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LM

LM FUNDING AMERICA, INC.LMFAEarnings & Financial Report

Nasdaq · Financials

LM Funding America, Inc. is a U.S.-headquartered specialty financial services firm. It primarily acquires, manages, and resolves delinquent real estate property tax liens, serving local government agencies and real estate market stakeholders across multiple U.S. states, with core business focusing on alternative asset investments tied to property tax claims.

What changed in LM FUNDING AMERICA, INC.'s 10-K — 2024 vs 2025

Top changes in LM FUNDING AMERICA, INC.'s 2025 10-K

313 paragraphs added · 231 removed · 166 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

35 edited+59 added−37 removed47 unchanged
The recent market conditions have provided opportunities to purchase both new and used machines on the spot-market from 4 other miners or retail-dealers of machines for better financial terms and delivery terms, but there can be no guarantee that such opportunities will continue on a long-term basis. Currently, we are purchasing mining machines from Bitmain.
The recent market conditions have provided opportunities to purchase both new and used machines on the spot-market from other miners or retail-dealers of machines for better financial terms and delivery terms, but there can be no guarantee that such opportunities will continue on a long-term basis. Currently, we are purchasing mining machines from Bitmain.
Further, the value of Bitcoin and other digital assets may be significantly impacted by factors beyond our control, including consumer trust in the market acceptance of Bitcoin as a means of exchange by consumers and producers. 1 Bitcoin “Halving” Events Bitcoin halving is a phenomenon that has historically occurred approximately every four years on the Bitcoin network.
Further, the value of Bitcoin and other digital assets may be significantly impacted by factors beyond our control, including consumer trust in the market acceptance of Bitcoin as a means of exchange by consumers and producers. Bitcoin “Halving” Events Bitcoin halving is a phenomenon that has historically occurred approximately every four years on the Bitcoin network.
Miners are rewarded with Bitcoins, both in the form of newly-created Bitcoins and fees in Bitcoin, for successfully solving the mathematical problems and providing computing power to the network. Factors such as access to computer processing capacity, interconnectivity, electricity cost, environmental factors (such as cooling capacity) and location play important roles in mining.
Miners are rewarded 1 with Bitcoins, both in the form of newly-created Bitcoins and fees in Bitcoin, for successfully solving the mathematical problems and providing computing power to the network. Factors such as access to computer processing capacity, interconnectivity, electricity cost, environmental factors (such as cooling capacity) and location play important roles in mining.
To our knowledge there has been no security breach or incident, unauthorized access or disclosure, or other compromise of or relating to the Company or its subsidiaries hard wallets, cold wallets, information technology and computer systems, networks, hardware, software, data and databases, equipment or technology.
To our knowledge there has been no security breach or incident, unauthorized access or disclosure, or other compromise of or relating to the Company or its subsidiaries hard wallets, cold wallets, information technology and computer systems, networks, hardware, 7 software, data and databases, equipment or technology.
We believe our principal competitive advantages include our energy background, a combination of owned, operated, and co-located miners and facilities, our strategic use of the Bitcoin we mine to fund operations growth, and our commitment to sustainable business practices, including sourcing renewable energy.
We believe our principal competitive advantages include our energy background, a combination of owned, operated, and co-located miners and facilities, our strategic use of the Bitcoin we mine to fund operations 6 growth, and our commitment to sustainable business practices, including sourcing renewable energy.
The 6 policy also excludes coverage of our Bitcoin holdings and cybersecurity coverage. We engage our insurance broker annually to solicit underwriters to provide proposals to renew our current coverage or update our policies to meet our needs, prior to the policies’ expiration each year.
The policy also excludes coverage of our Bitcoin holdings and cybersecurity coverage. We engage our insurance broker annually to solicit underwriters to provide proposals to renew our current coverage or update our policies to meet our needs, prior to the policies’ expiration each year.
While some macro-economic indicators available as of the date of this filing suggest that inflation may be slowing, inflationary pressures impact virtually all aspects of our materials and suppliers, including power prices, and are likely to impact our fiscal year 2025.
While some macro-economic indicators available as of the date of this filing suggest that inflation may be slowing, inflationary pressures impact virtually all aspects of our materials and suppliers, including power prices, and are likely to impact our fiscal year 2026.
There can be no certainty that we will not be affected in the future, and we believe that there is a significant risk that equipment supply chains will continue to be affected in 2025.
There can be no certainty that we will not be affected in the future, and we believe that there is a significant risk that equipment supply chains will continue to be affected in 2026.
The information on our website is not incorporated into, and is not part of, this Annual Report on Form 10-K or our other filings with the SEC. 7
The information on our website is not incorporated into, and is not part of, this Annual Report on Form 10-K or our other filings with the SEC. 8
Human Capital We believe that our future success depends, in no small part, on our ability to continue to attract, hire, and retain qualified personnel. As of March 21, 2025, we had 9 employees, all of which were full time and all located in the United States.
Human Capital We believe that our future success depends, in no small part, on our ability to continue to attract, hire, and retain qualified personnel. As of March 31, 2026, we had 16 employees, all of which were full time and all located in the United States.
In addition, as soon as reasonably practicable after these materials are filed with or furnished to the SEC, we will make copies available to the public free of charge through our website, https://www.lmfunding.com.
The public can obtain copies of these materials by accessing the SEC’s website at http://www.sec.gov. In addition, as soon as reasonably practicable after these materials are filed with or furnished to the SEC, we will make copies available to the public free of charge through our website, https://www.lmfunding.com.
Machine purchases require large down payments and miner deliveries often arrive many months after initial orders are placed. However, over the last 12 months, we have seen a significant improvement in the availability and pricing for Bitcoin mining machines.
Working Capital Items The Bitcoin mining industry is highly competitive and dependent on specialized mining machines that have few manufacturers. Machine purchases require large down payments and miner deliveries often arrive many months after initial orders are placed. However, over the last 12 months, we have seen a significant improvement in the availability and pricing for Bitcoin mining machines.
Users have full control over remitting Bitcoin from their own sending addresses. All transactions on the Bitcoin blockchain are transparent, allowing those running the appropriate software to confirm the validity of each transaction.
The authenticity of each Bitcoin transaction is protected through digital signatures that correspond with addresses of users that send and receive Bitcoin. Users have full control over remitting Bitcoin from their own sending addresses. All transactions on the Bitcoin blockchain are transparent, allowing those running the appropriate software to confirm the validity of each transaction.
Bitcoins we mine or hold for our own account may be subject to loss, theft or restriction on access. Hackers or malicious actors may launch attacks to steal, compromise or secure Bitcoins, such as by attacking the Bitcoin network source code, exchange miners, third-party platforms, cold and hot storage locations or software, or by other means.
Hackers or malicious actors may launch attacks to steal, compromise or secure Bitcoins, such as by attacking the Bitcoin network source code, exchange miners, third-party platforms, cold and hot storage locations or software, or by other means.
All of the machines we purchased this year were manufactured by Bitmain, one of the preeminent manufacturers of Bitcoin mining rigs. It is headquartered in China and manufactures throughout Asia.
Materials and Suppliers We engage in the operation of high efficiency Bitcoin mining machines. These specialized computers, often called mining rigs, have few manufacturers. All of the machines we purchased this year were manufactured by Bitmain, one of the preeminent manufacturers of Bitcoin mining rigs. It is headquartered in China and manufactures throughout Asia.
