the Company discontinued its own
self-mining activities. As of December 31, 2025 and March 16, 2026, the Company continued to own 35 Antminer S19 Pro miners with the
capability of providing approximately 3 Petahashes per second (“PH/s”) of hash power for self-mining. These miners were placed
in storage pending evaluation of redeployment alternatives.

The
Company’s business model has historically been dependent on the economics of digital asset mining, including the price of Bitcoin,
network difficulty, electricity costs, and access to competitively priced power. Following the cessation of mining operations, management’s
focus has shifted to preserving liquidity and evaluating strategic alternatives to monetize or repurpose its existing assets and to identify
new business opportunities.

Following
the cessation of its digital-asset mining operations in March 2025 and the sale of its LaFayette, Georgia facility in May 2025, the Company
currently does not have any active revenue-generating operations. Management has continued to actively manage its remaining assets, including
its cryptocurrency mining equipment and corporate infrastructure, while pursuing new business opportunities and potential acquisitions.
Management intends to redeploy the Company’s resources toward operating businesses or investments in sectors aligned with its historical
expertise in digital assets, financial technology, and data infrastructure.

Basis
of presentation

The
accompanying financial statements for the years ended December 31, 2025 and 2024 have been prepared in accordance with generally accepted
accounting principles in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the United States
Securities and Exchange Commission (“SEC”).

Disposition
of Hosting Facility – ASC 205-20 Classification Assessment

As
of March 31, 2025, management was evaluating strategic alternatives for the Company’s mining and hosting facility in LaFayette,
Georgia following the expiration of the Company’s primary hosting agreement earlier in the month. While the Company engaged in
preliminary discussions with potential counterparties, no approved plan of sale existed at March 31, 2025, multiple alternatives were
still being evaluated, and the Board of Directors did not approve a plan to sell the facility until April 1, 2025. Accordingly, the disposal
group did not meet the criteria for classification as held for sale under ASC 205-20-45-1E as of March 31, 2025, because management had
not committed to a plan to sell and the criteria requiring a sale to be probable within one year were not met.

The
Company completed the sale of the facility and related infrastructure in May 2025. Management has evaluated the requirements of ASC 205-20
and concluded that the sale does not meet the criteria for discontinued operations and has been presented within continuing operations
for all periods presented. Management continues to evaluate strategic alternatives; however, no decision has been made to discontinue
any business line, and the Company remains an active corporate entity pursuing new opportunities.

Inflation

Electricity
and other prices are vulnerable to inflation which may increase the Company’s mining costs and operating expenses including the
cost of mining equipment.

Note
2. Going Concern and Management’s Plans

The
accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. As of December 31, 2025, the Company had incurred significant operating losses since
inception and continues to generate losses from operations. For the year ended December 31, 2025, the Company had a net loss of $219 and cash used in operating activities of
$991. As of December 31, 2025, the Company had an accumulated deficit of $426,737, cash and cash equivalents of $103, and our working
capital deficit was $1,105.

Since
January 2023, the Company has secured $2,675 in working capital through the issuance of a convertible note, the sale of equity and
warrants, proceeds from the sale of assets and related party notes. In addition, management has made modifications to simplify our capital
structure and extend maturities of our debt to provide additional financial and strategic flexibility. The Company will require additional
funding to grow its operations. Management intends to continue raising capital through debt and equity as opportunities arise to meet
our on-going working capital needs. Further, depending upon operational profitability, the Company may also need to raise additional
funding for ongoing working capital purposes. There can be no assurance however that the Company will be able to raise additional capital
as and when needed, or at terms deemed acceptable, if at all.

F-6

Following
the cessation of its digital-asset mining operations in March 2025 and the sale of its LaFayette, Georgia facility in May 2025, the Company
currently does not have any active revenue-generating operations. In addition, there have been management changes and the Company will
require additional funding to re-establish and grow its operations. The Company has addressed this by raising $675 in its equity offering that expired on January 29, 2025, but will
need to raise additional capital beyond this offering. While new leadership is overseeing strategic and financing initiatives, there can be no assurance that the Company will be able to raise additional capital when needed to support these efforts,
or at terms deemed acceptable, if at all.

Such
factors raise substantial doubt about the Company’s ability to sustain operations for at least one year from the issuance of these financial statements. The accompanying financial statements do not include any adjustments related
to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company
be unable to continue as a going concern.

Note
3. Summary of Significant Accounting Policies

Use
of estimates and assumptions and critical accounting estimates and assumptions

The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements
and also affect the amounts of revenues and expenses reported for each period. Actual results could differ from those which result from
using such estimates. Management utilizes various other estimates, including but not limited to determining the estimated lives of long-lived
assets, determining the potential impairment of long-lived assets, the fair value of warrants issued, the fair value of conversion features,
and the valuation allowance for deferred tax assets. The results of any changes in accounting estimates are reflected in the financial
statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically, and the effects of
revisions are reflected in the period that they are determined to be necessary.

Cash
and cash equivalents

The
Company considers all highly liquid instruments with an original maturity of three months or less when acquired to be cash equivalents.
The Company’s combined accounts were $103 and $6 as of December 31, 2025 and 2024, respectively. Accounts are insured by the FDIC
up to $250 per financial institution. The Company has not experienced any losses in such accounts with these financial institutions.
As of December 31, 2025 and 2024, the Company had $0 and $0, respectively, in excess over the FDIC insurance limit.

Accounts
Receivable

Accounts
receivable are generally unsecured. The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding
invoices and management’s evaluation of collectability. Accounts are written off after all reasonable collection efforts have been
exhausted and management concludes that likelihood of collection is remote. Any future recoveries are applied against the allowance for
doubtful accounts. As of December 31, 2025 and 2024, we did not believe we needed to reserve for any doubtful accounts.

Crypto
Assets

Effective
January 1, 2025, the Company adopted ASU 2023-08, Accounting for and Disclosure of Crypto Assets (ASC 350-60), which requires eligible
crypto assets to be measured at fair value with changes in fair value recognized in net income. The Company applied the new guidance
prospectively and recognized no cumulative-effect adjustment to beginning retained earnings, as no crypto assets were held at December
31, 2024. The adoption did not have a material impact on any accounting or disclosure items with the adoption of ASU 2023-08.

