NYSE: XXI

Contemporaneously
with the execution of the Business Combination Agreement, Tether and Stellar Beacon LLC, a Delaware limited liability company (“SoftBank”)
entered into the SoftBank Purchase Agreement as amended and restated on June 23, 2025 (the “SoftBank Purchase Agreement”),
pursuant to which, among other things, immediately following the Closing, Tether transferred to SoftBank 89,106,748 shares of Class A
Common Stock and Class B Common Stock (the “SoftBank Shares”), and SoftBank paid Tether a consideration of $999,300,487.76,
based on a formula described thereunder.

Contemporaneously
with the execution of the Business Combination Agreement, Twenty One Capital and CEP entered into subscription agreements (the “Convertible
Notes Subscription Agreements”) with certain investors (the “Convertible Note Investors”), pursuant to which the
Convertible Note Investors have agreed to purchase $340.2 million aggregate principal amount of Convertible Notes (the “Subscription
Notes” and such subscription, the “Initial Convertible Notes PIPE” and together with the option for the Option Notes
(as defined below), the exchange for the Exchange Notes (as defined below) and any issuance of the Engagement Letter Notes (as defined
below), the “Convertible Notes PIPE”), upon the terms and subject to the conditions set forth therein. In addition, Twenty
One Capital granted the Convertible Note Investors an option to purchase, for a period of 30 days following the execution of the Convertible
Notes Subscription Agreements (the “Option Period”), additional Convertible Notes in an aggregate principal amount of up
to $100 million (the “Option Notes”), on a pro rata basis based on such Convertible Note Investor’s participation in
the Initial Convertible Notes PIPE. This option was fully subscribed as of the expiration of the Option Period on May 22, 2025 by the
Convertible Note Investors and the Sponsor (the “Option”). In addition, in connection with the full exercise of the Option
by the Convertible Note Investors and the Sponsor, on May 22, 2025, the Sponsor entered into the Sponsor Convertible Notes Subscription
Agreement on substantially the same terms as the Convertible Notes Subscription Agreements with respect to its $12,791,000 pro rata allotment
of the Option Notes. The Convertible Notes were issued on December 8, 2025. The total aggregate principal value of the Convertible Notes
is $486.5 million.

1

Contemporaneously
with the execution of the Business Combination Agreement, CEP and Twenty One Capital entered into subscription agreements (the “April
Equity PIPE Subscription Agreements,” and, together with the Convertible Notes Subscription Agreements, the “April PIPE Subscription
Agreements”) with certain investors (the “April Equity PIPE Investors” and together with the Convertible Note Investors,
the “April PIPE Investors”), pursuant to which, at Closing, CEP issued, and the April Equity PIPE Investors purchased, the
April Equity PIPE Shares for an aggregate purchase price of $200 million ($10.00 per share). On June 19, 2025, CEP and Twenty One Capital
entered into subscription agreements (the “June Equity PIPE Subscription Agreements” and, together with the April PIPE Subscription
Agreements and the Sponsor PIPE Subscription Agreement, the “PIPE Subscription Agreements”), pursuant to which, at Closing,
CEP issued, and the June Equity PIPE Investors purchased, the June Equity PIPE Shares for an aggregate purchase price of $165 million
($21.00 per share). Pursuant to the terms of the Business Combination Agreement and the June PIPE Bitcoin Sale and Purchase Agreement,
the net proceeds from the Equity PIPEs and the Convertible Notes PIPE were used by Twenty One Capital to purchase the PIPE Bitcoin from
Tether.

Our
Business Strategies

Twenty
One is an operating company engaged in a number of businesses focused on Bitcoin. Twenty One engages in two principal activities: (i)
actively accumulating Bitcoin and managing its Bitcoin holdings and (ii) commencing development of educational materials and branded
content intended to drive increased institutional and retail investor Bitcoin literacy. In addition, following these initial activities,
Twenty One expects to engage in Bitcoin-centric financial services that would leverage Twenty One’s Bitcoin expertise to provide
solutions tailored for institutions and individuals investing in, holding, and utilizing Bitcoin. Preparation for the launch of these
financial services is expected to begin shortly, with launch timing subject to regulatory approvals, market needs, and the macroeconomic
environment.

Bitcoin
Accumulation and Management Strategy

Twenty
One’s Bitcoin accumulation and management strategy involves (i) the acquisition of Bitcoin (from initial investments, debt and
equity financings, and operating cash flows in excess of operating expenses) according to a discretionary, macro-driven investment thesis,
(ii) active management of its Bitcoin holdings, subject to market conditions and other factors, and (iii) the issuance of debt or equity
securities or other capital raising transactions, from time to time, subject to market conditions and other factors, with the objective
of generating proceeds to be used for the purchase of Bitcoin and other operating expenses. Twenty One does not currently intend to hold
any other cryptocurrencies as a treasury asset.

Twenty
One is committed to a long-term Bitcoin accumulation strategy grounded in its belief that Bitcoin represents a superior monetary asset
and a foundation for long-term shareholder value. Twenty One’s active management of its Bitcoin holdings does not involve speculative
trading based on short-term market movements. Instead, it consists of ongoing assessment and adjustment of our capital allocation strategy
in accordance with its long-term, macro-driven Bitcoin investment thesis.

Determinations
with respect to Twenty One’s Bitcoin accumulation and management strategy will be made from time to time by assessing market factors
including, but not limited to, (i) the current market price of Bitcoin, (ii) price trends and market level analysis, (iii) analysis of
the broader macroeconomic environment, (iv) Twenty One’s relative stock performance, (v) the availability and cost of capital of
equity and debt financing to Twenty One, and (vi) the price per share of Twenty One’s stock relative to the Net Asset Value of
its Bitcoin holdings.