We face significant competition in certain operational aspects of our business, including, but not limited to, the acquisition of new miners, obtaining low cost electricity, obtaining access to energy sites with reliable sources of power, and evaluating new technology developments in the industry. 5 Intellectual Property We do not currently hold any patents or patent applications in connection with our Bitcoin mining related operations or our specialty finance business.
We face significant competition in certain operational aspects of our business, including, but not limited to, the acquisition of new miners, obtaining low cost electricity, obtaining access to energy sites with reliable sources of power, and evaluating new technology developments in the industry.
Therefore, as new and existing miners deploy additional hash rate, the global network hash rate will continue to increase, meaning a miner’s share of the global network hash rate (and therefore its chance of earning Bitcoin rewards) will decline if it fails to deploy additional hash rate at pace with the industry.
Therefore, as new and existing miners deploy additional hash rate, the global network hash rate will continue to increase, meaning a miner’s share of the global network hash rate (and therefore its chance of earning Bitcoin rewards) will decline if it fails to deploy additional hash rate at pace with the industry. 3 Equipment As of December 31, 2025, we own approximately 7,200 machines with total hashing capacity of approximately 0.75 EH/s.
We anticipate that cryptocurrency mining will be a focus for increased regulation in the near- and long-term, and we cannot predict how future regulations may affect our business or operations. State regulation of Bitcoin mining is important with respect to where we conduct our mining operations.
Government Regulation Cryptocurrency mining is largely an unregulated activity at both the state and federal level. We anticipate that cryptocurrency mining will be a focus for increased regulation in the near- and long-term, and we cannot predict how future regulations may affect our business or operations.
In December 2024, in connection with the closing of the Tech Infrastructure Acquisition, we acquired a mining site in Oklahoma whose infrastructure is backed by 15 MW through which we have an operational hashrate of 301 PH as of December 31, 2024.
In September 2025, in connection with the closing of the Greenidge Acquisition, we acquired a mining site in Mississippi whose infrastructure is backed by 11 MW through which we have an operational hashrate of 238 PH as of December 31, 2025. Our specialty finance business focused on Associations is focused entirely in the state of Florida.
The Bitcoin network is the first decentralized peer-to-peer payment network, powered by users participating in the consensus protocol, with no central authority or middlemen, that has wide network participation. The authenticity of each Bitcoin transaction is protected through digital signatures that correspond with addresses of users that send and receive Bitcoin.
Bitcoin is a form of digital currency that depends upon a consensus-based network and a public ledger called a “blockchain”, which contains a record of every Bitcoin transaction ever processed. The Bitcoin network is the first decentralized peer-to-peer payment network, powered by users participating in the consensus protocol, with no central authority or middlemen, that has wide network participation.
We conduct this business through a wholly owned subsidiary, US Digital Mining and Hosting Co, LLC, a Florida limited liability company (“US Digital”), which we formed in 2021 to develop and operate our Bitcoin mining business.
We may sell or leverage our Bitcoin to support operational needs and strategic initiatives. Our Bitcoin mining operation deploys our computing power to mine Bitcoin on the Bitcoin network. We conduct this business through our wholly owned subsidiary, US Digital, a Florida limited liability company, which we formed in 2021 to develop and operate our Bitcoin mining business.
The Company also from time to time organizes other subsidiaries to serve a specific purpose or hold a specific asset. Where you can Find More Information We maintain a corporate website at: https://www.lmfunding.com. The contents of this website is not incorporated in, or otherwise to be regarded as part of, this Annual Report.
US Digital has created various 100% owned subsidiaries to engage in business in various states in connection with its Bitcoin mining business. The Company also from time to time organizes other subsidiaries to serve a specific purpose or hold a specific asset. Where you can Find More Information We maintain a corporate website at: https://www.lmfunding.com.
We are required to file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other information, including our proxy statement, with the Securities and Exchange Commission (“SEC”). The public can obtain copies of these materials by accessing the SEC’s website at http://www.sec.gov.
The contents of this website is not incorporated in, or otherwise to be regarded as part of, this Annual Report. We are required to file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other information, including our proxy statement, with the Securities and Exchange Commission (“SEC”).
As of March 15, 2025, we have 4,320 installed S19 J Pro Antminer machines at the Oklahoma site which have a total projected hashrate of 432 PH. We have another 719 mining machines in storage at the Oklahoma site.
Mining Sites As of December 31, 2025, we owned a 15 MW hosting site located in Calumet, Oklahoma ( “ Oklahoma site ” ) with approximately 4,480 installed S19 J Pro, XP and S21 type Antminer machines at the Oklahoma site which have a total projected hashrate of 503 PH.
We hold any remainder of our Bitcoin in a combination of hot storage, hot storage custody accounts and cold storage. Bitcoin held is reconciled monthly and associated with unique blockchain addresses, with their activity recorded on the blockchain. We do carry insurance coverage on some of our Bitcoin holdings.
Bitcoin held is reconciled monthly and associated with unique blockchain addresses, with their activity recorded on the blockchain. We do carry insurance coverage on some of our Bitcoin holdings. Bitcoins we mine or hold for our own account may be subject to loss, theft or restriction on access.
“Risk Factors” Protection of Bitcoin Assets Our share of Bitcoins mined from our pool is initially received by us in wallets we control. We sell portions of the Bitcoin we mine and utilize hot wallets to hold this Bitcoin immediately prior to selling for working capital purposes.
We sell portions of the Bitcoin we mine and utilize hot wallets to hold this Bitcoin immediately prior to selling for working capital purposes. We hold any remainder of our Bitcoin in a combination of hot storage, hot storage custody accounts and cold storage.
Strictly speaking, there is no customer market for mining Bitcoin but we consider our mining pool operators as customers because they compensate us for providing processing power to the mining pool (see Item 1A. Risk Factors- “Our reliance on a third-party mining pool service provider for our mining revenue payouts may adversely affect an investment in us.”).
Mining Bitcoin supports the global Bitcoin blockchain and the millions of people that depend on it for economic security and other benefits. Strictly speaking, there is no customer market for mining Bitcoin but we consider our mining pool operators as customers because they compensate us for providing processing power to the mining pool (see Item 1A.
As of December 31, 2024, we own approximately 5,840 machines with total hashing capacity of approximately 0.634 EH/s. Mining Site As of December 31, 2024, we owned a 15 MW hosting site located in Oklahoma ( “ Oklahoma site ” ) with 3,006 installed S19J Pro Antminer machines which have a total projected hashrate of 301 PH.
We have another 365 mining machines in storage at the Oklahoma site. As of December 31, 2025, we also owned a 11 MW hosting site located in Columbus Mississippi ( “Mississippi site ” ) which had approximately 2,380 installed S19 or S19J Pro Antminer machines with a total projected hashrate of 238 PH.
The majority of our mining facilities are located in Kentucky and Oklahoma, which we believe currently has some of the most favorable regulatory environments for cryptocurrency miners. Given the recent reelection of President Trump, we anticipate there may be more Bitcoin-friendly regulations proposed and implemented by the new Trump administration.
State regulation of Bitcoin mining is important with respect to where we conduct our mining operations. The majority of our mining facilities are located in Mississippi and Oklahoma, which we believe currently has some of the most favorable regulatory environments for cryptocurrency miners.
