BMNR Filings — Bitmine Immersion Technologies, Inc.

BMNR Filings — Bitmine Immersion Technologies, Inc. - FilingSpy

10-Q · Quarter ended May 31, 2026 · SEC filing ↗

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Original filing text

Management's Discussion and Analysis

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For this purpose, any statements contained herein that are not statements of historical fact, including without limitation, certain statements regarding industry prospects and our results of operations or financial position, may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements. The important factors discussed under “Part II. Item 1A. Risk Factors,” among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Such forward-looking statements represent management’s current expectations and are inherently uncertain. Investors are warned that actual results may differ from management’s expectations. Overview We are a digital asset focused company. Beginning in the third calendar quarter of 2025, management expanded its existing digital asset business to primarily focus on the Ethereum blockchain and ETH as the digital asset. This included expanding toward an asset light operating model centered on Ethereum adjacent services (including advisory) and disciplined digital asset treasury management. Our results are now driven primarily by operating efficiency in a lower capex model and Ethereum market conditions, including their impact on client activity and the value of any ETH held in our treasury. In June and July 2025, we strengthened our liquidity through an underwritten public offering of common stock, private placements, and the establishment of our at-the-market program permitting sales of up to $24.5 billion of our common stock from time to time (the “ATM Program”). We also uplisted our common stock to the NYSE American in June 2025 and subsequently to the New York Stock Exchange on April 9, 2026. 27 Subsequent to May 31, 2026, we completed an underwritten public offering of our Series A Preferred Stock, generating net proceeds of $273.8 million. The offering further enhanced our liquidity and capital resources, and supports our digital asset treasury strategy, strategic investments and other general corporate purposes. During the current quarter, we also deployed capital into strategic moonshot investments that we believe complement our ETH-focused operating model and treasury strategy. These investments were evaluated alongside direct ETH acquisitions as part of our broader capital allocation framework and are intended to support long-term value creation rather than near-term operating income. Unless otherwise indicated, period to period comparisons are presented for the two most recent fiscal years consistent with Item 303 of Regulation S-K, as amended. ETH Treasury Strategy, Drivers and Outlook Our operating model is now anchored by our ETH Treasury Strategy and capital-light ecosystem services. The key drivers of our results include (i) ETH market conditions, which affect the value of our holdings and the economics of any staking or staking-adjacent activities; (ii) client demand for Ethereum-adjacent services, including advisory; (iii) security, custody and compliance expenditures necessary to support institutional-grade treasury operations; and (iv) access to capital to opportunistically acquire ETH and invest in enabling infrastructure. Treasury and yield framework. Our objective is to grow our net ETH position over time, subject to risk and liquidity constraints. We evaluate staking and related mechanisms based on security, liquidity, counterparty and regulatory profiles. We expect staking yields to evolve with validator participation rates, protocol parameters and market conditions. Where we deploy ETH to staking or analogous activities, we intend to size exposures conservatively, prioritize best-in-class custody and validator operations (including multi-client diversity and performance monitoring), and maintain appropriate unencumbered liquidity to meet corporate needs. We may rebalance or unwind positions in response to changes in risk, reward, or regulatory context. Capital deployed into strategic investments is subject to similar risk discipline, liquidity considerations and governance oversight as our ETH treasury activities, and may introduce additional sources of earnings volatility unrelated to ETH price movements. Operating expenditures and investment priorities. As an ETH-focused company, we expect a mix shift in operating expenses toward cybersecurity, custody, treasury operations, compliance and technology enablement for advisory and analytics. Capital expenditures are expected to remain modest relative to a mining-centric model. We intend to maintain a flexible cost structure aligned with services activity and treasury scale. In addition to direct ETH holdings, we may selectively pursue strategic moonshot investments in operating companies, platforms or ecosystems that we believe are aligned with Ethereum adoption, infrastructure or adjacent services. These investments are evaluated within the context of our ETH Treasury Strategy and are intended to complement, rather than replace, direct exposure to ETH. Key trends and uncertainties. We are monitoring (i) protocol upgrades on Ethereum’s roadmap and their implications for staking yields, fee markets and network security; (ii) growth in L2 activity and cross-chain interoperability; (iii) institutional adoption trends, including tokenization initiatives and regulated market-structure developments; (iv) availability and terms of regulated custodial services; and (v) evolving U.S. and non-U.S. regulatory frameworks applicable to digital assets and staking. Liquidity considerations. Our liquidity planning considers ETH price volatility, potential impairment charges under applicable accounting policies, the liquidity profile of any staked positions and our ability to access capital markets through our shelf registration and at-the-market program. We intend to maintain sufficient liquidity to support operations, regulatory compliance, and security investments, while seeking opportunities to increase ETH holdings when market conditions are attractive. Known events reasonably likely to affect future results. Our future results may be materially affected by changes in ETH prices and staking economics; regulatory developments pertaining to ETH, staking and custody; counterparty 28 or custodian developments; cybersecurity investments and events; and market structure changes affecting liquidity and capital access for digital-asset issuers. Key Performance Drivers Key performance drivers include ETH market conditions and staking economics; client demand for advisory services; and access to capital under our shelf and ATM Program. We focus on treasury security and liquidity, sizing of staking or staking adjacent activities, and maintaining flexibility to rebalance positions as risk/return or regulatory contexts evolve. Given our pivot to an asset light, ETH focused model, energy use metrics from prior mining operations are no longer decision useful and have been excluded from MD&A. Results of Operations Comparison of Results of Operations for the Three Months Ended May 31, 2026 and 2025. Three Months Ended May 31, 2026 2025 % Change Revenue from staking and validation $ 45,743 $ — NM Revenue from self-mining 624 813 (23)% Revenue from consulting 168 35 NM Revenue from leasing — 1,075 NM Revenue from the sale of mining equipment — 129 NM Total Revenue 46,535 2,052 NM Cost of Sales 5,726 1,742 NM Operating expenses: General and administrative expenses 37,270 744 NM Unrealized loss (gain) from the digital assets holdings 15,404 34 NM Total operating expenses 52,674 778 NM Loss from operations (11,865) (468) NM Other income (expense): Change in fair value of warrant liability 16,488 — NM Net loss on derivative contracts (92,093) — NM Change in the fair value of equity method investment (1,177) — NM Interest income (expense), net 5,300 (72) NM Other income (expense) (248) (83) NM Pre-tax loss (83,595) (623) NM Income tax benefit — — NM Net loss $ (83,595) $ (623) NM For the results of operations we have included the respective percentage of changes, unless greater than 100% or less than (100)%, in which case we have denoted such changes as not meaningful (“NM”). 