Under
this policy, crypto assets are included in current assets on the balance sheet and are measured at fair value using quoted market prices
as of the balance sheet date. Changes in fair value are recorded in Other income (expense) in the statements of operations. Sales of
crypto assets are included within investing activities in the statements of cash flows, and any realized gains or losses are recognized
based on the first-in, first-out (FIFO) method.

Historically,
the Company received Bitcoin as non-cash consideration from participation in third-party mining pools in exchange for providing computing
power used in the mining process. Bitcoin rewards earned from mining activities were recognized as revenue under ASC 606 at fair value
at the time the reward was confirmed by the mining pool operator.

For
the periods ended December 31, 2025, the Company converted all crypto assets received from mining activities to U.S. dollars shortly
after receipt and did not hold any crypto assets at December 31, 2025, or 2024; therefore, adoption of ASU 2023-08 did not have a material
impact on the Company’s financial statements.

The
Bitcoin Blockchain and the cryptocurrency reward for solving a block is subject to periodic incremental halving. Halving is a process
designed to control the overall supply and reduce the risk of inflation in cryptocurrencies using a Proof-of-Work consensus algorithm.
At a predetermined block, the mining reward is cut in half, hence the term “Halving.” A Halving for bitcoin occurred in April
2024, with a revised reward payout of 3.125 Bitcoin per block. Many factors influence the price of Bitcoin and potential increases or
decreases in prices in advance of or following a future halving is unknown.

The
following table presents the activities of digital currencies for the years ended December 31, 2025 and 2024:

Schedule of Digital Currencies

Digital
currencies at January 1, 2024
-

Additions
of digital currencies from mining
143

Realized
loss on sale of digital currencies
8

Sale
of digital currencies
(151 )

Effect
of adoption of ASU 2023-081
-

Digital
currencies at December 31, 2024
$ -

Additions
of digital currencies from mining
29

Realized
loss on sale of digital currencies
-

Sale
of digital currencies
(29 )

Digital
currencies at December 31, 2025
$ -

1
Effective
January 1, 2025, the Company adopted ASU 2023-08, Accounting for and Disclosure of Crypto Assets (ASC 350-60). Adoption did
not result in any cumulative-effect adjustment to retained earnings because no crypto assets were held at December 31, 2024 or 2025.

F-7

Property
and Equipment

Property
and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight–line method on the
various asset classes over their estimated useful lives, which range from one to ten years when placed in service. The cost of repairs
and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of,
the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the
year of disposition.

Leases

The
Company accounts for its leases under ASC 842, Leases. Under this guidance, arrangements meeting the definition of a lease are classified
as operating or financing leases and are recorded on the balance sheet as both a right of use asset and lease liability,
calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental
borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized
over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line
rent expense over the lease term. Variable lease expenses, if any, are recorded when incurred.

Impairment
of long-lived assets

Long-lived
assets are reviewed for impairment whenever facts or circumstances either internally or externally may suggest that the carrying value
of an asset may not be recoverable, should there be an indication of impairment, we test for recoverability by comparing the estimated
undiscounted future cash flows expected to result from the use of the asset to the carrying amount of the asset or asset group. Any excess
of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss.

Segment
Reporting

The
Company operates as a single reportable segment focused on digital currency data center operations, which consisted of two primary revenue-generating
activities during the period: (i) self-mining of Bitcoin and (ii) hosting services provided to third-party customers. These activities
were conducted at the Company’s facility located in the United States. Management evaluates financial performance and allocates
resources on a consolidated basis, and therefore the Company is managed as a single reporting segment under ASC 280.

The
Chief Operating Decision Maker (“CODM”), identified as the Company’s Interim Chief Executive Officer & Chief Financial
Officer, regularly reviews revenue, cost of revenues and operating income (loss), as the primary measure of segment performance and capital
allocation.

The
following tables present segment revenue and operating loss, including the significant expense items reviewed by the CODM, for the years
ended December 31, 2025 and 2024:

Schedule of Present Segment Revenue and Operating Loss

2025
2024

For
the years ended December 31,

2025
2024

Total
revenues
$ 87
$ 322

Less:
Cost of revenues

Depreciation
39
194

Electricity
and other expenses
50
201

General and administrative
795
1,051

Operating
loss
$ (797 )
$ (1,124 )

The
following table reconciles operating loss reviewed by the CODM to net income (loss) for the years ended December 31, 2025 and 2024:

2025
2024

For
the years ended December 31,

2025
2024

Operating
loss reviewed by CODM
$ (797 )
$ (1,124 )

Other
income
578
6,645

Net
(loss) income
$ (219 )
$ 5,521

For
the year ended December 31, 2025, one customer accounted for 67% of the Company’s total revenue. For the year ended December 31,
2024, two customers accounted for 44% of total revenue, respectively.

Revenue
recognition

General

The
Company recognizes revenue in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC
606”). ASC 606 establishes a principles-based framework for recognizing revenue that depicts the transfer of promised
goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for
those goods or services. As of March 2025, the Company ceased all active revenue-generating operations related to cryptocurrency mining
and hosting activities. Accordingly, the following policies primarily relate to historical and comparative periods presented in these
financial statements and any limited residual activities during the fiscal year ended December 31, 2025.

F-8

Crypto
asset mining (Historical and Comparative)

The
Company recognizes revenue under ASC 606. The core principle of the revenue standard is that a company should recognize revenue to depict
the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to
be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

●
Step
1: Identify the contract with the customer

●
Step
2: Identify the performance obligations in the contract 

●
Step
3: Determine the transaction price  

●
Step
4: Allocate the transaction price to the performance obligations in the contract  

●
Step
5: Recognize revenue when the Company satisfies a performance obligation  

In
order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in
the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of
a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can
benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e.,
the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is
separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the
context of the contract).

If
a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services
is identified that is distinct.

