Quarterly report [Sections 13 or 15(d)]

SEGMENT REPORTING

v3.26.1
SEGMENT REPORTING
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
SEGMENT REPORTING

NOTE 4 – SEGMENT REPORTING

 

In November 2023, the Financial Accounting Standards Board issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), requiring public companies to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public companies with a single report segment were required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements of ASU 2023-07 during the year ended December 31, 2024.

 

Subsequent to the implementation of the Company’s digital asset treasury strategy and investments in AI infrastructure and data center investments, the Company continues to operate as one operating segment and the Company’s Co-CEOs are the chief operating decision makers (“CODMs”). The “Corporate & Other” category presented in the following tables is not considered an operating segment. It consists primarily of costs and expenses related to executing the Company’s Bitcoin strategy and includes the loss on digital assets, other third party costs associated with the Company’s Bitcoin holdings, and net interest expense primarily related to debt obligations, the net proceeds of which were primarily used to repurchase the Company’s common stock. Beginning in July 2025, the Company has dedicated certain corporate resources to its Bitcoin strategy. These costs, including related share-based compensation expense, are included within the “Corporate” and the “Share-based compensation expense” segment expense line items to better align with their activities and utilization. The following tables present (for the operating segment and the corporate & other category, and on a consolidated basis) the Company’s revenues and significant expenses regularly provided to the CODMs, reconciled to net income (loss) for each of the periods presented.

                       
Three Months Ended June 30, 2026            
    Operating Segment     Corporate & Other     Total  
                   
Revenue   $ 80,019     $ –     $ 80,019  
Cost of goods sold     (148,203 )     –       (148,203 )
Gross margin     (68,184 )     –       (68,184 )
                         
Operating expenses:                        
Sales and marketing     2,382,844       –       2,382,844  
Product development     170,505       –       170,505  
General and administrative     1,335,514       –       1,335,514  
Corporate     –       223,471       223,471  
Digital asset custody fee     –       23,704       23,704  
Share-based compensation expense     –       92,789       92,789  
Shareholder litigation matter     –       9,858,130       9,858,130  
Loss on digital asset     –       27,913,227       27,913,227  
Total operating expenses     3,888,863       38,111,321       42,000,184  
                         
Other income     –       31,751       31,751  
Gain on change in fair value of financial liabilities     –       20,117       20,117  
Interest income     –       44,725       44,725  
Interest expense     –       (1,062,659 )     (1,062,659 )
                         
Net loss   $ (3,957,047 )   $ (39,077,387 )   $ (43,034,434 )

 

                         
Six Months Ended June 30, 2026            
    Operating Segment     Corporate & Other     Total  
                   
Revenue   $ 305,721     $ –     $ 305,721  
Cost of goods sold     (310,827 )     –       (310,827 )
Gross margin     (5,106 )     –       (5,106 )
                         
Operating expenses:                        
Sales and marketing     2,706,480       –       2,706,480  
Product development     295,451       –       295,451  
General and administrative     2,975,706       –       2,975,706  
Corporate     –       448,922       448,922  
Digital asset custody fee     –       33,270       33,270  
Share-based compensation expense     –       1,797,041       1,797,041  
Shareholder litigation matter     –       10,850,451       10,850,451  
Loss on digital assets     –       106,267,263       106,267,263  
Total operating expenses     5,977,637       119,396,947       125,374,584  
                         
Other income     –       585,180       585,180  
Loss on repayment of term loan     –       (568,142 )     (568,142 )
Loss on change in fair value of financial liabilities     –       (41,900 )     (41,900 )
Interest income     –       87,264       87,264  
Interest expense     –       (3,120,694 )     (3,120,694 )
                         
Net loss   $ (5,982,743 )   $ (122,455,239 )   $ (128,437,982 )

 

Prior to the implementation of the Company’s digital asset treasury strategy in July 2025, the Company operated as one operating segment, and the Company’s chief operating decision maker was the CEO, who used the consolidated statement of operations to assess financial performance. For the three and six month periods ended June 30, 2025 see the condensed consolidated statement of operations above.