29 Revenues During the three months ended May 31, 2026, revenues were $46,535, compared to $2,052 during the three months ended May 31, 2025. The increase in revenue was a result of the following: •Revenue from staking and validation. During the three months ended May 31, 2026, revenue from staking and validation was $45,743, compared to $0 in the three months ended May 31, 2025. The increase was a result of the Company initiating native staking in November 2025, with the intent for staking to become a primary yield generation strategy of the Company during the current fiscal year. Further, the Pier Two acquisition accounted for $3,527 in staking revenue for the three months ended May 31, 2026. •Revenue from self-mining. During the three months ended May 31, 2026, revenue from self-mining was $624, compared to $813 in the three months ended May 31, 2025. The Company is maintaining its small BTC mining operations. However, mining revenue declined due to the lower value of BTC for the three months ended May 31, 2026 compared to the prior year period. •Revenue from consulting. During the three months ended May 31, 2026, revenue from consulting was $168, as compared to $35 during the three months ended May 31, 2025. The increase in consulting revenue in 2026 was derived from one consulting agreement under which the Company is obligated to provide various operational, maintenance and consulting services, which saw more activity in 2026 as compared to the prior period. •Revenue from leasing. During the three months ended May 31, 2026, revenue from the leasing of miners was $0, as compared to $1,075 during the three months ended May 31, 2025. The machine lease agreements expired on December 31, 2025 and were not renewed. Thus, the revenue associated with this activity is no longer recognized. •Revenue from the sale of mining equipment. During the three months ended May 31, 2026, revenue from sale of mining equipment was $0, compared to $129 in the three months ended May 31, 2025. The decrease was a result of the Company ceasing sales of mining equipment. Cost of Sales Major components of cost of sales include rent to house mining and hosting equipment, staking, electricity, depreciation, and supplies. During the three months ended May 31, 2026, cost of sales was $5,726 compared to $1,742 during the three months ended May 31, 2025. The increase in cost of sales was related to self-mining with more Blockfusion expense incurred in the current period compared to the third period in the prior year. Further, the Company initiated native staking in November 2025, with the intent for staking to become a primary yield generation strategy of the Company during the current fiscal year, which generated more costs of sales associated with staking. The increase was partially off-set by cost of sales associated with leasing decreasing as the leasing contract ended in Q2 2026. In addition, cost of sales as a percentage of revenue increased during the three months ended May 31, 2026 period primarily due to the acquisition of Pier Two and the resulting impact on the Company's staking and validation operations, affecting comparability to prior periods. Operating Expenses •General and administrative expenses. General and administrative expenses were $37,270 in the three months ended May 31, 2026, compared to $744 in the three months ended May 31, 2025. The increase is primarily related to ETH custodian fees related to treasury operations and treasury management associated 30 with the strategy to shift to staking revenue being the primary source of revenue. Further, this increase in general and administrative expenses was due to the increase in employee salaries and the increase in board of director monetary and stock-based compensation. •Unrealized loss (gain) from the digital assets holdings. During the three months ended May 31, 2026, the Company recorded an unrealized loss of $15,404 related to changes in the fair value of our digital asset holdings, as compared to a loss of $34 for the three months ended May 31, 2025. The Company acquired ETH on top of its BTC holdings as part of our business expansion during the fourth quarter of fiscal year 2025. Thus, the major purchases of ETH drove the variance between the two quarters. Other Income (Expense) •Change in fair value of warrant liability. The Company recognized a $16,488 gain during the three months ended May 31, 2026. This gain reflects the change in fair value of the Liability Classified Warrants, which is reflected in other income within the consolidated statement of operations. See "Note 8. Stockholders' Equity" of the Interim Statements for additional information. •Net loss on derivative contracts. During the three months ended May 31, 2026, the Company recognized a net loss on derivative contracts of $(92,093), primarily attributable to losses on exercised option contracts of $14,026 and the net impact of option contracts that expired during the period of $78,601, partially offset by a gain of $534 related to changes in the fair value of open option contracts.The Company had no derivative activity during the three months ended May 31, 2025. •Change in the fair value of equity method investment . The Company recognized a loss of $(1,177) during the three months ended May 31, 2026. This loss reflects the change in fair value of the investment in Eightco, which is reflected in “Other Income” within the consolidated statement of operations. See "Note 8. Stockholders' Equity" of the Interim Statements for additional information. •Interest income (expense), net. Interest income was $5,300 in the three months ended May 31, 2026, as compared to an expense of $(72) during the three months ended May 31, 2025. The 2025 interest was related to the debt during the three months ended May 31, 2025 which was extinguished during fiscal 2025. The increase in interest income was associated with more cash from ATM capital that was placed into interest bearing bank accounts. •Other income (expense). The Company recognized other income (expense) of $(248) during the three months ended May 31, 2026, as compared to $(83) during the three months ended May 31, 2025. The decrease in expense is because the Company had no loss on extinguishment of debt during the three months ended May 31, 2026, as compared to a loss of ($208) during the three months ended May 31, 2025. The 2025 loss was related to the Company’s Hash Rate Sale Agreement. The Company had no debt as of May 31, 2026. Income Taxes During the three months ended May 31, 2026, the Company recognized no income tax benefit or income tax expense. 31 Comparison of Results of Operations for the Nine Months Ended May 31, 2026 and 2025. Nine Months Ended May 31, 2026 2025 % Change Revenue from staking and validation $ 56,924 $ — NM Revenue from self-mining 845 2,814 (70)% Revenue from consulting 565 35 NM Revenue from leasing 1,536 1,075 43% Revenue from the sale of mining equipment — 846 NM Total Revenue 59,870 4,770 NM Cost of Sales 8,177 4,393 86% Operating expenses: General and administrative expenses 335,662 2,667 NM Unrealized loss (gain) from the digital assets holdings 9,038,538 (25) NM Total operating expenses 9,374,200 2,642 NM Loss from operations (9,322,507) (2,265) NM Other income (expense): Change in fair value of warrant liability 264,121 — NM Net loss on derivative contracts (133,275) — NM Issuance costs related to warrant offering (9,381) — NM Change in the fair value of equity method investment (6,793) — NM Interest income (expense), net 9,917 (200) NM Other income (expense) (480) (289) 66% Pre-tax loss (9,198,398) (2,754) NM Income tax benefit 92,295 — NM Net loss $ (9,106,103) $ (2,754) NM For the results of operations we have included the respective percentage of changes, unless greater than 100% or less than (100)%, in which case we have denoted such changes as not meaningful (“NM”). Revenues During the nine months ended May 31, 2026, revenues were $59,870, compared to $4,770 during the nine months ended May 31, 2025. The increase in revenue was a result of the following: •Revenue from staking and validation. During the nine months ended May 31, 2026, revenue from staking and validation was $56,924, compared to $0 in the nine months ended May 31, 2025. The increase was a result of the Company initiating native staking in November 2025, with the intent for staking to become a primary yield generation strategy of the Company during the current fiscal year. Further, the Pier Two acquisition accounted for $3,527 in staking revenue for the nine months ended May 31, 2026. 