In pursuit of this strategy, Twenty One currently intends to utilize
Bitcoin-specific key performance indicators including Bitcoin per share (“BPS”) and Bitcoin Rate of Return (“BRR”)
to assess its performance and guide its operations. These KPIs are intended to efficiently communicate Twenty One’s mission of providing
the best vehicle for Bitcoin exposure in the market. This strategy also contemplates that Twenty One may, from time to time, subject to
market conditions and other factors, (i) sell Bitcoin under exceptional circumstances as described below, (ii) enter into additional capital
raising transactions, and (iii) consider the pursuit of strategies which monetize or otherwise utilize its Bitcoin holdings to generate
funds or income streams through the development and commercialization of Bitcoin-centric financial services and products. While Twenty
One expects to allocate the majority of its available treasury capital into Bitcoin over time, it retains flexibility to manage liquidity
and operations prudently.

2

At
present, Twenty One has no intention to sell Bitcoin, and views its Bitcoin position as a strategic reserve asset. However, we may consider
selling Bitcoin under exceptional circumstances, such as to meet operational needs, comply with legal or regulatory obligations, pursue
high-conviction strategic investments, or for general corporate purposes, subject to oversight by management and the Board.

Twenty
One does not currently plan to engage in hedging its Bitcoin exposure. We believe that our long-term thesis on Bitcoin’s appreciation
and adoption makes hedging unnecessary. We will revisit this policy periodically as part of our risk management processes.

Our
Bitcoin Holdings

The
initial Bitcoin holdings have been acquired through a combination of purchases and contributions made by Tether and Bitfinex in accordance
with the Business Combination Agreement and related agreements, as described below.

During
the 10-day period following the signing of the Business Combination Agreement, pursuant to the terms of the Business Combination Agreement,
Tether purchased 4,812.220927 Bitcoin at an aggregate purchase price of $458.7 million, being equal to the net cash proceeds from the
April Equity PIPE and Convertible Notes PIPE. These Bitcoin were acquired by the Company at Closing at the same aggregate purchase price.

During
the 10-day period following the expiry of the Option Period for Convertible Note Investors as granted pursuant to the Convertible Notes
Subscription Agreements, Tether purchased an additional 917.47360612 Bitcoin at an aggregate purchase price of $99.5 million, being equal
to the net proceeds from the full exercise of the Option, which were acquired by the Company at Closing at the same aggregate purchase
price, in each case in accordance with the terms of the Business Combination Agreement.

During
the 10-day period following the signing of the June Equity PIPE Subscription Agreements, pursuant to the terms of the June PIPE Bitcoin
Sale and Purchase Agreement, Tether purchased 1,381.15799423 Bitcoin at an aggregate purchase price of $147.5 million, being equal to
the net cash proceeds from the June Equity PIPE. These Bitcoin were acquired by the Company at Closing at the same aggregate purchase
price that Tether paid to purchase such Bitcoin.

In
addition, at the Closing, pursuant to the terms of the Business Combination Agreement and Amendment No. 1 to the Business Combination
Agreement, the Company acquired 4,422.688667 Bitcoin from Tether at a value of $84,863.57 per Bitcoin, such that, with the addition of
this Bitcoin, the sum of the Initial PIPE Bitcoin, the Option PIPE Bitcoin and the April In-Kind PIPE Bitcoin equals 10,500 Bitcoin.

At
Closing, certain April Equity PIPE Investors invested an aggregate of 259.2396 Bitcoin, and certain June Equity PIPE Investors will invest
an aggregate of 132.9547 Bitcoin, in each case in lieu of cash consideration, and in accordance with the terms of their respective subscription
agreements.

Pursuant
to the terms of the Business Combination Agreement and the Contribution Agreement, at the Closing and prior to the Mergers, Tether contributed
24,500 Bitcoin to Twenty One, and Bitfinex contributed 7,000 Bitcoin to Twenty One, in each case at a value of $84,863.57 per Bitcoin.

As
a result of these transactions, Twenty One held approximately 43,500 Bitcoin as of the Closing.

Custody
of our Bitcoin

As
of the Closing, we hold all of our Bitcoin in custody accounts with Anchorage, a U.S.-based, institutional-grade custodian that has demonstrated
records of regulatory compliance and information security. Anchorage is a qualified custodian under the Investment Advisers Act of 1940
and chartered by the U.S. Office of the Comptroller of the Currency (“OCC”) to custody clients’ digital assets in trust
on their behalf. As a result, the primary counterparty risk we are exposed to with respect to our Bitcoin is performance obligations
under the custody arrangements into which we entered with Anchorage. Our Bitcoin holdings are, and from time to time may be, concentrated
with a single custodian.

3

Our
custodial services contracts do not restrict our ability to reallocate our Bitcoin among multiple custodians. In light of the significant
amount of Bitcoin we hold, we may seek to engage additional digital asset custodians to diversify the custody of our Bitcoin and our
potential risk exposure to any one custodian

We
have and will continue to carefully select our Bitcoin custodians after undertaking a due diligence process. As part of our custodian
selection process, we have and will continue to evaluate and select custodians that can demonstrate that they operate with strict security
protocols, including multifactor authentication procedures designed to safekeep our Bitcoin. In addition, our custodial services agreements
specify that the private keys that control our Bitcoin are to be held in a cold storage compliant manner, which is designed to mitigate
risks that a system may be susceptible to when connected to the internet, including the risks associated with unauthorized network access
and cyberattacks. We also negotiate liability provisions in our custodial contracts, pursuant to which our custodians are held liable
in certain situations for their failure to safekeep our Bitcoin. In addition to our custodial arrangements, we also utilize affiliates
of our Bitcoin custodians to execute Bitcoin acquisition and disposition transactions on our behalf. We leverage the due diligence we
conduct in connection with our custodial arrangements when conducting due diligence of these trade execution service providers.

We
also plan to conduct due diligence reviews during the custodial relationship to monitor the safekeeping of our Bitcoin. As part of our
process, we will obtain and review our custodians’ Services Organization Controls reports. We are also contractually entitled to
periodically review and discuss our custodians’ relevant internal controls. We expect to conduct in the future, supplemental due
diligence when we believe it is warranted by market circumstances or otherwise.

We
negotiate specific contractual terms and conditions with our custodians that we believe will help establish, under existing law, that
our property interest in the Bitcoin held by our custodians is not subject to the claims of the custodian’s creditors in the event
the custodian enters bankruptcy, receivership or similar insolvency proceedings. All of our custodians are subject to regulatory regimes
intended to protect customers in the event that a custodian enters bankruptcy, receivership or similar insolvency proceedings. Based
on existing law and the terms and conditions of our contractual arrangements with our custodians, we believe that the Bitcoin held on
our behalf by our custodians would not be considered part of a custodian’s bankruptcy estate were one or more of our custodians
to enter bankruptcy, receivership or similar insolvency proceedings.

