Quarterly report [Sections 13 or 15(d)]

SEGMENT REPORTING

v3.26.3
SEGMENT REPORTING
 9 Months Ended
Sep. 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 September 30, 2026        
    Operating Segment   Corporate & Other   Total
             
Revenue   $ 99,606     $ –     $ 99,606  
Cost of goods sold     (285,354 )     –       (285,354 )
Gross margin     (185,748 )     –       (185,748 )
                         
Operating expenses:                        
Sales and marketing     231,470       –       231,470  
Product development     102,815       –       102,815  
General and administrative     1,251,295       –       1,251,295  
Corporate     –       227,228       227,228  
Digital asset custody fee     –       12,805       12,805  
Stockholder litigation, proxy preparation and distribution, and stockholder solicitation     –       10,613,667       10,613,667  
Gain on digital asset     –       (36,986,989 )     (36,986,989 )
Total operating (income) expenses     1,585,580       (26,133,289 )     (24,547,709 )
                         
Other income     –       34,298       34,298  
Gain on change in fair value of financial liabilities     –       16,513       16,513  
Interest income     –       324,229       324,229  
Interest expense     –       (750,907 )     (750,907 )
                         
Net income (loss) from continuing operations   $ (1,771,328 )   $ 25,757,422     $ 23,986,094  

 

             
Nine Months Ended September 30, 2026        
    Operating Segment   Corporate & Other   Total
             
Revenue   $ 405,327     $ –     $ 405,327  
Cost of goods sold     (596,181 )     –       (596,181 )
Gross margin     (190,854 )     –       (190,854 )
                         
Operating expenses:                        
Sales and marketing     2,937,950       –       2,937,950  
Product development     398,266       –       398,266  
General and administrative     4,227,001       –       4,227,001  
Corporate     –       676,150       676,150  
Digital asset custody fee     –       46,075       46,075  
Share-based compensation expense     –       1,797,041       1,797,041  
Stockholder litigation, proxy preparation and distribution, and stockholder solicitation     –       21,464,118       21,464,118  
Loss on digital assets     –       69,280,274       69,280,274  
Total operating expenses     7,563,217       93,263,658       100,826,875  
                         
Other income     –       619,478       619,478  
Loss on repayment of term loan     –       (568,142 )     (568,142 )
Loss on change in fair value of financial liabilities     –       (25,387 )     (25,387 )
Interest income     –       411,493       411,493  
Interest expense     –       (3,871,601 )     (3,871,601 )
                         
Net loss from continuing operations   $ (7,754,071 )   $ (96,697,817 )   $ (104,451,888 )

 

             
Three Months Ended September 30, 2025        
    Operating Segment   Corporate & Other   Total
             
Revenue   $ 199,984     $ –     $ 199,984  
Cost of goods sold     (197,537 )     –       (197,537 )
Gross margin     2,447       –       2,447  
                         
Operating expenses:                        
Sales and marketing     420,754       –       420,754  
Product development     67,522       –       67,522  
General and administrative     4,595,850       –       4,595,850  
Corporate     –       424,702       424,702  
Digital asset custody fee     –       628,815       628,815  
Share-based compensation expense     –       13,754,360       13,754,360  
Unrealized loss on digital assets     –       14,106,222       14,106,222  
Total operating expenses     5,084,126       28,914,099       33,998,225  
                         
Other income     –       289,670       289,670  
Loss on repayment of credit facility     –       (125,377 )     (125,377 )
Gain on change in fair value of financial liabilities     –       39,533       39,533  
Interest income     –       84,134       84,134  
Interest expense     –       (361,464 )     (361,464 )
Income tax benefit     –       5,383,973       5,383,973  
                         
Net loss from continuing operations     (5,081,679 )     (23,603,630 )     (28,685,309 )
Net loss from discontinued operations     (486,019 )     –       (486,019 )
Net loss   $ (5,567,698 )   $ (23,603,630 )   $ (29,171,328 )

 

             
Nine Months Ended September 30, 2025        
    Operating Segment   Corporate & Other   Total
             
Revenue   $ 852,489     $ –     $ 852,489  
Cost of goods sold     (1,089,400 )     –       (1,089,400 )
Gross margin     (236,911 )     –       (236,911 )
                         
Operating expenses:                        
Sales and marketing     1,110,828       –       1,110,828  
Product development     371,424       –       371,424  
General and administrative     7,863,989       –       7,863,989  
Corporate     –       424,702       424,702  
Digital asset custody fee     –       628,815       628,815  
Share-based compensation expense     1,100,670       13,754,360       14,855,030  
Unrealized loss on digital assets     –       14,106,222       14,106,222  
Total operating expenses     10,446,911       28,914,099       39,361,010  
                         
Other income     –       348,784       348,784  
Loss on repayment of credit facility     –       (125,377 )     (125,377 )
Gain on change in fair value of financial liabilities     –       4,724       4,724  
Interest income     –       241,426       241,426  
Interest expense     –       (525,111 )     (525,111 )
Income tax benefit     –       5,383,973       5,383,973  
                         
Net loss from continuing operations     (10,683,822 )     (23,585,680 )     (34,269,502 )
Net loss from discontinued operations     (1,262,153 )     –       (1,262,153 )
Net loss   $ (11,945,975 )   $ (23,585,680 )   $ (35,531,655 )