Item 1. Business. LM Funding America, Inc. (“we”, “our”, “LMFA”, or the “Company”) currently has two lines of business: our Bitcoin mining business and our specialty finance business. Our Bitcoin mining operation deploys our computing power to mine Bitcoin on the Bitcoin network.
Item 1. Business. LM Funding America, Inc. (“we”, “our”, “LMFA”, or the “Company”) currently maintains three distinct business operations: our Bitcoin treasury operations, Bitcoin mining business and our specialty finance business. Our investment strategy with respect to our Bitcoin treasury operations involves retaining a majority of our currently held Bitcoin and acquiring new Bitcoin through our mining operations.
We do rely, and expect to continue relying, upon trade secrets, trademarks, service marks, trade names, copyrights and other non-patent intellectual property rights. Government Regulation Bitcoin Mining Cryptocurrency mining is largely an unregulated activity at both the state and federal level.
Intellectual Property We do not currently hold any patents or patent applications in connection with our Bitcoin mining related operations or our specialty finance business. We do rely, and expect to continue relying, upon trade secrets, trademarks, service marks, trade names, copyrights and other non-patent intellectual property rights.
As the regulatory and legal environment evolves, we may become subject to new laws, such as further regulation by the SEC, CFTC, and other agencies, which may affect our mining and other activities. For additional discussion regarding our belief about the potential risks existing and future regulation pose to our business, see Part I, Item 1A.
Given that President Trump is now well into his second term, the administration has continued to signal and advance Bitcoin-friendly regulatory policies, and we anticipate further proposals and implementations in this area As the regulatory and legal environment evolves, we may become subject to new laws, such as further regulation by the SEC, CFTC, and other agencies, which may affect our mining and other activities.
Cryptocurrency Mining Business Bitcoin was introduced in 2008 with the goal of serving as a digital means of exchanging and storing value. Bitcoin is a form of digital currency that depends upon a consensus-based network and a public ledger called a “blockchain”, which contains a record of every Bitcoin transaction ever processed.
We conduct this business through a wholly owned subsidiary, US Digital, which we formed in 2021 to develop and operate our Bitcoin mining business. Bitcoin was introduced in 2008 with the goal of serving as a digital means of exchanging and storing value.
We also granted SE&AJ a first perfected security interest in substantially all of our assets. The Senior Note bears interest at a rate of 12.0% per annum and will mature on August 6, 2026.
The Additional Loan bears interest at a rate of 12.0% per annum and will mature on September 15, 2027 (the “Maturity Date”).
The majority of miners we operate and expect to operate once received are the latest generation of miners manufactured by Bitmain, including the S19J-Pro and S19 XP. Materials and Suppliers We engage in the operation of high efficiency Bitcoin mining machines. These specialized computers, often called mining rigs, have few manufacturers.
As of December 31, 2025, we owned approximately 7,200 machines. The Company expects to enter into additional agreements to purchase more miners in the coming years. The majority of miners we operate and expect to operate once received are the miners manufactured by Bitmain, including the S19J-Pro, S19 XP, S21 and S21 Immersion models.
Removed
Factors Affecting Profitability Market Price of Bitcoin Our business is heavily dependent on the price of Bitcoin.
Added
Bitcoin Treasury Operations and Strategy During August 2025, we raised approximately $21.3 million in net proceeds from capital raises and we purchased 164 Bitcoins with substantially all of the proceeds from such offering.
Removed
Equipment Purchases From 2021 through 2024, we have purchased an aggregate of 6,270 Antminer Bitcoin mining machines of varying configurations, as follows: Type of Miner Year Delivered Avg TH/Power Number of Miners S19J Pro 2022 100/2950 2,773 S19J Pro 2023 100/2950 2,691 S19 XP 2023 140/3010 497 S21 2024 200/3500 309 We have written off approximately 430 machines as of December 31, 2024.
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During December 2025, we raised an additional $5.9 million in net proceeds from capital raises and we purchased an additional 47 Bitcoins with substantially all of the proceeds from such offering.
Removed
During fiscal year 2024, we moved 5,039 mining machines from our three hosting companies to the Oklahoma site of which approximately 2,033 were stored in containers at Oklahoma site and not plugged into power as of December 31, 2024. Hosting Contracts The Company used three companies to host its miners in 2024: Core Scientific Inc.
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Our Bitcoin treasury strategy for the next twelve months includes acquiring and holding Bitcoin, using cash flows from operations that exceed working capital requirements, and from time to time, subject to market conditions, issuing equity or debt securities or engaging in other capital raising transactions with the objective of using the proceeds to purchase Bitcoin.
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(“Core”), Giga Energy Inc (“GIGA”) and Tech Infrastructure JV I LLC (“Tech Infrastructure”).
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We have not set any specific target for the amount of Bitcoin we seek to hold, and we will continue to monitor market conditions in determining whether to engage in additional Bitcoin purchases.
Removed
On September 5, 2022, the Company, through its wholly-owned subsidiary US Digital, entered into a hosting agreement (the “Core Hosting Agreement”) with Core pursuant to which Core, under various additional orders, agreed to host approximately 3,000 of the Company's Bitcoin miner machines at a secure location and provide power, maintenance and other services specified in the contract with a term of one year, with automatic renewals unless either party notifies the other party in writing not less than ninety (90) calendar days before such renewal of its desire for the order not to renew unless terminated sooner pursuant to the terms of the Core Hosting Agreement.
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This overall strategy also contemplates that we may periodically sell Bitcoin for general corporate purposes or in connection with strategies that generate tax benefits in accordance with applicable law, enter into additional capital raising transactions, including those that could be collateralized by its Bitcoin holdings, and consider pursuing strategies to create income streams or otherwise generate funds using our Bitcoin holdings.
Removed
The Company entered into a number of amendments in 2023 and 2024 that resulted in Core hosting a total of 2 approximately 4,870 miners as of March 31, 2024.
Added
As of December 31, 2025, we controlled 211.4 Bitcoins and 145 Bitcoins were pledged as collateral for a $11 million loan. We currently maintain a formal, documented strategy that governs circumstances under which we acquire or monetize our Bitcoin holdings.
Removed
Pursuant to the terms of the amended Core Hosting Agreement, the terms of the hosting arrangement expired with respect to approximately 4,000 miners on May 31, 2024 while the terms of the hosting arrangement continued with respect to approximately 800 miners through December 31, 2024.
Added
Decisions to purchase or sell Bitcoin are made on a case-by-case basis at management’s discretion, taking into account factors such as our liquidity, general market conditions, and anticipated cash requirements. As of December 31, 2025, Bitcoin represented 100% of our treasury holdings.
Removed
We moved approximately 4,070 machines to our Oklahoma hosting site upon the expiration of the Core Hosting Agreement. As of March 15, 2025, we currently have approximately 800 machines on a month-to-month hosting agreement with Core that is expected to end April 30, 2025.
Added
We do have small holdings of Tether and USDC outside of our treasury holdings that value in the aggregate less than $10,000 and are used for purchases with merchants that accept such crypto assets as payment.
Removed
We anticipate placing the 800 miners at a new hosting location or in a new acquired mining site.