In
addition, the following provides a more detailed description of the material terms of our custody arrangement with Anchorage:

At
Closing, the Company entered into a custody agreement with Anchorage (the “Custody Agreement”). The Custody Agreement has
an initial term of three (3) years. The agreement automatically renews for successive one-year periods unless either provides written
notice of non-renewal at least thirty (30) days prior to the end of the then-current term.

The
Custody Agreement may be terminated by either party for cause under several specific conditions. These include a reasonable determination
that the services may violate applicable laws or pose material regulatory, risk or reputational issues. The agreement may also be terminated
if the other party acts fraudulently, files for bankruptcy, is declared insolvent or violates the confidentiality provisions outlined
in the agreement.

Pursuant
to the Custody Agreement, Twenty One’s Bitcoin is held in a cold storage compliant manner in a segregated digital wallet, which
is unique to Twenty One and not commingled with the assets of other Anchorage clients or Anchorage’s proprietary assets. Only designated
and authorized personnel of Twenty One have the authority to initiate transactions from our custody account. This authority is subject
to a multi-party approval process that is implemented and managed by Anchorage. The existence and balance of our Bitcoin held with Anchorage
is verifiable at any time by any party by using a publicly available wallet address and a blockchain explorer.

Anchorage,
through its parent company, maintains a commercial crime insurance policy, which is intended to cover the loss of client assets it custodies,
including from employee collusion or fraud, physical loss including theft, damage of key material, security breach or hack, and fraudulent
transfer, subject to its terms and conditions. The insurance maintained by Anchorage is shared among all of its customers, is not specific
to Twenty One, and may not be available or sufficient to protect Twenty One from any or all possible losses or sources of losses. For
a discussion of risks relating to the custody of our Bitcoin, see “Risk Factors—Risks Related to the Business and Strategy
of Twenty One Capital”.

4

Policies
on Airdrops, Forks, and Incidental Rights

As
a holder of Bitcoin, Twenty One may from time to time become entitled to receive additional rights or assets in the form of airdrops,
forks, or other incidental entitlements. These events are not initiated by us and are not part of our business strategy.

Twenty
One will not proactively seek or rely upon any such entitlements, and does not consider them to be material to its business or investment
thesis.

Anchorage,
as the custodian of Twenty One’s Bitcoin following Closing, retains the right to determine whether or not to support (or cease
supporting) a forked network. Similarly, if Twenty One notifies Anchorage in writing of an upcoming airdrop, Anchorage may, among other
actions, elect to: (i) custody the airdropped digital asset for an additional fee or (ii) not pursue obtaining the airdropped digital
assets.

Twenty
One does not intend to hold or invest in any digital assets other than Bitcoin. Any value realized from incidental rights, if material,
will be disclosed in accordance with applicable accounting standards and regulatory requirements.

Potential
Advantages and Disadvantages of Holding Bitcoin

We
believe that Bitcoin is an attractive asset because it can serve as a store of value, supported by a robust and public open-source architecture,
that is insulated from certain external factors such as governments and financial firms. Due to Bitcoin’s immutable, verifiable
supply limit of 21 million Bitcoin, Bitcoin has the potential to serve as a hedge against inflation and currency devaluation in the long-term
and, if its adoption increases, the opportunity for appreciation in value.

Bitcoin
exists entirely in digital form, as virtually irreversible public transaction ledger entries on the blockchain, and transactions in Bitcoin
are recorded and authenticated not by a central repository or authority, but by a decentralized peer-to-peer network. This decentralization
mitigates the risks of certain threats common to centralized computer networks, such as denial-of-service attacks, and reduces the dependency
of the Bitcoin network on any single system. The decentralization of user nodes and miners also mitigates the risk of a 51% attack, which
would be very costly and difficult to execute with respect to Bitcoin because the Bitcoin network is open source and widely distributed,
and transactions on the blockchain require significant computing power to be validated. However, while the Bitcoin network as a whole
is decentralized, the private keys used to access Bitcoin balances are not widely distributed and are susceptible to phishing and other
attacks designed to obtain sensitive information or gain access to password-protected systems. Loss of such private keys can result in
an inability to access, and effective loss of, the corresponding Bitcoin. Consequently, Bitcoin holdings are susceptible to all of the
risks inherent in holding any electronic data, such as power failure, data corruption, security breach, communication failure and user
error, among others. These risks, in turn, make Bitcoin substantially more susceptible to theft, destruction, or loss of value from hackers,
corruption, viruses and other technology-specific factors as compared to conventional fiat currency or other conventional financial assets.
See “Risk Factors—Risks Related to the Business and Strategy of Twenty One Capital”.

In
addition, the Bitcoin network relies on open-source developers to maintain and improve the Bitcoin protocol. Accordingly, Bitcoin may
be subject to protocol design changes, governance disputes such as “forked” protocols, competing protocols, and other open
source-specific risks that do not affect conventional proprietary software.

Bitcoin
Education and Branding Strategy

Education
and Twenty One branded content are a central pillar of Twenty One’s mission to accelerate Bitcoin adoption and Bitcoin literacy
at both institutional and retail levels. Shortly following the consummation of the Business Combination, Twenty One will create an education
division that will commence the creation of high-quality content tailored for policymakers, institutional investors, financial advisors,
corporations, and retail investors. With the accelerating institutional adoption of Bitcoin and digital assets-and the growing demand
for education that is both credible and brand-compatible, Twenty One will create and license modular educational content, produce branded
video media, and act as the go-to content partner for major conferences, Web3 firms, and fintech institutions. Although preparation of
educational materials and branded content will commence shortly after the Closing, the timing of the deployment and commercialization
of the educational and branded content will depend on a number of factors, including Twenty One’s determinations relating to operational
conditions and optimal market demand for its content.