The
transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods
or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.
When determining the transaction price, an entity must consider the effects of all of the following:

●
Variable
consideration  

●
Constraining
estimates of variable consideration  

●
The
existence of a significant financing component in the contract  

●
Noncash
consideration  

●
Consideration
payable to a customer  

Variable
consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of
cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price
allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time
as appropriate.

The
Company earns Bitcoin mining revenue from two primary sources: the operation of its owned miners and the operation of third-party owned
miners that the Company has concluded are subject to abandonment. Historically, the Company participated in third-party operated digital
asset mining pools in which it contributed computing power in exchange for a proportional share of cryptocurrency rewards generated by
the pool. The Company has entered into digital asset mining pools by executing contracts, as amended from time to time, with the mining
pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s
enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. The Company’s
performance obligation under these agreements was the continuous provision of computing power to the mining pool operator. In exchange,
the Company received non-cash consideration in the form of Bitcoin representing its proportional share of the total cryptocurrency rewards
earned by the mining pool during the applicable period. The Company’s share was based on the proportion of computing power the
Company contributed to the mining pool relative to the total computing power contributed by all mining pool participants.

In exchange for providing computing power, the Company is entitled to a fractional share of the fixed
cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are
recorded as a component of cost of revenues), for successfully adding a block to the Blockchain. The terms of the agreement provide
that neither party can dispute settlement terms after thirty-five days following settlement. The Company’s fractional share is
based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power
contributed by all mining pool participants in solving the current algorithm.

Providing
computing power to solve complex cryptographic algorithms in support of the Bitcoin Blockchain (in a process known as “solving
a block”) is an output of the Company’s ordinary activities. The provision of providing such computing power is the only
performance obligation in the Company’s agreements with mining pool operators. The transaction consideration the Company receives,
if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than
the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable.
Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the
mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of
the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions.

Fair
value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt.
In 2023, the FASB issued ASU 2023-08, which addresses the accounting and disclosure requirements for certain crypto assets. The new guidance
requires entities to subsequently measure certain crypto assets at fair value, with changes in fair value recorded in net income in each
reporting period. In addition, entities are required to provide additional disclosures about the holdings of certain crypto assets. The
ASU’s amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years.
There was no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized
as revenue or held, prior to the issuance of ASU 2023-08 and management has exercised significant judgment in determining the appropriate
accounting treatment for the current year. The Company evaluated the impact of ASU 2023-08 and determined that the standard did not have a material impact on its financial statements.

Hosting
Revenues

We
receive revenues from third parties renting capacity at our facility and from hosting miners owned by others. Under these
agreements, the Company provided hosting services that included supplying electrical power, infrastructure support, monitoring, and
operational maintenance for third-party mining equipment located within the Company’s facilities. The Company recognized
$58
and $179
from these sources during the years ended December 31, 2025 and 2024, respectively. During the years ended December 31, 2025 and
2024, one and two customers accounted for 100%
and 91%,
respectively of hosting revenue. After a hosting agreement expires, the Company no longer recognizes hosting revenue for the related
miners.

F-9

Gain
(Loss) on Modification/Extinguishment of Debt

In
accordance with ASC 470, a modification or an exchange of debt instruments that adds or eliminates a conversion option that was substantive
at the date of the modification or exchange is considered a substantive change and is measured and accounted for as extinguishment of
the original instrument along with the recognition of a gain or loss. Additionally, under ASC 470, a substantive modification of a debt
instrument is deemed to have been accomplished with debt instruments that are substantially different if the present value of the cash
flows under the terms of the new debt instrument is at least 10 percent different from the present value of the remaining cash flows
under the terms of the original instrument. A substantive modification is accounted for as an extinguishment of the original instrument
along with the recognition of a gain or loss. For the year ended December 31, 2024 the Company recorded a gain of $15 from the settlement
of debt and extinguishment of convertible debt as non-operating income in the statements of operations. The Company’s debt modifications
in 2025 did not result in any gain or loss.

Income
taxes

The
Company accounts for income taxes in accordance with ASC 740, “Income Taxes”. ASC 740 requires an asset and liability approach
for financial accounting and reporting for income taxes and established for all the entities a minimum threshold for financial statement
recognition of the benefit of tax positions and requires certain expanded disclosures. The provision for income taxes is based upon income
or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes
represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities
at the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company evaluates the recoverability
of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax
assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit
and cause changes to previous estimates of tax liability. In management’s opinion, adequate provisions for income taxes have been
made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

Income
(loss) per share

Basic
income (loss) per share is calculated by dividing net income (loss) applicable to common shareholders by the weighted average number
of common shares outstanding during the period. Diluted income (loss) per share is calculated by dividing the net income (loss) attributable
to common shareholders by the sum of the weighted average number of common shares outstanding plus potential dilutive common shares outstanding
during the period. Potential dilutive securities, comprised of convertible debt are not reflected in diluted net income (loss) per share
because their inclusion would not have resulted in additional dilution, based on the impact of the change in derivative liability and
related adjustments to net income for the period.

Accordingly,
the computation of diluted loss per share for the year ended December 31, 2025 excludes 1,220,240,000 shares issuable upon the conversion
of convertible notes payable. There were no outstanding financial instruments that would result in a dilution as of December 31, 2024.

Fair
Value Measure and Disclosures

ASC
820 “Fair Value Measurements and Disclosures” provides the framework for measuring fair value. That framework provides a
fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest
priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority
to unobservable inputs (Level 3 measurements).

Fair
value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a
liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on
assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize
the inputs in measuring fair value as follows:

●
Level
1 Quoted prices in active markets for identical assets or liabilities.

●
Level
2 Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities
in markets that are not active, or other inputs that are observable, either directly or indirectly.

●
Level
3 Significant unobservable inputs that cannot be corroborated by market data.

As
of December 31, 2025, and 2024, our financial instruments consisted primarily of cash and cash equivalents, accounts receivable, other
current assets, accounts payable, and accrued expenses and other payables. The carrying amounts of such financial instruments approximate
their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

Management’s
evaluation of subsequent events

The
Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the
review, other than what is described in Note 13– Subsequent Events, the Company did not identify any recognized or non-recognized
subsequent events that would have required adjustment or disclosure in the financial statements.