32 •Revenue from self-mining. During the nine months ended May 31, 2026, revenue from self-mining was $845, compared to $2,814 in the nine months ended May 31, 2025. The Company is maintaining its small BTC mining operations. However, mining revenue declined partially due to the suspension of self-mining operations during relocation in the nine months ended May 31, 2026. •Revenue from consulting. During the nine months ended May 31, 2026, revenue from consulting was $565, as compared to $35 during the nine months ended May 31, 2025. All of the consulting revenue in 2026 was derived from its consulting agreement with KULR Technology Group, Inc., under which the Company is obligated to provide various operational, maintenance and consulting services from May 16, 2025 to May 15, 2026. •Revenue from leasing. During the nine months ended May 31, 2026, revenue from the leasing of miners was $1,536, as compared to $1,075 during the nine months ended May 31, 2025. This was due to more activity within its leasing contracts with KULR Technology Group, Inc. for the nine month period ended May 31, 2026. •Revenue from the sale of mining equipment. During the nine months ended May 31, 2026, revenue from the sale of mining equipment was $0, compared to $846 in the nine months ended May 31, 2025. The revenue recognized during the nine months ended May 31, 2025 was primarily related to the sale of ten transformers. No such revenue was recognized during the nine months ended May 31, 2026. Cost of Sales Major components of cost of sales include rent to house mining and hosting equipment, staking, electricity, depreciation, and supplies. During the nine months ended May 31, 2026, cost of sales was $8,177 compared to $4,393 during the nine months ended May 31, 2025. The increase in cost of sales was due in part to leasing costs resulting from the Machine Lease Agreement that Bitmine entered into with KULR Technology Group, Inc. on May 16, 2025. As part of this agreement, Bitmine is responsible for maintaining the equipment, providing a contractually agreed upon level of hash rate, and ensuring continuous operation, either directly or through third-party providers. Further, the Company initiated native staking in November 2025, with the intent for staking to become a primary yield generation strategy of the Company during the current fiscal year, which generated more cost of sales associated with staking. This was partially offset by the Company continuing its strategy of winding down its proprietary self-mining exposure and deferring new site build outs during the nine months ended May 31, 2026 and the costs incurred during the nine months ended May 31, 2025 . Operating Expenses •General and administrative expenses. General and administrative expenses were $335,662 in the nine months ended May 31, 2026, compared to $2,667 in the nine months ended May 31, 2025. The increase is primarily related to treasury activity associated with the Company's ETH strategy. Due to the large purchases of ETH throughout the year, the Company incurred significantly more of these treasury expenses. Further, this increase in general and administrative expenses was due to the increase in employee salaries and the increase in board of director monetary and stock-based compensation. •Unrealized loss (gain) from the digital assets holdings. During the nine months ended May 31, 2026, the Company recorded an unrealized loss of $9,038,538 related to changes in the fair value of our digital asset holdings, as compared to a gain of $(25) for the nine months ended May 31, 2025. The Company acquired ETH on top of its BTC holdings as part of our business expansion during the last quarter of fiscal year 2025. Since the company now possesses ETH in addition to BTC, the company is more exposed to market fluctuations that result in unrealized losses or gains. 33 Other Income (Expense) •Change in fair value of warrant liability. The Company recognized a $264,121 gain during the nine months ended May 31, 2026. This gain reflects the change in fair value of the Liability Classified Warrants, which is reflected in other income within the consolidated statement of operations. See "Note 8. Stockholders' Equity" of the Interim Statements for additional information. •Net loss on derivative contracts. During the nine months ended May 31, 2026, the Company recognized a net loss on derivative contracts of ($133,275), primarily attributable to losses on exercised option contracts of $79,278 and the net impact of option contracts that expired during the period of $54,512, partially offset by a $515 gain related to changes in the fair value of open option contracts. The Company had no derivative activity during the nine months ended May 31, 2025. •Issuance costs related to warrant offering. The Company incurred an issuance cost of ($9,381) during the nine months ended May 31, 2026. These costs were incurred in connection with the warrant offering completed during the period and did not exist in the prior year. •Change in the fair value of equity method investment . The Company recognized a $6,793 loss during the nine months ended May 31, 2026. This loss reflects the change in fair value of the investment in Eightco, which is reflected in “Other Income” within the consolidated statement of operations. See "Note 8. Stockholders' Equity" of the Interim Statements for additional information. •Interest income (expense), net. Interest expense, net was $9,917 in the nine months ended May 31, 2026, as compared to $(200) in interest expense, net in the nine months ended May 31, 2025. The 2025 interest was related to the debt during the three months ended May 31, 2025 which was extinguished during fiscal 2025. The increase in interest income was associated with more cash from ATM capital that was placed into interest bearing bank accounts. •Other income (expense). The Company recognized other income (expense) of $(480) during the nine months ended May 31, 2026, as compared to $(289) during the nine months ended May 31, 2025. The decrease in expense is because the Company had no loss on extinguishment of debt during the nine months ended May 31, 2026, as compared to a loss of $(289) during the nine months ended May 31, 2025. The 2025 loss was related to the Company’s Hash Rate Sale Agreement. The Company had no debt as of May 31, 2026. Income Taxes During the nine months ended May 31, 2026, the Company recognized an income tax benefit of $92,295, primarily attributable to the reversal of the deferred tax liabilities associated with unrealized gains on digital assets recognized in prior periods that are now in a significant unrealized loss position. These unrealized losses resulted in the recognition of deferred tax assets, against which the Company recorded a 100% valuation allowance. Non-GAAP Financial Measures The following tables present Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) and Adjusted Earnings Per Share (“EPS”). These are non-U.S. GAAP financial measures within the meaning of Regulation G dictated by the Securities and Exchange Commission. Adjusted EBITDA is defined as EBITDA excluding the impact of certain non-cash items for the period presented. Adjusted EPS is defined as EPS in accordance with US GAAP excluding the impact of certain non-cash items for the period presented. The Company uses Adjusted EBITDA and Adjusted EPS in explaining its results to shareholders and the investment community and in its internal evaluation and management of its businesses. The Company’s management believes 34 that these non-GAAP financial measures and the information they provide are useful to investors since these measures (a) permit investors to view the Company’s performance using the same tools that management uses to evaluate the Company’s past performance, (b) permit investors to compare the Company with its peers, and (c) provide consistent period-to-period comparisons of the results. While the Company believes that these measures are useful in evaluating the Company’s performance, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these measurements may differ from similar measures presented by other companies. A reconciliation of