5

Twenty
One believes its education efforts can generate both direct revenue and indirect value for us and our shareholders. We plan to create
and monetize high-quality educational content through channels such as subscriptions, licensing fees for enterprises, and sponsored partnerships,
which are expected to contribute to our revenue streams. Furthermore, by advancing Bitcoin literacy and accelerating adoption, our educational
initiatives are designed to have a material, indirect benefit. As more individuals and institutions understand and embrace Bitcoin, demand
for the asset is expected to increase, which could contribute to its long-term appreciation. As a company holding a significant Bitcoin
treasury, Twenty One’s financial performance and shareholder value are tied to the value of Bitcoin, Twenty One’s educational
initiatives will directly support its overall financial objectives. In essence, Twenty One views its educational efforts as a strategic
investment in both the broader Bitcoin ecosystem and as a source of direct revenues.

Initially,
much of Twenty One’s educational reach is expected to be driven by its co-founder and CEO, whose existing platform and voice in
the crypto-asset industry is intended to allow us to catalyze meaningful public discourse around Bitcoin. We believe that this strategy
will prove to be a powerful and cost-effective means of brand-building and community engagement.

In
order to successfully monetize its content through subscriptions, licensing fees and sponsored partnerships, Twenty One plans to scale
its educational initiatives over time, which is expected to involve a number of development steps. Twenty One expects to build a dedicated
content team and infrastructure capable of producing and distributing a broad range of educational materials. This is expected to involve
the creation of multimedia educational materials-short-form videos, explainers, interviews, and white-labelled learning modules-designed
to be informative, visually engaging, and easily distributed. Twenty One plans to develop all content in collaboration with economists,
technical experts, and compliance consultants to seek to ensure intellectual integrity and accessibility. These materials will be designed
to scale across audiences, from financial advisors and journalists to developers and policymakers. Twenty One plans to continually update
to reflect new developments in the Bitcoin ecosystem and tailor its content for impact across geographies.

Initial
development costs are estimated at $1 million to $2 million, including content production, platform development, legal/compliance review,
and early hiring. Twenty One anticipates these costs will be funded through operating cash flow and existing capital resources.

Twenty
One expects to be working at the intersection of content, conferences, and community, as described in more detail below.

Content
Development

Twenty
One plans to develop an extensive multimedia content library as part of its education and branding strategy. While development is subject
to ongoing resource allocation and market conditions, Twenty One currently anticipates that the content library will include:

(1)Modular
Educational Video Series

Twenty
One intends to produce professionally developed video segments, which may range from 3 to 7 minutes in length, covering topics such as:

●Bitcoin
fundamentals: history, technical design, decentralization

●Macroeconomic
narratives: inflation hedge, monetary alternatives

●Mining
and energy use: sustainability, hardware, policy

●Regulatory
frameworks: U.S., EU, Asia-Pacific compliance landscapes

●Bitcoin
vs. crypto: narrative clarity and market distinctions

●Custody:
methods to securely storing Bitcoin for individuals and institutions

6

(2)Branded
and Sponsored Thought Leadership

Twenty
One is exploring potential opportunities to create branded content aligned with industry events and sponsor engagement, which may include:

●Panels
and interviews filmed live at 20+ major conferences annually

●Branded
content packages featuring industry leaders and sponsors

●Post-production
content designed for social media and digital distribution

(3)White-Labeled
Enterprise Modules

Twenty
One is also evaluating opportunities to offer customizable educational solutions for enterprise clients, such as:

●Customizable
packages for onboarding, training and client education

●Legal
and compliance reviews for institutional distribution

●Integration
with client platforms via secure API or LMS solutions

While
these plans remain subject to further evaluation, Twenty One believes that a multimedia content library could serve as a strategic asset
to support revenue growth. Twenty One recognizes challenges, including regulatory scrutiny of financial content, localization for international
audiences, and ensuring institutional-grade compliance. However, Twenty One believes its direct connection with the Bitcoin community,
deep subject-matter expertise and clear brand identity uniquely position it to succeed in this domain.

Memberships

As
part of its strategic plan to diversify and expand its revenue streams, Twenty One intends to develop a three-tiered membership program
designed to generate recurring revenue and support community engagement. While no final decisions have been made, the membership model
under consideration includes the following tier structure:

(1)Foundational
Membership

This
entry-level tier would provide individual users with access to core educational and community features, including:

●Full
access to Twenty One’s video library;

●Monthly
live webinars with educators and Bitcoin experts;

●A
research newsletter focused on Bitcoin and macroeconomic trends; and

●Priority
access to conference recordings and digital events.

(2)Professional
Membership

This
tier would be designed for professionals seeking enhanced educational resources and client-facing content rights, including all benefits
of the Foundational Membership, in addition to:

●Continuing
education credits for financial professionals;

●Licensing
rights to redistribute content to clients or students; and

●Early
access to research briefings and video interviews.

●Institutional
Partnership

7

Tailored
for enterprise clients, this highest tier would offer fully customized content and data services, including:

●Fully
customizable content packages;

●Private
onboarding workshops and strategic briefings;

●Branded
studio production and integration with enterprise platforms; and

●Quarterly
usage reports and learning analytics.

Twenty
One believes that this multi-tiered membership structure would enable scalable monetization of future intellectual property and educational
resources, while also strengthening user engagement and brand positioning.

Technology
Infrastructure

Twenty
One plans to design its platform for scale. Twenty One expects the backend architecture will be designed to support content hosting,
analytics, API distribution and secure B2B delivery. The planned membership site is expected to include features for video streaming,
learning management, credentialing and enterprise integration. This infrastructure is intended to support delivery of content both broadly
(via social media and media partnerships) and deeply (within institutional training environments).

Event
& Conference Partnerships

In
addition to the foregoing, Twenty One will explore ways to integrate its educational products with the global calendar of technology
and finance events by producing branded content at these events—moderated panels, keynote interviews and behind-the-scenes segments.
Twenty One’s future production teams may travel to conferences to generate real-time, high-quality media that can be streamed,
published or used for internal training, with the goal of making Twenty One not only a media partner but an educational layer within
the conference economy.