Recent
accounting pronouncements

Management
does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect
on the accompanying financial statements, other than those disclosed below.

In
December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This standard requires
enhanced annual disclosures, including disaggregated information about a reporting entity’s effective tax rate reconciliation and
income taxes paid. The Company adopted this guidance for the fiscal year ended December 31, 2025. The adoption resulted in additional
footnote disclosures (see Note 12- Income taxes) but did not have a material impact on the Company’s financial position
or results of operations.

F-10

In
March 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures
(Subtopic 220-40). which requires public companies to provide expanded annual disclosures of certain natural expense categories.
The guidance is effective for annual periods beginning after December 15, 2026, with early adoption permitted. While the Company previously
indicated an intent to early adopt this guidance, it has elected to defer adoption until the mandatory effective date. The Company is
currently evaluating the impact that the adoption of this guidance will have on its financial statements and related disclosure

In
November 2024, the FASB issued ASU 2024-04, Induced Conversions of Convertible Debt Instruments, which clarifies the requirements
for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions. The guidance
is effective for fiscal years beginning after December 15, 2025. The Company is currently evaluating the impact of this guidance but
does not anticipate it will have a material effect on its financial statements based on its current debt structure.

Note
4. Accounts Receivable

Accounts
receivable balance of $0 and $45 at December 31, 2025 and 2024, respectively, consisted primarily of receivables in respect of electricity
for hosting.

Note
5. Property and Equipment

Property
and equipment consisted of the following:

Schedule
of Property and Equipment

December
31,

2025
December
31,

2024

As
of

December
31,

2025
December
31,

2024

Land
$ -
$ 55

Computer
hardware and software
-
10

Bitcoin
mining machines
70
70

Infrastructure
-
1,185

Containers
-
403

Property
and equipment, gross
70
1,723

Less:
Accumulated depreciation
(70 )
(1,010 )

Property
and equipment, net
$ -
$ 713

The
Company recorded depreciation expense of $39 and $194 for the years ended December 31, 2025 and 2024, respectively. For the years ended
December 31, 2025 and 2024, the Company recorded gains on sale of property and equipment of $676 and $0, respectively.

On
May 13, 2025, the Company completed the sale of its cryptocurrency mining and hosting facility located in LaFayette, Georgia to CSRE
Properties LLC for total consideration of $1,350. The sale included land, containers, electrical infrastructure, and other improvements
associated with the Company’s former hosting and mining operations. At the date of sale, the related assets had a net carrying
value of $674, consisting primarily of infrastructure, containers, and land, as shown below:

Schedule of Property and Equipment Carrying Value

Net
Book Value at Sale

Land
$ 55

Computer
hardware and software
-

Infrastructure
619

Containers
-

Total
carrying value
$ 674

In
accordance with ASC 360, the Company derecognized the carrying amount of the disposed assets and recorded the sale proceeds, resulting
in a gain included in continuing operations. Management evaluated the disposal under ASC 205-20 and determined it does not represent
a strategic shift. Therefore, discontinued operations presentation is not required.

Following
completion of the sale, the Company continues to own 35 Antminer S19 Pro miners with a carrying amount of property and equipment of $0
as of December 31, 2025.

Note
6. Notes Payable

December
2023 Note (Extinguished)

On
December 19, 2023, the Company exchanged its existing note payable new note (the “December 2023 Note”) with
substantially the same terms with the exception of a maturity date of December
31, 2024 and with a conversion feature based on a 40%
of the Company’s common stock in a fully diluted basis. The principal balance of the December 2023 Note was $1,579,
had a debt discount of $257,
and bears interest at a rate of 6%
per annum. On November 1, 2024, the Company exchanged the December 2023 Note for a new note (the “November 2024 Note”), and the December 2023 Note was extinguished. The company recorded interest expense
of $72
for the year ending December 31, 2024 for this note.

November
2024 Note (Extinguished)

On
November 1, 2024, the Company exchanged the December 2023 Note for a new note (the “November 2024 Note”), in the
principal amount of $1,620
with an interest of 8%
per annum and a maturity date of December
31, 2025 and 750,000,000 shares of common stock. In case of an event of default under the New Secured Exchange Note, interest shall
accrue at the lesser of
(i) a rate of 12% per annum or (ii) the maximum amount permitted by law, and once the event of default is cured, the interest rate
shall revert to 8% per annum. Furthermore, under the terms of the New Secured Exchange Note, an event of default may result, at the
holder’s election, in the accelerated maturity of the note, in which case 110% of the principal of and accrued and unpaid
interest on the note will automatically become due and payable.

On
November 1, 2024, the lender also exchanged all outstanding warrants to purchase 2,043,808,450 shares of common stock for
600,000,000 shares of common stock and 650,000 shares of Series D Preferred Stock. As a result of the exchange, the Company
recognized a $4,150 reduction in the fair value of the related warrant derivative liability immediately prior to settlement. The
Company determined the fair value of the instruments exchanged as of November 1, 2024. The fair value of the common stock was based
on the closing market price of $0.0001 per share on the exchange date. The fair value of the Series D Preferred Stock was estimated
using a market based approach that considered its current price of the common stock and then applying the conversion ratio as
stipulated in the agreement and then applying a dilution in the fair value. The warrants surrendered were valued immediately prior
to the exchange using the Black-Scholes option-pricing model, with key inputs including an expected volatility of 301%, risk-free
interest rates of 4.23% to 4.32%, expected terms of 0.86 to 1.72 years, and dividend yield of 0%. Following completion of the
exchange, no warrants remained outstanding. The company recorded interest expense of $109
and $25
for the years ending December 31, 2025 and 2024, respectively for this note.

F-11

On
May 13, 2025, the Company used $400 of the cash proceeds from the sale of its LaFayette, Georgia facility (see Note 5 – Property,
Plant and Equipment) to make a partial repayment of principal and accrued interest on the November 2024 Note. After this payment,
the outstanding principal balance was $1,220. The November 2024 Note was exchanged for a new Convertible Note of equal face value in
September 2025 (refer to “September 2025 Note” section disclosed below).