Added
We do not currently engage in hedging activities and we have not implemented derivative transactions, futures, options, swaps, or other financial instruments to reduce our exposure to Bitcoin price volatility. Any future hedging activity, if undertaken, would be determined by management on a discretionary basis.
Removed
On May 5, 2023, the Company entered into a hosting agreement (the “GIGA Hosting Agreement”) with GIGA pursuant to which GIGA agreed to host 1,080 of the Company's Bitcoin Miner S19J Pro machines at a secure location and provide power, maintenance and other services specified in the contract with a term of one year.
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Bitcoin Mining Business Our Bitcoin mining business operation deploys our computing power to mine Bitcoin and validate transactions on the Bitcoin network. We believe that developments in Bitcoin mining have created an opportunity for us to deploy capital and conduct large-scale mining operations in the United States.
Removed
On April 12, 2024, the Company amended the contract to allow for an extension of the contract with a sixty (60) day termination notice. As required under the GIGA Hosting Agreement, the Company paid $173 thousand as a pre-payment in May 2023 and paid a refundable deposit of $173 thousand in August 2023.
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New Bitcoins are introduced into circulation through a process called mining, where participants validate transactions and add them to the blockchain. Miners are rewarded with a fixed number of Bitcoins for each block they successfully add, with this reward halving approximately every four years to control the supply.
Removed
The GIGA Hosting Agreement was terminated with GIGA as of June 30, 2024. As of December 31, 2024 and December 31, 2023, respectively, the Company had nil and $117 thousand of prepaid deposits remaining with GIGA, respectively. The Company moved the 1,075 machines previously installed at the GIGA site to our Oklahoma site as of December 31, 2024.
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As of December 31, 2025, there were approximately 19,930,000 Bitcoins in circulation, with a maximum supply capped at 21 million, a limit expected to be reached around the year 2140. Additionally, as of December 31, 2025, Bitcoin’s market capitalization, calculated using market prices and total available supply, was $1.75 trillion.
Removed
On May 6, 2024, the Company entered into a hosting agreement (the “Arthur Hosting Agreement”) with Tech Infrastructure pursuant to which Tech Infrastructure agreed to host approximately 3,000 of the Company's Bitcoin Miner S19J Pro machines at a secure location and provide power, maintenance and other services specified in the contract with a term of nine months.
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The lifecycle of Bitcoin can be described by the following: 1. Creation (Mining): New Bitcoin are issued as a reward to miners who successfully add a new block to the blockchain by solving complex cryptographic puzzles. This process is called “mining” and currently results in a fixed block reward that halves approximately every four years. 2.
Removed
On July 17, 2024, the Company amended the contract to allow for an extension of the contract of one month. This contract was cancelled on December 6, 2024 due to the acquisition of the Oklahoma site by the Company.
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Circulation: Once created, Bitcoin are held in digital wallets and can be transferred between users by broadcasting digitally signed transactions to the network. 3.Validation and Settlement: Transactions are validated by nodes and recorded permanently on the blockchain. 4.
Removed
Recent Developments August 2024 Registered Direct Offering On August 16, 2024, a single institutional investor (“Investor”) purchased 278,000 shares of common stock and 590,185 pre-funded warrants in a registered direct offering, along with Series A warrants to purchase up to an aggregate of 868,185 shares of common stock and Series B warrants to purchase up to an aggregate of 868,185 shares of common stock in a concurrent private placement.
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Removal: Bitcoin cannot be revoked or deleted, but they can become inaccessible if private keys are lost or if sent to unspendable addresses. 5. Fixed Supply Cap: Issuance continues until the maximum supply limit is reached, after which miners will be compensated solely by transaction fees.
Removed
The combined effective offering price for each share of common stock (or pre-funded warrant in lieu thereof) and accompanying Series A and B warrants was $2.98.
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While Bitcoin’s price has been significantly influenced by speculative trading, its valuation is also impacted by the underlying health and performance of the Bitcoin network.
Removed
The Series A and B Warrants will have an exercise price of $2.98, be exercisable beginning on the effective date of stockholder approval and, in the case of Series A warrants, will expire on the five-year anniversary of November 8, 2024, and in the case of Series B warrants, will expire on the two-year anniversary of November 8, 2024.
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Key metrics such as the network’s hash rate (a measure of computational power), the number of active addresses, and transaction volumes can provide insights into network security, user adoption, and overall activity, all of which contribute to Bitcoin’s valuation.
Removed
The gross proceeds to the Company from the registered direct offering and concurrent private placement were approximately $2.6 million. On December 8, 2024, the above-mentioned Investor agreed to exercise 1,736,370 outstanding common stock warrants (the “Existing Warrants”) to purchase an aggregate of 1,736,370 shares of common stock for cash at the exercise price of $2.98 per share.
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Custodially-Held Assets Through “off-the-shelf” custody agreements (the “Custody Agreements”), we custody approximately 86% of our Bitcoin holdings at regulated third-party custodians (the “Bitcoin Custodians”) that carry insurance and are chartered as a limited purpose trust company under the New York Banking Law.
Removed
The 3 Existing Warrants were previously issued in the August 2024 concurrent private placement. In consideration for the immediate exercise of the Existing Warrants, the exercising holder received new unregistered common stock warrants (the “New Warrants”) to purchase an aggregate of 3,472,740 shares of common stock.
Added
The remaining approximately 14% of our Bitcoin holdings are held in a depository account with the Bitcoin Custodians, where Bitcoin mining proceeds are deposited. The Bitcoin Custodians make available to us segregated from all other assets held by the Bitcoin Custodians in which our Bitcoin holdings are directly verifiable via the applicable blockchain.
Removed
The New Warrants have an exercise price of $2.95 per share and were immediately exercisable for a period of five years from the issuance date. The gross proceeds of the exercise of the Existing Warrants to the Company, before deducting estimated expenses and fees, was approximately $5.2 million.
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Bitcoin private keys are stored in two different forms: “hot” storage, whereby the private keys are stored on secure, internet-connected devices (a “hot wallet”), and “cold” storage, where digital currency private keys are stored completely offline. The Bitcoin Custody Agreements require the Bitcoin Custodians to hold our Bitcoin in cold storage, unless required to facilitate withdrawals as a temporary measure.
Removed
Asset Purchase with Tech Infrastructure JV I LLC On November 14, 2024, the Company and our wholly owned subsidiary US Digital entered into an asset purchase agreement with Tech Infrastructure for the purchase of substantially all of the business assets (the “Tech Infrastructure Acquisition”) of Tech Infrastructure (the “Tech Infrastructure Assets”).
Added
The Bitcoin Custodians will at all times record and identify in its books and records that such Bitcoins constitute the property of our Bitcoin account. The Custody Agreements provide that the Bitcoin Custodians will not loan, hypothecate, pledge or otherwise encumber any of our Bitcoin held in our Bitcoin account.
Removed
The sale of the Tech Infrastructure Assets closed on December 6, 2024.
Added
The Bitcoin Custodian’s services in respect of the Bitcoin account (i) allow Bitcoin to be deposited from a public blockchain address to our Bitcoin Account and (ii) allow Bitcoin to be withdrawn from our Bitcoin account to a public blockchain address as instructed by us. As of December 31, 2025, approximately 211 Bitcoin were held by the Bitcoin Custodians.