Education
Team

Twenty
One’s education efforts will be led by CEO and President Jack Mallers, a globally recognized voice in the Bitcoin space known for
his work advancing Bitcoin literacy through public speaking, media and high-impact content. Our CEO’s personal platform has been
instrumental in shaping the narrative around Bitcoin’s role in monetary history, economic sovereignty and global financial inclusion.

Initially,
our CEO will be supported by our Head of Brand & Communication Strategy and two unaffiliated agencies: a communications agency supporting
media positioning, messaging strategy and distribution and a creative agency focused on animation, video production and branded visual
content.

Operational
Relationship with Tether

Concurrently
with the consummation of the Business Combination, Twenty One entered into the Services Agreement with Tether pursuant to which Tether
provides certain support services. Under the Services Agreement, Tether provides Twenty One and its subsidiaries with access to select
services The services include: information technology services, such as the development and maintenance of IT systems and cybersecurity;
legal services related to regulatory compliance, corporate governance, and intellectual property; health, safety, and environmental services;
management and commercialization of intellectual property; treasury and risk management, including Bitcoin trading; human resources services
such as payroll and benefits administration; and investor relations services. These services are available on an as-needed basis and
are administered under customary commercial terms for such services. The Services Agreement is designed to enhance Twenty One’s
operational efficiency and reduce overhead costs during early growth stages.

8

Tether’s
support reflects a deep strategic alignment between Twenty One and its controlling shareholder. As one of the most successful and established
companies in the digital asset industry, Tether brings world-class expertise, infrastructure, and operational excellence. Twenty One
believes that its ability to selectively leverage these capabilities positions it to accelerate its go-to-market efforts, strengthen
compliance readiness, and operate with leaner fixed costs, in particular during its initial growth phase.

While
Twenty One benefits from Tether’s operational support, Twenty One’s Board of Directors is responsible for all material business
decisions, strategic direction, risk management and regulatory compliance. Twenty One maintains its own Board of Directors, executive
team, treasury management policies and hiring plans. The Services Agreement does not confer any management rights to Tether and may be
terminated under mutually agreed conditions or pursuant to its contractual terms.

This
structure enables Twenty One to combine the independence and transparency of a public company with the support of a globally recognized
digital asset leader, creating a scalable foundation for long-term value creation. For additional information, see the risk factor titled
“The Company relies on Tether, which will have a controlling interest in the Company, for certain administrative and operational
services.”

Financial
Services Strategy

Following
its initial activities of actively accumulating and managing Bitcoin and commencing development of educational materials and branded
content, Twenty One will explore the potential for providing Bitcoin-centric financial services that would leverage its Bitcoin expertise
to provide solutions tailored for institutions and individuals investing in, holding, and utilizing Bitcoin. These may include, among
other possibilities, Bitcoin-related financial and advisory services, the offering of structured debt and equity products linked to Bitcoin,
and Bitcoin-related lending.

The
launch of these financial services will require significant preparation and planning, which will commence once Twenty One is generating
sufficient revenues from its initial activities. Twenty One will need to develop and implement the necessary organizational and compliance
structures for each service it plans to offer, which may include the offering of Bitcoin-related debt and equity structured products
and Bitcoin-related lending. Because these activities are pervasively regulated, Twenty One will be required to address a wide range
of regulatory considerations, including compliance with the rules and regulations of the Securities and Exchange Commission, the Commodity
Futures Trading Commission, FinCen, and various state financial and business regulators. Additionally, we will be required to develop
and implement anti-money laundering (AML) protocols and comply with various domestic and potentially foreign laws and regulations. The
timing, cost and feasibility of these efforts are highly uncertain and subject to numerous variables, including the evolving regulatory
landscape, our financial resources and the overall macroeconomic and market environment for Bitcoin and related services.

Our
Competitive Strengths

Twenty
One believes it is well-positioned to become a differentiated public market vehicle for investors seeking exposure to Bitcoin. Twenty
One is being established as a purpose-built platform for Bitcoin investment via the public equity markets, with a strategy focused exclusively
on Bitcoin-related operations. Twenty One’s model is intended to unlock a potentially compelling opportunity for long-term value
creation through multiple Bitcoin-focused business lines.

Twenty
One’s business strategy is based on a Bitcoin-native operating structure designed to result in significantly lower operating costs
relative to other companies that hold Bitcoin on their balance sheets but operate unrelated legacy businesses. This structure also enables
Twenty One to prioritize Bitcoin-centric key performance indicators, such as BPS and BRR, which Twenty One expects to use in guiding
its capital allocation and strategic decisions.

Twenty
One intends to utilize proceeds from future financings to pursue strategic acquisitions of Bitcoin—an asset that has historically
exhibited significant long-term performance characteristics—and to support the execution of its broader growth initiatives. Twenty
One believes it can strategically raise and deploy capital with the goal of increasing BPS over time.

Twenty
One launched with an initial holding of approximately 43,500 Bitcoin and seeks to execute a capital-efficient accumulation strategy.
Twenty One believes this structure offers a potentially more favorable growth trajectory relative to existing large-scale Bitcoin-holding
companies whose greater scale may reduce the marginal impact of incremental capital deployment on per-share metrics.

9

As
of the Closing, Twenty One is majority-owned by Tether, the world’s largest issuer of U.S. dollar-pegged stablecoins, and Bitfinex,
a global digital asset trading platform, with significant minority ownership by SoftBank, a leading global technology investment firm.
Twenty One believes that this ownership structure provides meaningful alignment with its Bitcoin-focused strategy and long-term vision.

As
a Bitcoin-native entity, Twenty One offers several structural and operational advantages over existing public vehicles for Bitcoin exposure,
including:

●Exclusive
focus on Bitcoin-related business lines, with no unrelated legacy business;

●Strategic
accumulation of Bitcoin rather than passive holding;

●Simplified
balance sheet providing flexibility for future strategic capital raises;

●Bitcoin-specific
operational metrics (BPS, BRR) to guide performance;

●Deliberate
financing strategy to deliver superior performance for shareholders; and

●A
long-term goal of promoting the global adoption of Bitcoin as a treasury reserve asset.

Twenty
One plans to grow responsibly and in accordance with prevailing market conditions, while maintaining its strategic focus on maximizing
long-term value for holders of its common stock.