Adjusted EBITDA and Adjusted EPS is detailed below. The reconciliation of Adjusted EBITDA for the three months ended May 31, 2026 and 2025 is as follows: Three Months Ended May 31, 2026 2025 Net Income (loss) $ (83,595) $ (623) Interest income (expense), net (5,300) 72 Depreciation and amortization expense 386 181 EBITDA $ (88,509) $ (370) Adjustments Stock based compensation (1) $ 13,251 $ 647 Change in the fair value of equity method investment(3) 1,177 — Change in fair value of warrant liability(5) (16,488) — Unrealized change in fair value of ETH option contracts(6) (515) — Loss on the extinguishment of debt(7) — 208 Unrealized loss (gain) from the digital assets holdings(8) 15,404 34 Adjusted EBITDA $ (75,680) $ 519 The reconciliation of Adjusted EBITDA for the nine months ended May 31, 2026 and 2025 is as follows: Nine Months Ended May 31, 2026 2025 Net Income (loss) $ (9,106,103) $ (2,754) Interest income (expense), net (9,917) 200 Provision for income taxes (92,295) — Depreciation and amortization expense 631 539 EBITDA $ (9,207,684) $ (2,015) Adjustments Stock based compensation (1) $ 38,357 $ 1,319 Loss on sale of property and equipment(2) 200 — Change in the fair value of equity method investment(3) 6,793 — Issuance costs related to warrant offering(4) 9,381 — Change in fair value of warrant liability(5) (264,121) — Unrealized change in fair value of ETH option contracts(6) (515) — Loss on the extinguishment of debt(7) — 289 Unrealized loss (gain) from the digital assets holdings(8) 9,038,538 (25) One time consulting and legal fees(9) 200,044 — Adjusted EBITDA $ (179,007) $ (432) 35 (1) Stock based compensation represents the non-cash expense recorded for the Company's restricted stock units and restricted stock awards. This includes the impact of the modification that occurred during the three and nine months ended May 31, 2026 as well as the vesting of existing awards. (2) Represents a loss recorded during the period on the sale of property, plant and equipment that was the difference between the book carrying value and the sale price. (3) Represents the change in fair value of the Company's equity held investment in Eightco's common stock for the three and nine months ended May 31, 2026. (4) Represents the issuance cost incurred for the warrant offering for the nine months ended May 31, 2026 disclosed within "Note 8. Stockholders' Equity." (5) Represents the change in fair value of the Company's liability classified warrants for the three and nine months ended May 31, 2026. (6) Represents the unrealized fair value adjustment related to the Company's outstanding ETH option contracts for the three and nine months ended May 31, 2026. (7) Represents non-recurring charges incurred in connection with the early settlement of the Company's line of credit from IDI and the Hash Rate Sale Agreement. (8) Removes the impact of unrealized changes in fair value of our digital asset holdings from net income. (9) Represents one time capital raising, advisory, legal and other consulting fees incurred during the period. The reconciliation of Adjusted EPS for the three months ended May 31, 2026 and 2025 is as follows: Three Months Ended May 31, 2026 2025 Pre-tax loss $ (83,595) $ (623) Adjustments: Stock based compensation (1) 13,251 647 Change in the fair value of equity method investment(3) 1,177 — Change in fair value of warrant liability(5) (16,488) — Unrealized change in fair value of ETH option contracts(6) (515) — Loss on the extinguishment of debt(7) — 208 Unrealized loss (gain) from the digital assets holdings(8) 15,404 34 One time consulting and legal fees(9) — — Adjusted net income (loss) before income tax provision $ (70,766) $ 266 Income tax benefit (as reported) — — Income tax provision adjustment(10) — — Adjusted income tax benefit $ — $ — Adjusted net income (loss) $ (70,766) $ 266 Deemed dividend on Series A Preferred Stock — — Adjusted net income (loss) attributable to common stockholders $ (70,766) $ 266 Diluted weighted average common shares outstanding 551,788,656 2,006,202 Adjusted diluted net income (loss) per common share $ (128.25) $ 132.59 36 The reconciliation of Adjusted EPS for the nine months ended May 31, 2026 and 2025 is as follows: Nine Months Ended May 31, 2026 2025 Pre-tax loss $ (9,198,398) $ (2,754) Adjustments: Stock based compensation(1) 38,357 1,319 Loss on sale of property and equipment(2) 200 — Change in the fair value of equity method investment(3) 6,793 — Issuance costs related to warrant offering(4) 9,381 — Change in fair value of warrant liability(5) (264,121) — Unrealized change in fair value of ETH option contracts(6) (515) — Loss on the extinguishment of debt(7) — 289 Unrealized loss (gain) from the digital assets holding(8) 9,038,538 (25) One time consulting and legal fees(9) 200,044 — Adjusted net income (loss) before income tax provision $ (169,721) $ (1,171) Income tax benefit (as reported) (92,295) — Income tax provision adjustment(10) 35,641 — Adjusted income tax benefit $ (56,654) $ — Adjusted net income (loss) $ (113,067) $ (1,171) Deemed dividend on Series A Preferred Stock — (2,961) Adjusted net income (loss) attributable to common stockholders $ (113,067) $ (4,132) Diluted weighted average common shares outstanding 443,947,604 2,185,206 Adjusted diluted net income (loss) per common share $ (0.25) $ (535.88) (1) Stock based compensation represents the non-cash expense recorded for the Company's restricted stock units and restricted stock awards. This includes the impact of the modification that occurred during the three and nine months ended May 31, 2026 as well as the vesting of existing awards. (2) Represents a loss recorded during the period on the sale of property, plant and equipment that was the difference between the book carrying value and the sale price. (3) Represents the change in fair value of the Company's equity held investment in Eightco's common stock for the three and nine months ended May 31, 2026. (4) Represents the issuance cost incurred for the warrant offering for the nine months ended May 31, 2026 disclosed within "Note 8. Stockholders' Equity." (5) Represents the change in fair value of the Company's liability classified warrants for the three and nine months ended May 31, 2026. (6) Represents the unrealized fair value adjustment related to the Company's outstanding ETH option contracts for the three and nine months ended May 31, 2026. (7) Represents non-recurring charges incurred in connection with the early settlement of the Company's line of credit from IDI and the Hash Rate Sale Agreement. (8) Removes the impact of unrealized changes in fair value of our digital asset holdings from net income. 37 (9) Represents one time capital raising, advisory, legal and other consulting fees incurred during the period. (10) The income tax provision adjustment is calculated by multiplying “Adjusted income (loss) before income tax provision” by the Company’s applicable tax rate of 21%. Known Trends, Events and Uncertainties Business expansion. Following our July 2025 and ongoing financings, we have pivoted to a services-led model and reduced proprietary mining exposure, including by redeploying/retiring less-efficient machines, concentrating hash rate at lower-cost sites and phasing capex. In the second half of calendar 2025, we further reduced exposure to halving-driven volatility by pivoting to a services-led, capital-light model and by winding down new proprietary mining investments. We discuss the implications for liquidity, capital needs and accounting estimates under “Liquidity and Capital Resources” and “Critical Accounting Estimates.” This reduces direct exposure to network difficulty and power prices but increases reliance on client demand for advisory and leasing services. We expect services mix and pricing to be key drivers of variability. Ethereum market dynamics. ETH price levels influence client activity and the value of any ETH held in treasury. Increased adoption or volatility can raise demand for advisory services; conversely, sustained price declines could dampen client spending. Capital markets and liquidity. We believe our June and July 2025 transactions, shelf registration and ATM Program provide flexibility to access equity capital opportunistically to support working capital and selective investments aligned with a capital-light strategy. Adverse market conditions or