New
Promissory Note (Extinguished)

Also
on November 1, 2024, the Company’s lender consolidated three prior short-term loans (totaling $200 principal plus accrued interest)
into a single non-convertible promissory note with a principal balance of $242 and an interest rate of 8% per annum (the “New Promissory
Note”). The New Promissory Note matures on December 31, 2025.

On
May 13, 2025, the Company used $262 of the cash proceeds from the sale of its LaFayette, Georgia facility (see Note 5 – Property,
Plant and Equipment) to make full repayment of principal and accrued interest on the New Promissory Note. For the New Promissory
Note, the Company recorded interest expense of $9 and $0.3 for the years ending December 31, 2025 and 2024, respectively.

September
2025 Note

On
September 22, 2025, the Company entered into a Secured Exchange Note Exchange Agreement with November 2024 Note holder, pursuant to which
the parties agreed to exchange the Company’s outstanding November 2024 Note. As of the exchange date, the November 2024 Note had
an outstanding principal balance of $1,220, bore interest at 8% per annum, and was scheduled to mature on December 31, 2025. Under the
Exchange Agreement, the holder surrendered the 2024 Note in exchange for (i) a new secured convertible promissory note (the “September
2025 Note”) issued in the principal amount of $1,220, bearing interest at 8% per annum and maturing on December 31, 2027, and (ii)
500,000,000 shares of the Company’s common stock. The equity consideration was valued at $0.0001 per share, resulting in a fair
value of $50 as of the issuance date. The September 2025 Note is convertible into common shares at $0.001 per share. The company recorded
interest expense of $27 and $0 for the years ending December 31, 2025 and 2024, respectively for this note.

The
Company reviewed the transaction under ASC 470-50 and concluded that the revised terms do not constitute a substantial modification.
Accordingly, the transaction is accounted for as a modification of the existing November 2024 Note. The value of the equity in the transaction
was $50 and recorded as a debt discount in accordance with ASC 470. The conversion feature added by the modification was determined to
be non-substantive under ASC 470. No gain or loss was recognized as a result of the modification. The note continues to be carried at
its previous amortized cost basis, adjusted for the $50 debt discount, which will be amortized over the remaining term of the note. For
the year ended December 31, 2025, the Company recorded $6 in accretion of debt discount. As of December 31, 2025, the carrying value
of the Note was $1,176, net of unamortized discount of $44.

The September 2025 Note is
classified as a long-term liability on the Company's balance sheet, as the maturity date exceeds one year from the reporting date. As
of December 31, 2025, there are 1,220,240,000 potentially dilutive shares of common stock issuable upon the conversion of this note.
These shares were excluded from the computation of diluted net loss per share for the year ended December 31, 2025, as their inclusion
would have been anti-dilutive.

Derivative
Liabilities

Prior
to November 1, 2024, the Company’s notes included convertible instruments which contained variable conversion and exercise features
requiring treatment as derivative liabilities. In connection with the November 2024 debt restructuring, all such conversion features
and variable-rate warrants (including Series X, Y, and Z) were extinguished or cancelled.

The
Company’s activity in its convertible debt related derivative liability was as follows for the years ended December 31, 2024 and
2025

Schedule of Derivative Liability Activity

Balance of derivative liability at January 1, 2024
$ 3,334

Settlement of derivative liability at debt conversion
(368 )

Change in fair value of derivative liability
(2,976 )

Balance of derivative liability at December 31, 2024
$ -

Settlement of derivative liability at exchange
-

Change in fair value of derivative liability
-

Balance of derivative liability at December 31, 2025
$ -

Key
valuation inputs used at the November 1, 2024 settlement date were: stock price $0.0001 per share, strike $0.007 – $0.05, risk-free
rate 4.23 – 4.32 %, expected volatility ≈ 301 %, expected term 0.86 – 1.72 years, and dividend yield 0 %. Upon completion
of the warrant exchange, the derivative liability was fully extinguished.

As
the November 2024 Note contained no conversion features, and the subsequent September 2025 Note contains a fixed conversion price not
subject to derivative treatment, the Company had no derivative or warrant liabilities during 2025. For the year ended December 31, 2024,
the Company recorded a gain on the change in fair value of warrant derivative liability of $4,042 and a gain on change in fair value
of derivative liability of $2,914. As of December 31, 2025, and 2024, the fair value of these liabilities was $0.

Warrant
Derivative Liabilities

As
noted above, all the outstanding warrants as of November 1, 2024 were exchanged by the lender resulting in a gain on settlement from
the exchange.

The
valuation at the November 1, 2024 exchange date incorporated the following assumptions: stock price $0.0001 per share; strike prices
$0.007 – $0.05 per share; risk-free interest rates 4.23 – 4.32 %; expected volatility 301 %; expected terms 0.86 –
1.72 years; dividend yield 0 %. The resulting aggregate fair value of the warrants exchanged was $59,642, as calculated by the Company’s
valuation specialist. All warrant derivative liabilities were eliminated upon completion of the exchange.

The
Company’s activity in its derivative liabilities was as follows for the year ended December 31, 2024 and 2025:

Schedule of Warrant Derivative Liabilities

Balance of warrant derivative liabilities at January 1, 2024
$ 4,253

Transfer out upon conversion of convertible notes and warrants with embedded conversion provisions
(809 )

Change in fair value of warrant liability
(4,150 )

Balance of warrant derivative liabilities at December 31, 2024
$ -

Transfer out upon conversion of convertible notes and warrants with embedded conversion provisions
-

Transfer in due to issuance of warrants with embedded conversion features
-

Change in fair value of warrant liability
-

Balance of warrant derivative liabilities at December 31, 2025
$ -

The
Company recorded change in fair value of warrant liability in the amount of $4,150 for the year ended December 31, 2024.

Fluctuations
in the Company’s stock price are a primary driver for the changes in the derivative valuations during the year ended December 31,
2024. As the stock price increases for each of the related derivative instruments, the value to the holder of the instrument generally
increases, therefore increasing the liability on the Company’s balance sheet. Additionally, stock price volatility is one of the
significant unobservable inputs used in the fair value measurement of each of the Company’s derivative instruments. The simulated
fair value of these liabilities is sensitive to changes in the Company’s expected volatility. Increases in expected volatility
would generally result in higher fair value measurement. A 10% change in pricing inputs and changes in volatilities and correlation factors
would not result in a material change in our Level 3 fair value.