Overview
of the Bitcoin Industry and Market

Bitcoin
is a digital asset that is issued by and transmitted through an open-source protocol, known as the Bitcoin protocol, collectively maintained
by a peer-to-peer network of decentralized user nodes. This network hosts a public transaction ledger, known as the Bitcoin blockchain,
on which Bitcoin holdings and all validated transactions that have ever taken place on the Bitcoin network are recorded. Balances of
Bitcoin are stored in individual “wallet” functions, which associate network public addresses with one or more “private
keys” that control the transfer of Bitcoin. The Bitcoin blockchain can be updated without any single entity owning or operating
the network.

Creation
of New Bitcoin and Limits on Supply

The
Bitcoin protocol limits the total number of Bitcoins that can be generated over time to 21 million. As of July 30, 2025, approximately
19.9 million Bitcoins have been generated. The remaining approximately 1 million Bitcoin are expected to be generated over the next 120
years. New Bitcoins are created and allocated by the Bitcoin protocol through a “mining” process that rewards users that
validate transactions in the Bitcoin blockchain. Validated transactions are added in approximately 144 daily “blocks”. The
mining process serves to validate transactions and secure the Bitcoin network. Mining is a competitive and costly operation that requires
a large amount of computational power to solve complex mathematical algorithms. This expenditure of computing power is known as “proof
of work”.

To
incentivize miners to incur the costs of mining Bitcoin, the Bitcoin protocol rewards miners that successfully validate a block of transactions
with newly generated Bitcoin. As of December 30, 2025, the current reward for miners that successfully validate a block of transactions
is 3.125 Bitcoin per mined block. The mining reward is reduced by half, which is referred to as a Bitcoin halving, after every 210,000
blocks are mined. Given the approximately 144 daily blocks and 3.125 Bitcoin per block, there are approximately 450 Bitcoin generated
daily. The next Bitcoin halving is expected to occur in April 2028, at which point the mining reward will reduce to 1.5625 Bitcoin per
block.

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Modifications
to the Bitcoin Protocol

Bitcoin
is an open-source network that has no central authority, so no one person can unilaterally make changes to the software that runs the
network. However, there is a core group of developers that maintains the code for the Bitcoin protocol, and they can propose changes
to the source code and release periodic updates and other changes. Unlike most software that has a central entity that can push updates
to users, Bitcoin is a peer-to-peer network in which individual network participants, called nodes, decide whether to upgrade the software
and accept the new changes. As a practical matter, a modification becomes part of the Bitcoin protocol only if the proposed changes are
accepted by participants collectively having more than 50% of the processing power, known as hash rate, on the network. If a certain
percentage of the nodes reject the changes, then a “fork” takes place, and participants can choose the version of the software
they want to run. For additional information, see the risk factor titled “Company may be unable to recognize the economic benefit
of a “fork” or an “airdrop”, which could adversely impact an investment in the Company.”

Forms
of Attack Against the Bitcoin Network and Wallets

Blockchain
technology has many built-in security features that make it difficult for hackers and other malicious actors to corrupt the protocol
or blockchain. However, as with any computer network, the Bitcoin network may be subject to certain attacks. Some forms of attack include
unauthorized access to wallets that hold Bitcoin and direct attacks, like “51% attacks” or “denial-of-service attacks”
on the Bitcoin network.

Bitcoin
is controllable only by the possessor of both the unique public key and private key(s) relating to the local or online digital wallet
in which the Bitcoin is held. Private keys used to access Bitcoin balances are not widely distributed and are typically held on hardware
(which can be physically controlled by the holder or by a third party such as a custodian) or via software programs on third-party servers.
One form of obtaining unauthorized access to a wallet occurs following a phishing attack where the attacker deceives the victim and manipulates
them into sharing their private keys for their digital wallet or other sensitive information. Other similar attacks may also result in
the loss of private keys and the inability to access, and effective loss of, the corresponding Bitcoin.

A
“51% attack” may occur when a group of miners attain more than 50% of the Bitcoin network’s mining power, thereby enabling
them to control the Bitcoin network and protocol and manipulate the blockchain. The Bitcoin network is designed to discourage 51% attacks
by making the economic incentive for mining greater than the economic incentive of re-mining all necessary blocks to manipulate the blockchain.
See “Creation of New Bitcoin and Limits on Supply” above. A “denial-of-service attack” occurs when legitimate
users are unable to access information systems, devices or other network resources due to the actions of a malicious actor flooding the
network with traffic until the network is unable to respond or crashes. The Bitcoin network has been, and can be in the future, subject
to denial-of-service attacks, which can result in temporary delays in block creation and in the transfer of Bitcoin.

Bitcoin
Industry Participants

The
primary Bitcoin industry participants are miners, investors and traders, digital asset exchanges and service providers, including custodians,
brokers, payment processors, wallet providers and financial institutions.

Miners
range from Bitcoin enthusiasts to professional mining operations that design and build dedicated mining machines and data centers, including
mining pools, which are groups of miners that act cohesively and combine their processing power to mine Bitcoin blocks. See “Creation
of New Bitcoin and Limits on Supply” above.

Bitcoin
investors and traders include individuals and institutional investors who, directly or indirectly, purchase, hold and sell Bitcoin or
Bitcoin-based derivatives. As Bitcoin adoption accelerates, large institutions are becoming increasingly significant Bitcoin investors.
As of June 30, 2025, over 10% of Bitcoin’s supply is held by corporations, governments and large institutions.

Digital
asset exchanges provide trading venues for purchases and sales of Bitcoin in exchange for fiat or other digital assets. Bitcoin can be
exchanged for fiat currencies, such as the U.S. dollar, at rates of exchange determined by market forces on Bitcoin trading platforms,
which are not regulated in the same manner as traditional securities exchanges. In addition to these platforms, over-the-counter markets
and derivatives markets for Bitcoin also exist. The value of Bitcoin within the market is determined, in part, by the supply of and demand
for Bitcoin in the global Bitcoin market, market expectations for the adoption of Bitcoin as a store of value, the number of merchants
that accept Bitcoin as a form of payment and the volume of peer-to-peer transactions, among other factors. For a discussion of risks
associated with digital asset exchanges, see “Risk Factors—Risks Related to the Business and Strategy of Twenty One Capital”.