unfavorable industry sentiment could constrain our ability to raise capital on acceptable terms. Regulatory environment. Evolving U.S. and foreign regulations related to digital assets, data center operations, financial markets and custody may impose new compliance obligations or restrictions. Management updates. On November 20, 2025, the Company entered into an employment agreement with Chi Tsang to serve as the Company’s Chief Executive Officer. Additionally, on January 7, 2026, the Company entered into an employment agreement with Young Kim to serve as the Company’s Chief Financial Officer and Chief Operating Officer. Liquidity and Capital Resources Current liquidity position As of May 31, 2026, the Company had $340,289 in cash on hand and working capital of $433,123. The Company's primary sources of liquidity during the nine-months ended May 31, 2026, were proceeds from equity financing transactions, including the September 2025 issuance of common stock and warrants, and proceeds generated through its ATM equity program. During the period, the Company generated gross proceeds of $12,235,110 from equity financing transactions, consisting of (i) $11,869,870 in gross proceeds from the sale of 340,748,312 shares of common stock pursuant to the ATM Offering and (ii) $365,240 in gross proceeds from the September 2025 issuance of common stock and warrants. Subsequent to May 31, 2026, the Company completed an underwritten public offering of 3,500,000 shares of its Series A Preferred Stock at a public offering price of $80.00 per share, generating net proceeds of $273.8 million after deducting underwriting discounts and offering expenses. The Series A Preferred Stock is listed on the New York Stock Exchange under the symbol "BMNP." 38 The Company intends to use available liquidity to support its digital asset treasury strategy, strategic investments, working capital requirements and general corporate purposes. Management continues to evaluate capital allocation opportunities, including direct digital asset acquisitions and investments in blockchain-related businesses and technologies that complement the Company's Ethereum-focused strategy. Sources and uses of cash Nine Months Ended May 31, 2026 2025 Net cash provided by (used in) operating activities $ (287,592) $ 1,366 Net cash provided by (used in) investing activities (12,102,446) (18) Net cash provided by (used in) financing activities 12,218,362 (374) Net increase (decrease) in cash and cash equivalents $ (171,676) $ 974 Net cash used in operating activities was $(287,592) for the nine months ended May 31, 2026, compared to net cash provided by operating activities of $1,366 for the nine months ended May 31, 2025. The change was driven primarily by a net loss of $9,106,084 for the current period, which included $9,038,538 of unrealized losses on the Company's ETH treasury holdings recognized through net income. On a cash basis, operating outflows increased due to one time capital raising, advisory, legal, and other consulting fees. The increase is also related to expenses associated with the Consulting Agreement. This increase in cash outflow was offset by an increase in cash received from the Company’s revenue generating activities. Net cash used in investing activities was $(12,102,446) for the nine months ended May 31, 2026, compared to $(18) for the nine months ended May 31, 2025. The increase in investing cash outflow was primarily driven by the $(11,687,493) purchase of ETH. The remaining investing cash outflow was driven by the purchases of the Company’s investments in Beast Industries and Eightco Holdings. Net cash provided by financing activities was $12,218,362 for the nine months ended May 31, 2026, compared to the $(374) used in financing activities for the nine months ended May 31, 2025. This increase was primarily driven by the $11,869,870 of proceeds received from the ATM Offering. Refer to "Note 8. Stockholder’s Equity" within the financial statements for further details regarding these offerings. Material cash requirements and known liquidity risks We expect the following material cash requirements over the next 12 months under our capital-light model: •fees payable to industry-experienced third parties for managing the Company’s ETH holdings which are expected to be in the range from approximately $40,000 to $50,000 annually. The Company expects these costs to be more than offset by staking rewards generated from its ETH holdings. However, there can be no assurances that such staking rewards will be realized at anticipated levels; •ongoing revenue participation payments under the Management Services Agreement with Eth Tower, which are based on the level of staking activity and related revenues generated by MAVAN Holdings; •modest capital expenditures of approximately $1,500, primarily related to the for maintenance of existing technology platforms and infrastructure supporting the Company's operations; •working capital requirements for general operations, approximately $1,000 per month at current run-rate activity levels; and •public company costs, including audit and compliance, of approximately $4,000 annually. •general operating and overhead costs of approximately $83,016 annually. 39 •dividend obligations associated with the Company's outstanding Series A Preferred Stock of approximately $33,250 annually. Our liquidity is now less sensitive to network difficulty and power price volatility than under a mining-centric model, though ETH and BTC price levels can influence client demand and the value of any digital assets held in treasury. We mitigate liquidity risks by (i) maintaining a flexible cost structure aligned with services activity, (ii) limiting new capex commitments, and (iii) preserving access to equity capital via our shelf and ATM facilities. We believe, based on our current operating plan, expected cash on hand, anticipated operating cash flows and access to capital under our shelf/ATM, that we will have sufficient liquidity to fund operations for at least the next 12 months. Beyond 12 months, our ability to fund growth and meet obligations will depend on market conditions, client demand for services, and access to capital on acceptable terms. Counterparty and market developments. We monitor counterparties in the digital asset ecosystem for credit and operational risks, including custodians, pool operators, hosting partners and joint venture partners. We currently do not have material assets with bankrupt or suspended counterparties, and we assess custody practices, insurance and operational controls at our partners. Disruptions in digital asset markets, regulatory developments or power market dislocations could adversely affect our liquidity, capital access and operational continuity. Off-Balance Sheet Arrangements The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on the Company’s financial condition, changes in financial condition, and results of operations, liquidity or capital resources. Legacy commitments under power, site control and joint-venture agreements are being evaluated in light of our strategic shift; any remaining obligations (e.g., minimums or deposits) are included in our liquidity planning. We do not expect to enter into new long-term power purchase or build-to-suit arrangements absent clear, low-risk returns. Critical Accounting Estimates Our financial statements are prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions affecting reported amounts of assets, liabilities, revenues, expenses and related disclosures. We consider the following to be our critical accounting estimates because they involve significant judgment, are subject to uncertainty, and could materially impact our financial results if actual results differ from our estimates. This discussion supplements, and should be read together with, the summary of significant accounting policies in our financial statement notes. Business Combinations. Business combinations are recorded using the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under this method, the purchase consideration is allocated to the tangible assets acquired, liabilities assumed, and identifiable intangible assets acquired based on their estimated fair values as of the acquisition date, with any excess recorded as goodwill. The determination of the fair value of assets acquired and liabilities assumed requires