Loans
Payable – Related Party

On
August 1, 2023 a former executive loaned the Company $15. The loan bears interest at an annual rate of 4.43%. A maturity date has not
yet been set. For the years ended December 31, 2025 and 2024, respectively, the Company recorded $0.6 and $0.6 of interest expense in
respect of this loan.

Note
7. Leases

The
Company is not a party to any leases. As a result, the Company did not record rent expense for the years ended December 31, 2025 and
2024. The lease liability disclosed on the balance sheets are the loss on lease incentive recorded in April 2023 (see Note 9-Commitments
and Contingencies).

Note
8. Common Stock, Preferred Stock and Warrants

Common
stock

Income
(Loss) Per Share

The
Company computes income (loss) per share in accordance with ASC 260, Earnings Per Share. Basic net income (loss) per share is
computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income
(loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding, plus the impact
of potentially dilutive securities.

For
the years ended December 31, 2025 and 2024, the weighted-average number of common shares outstanding used in the calculation of basic
and diluted EPS was 3,009,164,054 and 1,278,102,597, respectively.

During
the year ended December 31, 2025, the Company issued a total of 2,150,000,000 shares of common stock through various debt restructurings,
preferred stock conversions, and compensation arrangements. As of December 31, 2025, the Company had 1,220,240,000 potentially dilutive
shares issuable upon the conversion of the September 2025 Note. These shares were excluded from the computation of diluted net loss per
share for 2025 because their effect would be anti-dilutive due to the Company's net loss.

Common
Stock Issuances

On
June 21, 2024, 3,346,420 warrants with an embedded conversion feature were exercised on a cashless basis for the issuance of 103,500,000,000
shares of common stock.

During
the year ended December 31, 2024, the Company issued 126,000,000 shares of common stock in respect of the partial conversion of the December
2023 Note. These shares were valued at $178 upon issuance.

During
the year ended December 31, 2024, the Company issued 62,000,000 shares of common stock in respect of the Lease Agreement. These shares
were valued at $372 upon issuance.

On
November 1, 2024, the lender exchanged all outstanding common stock purchase warrants for 600,000,000 shares of common stock and 650,000
shares of Series D Preferred Stock. These common and Series D preferred stock were valued at $29 and $31, respectively upon issuance.

On
November 1, 2024, the company issued 750,000,000 shares of common stock in connection with restructuring its convertible note. These
shares were valued at $36 upon issuance.

On
July 14, 2025, the Company filed a Preliminary Information Statement on Schedule 14C to increase its authorized common stock and authorize
a reverse stock split within a range of ratios to be determined by the Board. The Definitive Information Statement was filed on July
25, 2025, and mailed to shareholders of record on August 7, 2025. The amendment to the Certificate of Incorporation increasing authorized
common stock to 10 billion shares became effective in Delaware on August 25, 2025.

On
September 22, 2025, the Company issued 500,000,000 shares of common stock as part of restructuring its 2024 Notes. The issuance was exempt
from registration under Section 3(a)(9) of the Securities Act of 1933, as amended. (See Note 6-Notes Payable for accounting treatment
under ASC 470-50.)

F-12

Additionally,
on September 22, 2025, the Company issued 650,000,000 shares of common stock upon conversion of 650,000 shares of Series D Preferred
Stock. The converted shares represented all outstanding Series D Preferred Stock. The issuance was exempt from registration under Section
3(a)(9) of the Securities Act of 1933, as amended.

On
September 23, 2025, the Company issued (i) 100,000,000 shares of common stock valued at $10 to its Interim CEO and CFO, Jonathan M. Pfohl,
(ii) 100,000,000 shares of common stock valued at $10 to another employee, and (iii) 500,000,000 shares of common stock to Director, Michael
Onghai in exchange for or waiver of $56 in outstanding director fees. The issuance was exempt from registration under Section 4(a)(2)
of the Securities Act of 1933, as amended.

In
December 2025, the company issued 300,000,000 shares of common stock to accredited investors that participated in a private placement
for an aggregate of $300. The issuance was exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended,
and Rule 506(b) of Regulation D thereunder.

Preferred
Stock

On
November 1, 2024, the Company issued 650,000 shares of Series D Preferred Stock. The Series D Preferred Stock had a par value of $0.001
per share and a liquidation preference of $0.001 per share. Each share of Series D Preferred Stock was convertible into 1,000 shares
of the Company’s common stock and held voting rights equal to the number of common shares into which it was convertible.

On
September 22, 2025, the holder of the Series D Preferred Stock elected to convert all 650,000 outstanding shares into 650,000,000 shares
of the Company’s common stock. Following this conversion, there were no shares of Series D Preferred Stock outstanding as of December
31, 2025.

Warrants

During
the period from January 1, 2024 through November 1, 2024, 226,800,000 warrants were issued as a result of the partial conversion
of convertible debt and 617,944,296 warrants were issued are a result of an adjustment to the number of X, Y and Z warrants
as a result of the terms of the December 2023 Note.

On
November 1, 2024, the Company exchanged all outstanding common stock warrants to purchase 2,043,808,450 shares for 600,000,000
shares of common stock and 650,000 shares of Series D Preferred Stock. In this transaction, the Company recognized a $4,150 reduction
in the fair value of the related warrant derivative liability. Following this exchange, all warrant derivative liabilities were eliminated.
There were no warrants issued, outstanding, or exercisable as of December 31, 2025 or 2024, respectively.