Removed
The purchase price for the Tech Infrastructure Assets was $7.3 million, payable as follows: (i) approximately $1.1 million was paid by us to Tech Infrastructure in cash at the closing; (ii) approximately $3.7 million was credited against outstanding loans made by us and our affiliates to Tech Infrastructure; and (iii) approximately $2.5 million is currently being held in escrow in order to ensure that Tech Infrastructure vacates the site, including by removing all of the miners that Tech Infrastructure hosts for its other clients.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

63 edited+67 added−11 removed279 unchanged
If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected and we could become subject to private litigation or to investigations or enforcement actions by the 27 SEC or other regulatory authorities, all of which could require our expenditure of additional financial and management resources and could have a material adverse effect on our business, financial condition and results of operations.
If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected and we could become subject to private litigation or to investigations or enforcement actions by the SEC or other regulatory authorities, all of which could require our expenditure of additional financial and management resources and could have a material adverse effect on our business, financial condition and results of operations.
Long- and short-term power prices may fluctuate substantially due to a variety of factors outside of our control, including, but not limited to: • increases and decreases in generation capacity; • changes in power transmission or fuel transportation capacity constraints or inefficiencies; • volatile weather conditions, particularly unusually hot or mild summers or unusually cold or warm winters; • technological shifts resulting in changes in the demand for power or in patterns of power usage, including the potential development of demand-side management tools, expansion and technological advancements in power storage capability and the development of new fuels or new technologies for the production or storage of power; • federal and state power, market and environmental regulation and legislation; and • changes in capacity prices and capacity markets.
Long- and short-term power prices may fluctuate substantially due to a variety of factors outside of our control, including, but not limited to: • increases and decreases in generation capacity; • changes in power transmission or fuel transportation capacity constraints or inefficiencies; • volatile weather conditions, particularly unusually hot or mild summers or unusually cold or warm winters; • technological shifts resulting in changes in the demand for power or in patterns of power usage, including the potential development of demand-side management tools, expansion and technological advancements in power storage capability and the development of new fuels or new technologies for the production or storage of power; 22 • federal and state power, market and environmental regulation and legislation; and • changes in capacity prices and capacity markets.
If, however, BLGAL were to become subject to any insolvency law and a creditor or 23 trustee-in-bankruptcy of BLGAL were to take the position that proceeds of the Accounts held in BLGAL’s IOLTA Trust Account should be treated as assets of BLGAL, an Association or another third party, delays in payments from collections on the Accounts held by BLGAL could occur or reductions in the amounts of payments to be remitted by BLGAL to us could result, which could adversely affect our financial condition, results of operations and cash flows.
If, however, BLGAL were to become subject to any insolvency law and a creditor or trustee-in-bankruptcy of BLGAL were to take the position that proceeds of the Accounts held in BLGAL’s IOLTA Trust Account should be treated as assets of BLGAL, an Association or another third party, delays in payments from collections on the Accounts held by BLGAL could occur or reductions in the amounts of payments to be remitted by BLGAL to us could result, which could adversely affect our financial condition, results of operations and cash flows.
Different metrics adopted by industry participants to determine which is the original asset include: referring to the wishes of the core developers of a cryptocurrency; determining based on the blockchain with the greatest amount of hash rate contributed by miners or validators; or by reference to the “length” of blockchain (i.e., the time between the first 14 transaction recorded in the blockchain’s distributed ledger, and the date of the most recent transaction).
Different metrics adopted by industry participants to determine which is the original asset include: referring to the wishes of the core developers of a cryptocurrency; determining based on the blockchain with the greatest amount of hash rate contributed by miners or validators; or by reference to the “length” of blockchain (i.e., the time between the first transaction recorded in the blockchain’s distributed ledger, and the date of the most recent transaction).
Moreover, because our miners use these highly specialized ASIC chips, we may not be able to successfully repurpose them in a timely manner, if at all, if we decide to switch to mining a different cryptocurrency (or to another purpose altogether) following a sustained decline in Bitcoin’s value or if Bitcoin is replaced by another cryptocurrency not using the SHA-256 algorithm.
Moreover, because our miners use these highly specialized ASIC chips, we may not be able to successfully 18 repurpose them in a timely manner, if at all, if we decide to switch to mining a different cryptocurrency (or to another purpose altogether) following a sustained decline in Bitcoin’s value or if Bitcoin is replaced by another cryptocurrency not using the SHA-256 algorithm.
Our results may fluctuate as a result of the following factors: • the price of Bitcoin and the amount of hashrate generated by our Bitcoin mining activity; 9 • the timing and amount of collections on our Account portfolio; • our inability to identify and acquire additional Accounts; • a decline in the value of our Account portfolio recoveries; • increases in operating expenses associated with the growth of our operations; and • general, economic and real estate market conditions.
Our results may fluctuate as a result of the following factors: • the price of Bitcoin and the amount of hashrate generated by our Bitcoin mining activity; • the timing and amount of collections on our Account portfolio; • our inability to identify and acquire additional Accounts; • a decline in the value of our Account portfolio recoveries; • increases in operating expenses associated with the growth of our operations; and • general, economic and real estate market conditions.
Debt and equity financings, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as redeeming our shares of common stock, making investments, incurring additional debt, making capital expenditures or declaring dividends. We maintain our cash at financial institutions, which at times, exceed federally insured limits.
Debt and equity financings, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as redeeming our shares of common stock, making investments, incurring additional debt, making capital expenditures or declaring dividends. 12 We maintain our cash at financial institutions, which at times, exceed federally insured limits.
We will continue to monitor for developments in state-level legislation, guidance or regulations applicable to us. Such additional federal or state regulatory obligations in the United States or obligations that could arise under the regulatory frameworks of other countries may cause us to incur significant expenses, possibly affecting its business and financial condition in a 19 material and adverse manner.
We will continue to monitor for developments in state-level legislation, guidance or regulations applicable to us. Such additional federal or state regulatory obligations in the United States or obligations that could arise under the regulatory frameworks of other countries may cause us to incur significant expenses, possibly affecting its business and financial condition in a material and adverse manner.
Currently, we qualify as a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act. We have elected to provide disclosure under the smaller reporting company rules and, therefore, are subject to decreased disclosure obligations in our filings with the SEC, including being required to provide only two years of audited financial statements in our annual reports.
Currently, we qualify as a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act. We have elected to provide disclosure under the smaller reporting company rules and, therefore, are subject to decreased disclosure obligations in our filings with 31 the SEC, including being required to provide only two years of audited financial statements in our annual reports.
Additionally, Associations and their management companies sometimes try to solve their delinquent Account problems in house, without the assistance of third-party collection agencies. An Account that an Association attempts to collect through any of these other options is an Account we cannot purchase and collect. We compete on the basis of 21 reputation, industry experience, performance and financing dollars.
Additionally, Associations and their management companies sometimes try to solve their delinquent Account problems in house, without the assistance of third-party collection agencies. An Account that an Association attempts to collect through any of these other options is an Account we cannot purchase and collect. We compete on the basis of reputation, industry experience, performance and financing dollars.
Depending on the magnitude of such effects on our supply chain, shipments of parts for our miners, or any new miners that we order, may be delayed. There are a small number of major suppliers of Bitcoin minors globally, and Bitcoin mining manufacturing is located primarily in China, including Bitmain, the primary supplier of our Bitcoin miners.