management to make significant estimates and assumptions. The most significant judgments relate to the identification and valuation of acquired intangible assets, including estimates of future cash flows, discount rates, customer attrition rates, technology obsolescence, and the determination of useful lives used to calculate amortization expense. Changes in these assumptions could materially affect the amounts assigned to identifiable intangible assets and goodwill, as well as future amortization and impairment expense. For significant acquisitions, the Company engages third-party valuation specialists to assist management in determining the fair value of acquired intangible assets and certain acquired assets and liabilities. Goodwill and Intangible Assets Impairment. The Company records goodwill and identifiable intangible assets in connection with business combinations. As of May 31, 2026, the Company recorded goodwill of $15.0 million and intangible assets, net, of $11.1 million, primarily related to the Pier Two acquisition. Goodwill is tested for impairment at least annually, or more frequently if events or circumstances indicate that impairment may exist, at the reporting unit level. Based on management’s assessment under ASC 280 and ASC 350, the Company has identified one reporting unit for purposes of goodwill impairment testing. Definite-lived intangible assets are amortized over 40 their estimated useful lives and reviewed for impairment when indicators of impairment are present. These assessments require significant judgment, including estimates of future cash flows, discount rates, revenue growth, useful lives, and market participant assumptions. Management did not identify any impairment of goodwill or definite-lived intangible assets during the three and nine months ended May 31, 2026. Staking and validation services revenue recognition. The Company recognizes revenue from blockchain validation and staking services in accordance with ASC 606. Revenue is earned in the form of digital assets received for validating blockchain transactions and providing staking services. The Company recognizes revenue when its performance obligation is satisfied through the successful validation of blocks or transactions on the applicable blockchain network. Significant judgment is required in evaluating the application of ASC 606 to blockchain validation arrangements, including the identification of the customer and contract by analogy, determining when performance obligations are satisfied, and assessing whether the Company acts as principal or agent in generating staking rewards. The Company recognizes revenue on a gross basis when it controls the validation services provided to the blockchain network and is primarily responsible for fulfilling the related performance obligation. Changes in these judgments could materially affect the amount and timing of revenue recognized. Stock-based compensation. We measure equity awards at grant-date fair value under ASC 718 using observable market prices and, where applicable, option-pricing models. Inputs include volatility, expected term and risk-free rates. Fair value of derivative liabilities and financing instruments. Certain financing arrangements contain embedded features accounted for as derivatives measured at fair value with changes recognized in earnings. We estimate fair value using market-based models that require assumptions about volatility, discount rates and probability-weighted outcomes. Accounting policies and estimates are reviewed periodically for consistency with SEC guidance, including the 2003 MD&A Guidance and the 2020 amendments to Item 303. We will update our critical accounting estimates as our operations evolve and additional trends and data become reasonably available.

Risk Factors

The following risk factors supplement the Company’s existing Item 1A disclosures included in the Company’s previous filings with the SEC. These supplemental risk factors should be read in conjunction with the other information contained in this Report and the Company’s other filings with the SEC, including, but not limited to, the Company’s Rule 424(b)(5) prospectus supplement dated June 5, 2026 filed with the Securities and Exchange Commission. Risks Related to Our Series A Preferred Stock Staking yield volatility may materially and adversely affect our ability to pay dividends on the Series A Preferred Stock. A significant portion of our revenue is derived from staking rewards earned on our Ethereum holdings. Staking rewards are not fixed and are subject to substantial fluctuation based on a variety of factors, many of which are beyond our control. These factors include changes in the total amount of Ethereum staked across the network, modifications to the Ethereum protocol’s reward mechanisms through network upgrades or governance decisions, fluctuations in network transaction volume and associated priority fees, changes in the rate of new validator participation, and broader macroeconomic and cryptocurrency market conditions. As the total amount of Ethereum staked on the network increases, the per-validator reward rate generally decreases, which could result in a material reduction in the yield we earn on our staked assets over time. Because we rely on staking income as a primary source of cash generation, any sustained decline or period of heightened volatility in staking yields could materially impair our ability to meet our operating expenses, service any outstanding indebtedness, and maintain dividend payments on our Series A Preferred Stock at current or anticipated levels. Our board of directors retains discretion over the declaration and payment of dividends, and there can be no assurance that dividends will be declared or paid in any particular amount or at all. A reduction or suspension of 42 dividends resulting from diminished staking yields could adversely affect the market price of our securities, including the Series A Preferred Stock, and may make our securities less attractive to income-oriented investors. In addition, the yield earned through Ethereum staking is denominated in ETH, the value of which is itself subject to significant price volatility. Even if staking yields remain stable in terms of the quantity of ETH earned, the fiat-currency equivalent of those rewards may fluctuate materially due to changes in the market price of ETH. A decline in the price of ETH concurrent with a decline in staking yield rates would compound the adverse impact on our cash flow and our ability to fund dividend payments on the Series A Preferred Stock. Conversely, even if ETH prices appreciate, a sufficient decline in staking yield rates could still result in reduced revenue in absolute terms if the rate of yield compression outpaces any price appreciation. Furthermore, the Ethereum network and its proof-of-stake consensus mechanism remain subject to ongoing development and potential protocol changes. Future upgrades to the Ethereum network, including changes to issuance schedules, reward distribution mechanisms, or the introduction of new staking paradigms, could alter the economics of staking in ways that are difficult to predict. Regulatory developments in the United States and abroad may also affect our ability to stake Ethereum or the economic terms on which staking is conducted, including the potential classification of staking activities or staking rewards as securities transactions, which could subject us to additional compliance obligations or restrict our staking operations. Any such changes could further reduce the yields available to us, which may have a material adverse effect on our ability to cover dividend payments on the Series A Preferred Stock. There can be no assurance that staking yields will remain at levels sufficient to support our current business model or dividend policy, and investors should not place undue reliance on historical staking yields as indicative of future performance. Ongoing issuance of new ETH may adversely affect the price of ETH and our ability to cover dividend payments on the Series A Preferred Stock. The rate at which new ETH are issued and put into circulation is expected to vary. Unlike bitcoin, which has a hard-coded maximum supply of 21 million coins, the Ethereum network has no formal cap on the total supply of ETH. New ETH is issued to validators as staking