The
following table summarizes information about shares issuable under warrants outstanding during the years ended December 31, 2025 and
2024:

Schedule of Warrants Outstanding

Warrant

shares

outstanding
*Weighted

average

exercise price
*Weighted

average

remaining life
Intrinsic

value

Outstanding and exercisable at January 1, 2024
1,202,410,574
$ 0.03
2.75
$ -

Issued
844,744,296
-
-
-

Exercised
(3,346,420 )
0.05

Exchanged
(2,043,808,450 )
0.01
-
-

Outstanding and exercisable at December 31, 2024
-
$ -
-
$ -

Issued
-
-
-
-

Exercised
-
-
-
-

Exercised
-
-
-
-

Outstanding and exercisable at December 31, 2025
-
$ -
-
$ -

(*)
Of
the 844,744,296 warrants issued during the year ended December 31, 2024 and 0 warrants outstanding and exercisable at December 31,
2024, the weighted average exercise price and weighted average remaining life was not included for 844,744,296 and 0 warrants, respectively,
because their exercise price is variable.

Note
9. Commitments and Contingencies

Bitcoin
Production Equipment and Operations

On
March 16, 2023, the Company entered into a partnership agreement (the “Partnership Agreement”) and a property lease agreement
(the “Lease Agreement”, and together with the Partnership Agreement, collectively, the “Agreement”) with another
cryptocurrency mining company (“Tenant”). Pursuant to the Lease Agreement, the Company agreed to lease to Tenant portions
of the Company’s six acre mining facility in Lafayette, GA in increments of up to 10 spaces that are 40 feet in length and eight
feet in height each (“Spaces”), together with related utilities access including electricity of up to one megawatt (“MW”)
per Space, for deploying mining equipment, in exchange for rental payments of $5 per Space per month (provided the Spaces are powered)
and payment of the electricity costs and deposit requirements arising from the Spaces. In connection with the Lease Agreement, Tenant
agreed to make an initial deposit of $229 for the initial electricity deployment for five MW.

Pursuant
to the Partnership Agreement, the Company agreed to issue Tenant 500,000 shares its common stock per month for each rented Space (the
“Monthly Issuances”), and to also issue an additional number of shares of common stock annually equal to 100% of the Monthly
Issuances for the applicable year (the “Annual Issuances,” and together with the Monthly Issuances, collectively, the “Issuances”).
Further, pursuant to the Partnership Agreement, the Company provided Tenant with the option (the “Option”) to lend MGT up
to $1 million evidenced by a convertible promissory note that is convertible into 25% of the Company’s outstanding common stock,
assuming all $1 million is lent, on a pro-forma, post-issuance basis (the “Note”), together with an accompanying warrant
to purchase 60% of the shares of common stock underlying the Note (the “Warrant”). The terms of the Note and Warrant would
be substantially similar to the September 2022 Note and accompanying warrants that were issued by the Company along with that note. If
the Option is exercised, the parties may elect to substitute the $1 million purchase price, in whole or in part, with equipment and infrastructure
improvements to enable the Company to have access to up to an additional 10 MWs of electricity to the facility’s currently available
electrical power capacity. The Company’s facility currently has electrical capacity of up to 10 MW. The Agreement has a term of
24 months.

The
Company considered the terms of the Option under ASC 815 and concluded that the Option is a non-option embedded derivative with no initial
fair value and would not require bifurcation from the host contract. ASC 606 states that consideration payable to a customer should be
recorded as a direct reduction to the transaction price. Therefore, the Company determined the transaction should be accounted for on
a net basis, and the fair value of the equity should be recorded as a direct deduction from rental revenue. The Company determined that
the share issuances would be treated as lease incentives and ASC 842-10-30-5 requires lease incentives to be recorded as a reduction
of fixed payments when determining lease payments. The Company concluded that the equity portion of the agreement should be recorded
at fair value on the grant date. Upon recording the equity at fair value at the time of issuance and taking into consideration that revenue
should be reduced by the fair value of equity, the Company determined that the fair value of the equity exceeds the total cash to be
received based on the fair value of the contract at the date of issuance, resulting in a contract loss at inception of $184.

The
Company applied the guidance under ASU 2021-05 and determined that it would be appropriate to account for the entire loss at commencement
and recognize that loss as a future equity commitment. The loss is based on the difference between the amount of cash to be received
under the contract and the fair value of the stock to be issued under the contract. As the lease actually commenced on April 1, 2023,
the Company began accounting for the lease on that date. At lease inception, the Company recorded a lease incentive loss of $184 and
recorded an operating lease liability in the corresponding amount. The lease liability was reduced over the lease term period in conjunction
with the issuance of the shares. On March 15, 2025, the lease agreement with the Tenant expired.

During
the year ended December 31, 2024, the Company received $420,
issued 62
million shares of common stock and reduced the lease liability by $96.
During the year ended December 31, 2025, the Company received $113,
reduced the lease liability by $20,
issued 0
shares of common stock, and recorded 56,000,000
shares of common stock to be issued. At December 31, 2025, the Company recorded a liability of $360
for 88,000,000
shares of common stock potentially issuable under the Agreements. These shares have yet to be issued pending administrative closeout of the contract and mutually agreeable releases.

F-13

Legal
proceedings

The
Company is not a party to any material legal proceedings and, to management’s knowledge, no such proceedings have been threatened.
From time to time, the Company may be involved in routine litigation or claims that arise in the ordinary course of business; however,
management does not believe that any such matters will have a material effect on the Company’s financial position, results of operations,
or cash flows.

Note
10. Employee Benefit Plans

The
Company maintains defined contribution benefit plans under Section 401(k) of the Internal Revenue Code covering substantially all qualified
employees of the Company (the “401(k) Plan”). Under the 401(k) Plan, the Company may make discretionary contributions of
up to 100% of employee contributions. During the years ended December 31, 2025 and 2024, the Company made contributions to the 401(k)
Plan of $3 and $3, respectively.

Note
11. Related Party Transactions

On
September 23, 2025, the Company issued shares of its common stock to a director. The Company issued 500,000,000 shares of common stock
to a director in settlement of $56 of previously accrued fees. The shares have a par value of $0.001, resulting in $500 recorded to common
stock. The excess of par value over the liability settled, totaling $444, was recorded as a reduction to additional paid-in capital.
No incremental compensation expense was recognized as the related services had been fully accrued in prior periods.