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Service
providers offer a multitude of services to other participants in the Bitcoin industry, including custodial and trade execution services,
commercial and retail payment processing, loans secured by Bitcoin collateral and financial advisory services. If adoption of the Bitcoin
network continues to materially increase, we anticipate that service providers may expand the currently available range of services and
that additional parties will enter the service sector for the Bitcoin network.

Bitcoin
Education Market

Educational
products focused specifically on Bitcoin represent a growing niche within the broader trend towards financial literacy among individuals
and the adoption of Bitcoin among institutions, globally. Twenty One sees a gap in the market for high-quality, non-promotional, multilingual
educational material that collates and presents Bitcoin’s key features in an accessible and digestible format for novice and professional
users alike.

We
believe that a substantial market opportunity exists to develop and scale a purpose-built Bitcoin education platform that creates and
distributes courses designed to address two distinct, large and under-served segments. These segments are (i) the retail market, which
consists of individual investors, investment advisors and other professionals seeking a trustworthy guide to financial decision-making,
protection against fraud & misuse and up-to-date guidance on tax treatment and compliance regulations and (ii) the institutional
market, which consists of asset managers, college and university systems, governments and any business integrating Bitcoin into its operations
and strategy. The institutional segment requires the same key resources needed in the retail market as well as guidance for enhanced
security, utilization and application, and credentialing—in many cases across borders or in multiple regions.

Twenty
One intends to provide users at all levels of proficiency with access to a dedicated platform that delivers this information in a structured,
digestible and modular format.

Competition

Our
Bitcoin strategy generally involves from time to time, subject to market conditions, (i) issuing debt or equity securities or engaging
in other capital raising transactions with the objective of using the proceeds to purchase Bitcoin and (ii) acquiring Bitcoin with our
liquid assets that exceed working capital requirements. When we engage in such capital raising transactions, we compete for capital with,
among others, other companies that hold Bitcoin or other digital assets as treasury reserve assets, ETPs, Bitcoin miners, digital assets
exchanges, other digital assets service providers, private funds that invest in Bitcoin and other digital assets, and similar vehicles.
The current average daily buying volume from other companies that hold Bitcoin as treasury reserve assets already exceeds the current
average number of Bitcoin mined per day. This trend is likely to continue given future Bitcoin halving events and the ongoing growth
in popularity of Bitcoin treasury strategies. An increase in the competition for sources of capital could adversely affect the availability
and cost of financing for our Bitcoin purchases, and thereby could adversely affect the market price of shares of Class A Common Stock.

The
market for Bitcoin education products is highly fragmented but rapidly evolving and characterized by low barriers to entry. Companies
operating in this market compete on a variety of factors, including (i) quality of educational content, (ii) brand reputation, (iii)
user experience (iv) pricing, and (v) accessibility across geographies, languages, and proficiency levels.

Existing
providers include a range of participants such as (i) traditional education platforms (e.g., Coursera and Udemy), (ii) financial services
firms with content offerings (e.g., Binance), and (iii) publicly accessible media channels (e.g., YouTube-based content creators). Additionally,
we could face competition from any number of new entrants from (i) crypto-native platforms, (ii) content creators, and (iii) non-profit
& academic organizations.

The
market for Bitcoin education products is subject to material uncertainties, including volatility in public interest, changes in regulatory
treatment of cryptocurrencies, and reputational risks associated with the broader cryptocurrency sector. These and other factors may
materially impact the business, financial condition, and results of operations of companies operating in this sector.

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Government
Regulation

The
laws and regulations applicable to Bitcoin and digital assets are evolving and subject to interpretation and change.

Governments
around the world have reacted differently to digital assets. Certain governments have deemed them illegal, and others have allowed their
use and trade without restriction, while in some jurisdictions, such as the U.S., digital assets are subject to overlapping, uncertain
and evolving regulatory requirements.

As
digital assets have grown in both popularity and market size, the U.S. Executive Branch, Congress and a number of U.S. federal and state
agencies, including the Financial Crimes Enforcement Network, the CFTC, the SEC, FINRA, the Consumer Financial Protection Bureau, the
Department of Justice, the Department of Homeland Security, the Federal Bureau of Investigation, the IRS and state financial regulators,
have been examining the operations of digital asset networks, digital asset users and digital asset exchanges, with particular focus
on the extent to which digital assets can be used to violate state or federal laws, including to facilitate the laundering of proceeds
of illegal activities or the funding of 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 digital assets for users. Many of these state and federal
agencies have issued consumer advisories regarding the risks posed by digital assets to investors. In addition, federal and state agencies,
and other countries have issued rules or guidance regarding the treatment of digital asset transactions and requirements for businesses
engaged in activities related to digital assets.

Depending
on the regulatory characterization of Bitcoin, the markets for Bitcoin in general, and our activities in particular, our business and
our Bitcoin strategy may be subject to regulation by one or more regulators in the United States and globally. Ongoing and future regulatory
actions may alter, to a materially adverse extent, the nature of digital assets markets, the participation of industry participants,
including service providers and financial institutions in these markets, and our ability to pursue our Bitcoin strategy. Additionally,
U.S. state and federal and foreign regulators and legislatures have taken action against industry participants, including digital assets
businesses, and enacted restrictive regimes in response to adverse publicity arising from hacks, consumer harm or criminal activity stemming
from digital assets activity. U.S. federal and state energy regulatory authorities are also monitoring the total electricity consumption
of cryptocurrency mining, and the potential impacts of cryptocurrency mining to the supply and dispatch functionality of the wholesale
grid and retail distribution systems. Many state legislative bodies have passed, or are actively considering, legislation to address
the impact of cryptocurrency mining in their respective states.