rewards on a continuing basis, and continued net issuance of ETH may introduce sustained downward pressure on the price of ETH, particularly if a meaningful portion of newly minted ETH is sold by validators. Sustained pressure on the price of ETH may have a material adverse effect on our ability to cover dividend payments on the Series A Preferred Stock. Our ETH holdings are less liquid than cash and cash equivalents and may not be able to serve as a source of liquidity to fund dividends on the Series A Preferred Stock. Historically, the ETH market has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. Staked ETH may not be immediately available for withdrawal or sale. As part of the “activating” and “exiting” processes of staking, staked ETH will be inaccessible for a variable period of time determined by a range of factors, including network congestion. These delays may be unpredictable and could occur during periods of market stress or declining ETH prices, limiting our ability to use staked ETH as a source of liquidity to fund dividends on the Series A Preferred Stock. Further, during times of market instability, we may not be able to sell our ETH at favorable prices or at all. For example, a number of ETH trading venues temporarily halted deposits and withdrawals in 2022, although the Coinbase exchange (our principal market for ETH) has, to date, not done so. As a result, our ETH holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents. Further, ETH we hold with our custodians do not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered ETH or otherwise generate funds using our ETH holdings, including during times of market instability or when the price of ETH has declined significantly. If we are unable to sell our ETH, enter into additional capital raising transactions, including capital raising transactions using ETH as collateral, or otherwise generate funds using our ETH holdings, or if we are forced to sell our ETH at a significant 43 loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted and our ability to fund dividend payments on the Series A Preferred Stock could be materially impaired. Regulatory treatment of digital assets could cause us to be deemed an “investment company,” which could materially harm the trading price of the Series A Preferred Stock. There is a risk that changing regulatory treatment of ETH, other digital assets we hold, or activities in which we are engaged could cause us to be deemed to be an “investment company” within the meaning of the Investment Company Act of 1940, as amended, which would impose substantial regulatory burdens, restrict our ability to operate our business as currently conducted, and could require us to liquidate or restructure our holdings. If we were deemed to be an investment company, we could be required to register as such under the Investment Company Act, which would subject us to significant regulatory requirements and restrictions, including limitations on leverage, affiliate transactions, and our ability to pursue our current digital asset treasury strategy. The costs and administrative burden of compliance with the Investment Company Act could be substantial and could materially affect our profitability and operations. Adverse regulatory developments concerning the classification of digital assets and related activities under the Investment Company Act or other federal securities laws could materially harm our business and the trading prices of our securities, including the Series A Preferred Stock. Our option strategies and strategic investments expose us to additional volatility and counterparty risks that could impair our ability to cover dividend payments on the Series A Preferred Stock. We generate ETH option premium income from option strategies on our ETH holdings. These strategies expose us to mark-to-market volatility, counterparty risk, and the risk that ETH could be called away at unfavorable prices. We also hold strategic “moonshot” investments, including a stake in Beast Industries Co. valued at $186 million (recorded as an equity investment measured at cost) and a stake in Eightco Holdings Inc. valued at $93 million as of May 31, 2026 (recorded as an equity method investment measured at fair value), which are subject to substantial volatility, illiquidity, and concentration risks. If any of the foregoing risks were to materialize, it could reduce the yield generated from our ETH holdings and/or our future revenues, which could have a material adverse effect on our ability to cover dividend payments on the Series A Preferred Stock. We may be unable to access capital markets on acceptable terms, which could increase the cost of issuing parity or junior preferred stock and adversely affect our ability to maintain dividends on the Series A Preferred Stock. Our digital asset acquisition strategy depends on our continued ability to access capital markets, including through issuances of equity, preferred, and debt securities. Adverse capital markets conditions, regulatory developments, declines in the price of ETH or our common stock, or perceptions about our creditworthiness could limit our ability to raise capital and could increase our cost of capital, including our cost of issuing additional parity stock or junior stock. If we are unable to access the capital markets on acceptable terms, we may be unable to fund our digital asset treasury strategy, meet our operating obligations, or maintain dividend payments on the Series A Preferred Stock, any of which could have a material adverse effect on our business, financial condition, results of operations, and the trading price of our securities. Risks Related to Our Staking and Validator Operations Our staking and validator operations conducted through MAVAN are subject to significant risks, including slashing, lock-up periods, smart contract vulnerabilities, liquidity constraints, counterparty exposure, and operational failures, any of which could result in a partial or total loss of staked ETH or a material reduction in staking revenue. We generate substantially all of our revenue from native ETH staking conducted through MAVAN. Staking requires continuous operational reliability, adherence to Ethereum protocol rules, and the maintenance of high-availability validator infrastructure. Validators that act maliciously, produce conflicting attestations, or suffer extended downtime may be “slashed” by the Ethereum network, resulting in an irrecoverable partial loss of staked principal. As of May 31, 2026, the Company held 5,416,945 ETH with a fair value of $10.9 billion, a substantial portion of which is staked through MAVAN, and any slashing event could result in a material loss of digital assets. In addition, staking involves unbonding or lock-up periods during which staked ETH cannot be withdrawn or sold; these periods may be unpredictable and may coincide with periods of market stress, reducing our ability to respond to adverse price movements or meet liquidity needs. Our staking operations also involve exposure to smart contract risk—the 44 underlying protocols, liquid staking mechanisms, and restaking integrations on which MAVAN relies are governed by code that may contain undiscovered vulnerabilities exploitable by malicious actors. Where staking is conducted through or in conjunction with third-party custodians, infrastructure providers, or staking protocols, we face counterparty and operational risk that could result in delayed access to staked assets, loss of staking rewards, or in extreme cases, loss of principal. Any of the foregoing risks, if realized, could have a material adverse effect on our financial condition and results of operations. Our recent strategic transactions, including the acquisition of Pier Two and the launch of MAVAN, may not be successfully integrated or generate the anticipated benefits, and our projected staking revenue figures are based on assumptions that may prove incorrect. We completed the acquisition of Pier Two Holdings Pty Ltd in March 2026 for total preliminary consideration of $27.8 million and launched MAVAN later that month. The integration of Pier Two’s non-custodial staking infrastructure and personnel into MAVAN involves substantial execution risks, including risks related to the integration of technology systems and operational workflows, retention of key technical