Depending on the magnitude of such effects on our supply chain, shipments of parts for our miners, or any new miners that we order, may be delayed. There are a small number of major suppliers of Bitcoin miners globally, and Bitcoin mining manufacturing is located primarily in China, including Bitmain, the primary supplier of our Bitcoin miners.
Our failure to comply with any laws applicable to us, including state licensing laws, could limit our ability to recover our Accounts and could subject us to fines and penalties, which could reduce our revenues. We may become regulated under the Consumer Financial Protection Bureau, or CFPB, and have not developed compliance standards for such oversight.
Our failure to comply with any laws applicable to us, including state licensing laws, could limit our ability to recover our Accounts and could subject us to fines and penalties, which could reduce our revenues. 26 We may become regulated under the Consumer Financial Protection Bureau, or CFPB, and have not developed compliance standards for such oversight.
If we, or our customers, were unable to source Miners from those suppliers (for example due to overwhelming global demand for Bitcoin miners, or due to geopolitical tensions, or war) at a 13 commercial price, or at all, this would have a materially adverse impact on our business, financial condition, results of operations and prospects.
If we, or our customers, were unable to source Miners from those suppliers (for example due to overwhelming global demand for Bitcoin miners, or due to geopolitical tensions, or war) at a commercial price, or at all, this would have a materially adverse impact on our business, financial condition, results of operations and prospects.
Accordingly, we will likely require additional capital to fund our additional equipment purchases and to respond to technological advancements, competitive dynamics or technologies, customer demands, business opportunities, challenges, or unforeseen circumstances. Accordingly, we will likely need to engage in equity or debt financings or enter into credit facilities for the above-mentioned or other reasons.
Accordingly, we will likely 21 require additional capital to fund our additional equipment purchases and to respond to technological advancements, competitive dynamics or technologies, customer demands, business opportunities, challenges, or unforeseen circumstances. Accordingly, we will likely need to engage in equity or debt financings or enter into credit facilities for the above-mentioned or other reasons.
Even if such measures are effective, there could be a difference between the timing of when these beneficial actions impact our results of operations and when the cost inflation is incurred. 10 We rely heavily on our management team, whose continued service and performance is critical to our future success.
Even if such measures are effective, there could be a difference between the timing of when these beneficial actions impact our results of operations and when the cost inflation is incurred. We rely heavily on our management team, whose continued service and performance is critical to our future success.
To extent the power prices increase significantly as result of severe weather conditions, natural disasters or any other causes, resulting in contract 18 prices for power being significantly lower than current market prices, the counterparties under our power and hosting arrangements may refuse to supply power to us during that period of fluctuating prices.
To extent the power prices increase significantly as result of severe weather conditions, natural disasters or any other causes, resulting in contract prices for power being significantly lower than current market prices, the counterparties under our power and hosting arrangements may refuse to supply power to us during that period of fluctuating prices.
Our sole recourse in this instance is to recover these misapplied payments through set-offs of payments later collected for that Association by our third-party law firms. A significant number of misapplied or reduced payments could hinder our cash flows and adversely affect our financial condition and results of operations.
Our sole recourse in this instance is to recover these misapplied payments through set-offs of payments later 28 collected for that Association by our third-party law firms. A significant number of misapplied or reduced payments could hinder our cash flows and adversely affect our financial condition and results of operations.
If an owner fails to pay off the Account relating to his, her or its unit or 24 home, only net amounts recovered, if any, will be available with respect to that Account. Foreclosures by holders of first mortgages generally result in our receipt of reduced recoveries from Accounts.
If an owner fails to pay off the Account relating to his, her or its unit or home, only net amounts recovered, if any, will be available with respect to that Account. Foreclosures by holders of first mortgages generally result in our receipt of reduced recoveries from Accounts.
The rewards, distributed proportionally to 15 our contribution to the pool’s overall mining power, are distributed by the pool operator. Should our pools’ operator systems suffer downtime due to a cyber-attack, software malfunction or other similar issues, it will negatively impact our ability to mine and receive revenue.
The rewards, distributed proportionally to our contribution to the pool’s overall mining power, are distributed by the pool operator. Should our pools’ operator systems suffer downtime due to a cyber-attack, software malfunction or other similar issues, it will negatively impact our ability to mine and receive revenue.
At this time, we do not anticipate engaging in any hedging activities related to our holding of Bitcoin; this would expose us to substantial decreases in the price of Bitcoin. 12 The sale of our Bitcoins to pay for expenses at a time of low Bitcoin prices could adversely affect an investment in us.
At this time, we do not anticipate engaging in any hedging activities related to our holding of Bitcoin; this would expose us to substantial decreases in the price of Bitcoin. The sale of our Bitcoins to pay for expenses at a time of low Bitcoin prices could adversely affect an investment in us.
Furthermore, state or regional government officials to introduce new legislation and requirements on power providers that may result in, among other things, restrictions on cryptocurrency mining operations in general. The properties in our mining network may experience damages, including damages that are not covered by insurance.
Furthermore, state or regional government officials may introduce new legislation and requirements on power providers that may result in, among other things, restrictions on cryptocurrency mining operations in general. The properties in our mining network may experience damages, including damages that are not covered by insurance.
If we can’t acquire sufficient numbers of new miners or access sufficient capital to fund our acquisitions, our results of operations and financial condition, which could adversely affect investments in our securities. Transaction fees may decrease demand for Bitcoin and prevent expansion.
If we can’t acquire sufficient numbers of new miners or access sufficient capital to fund our acquisitions, our results of operations and financial condition, which could adversely affect investments in our securities. 19 Transaction fees may decrease demand for Bitcoin and prevent expansion.
Moreover, although current IRS guidance addresses the treatment of certain forks, there 20 continues to be uncertainty with respect to the timing and amount of income inclusions for various digital asset transactions, including, but not limited to, staking rewards and other digital asset incentives and rewards products.
Moreover, although current IRS guidance addresses the treatment of certain forks, there continues to be uncertainty with respect to the timing and amount of income inclusions for various digital asset transactions, including, but not limited to, staking rewards and other digital asset incentives and rewards products.
The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, shipping costs, supply shortages, increased costs of labor, weakening exchange rates and other similar effects. As a result of inflation, we have experienced and may continue to experience, cost increases.
The 11 existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, shipping costs, supply shortages, increased costs of labor, weakening exchange rates and other similar effects. As a result of inflation, we have experienced and may continue to experience, cost increases.
Digital asset exchanges on which cryptocurrencies trade are relatively new and, in most cases, largely unregulated. Many digital exchanges do not provide the public with significant information regarding their ownership structure, management teams, corporate 16 practices or regulatory compliance.
Digital asset exchanges on which cryptocurrencies trade are relatively new and, in most cases, largely unregulated. Many digital exchanges do not provide the public with significant information regarding their ownership structure, management teams, corporate practices or regulatory compliance.
The availability and cost of electricity will restrict the geographic locations of our mining activities. Any shortage of 17 electricity supply or increase in electricity costs in any location where we plan to operate may negatively impact the viability and the expected economic return for Bitcoin mining activities in that location.
The availability and cost of electricity will restrict the geographic locations of our mining activities. Any shortage of electricity supply or increase in electricity costs in any location where we plan to operate may negatively impact the viability and the expected economic return for Bitcoin mining activities in that location.