In
separate transactions on September 23, 2025, the Company issued 100,000,000
shares to its Interim CEO & CFO and 100,000,000
shares to an employee. The shares were granted at a fair value of $0.0001
per share, resulting in compensation expense of $10
for each grant. The shares carry a par value of $0.001,
resulting in $100
recorded to common stock for each issuance. The excess of par value over the fair value of the shares issued, totaling $90
for each grant, was recorded as a reduction to additional paid-in capital. The shares were vested on grant date.

Loans
Payable – Related Party

On
August 1, 2023, a former executive loaned the Company $15. The loan bears interest at an annual rate of 4.43%. A maturity date has not
yet been set. For the years ended December 31, 2025 and 2024, respectively, the Company recorded $0.7 and $0.6 of interest expense in
respect of this loan.

Accounts
Payable – Related Party

During
the year ended December 31, 2023, a former executive paid consultants reimbursable by the Company in the amount of $20,
which are outstanding as of December 31, 2025. During the year ended December 31, 2024, an executive paid legal fee reimbursable by
the company in the amount of $25,
which are outstanding as of December 31, 2025. The total related-party payable balance outstanding as of December 31, 2025 was $45.

Note
12. Income Taxes

Components
of Income (Loss) before Income Taxes

As
required by ASU 2023-09, the components of loss before income taxes are as follows:

Schedule of Components of Loss Before Income Taxes

2025
2024

For the year ended December 31,

2025
2024

Domestic (U.S.)
$ (219 )
$ 5,521

Foreign
-
-

Total income (loss) before income taxes
$ (219 )
$ 5,521

Effective
Tax Rate Reconciliation

The
following table reconciles the income tax benefit computed at the U.S. federal statutory rate to the Company’s reported income
tax expense. Percentages are based on the loss before income taxes.

Schedule of Effective Income Tax Rate Reconciliation

For the year ended December 31,
2025($)
2025(%)
2024($)
2024(%)

Federal statutory tax (at 21%)
$ (46 )
21.0 %
$ 1,159
21.0 %

State and local income taxes, net 1
(9 )
4.1 %
235
4.3 %

Non-taxable or non-deductible items

Change in fair value of derivatives 2
-
0.0 %
(1,496 )
-27.1 %

Other permanent items
1
-0.5 %
-
0.0 %

Changes in valuation allowances
54
-24.6 %
102
1.8 %

Income tax expense (benefit)
$ -
0.0 %
$ -
0.0 %

1 The state and
local income tax category is primarily comprised of taxes related to the state of Georgia, which represents 100% of the Company’s
state tax effect for the periods presented, net of federal tax benefits.

2 In accordance
with ASU 2023-09, the Company has disaggregated reconciling items that exceed 5% of the statutory tax amount. This includes the non-taxable
change in fair value of derivatives in 2024.

Deferred Tax Assets and Liabilities

Significant
components of the Company’s deferred tax assets are as follows:

Schedule of Components of Deferred Tax Assets

2025
2024

As
of December 31,

2025
2024

U.S.
federal tax loss carry–forward
$ 19,039
$ 18,994

U.S.
State tax loss carry–forward
464
455

Equity
based compensation
8,567
8,567

Fixed assets, intangibles, and goodwill
(51 )
(51 )

Long-term
investments
(7 )
(7 )

Total
deferred tax assets
28,012
27,958

Less:
valuation allowance
(28,012 )
(27,958 )

Net
deferred tax asset
$ -
$ -

F-14

Income
Taxes Paid (Disaggregated by Jurisdiction)

The
Company paid no material income taxes during the years ended December 31, 2025, and 2024.

Schedule of Material Income Taxes Paid

2025
2024

For the year ended December 31,

2025
2024

Federal (U.S.)
$ -
$ -

State and local (Georgia)
-
-

Foreign
-
-

Total Income Taxes Paid, net of refunds.
$ -
$ -

Operating
Loss Carryforwards

As
of December 31, 2025, the Company has gross federal net operating loss (“NOL”) carryforwards of approximately $90,661 and
gross state net operations loss carryforwards of $10,261. As it is not more likely than not that the resulting deferred tax benefits
will be realized, a full valuation allowance has been recognized for such deferred tax assets. Federal and state laws impose substantial
restrictions on the utilization of tax attributes in the event of an “ownership change,” as defined in Section 382 of the
Internal Revenue Code. As of December 31, 2025, the Company performed a high-level review of its changes in ownership and determined
that a change of control event likely occurred under Section 382 of the Internal Revenue Code and the Company’s net operating loss
carryforwards are likely to be limited.

The Company
has adopted the provisions of ASC 740-10-25, which provides recognition criteria and a related measurement model for uncertain tax positions
taken or expected to be taken in income tax returns. ASC 740-10-25 requires that a position taken or expected to be taken in a tax return
be recognized in the financial statements when it is more likely than not that the position would be sustained upon examination by tax
authorities.

Tax positions
that meet the more likely than not threshold are then measured using a probability weighted approach recognizing the largest amount of
tax benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company had no tax positions relating to open
income tax returns that were considered to be uncertain.

The
Company files income tax returns in the U.S. federal jurisdiction and Georgia jurisdiction. With few exceptions, the Company is no longer
subject to U.S. federal, state and local, or non-U.S. income tax examination by tax authorities for years before 2022. The Internal Revenue
Service has not recently informed the Company of any pending examinations.

Note
13. Subsequent Events

The
Company has evaluated subsequent events through the date these financial statements were issued and determined the following are material:

On
December 23, 2025, we initiated a common stock offering to raise up to $1,000 at $0.001 per share from accredited investors. The offering
is exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D thereunder.
At December 31, 2025, we had raised $300 and issued 300,000,000 shares of common stock. Subsequent to December 31, 2025, we raised an
additional $375 and issued 375,000,000 shares of common stock. The offering closed on January 29, 2026 with the company raising $675
in aggregate and issuing a total of 675,000,000 common shares.

In February 2026, the Company bound a Management Liability
(Directors & Officers) insurance policy with a $1,000 aggregate limit of liability. The policy provides coverage for an annual period
and includes Insuring Agreements A, B, and C. The annual premium for the policy is $34, plus applicable fees and taxes. This policy replaces
coverage that had been previously exhausted.

No
other subsequent events requiring disclosure were identified.

F-15