employees, regulatory compliance across multiple jurisdictions (including Australian and U.S. regulatory regimes), validator performance optimization, and our ability to attract and retain institutional staking customers. If we are unable to successfully integrate Pier Two’s operations or retain key personnel, we may not realize the anticipated benefits of the acquisition, which could impair the carrying value of the goodwill and intangible assets recognized in connection with the transaction. Furthermore, the annualized staking revenue figures and yield assumptions we have disclosed in connection with MAVAN’s operations are based on assumptions regarding staking yield rates, the proportion of our ETH holdings that are staked at any given time, validator uptime, and Ethereum network conditions—all of which are subject to change. Actual results may differ materially from these assumptions, and there can be no assurance that MAVAN will achieve the revenue levels or operational performance we anticipate. Our revenue is highly concentrated in ETH staking and validation operations conducted through MAVAN, and any disruption to those operations, decline in staking yields, or adverse protocol change would have a disproportionate impact on our results of operations and financial condition. For the three months ended May 31, 2026, revenue from staking and validation was $45.7 million, representing 98% of total revenue of $46.5 million for the quarter. For the nine months ended May 31, 2026, revenue from staking and validation was $56.9 million, representing 95% of total revenue of $59.9 million for the nine-month period. This extraordinary concentration of revenue in a single operating activity—Ethereum staking conducted principally through MAVAN—means that any disruption to MAVAN’s validator performance, any decline in Ethereum staking yield rates, or any adverse change to the Ethereum protocol’s reward mechanisms could result in a disproportionate and material decline in our total revenue, operating income, and cash flow from operations. Unlike a diversified revenue base, our reliance on a single yield-generation mechanism affords limited ability to offset declines in staking economics with revenue from other sources. In addition, because staking revenue is denominated in ETH, fluctuations in the market price of ETH directly affect the U.S. dollar-equivalent revenue recognized by the Company, compounding the impact of any reduction in yield rates. There can be no assurance that our revenue concentration in staking will decrease over time, and investors should consider that our results of operations are substantially dependent on the continued performance of MAVAN and favorable Ethereum staking economics. Regulatory uncertainty regarding the classification and treatment of staking activities and staking rewards in the United States and abroad may subject us to additional compliance obligations, restrict our staking operations, or require changes to MAVAN’s business model as it expands to serve institutional clients. The regulatory treatment of staking activities and staking rewards under U.S. federal and state securities laws, banking regulations, money transmission laws, and tax laws remains uncertain and continues to evolve. Regulators, including the Securities and Exchange Commission, the Commodity Futures Trading Commission, and various state regulators, have not provided definitive guidance on whether staking activities or staking rewards constitute securities transactions, commodity transactions, or money services business activities. If staking activities or staking rewards are classified as securities or are otherwise subject to registration, licensing, or reporting obligations, we could be required to register as a broker-dealer, investment adviser, money services business, or similar regulated entity, to modify MAVAN’s operations, or to curtail or cease certain staking activities. These risks are amplified as MAVAN expands beyond supporting our own ETH treasury to offering staking services to institutional investors, custodians, and ecosystem partners—an expansion that may subject the Company to additional or different regulatory regimes applicable to staking service providers, including fiduciary, custody, and consumer protection 45 requirements not previously applicable to our operations. Regulatory developments in foreign jurisdictions, including Australia (where Pier Two is domiciled and operates), may similarly affect our ability to conduct staking operations or the economic terms on which staking is offered. Any adverse regulatory development could materially impair our staking revenue or require us to restructure MAVAN’s operations at significant cost. We rely on third-party infrastructure providers and key personnel, including Ethereum Tower LLC under a long-term Management Services Agreement, to operate MAVAN’s validator nodes, and any failure of performance, termination of arrangements, or loss of key personnel could materially disrupt our staking operations. MAVAN’s validator operations depend on the continued performance of third-party infrastructure providers and key personnel. Pursuant to a ten-year Management Services Agreement dated March 24, 2026, Ethereum Tower LLC provides management and operating services to MAVAN Holdings LLC in exchange for an irrevocable 2.00% membership interest in MAVAN Holdings LLC and a monthly fee calculated as a percentage of the Company’s native staking rewards attributable to ETH staked through MAVAN Holdings LLC. If Ethereum Tower LLC fails to perform its obligations, experiences operational failures, or is unable to retain qualified personnel, our validator operations could be disrupted, resulting in reduced staking rewards, increased risk of slashing events, or reputational harm. In addition, much of MAVAN’s technical expertise was obtained through the Pier Two acquisition, and there can be no assurance that we will be able to retain key technical and operational personnel acquired in that transaction, particularly given the competitive market for blockchain infrastructure talent. MAVAN also relies on third-party cloud computing, co-location, and network infrastructure providers for the hosting and connectivity of its validator nodes; any failure, security breach, or service interruption by such providers could result in extended validator downtime, slashing, or loss of staking rewards. We do not control the operations of these third parties and may have limited contractual remedies if they fail to perform. MAVAN’s planned expansion from an internally-focused staking platform to a commercial staking-services provider serving third-party institutional investors, custodians, and ecosystem partners introduces new customer acquisition, competitive, service-level, and reputational risks not previously applicable to the Company’s business. MAVAN was originally developed to support the Company’s own Ethereum treasury operations and has operated principally as an internal staking platform since its launch in March 2026. The Company has publicly disclosed its intention to expand MAVAN to serve institutional investors, custodians, and other ecosystem partners seeking institutional-grade staking infrastructure. This expansion introduces risks that were not previously applicable to the Company’s business, including the need to develop and maintain commercial-grade service-level agreements, manage customer onboarding and support, compete with established institutional staking service providers (including Coinbase Cloud, Figment, Kiln, and others), and protect the Company’s reputation in a market where validator downtime or slashing events affecting client assets could result in significant liability, loss of customer confidence, and competitive harm. The Company has limited operating history as a commercial staking-services provider, and there can be no assurance that MAVAN will successfully attract or retain institutional staking clients on terms favorable to the Company, or at all. Failure to successfully execute this expansion could limit the Company’s revenue diversification, impair the return on investment from the Pier Two acquisition, and adversely affect our competitive position in the rapidly evolving blockchain infrastructure services market.

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Risk Factors