We must record and process significant amounts of data quickly and accurately to properly track, monitor and collect our Accounts. Any failure of our information systems and their backup systems, including by means of cybersecurity attacks, breaches or other incidents, would interrupt our operations.
We must record and process significant amounts of data quickly and accurately to properly track, monitor and collect our Accounts. Any failure of our information systems and their backup systems, 27 including by means of cybersecurity attacks, breaches or other incidents, would interrupt our operations.
Declines in the condition of our miners and other hardware will require us, over time, to repair or replace those miners. Additionally, as the technology evolves, we may be required to acquire newer models of miners to remain competitive in the market.
Declines in the condition of our miners and other hardware will require us, over time, to 17 repair or replace those miners. Additionally, as the technology evolves, we may be required to acquire newer models of miners to remain competitive in the market.
When we keep our Bitcoin in cold storage, we may experience lag time in our ability to respond to market fluctuations in the price of our cryptocurrency assets. We currently mine Bitcoin by contributing to and benefiting from our pools’ processing power.
When we keep our Bitcoin in cold storage, we may experience lag time in our ability to respond to market fluctuations in the price of our cryptocurrency assets. 20 We currently mine Bitcoin by contributing to and benefiting from our pools’ processing power.
For instance, if the debtor has incurred a property tax lien, a sale related to such lien could result in our complete loss of the Account.
For instance, if the debtor has incurred a property 25 tax lien, a sale related to such lien could result in our complete loss of the Account.
Risks Relating to our Business — General Risks • Our quarterly operating results may fluctuate and cause our stock price to decline. • Any future acquisitions that we make may prove unsuccessful or strain or divert our resources • Our organizational documents and Delaware law may make it harder for us to be acquired without the consent and cooperation of our Board of Directors and management. • A reversal of the U.S. economic recovery and a return to volatile or recessionary conditions in the United States or abroad could adversely affect our business or our access to capital markets in a material manner. • We have been adversely affected by the effects of inflation. • We rely heavily on our management team, whose continued service and performance is critical to our future success. • We may need financing in the future to sustain and expand our operations and may not be able to obtain such financing on acceptable terms, or at all. • We maintain our cash at financial institutions, which at times, exceed federally insured limits.
SUMMARY OF RISK FACTORS Risks Relating to our Business — General Risks • Our quarterly operating results may fluctuate and cause our stock price to decline. • Any future acquisitions that we make may prove unsuccessful or strain or divert our resources • Our organizational documents and Delaware law may make it harder for us to be acquired without the consent and cooperation of our Board of Directors and management. • A reversal of the U.S. economic recovery and a return to volatile or recessionary conditions in the United States or abroad could adversely affect our business or our access to capital markets in a material manner. • We may be adversely affected by the effects of inflation. • We rely heavily on our management team, whose continued service and performance is critical to our future success. • We may need financing in the future to sustain and expand our operations and may not be able to obtain such financing on acceptable terms, or at all. • We maintain our cash at financial institutions, which at times, exceed federally insured limits.
Our primary business relates to revenues from Accounts purchased by us, which are all based in Florida, and our primary source of revenue consists of payments made by condominium and home-owners to satisfy the liens against their condominiums and homes. As of December 31, 2024 and December 31, 2023, Florida represented 100% of our Accounts.
Our primary business relates to revenues from Accounts purchased by us, which are all based in Florida, and our primary source of revenue consists of payments made by condominium and home-owners to satisfy the liens against their condominiums and homes. As of December 31, 2025 and December 31, 2024, Florida represented 100% of our Accounts.
As part of the build out of our cryptocurrency mining operations, we have engaged several companies to host our machines at various cryptocurrency mining facilities (or sites). Actually securing these sites on terms acceptable to our management team may not occur within our timing expectations or at all.
As part of the build out of our Bitcoin mining operations, we have engaged several companies to host our machines at various Bitcoin mining facilities (or sites). Actually securing these sites on terms acceptable to our management team may not occur within our timing expectations or at all.
As of December 31, 2024, our mining operations in the states of Oklahoma and Kentucky are, and any future mining sites we may establish will be, subject to a variety of risks relating to physical condition and operation, including: • the presence of construction or repair defects or other structural or building damage; • any noncompliance with, or liabilities under, applicable environmental, health or safety regulations or requirements or building permit requirements; • any damage resulting from extreme weather conditions or natural disasters, such as hurricanes, earthquakes, fires, floods and snow or windstorms; and • claims by employees and others for injuries sustained at our properties.
As of December 31, 2025, our mining operations in the states of Oklahoma and Mississippi are, and any future mining sites we may establish will be, subject to a variety of risks relating to physical condition and operation, including: • the presence of construction or repair defects or other structural or building damage; • any noncompliance with, or liabilities under, applicable environmental, health or safety regulations or requirements or building permit requirements; • any damage resulting from extreme weather conditions or natural disasters, such as hurricanes, earthquakes, fires, floods and snow or windstorms; and • claims by employees and others for injuries sustained at our properties.
For example, our cryptocurrency mining facilities could be rendered inoperable, temporarily or permanently, as a result of, among others, a fire or other natural disasters. The security and other measures we anticipate to take to protect against these risks may not be sufficient.
For example, our Bitcoin mining facilities could be rendered inoperable, temporarily or permanently, as a result of, among others, a fire or other natural disasters. The security and other measures we anticipate to take to protect against these risks may not be sufficient.
Furthermore, under Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), we are required to document and test our internal control procedures and prepare annual management assessments of the effectiveness of our internal control over financial reporting. Our assessments must include disclosure of identified material weaknesses in our internal control over financial reporting.
Furthermore, under Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), we are required to document and test our internal control procedures and prepare annual management assessments of the effectiveness of our internal control over financial reporting. Our assessments must include disclosure of identified material weaknesses in our internal control over financial reporting.
Therefore, we may experience reduced earnings in earlier periods until such time as the revenue stream relating to the acquisition of such Accounts may be recognized. 25 Risks Relating to Our Securities Our common shares could be delisted from the Nasdaq Capital Market.
Therefore, we may experience reduced earnings in earlier periods until such time as the revenue stream relating to the acquisition of such Accounts may be recognized. 29 Risks Relating to Our Securities Our common shares could be delisted from the Nasdaq Capital Market.
Rodgers, the chairman and CEO of the Company, is a 50% owner of BLGAL, and the assignment and Amendment was approved by the independent directors of the Company. As of December 31, 2024, BLGAL was responsible for servicing over 98% of our Accounts.
Rodgers, the chairman and CEO of the Company, is a 50% owner of BLGAL, and the assignment and Amendment was approved by the independent directors of the Company. As of December 31, 2025, BLGAL was responsible for servicing over 98% of our Accounts.
Sales of a substantial number of shares of our common stock in the public market could cause a decrease in the market price of our common stock. We had authorized 350,000,000 shares of common stock and 150,000,000 shares of preferred stock as of December 31, 2024.
Sales of a substantial number of shares of our common stock in the public market could cause a decrease in the market price of our common stock. We had authorized 350,000,000 shares of common stock and 150,000,000 shares of preferred stock as of December 31, 2025.
We cannot assure you that securities analysts will continue to cover our company. As of December 31, 2024, we had two analysts covering our company. If securities analysts do not cover our company, this lack of coverage may adversely affect the trading price of 26 our securities.