The
CFTC takes the position that some digital assets, including Bitcoin, fall within the definition of a “commodity” under the
Commodities Exchange Act of 1936, as amended (the “CEA”). Under the CEA, the CFTC has broad enforcement authority to police
market manipulation and fraud in spot digital assets markets in which we may transact. Beyond instances of fraud or manipulation, the
CFTC generally does not oversee cash or spot market exchanges or transactions involving digital asset commodities that do not utilize
margin, leverage, or financing. In addition, CFTC regulations and CFTC oversight and enforcement authority apply with respect to futures,
swaps, other derivative products and certain retail leveraged commodity transactions involving digital asset commodities, including the
markets on which these products trade.

The
SEC and its staff have taken the position that certain other digital assets fall within the definition of a “security” under
the U.S. federal securities laws. Public statements made by senior officials and senior members of the staff at the SEC indicate that
the SEC does not consider Bitcoin to be a security under the federal securities laws. However, such statements are not official policy
statements by the SEC and reflect only the speakers’ views, which are not binding on the SEC or any other agency or court and cannot
be generalized to any other digital assets.

In
addition, since transactions in Bitcoin provide a degree of anonymity, they are susceptible to misuse for criminal activities, such as
money laundering. This misuse, or the perception of such misuse, could lead to greater regulatory oversight of Bitcoin and Bitcoin platforms,
and there is the possibility that law enforcement agencies could close or blacklist Bitcoin platforms or other Bitcoin-related infrastructure
with little or no notice and prevent users from accessing or retrieving Bitcoin held via such platforms or infrastructure. For example,
the U.S. Treasury Department’s Office of Foreign Assets Control has issued updated advisories regarding the use of virtual currencies,
added a number of digital asset exchanges and service providers to the Specially Designated Nationals and Blocked Persons list and engaged
in several enforcement actions, including a series of enforcement actions that have either shut down or significantly curtailed the operations
of several smaller digital asset exchanges associated with Russian and/or North Korean nationals. Additionally, in January 2025, the
Consumer Financial Protection Bureau announced that it is seeking public input on privacy protections and surveillance in digital payments,
particularly those offered through large technology platforms.

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In
addition, there has been increasing focus on the extent to which digital assets can be used to launder the proceeds of illegal activities,
fund criminal or terrorist activities, or circumvent sanctions regimes, including those sanctions imposed in response to the ongoing
conflict between Russia and Ukraine. In order to address these risks, as of Closing, Twenty One has implemented and will maintain policies
and procedures reasonably designed to promote compliance with applicable AML, KYC and sanctions laws and regulations. Twenty One’s
compliance framework is designed to primarily rely on transacting with regulated third-party entities, such as registered money services
businesses or financial institutions, that are themselves subject to robust AML, KYC, and related compliance rules in the United States,
thereby mitigating these risks. For additional information, see the risk factor titled “Although the Company has relevant due
diligence procedures at Closing regarding anti-money laundering (“AML”) and know-your-customer (“KYC”),
these procedures may fail to prevent illegal transactions, which could subject the Company to criminal and civil liabilities and impact
the value of the shares of Class A Common Stock.”

As
noted above, activities involving Bitcoin and other digital assets may fall within the jurisdiction of more than one financial regulator
and various courts and such laws and regulations are rapidly evolving and increasing in scope. On January 23, 2025, President Trump issued
an executive order titled, Strengthening American Leadership in Digital Financial Technology. While the executive order did not mandate
the adoption of any specific regulations, the executive order identifies certain key objectives to guide agencies involved in crypto
regulation, including (i) protecting the sovereignty of the United States dollar by promoting the development of United States dollar-backed
stablecoins, (ii) providing regulatory clarity and certainty built on technology-neutral regulations for individuals and firms involved
in digital assets, including through well-defined jurisdictional regulatory boundaries, and (iii) taking measures to protect Americans
from the risks of Central Bank Digital Currencies. To achieve these objectives, the executive order established a working group on digital
asset markets within the National Economic Council, comprised of representatives from key federal agencies, with a tight timeline for
examining existing regulations and proposing a new regulatory framework. There have also been several bills introduced in Congress, including
the CLARITY Act, the DCIA and the GENIUS Act (which became law in July 2025) that propose to establish additional regulation and oversight
of the digital asset markets. For additional information, see the risk factor titled “Bitcoin and other digital assets are novel
assets, which will expose the Company to significant legal, commercial, regulatory and technical uncertainty, which could materially
adversely affect Twenty One Capital’s financial position, operations and prospects.”

Intellectual
Property

As
of December 31, 2025, Twenty One did not own or have the right to use any Bitcoin educational products. We anticipate that its intellectual
property portfolio will expand over time through the iterative development of (i) new course materials, (ii) technical updates, and (iii)
regionally customized content. Twenty One will regularly review and update its educational materials in response to developments in technology,
regulation, user feedback and market trends.

Twenty
One also maintains and uses trade names, unregistered trademarks, domain names and logos, which it considers material to its brand identity.
Twenty One may pursue registration of certain marks or content in additional jurisdictions as appropriate.

Human
Capital

Twenty
One has three employees, who are based in the United States. None of our employees are covered by a collective bargaining agreement.
We may engage third-party contractors and consultants on an as-needed basis. The executives and board members of Twenty One may hire
additional employees as needed based on operational expansions.

Human
capital management is critical to our ongoing business success, which requires investing in our people. Our aim is to create a highly
engaged and motivated workforce where employees are inspired by leadership, engaged in purpose-driven, meaningful work and have opportunities
for growth and development.

Legal
Proceedings

From
time to time, Twenty One or any of their respective subsidiaries may become involved in legal proceedings or be subject to claims arising
in the ordinary course of their business. None of Twenty One or any of their respective subsidiaries is currently a party to any legal
proceedings, the outcome of which, if determined adversely, would individually or in the aggregate have a material adverse effect on
their business or financial condition.

Additional
Information

Our
principal executive offices are located at 111 Congress Avenue, Suite 500 Austin, Texas, 78701. We were incorporated in the State of
Texas on March 7, 2025 for the purposes of effecting the Business Combination.

Our
website address is www.xxi.money/ and our investor relations website is located at https://investors.xxi.money/. Our Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports are available on our
investor relations website free of charge as soon as reasonably practicable after they are filed with the SEC. The information
contained on our website is not included in, nor incorporated by reference into, this Annual Report. Reports filed with the SEC also
may be viewed at www.sec.gov.

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