We cannot assure you that securities analysts will continue to cover our company. As of December 31, 2025, we had two analysts covering our company. If securities analysts do not cover our company, this lack of coverage may adversely affect the trading price of our securities.
On April 13, 2023, we received a Notification Letter from The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it was not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on the Nasdaq Capital Market, due to the bid price of the Company’s common stock closing below the minimum $1 per share for the thirty (30) consecutive business days prior to the date of the Notification Letter.
On January 7, 2026, we received a Notification Letter from The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it was not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on the Nasdaq Capital Market, due to the bid price of the Company’s common stock closing below the minimum $1 per share for the thirty (30) consecutive business days prior to the date of the Notification Letter.
Risks Related to the Specialty Finance Business • We may not be able to purchase Accounts at favorable prices, or on sufficiently favorable terms, or at all. • We may not be able to recover sufficient amounts on our Accounts to fund our operations. • We are subject to intense competition seeking to provide a collection solution to Association s for delinquent Accounts. • We are dependent upon third-party law firms to service our Accounts. • Government regulations may limit our ability to recover and enforce the collection of our Accounts. • We may become regulated under the Consumer Financial Protection Bureau, or CFPB, and have not developed compliance standards for such oversight. • Current and new laws may adversely affect our ability to collect our Accounts, which could adversely affect our revenues and earnings. • Class action suits and other litigation could divert our management’s attention from operating our business, increase our expenses, and otherwise harm our business. • If our technology and software systems are not operational or are subject to cybersecurity incidents, our operations could be disrupted and our ability to successfully acquire and collect Accounts could be adversely affected. • Insolvency of BLGAL could have a material adverse effect on our financial condition, results of operations and cash flows. • Association do not make any guarantee with respect to the validity, enforceability or collectability of the Accounts acquired by us. • All of our Accounts are located in Florida. • Foreclosure on an Association’s lien may not result in our recouping the amount that we invested in the related Account. • The liens securing the Accounts we own may not be superior to all liens on the related units and homes. • We may not choose to pursue a foreclosure action against delinquent condominium and home owners. • The holding period for our Accounts from purchase to payoff is indeterminate.
Risks Related to the Specialty Finance Business • We may not be able to purchase Accounts at favorable prices, or on sufficiently favorable terms, or at all. • We may not be able to recover sufficient amounts on our Accounts to fund our operations. • We are subject to intense competition seeking to provide a collection solution to Association s for delinquent Accounts. • We are dependent upon third-party law firms to service our Accounts. • Government regulations may limit our ability to recover and enforce the collection of our Accounts. • We may become regulated under the Consumer Financial Protection Bureau, or CFPB, and have not developed compliance standards for such oversight. • Current and new laws may adversely affect our ability to collect our Accounts, which could adversely affect our revenues and earnings. • Class action suits and other litigation could divert our management’s attention from operating our business, increase our expenses, and otherwise harm our business. • Insolvency of BLGAL could have a material adverse effect on our financial condition, results of operations and cash flows. • Association do not make any guarantee with respect to the validity, enforceability or collectability of the Accounts acquired by us. • All of our Accounts are located in Florida. • Foreclosure on an Association’s lien may not result in our recouping the amount that we invested in the related Account. • We may not choose to pursue a foreclosure action against delinquent condominium and home owners. • The holding period for our Accounts from purchase to payoff is indeterminate.
Furthermore, changes in state law regarding the lien priority status of delinquent Association assessments could materially and adversely affect our business. Currently all of our Accounts are located in Florida, Class action suits and other litigation could divert our management’s attention from operating our business, increase our expenses, and otherwise harm our business.
Furthermore, changes in state law regarding the lien priority status of delinquent Association assessments could materially and adversely affect our business. Class action suits and other litigation could divert our management’s attention from operating our business, increase our expenses, and otherwise harm our business.
The revenue from our Bitcoin mining business is dependent on Bitcoin and the broader blockchain and Bitcoin mining ecosystem. Due to the highly volatile nature of the Bitcoin markets and the prices of Bitcoin assets, our operating results may fluctuate significantly from quarter to quarter in accordance with market sentiments and movements in the broader cryptocurrency ecosystem.
Due to the highly volatile nature of the Bitcoin markets and the prices of Bitcoin assets, our operating results may fluctuate significantly from quarter to quarter in accordance with market sentiments and movements in the broader cryptocurrency ecosystem.
Further, even without such regulation, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change or energy use by us or other companies in our industry could harm our reputation.
Further, even without such regulation, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change or energy use by us or other companies in our industry could harm our reputation and can have a material adverse effect on our business and financial condition.
Risks Relating to Our Cryptocurrency Mining Business • Our limited operating history in the Bitcoin mining business and history of operating losses and negative cashflow makes evaluating our business difficult. • Operating results may fluctuate due to the highly volatile nature of Bitcoin markets. • The uncertain impact of geopolitical and economic events on the demand for Bitcoin may adversely affect our business. • We have exposure to pricing risk and volatility associated with the value of Bitcoin because we do not currently hedge our investment in Bitcoin. • The sale of our Bitcoins to pay for expenses at a time of low Bitcoin prices could adversely affect an investment in us. • The development and acceptance of cryptographic and algorithmic protocols governing the issuance of and transactions in digital assets is subject to a variety of factors that are difficult to evaluate. • We will be exposed to risks and potential unexpected costs related to disruptions or other failures in the supply chain for Bitcoin hardware and difficulties in obtaining new hardware. • Mining machines rely on components and raw materials that may be subject to price fluctuations or shortages. • If we are unable to maintain power and hosting arrangements or secure sites for data centers, our business results may suffer. • Because our miners are designed specifically to mine Bitcoin and may not be readily adaptable to mining other cryptocurrencies, a sustained decline in Bitcoin's value could adversely affect our business and results of operations. • We may not be able to realize the benefits of forks . • The reward for successfully solving a block will halve in the future and its value may not adjust to compensate us for the reduction in the rewards we receive from our mining efforts. • If we fail to grow our hash rate, we may be unable to compete, and our results of operations could suffer. • Transaction fees may decrease demand for Bitcoin and prevent expansion. • Our reliance on a third-party mining pool service provider for our mining revenue payouts may adversely affect us. • We face risks from the open-source structure of the Bitcoin network protocol and any failure to properly monitor and upgrade the protocol. • Bitcoins held by us are not subject to FDIC or SIPC protections. • Bitcoins we mine or hold for our own account may be subject to loss, theft, or restriction on access. • We face risks from potential failures of digital asset exchanges and custodians. • The irreversibility of incorrect or fraudulent Bitcoin transactions creates risks for our business. • We face the risk of the possibility that a cryptocurrency other than Bitcoin could become more desirable to the digital asset user base. • We will likely need to raise additional capital to fund our Bitcoin mining business. • Bitcoin mining activities are energy-intensive, which may restrict the geographic locations of miners and have a negative environmental impact. • We may be affected by price fluctuations in the wholesale and retail power markets. • We will be vulnerable to severe weather conditions and natural disasters, including severe heat, earthquakes, fires, floods, hurricanes, as well as power outages and other industrial incidents, which could severely disrupt the normal operation of our business and adversely affect our results of operations. 8 • The properties in our mining network may experience damages, including damages that are not covered by insurance. • Adoption of a different method of validating transactions in Bitcoin could materially impair our Bitcoin mining business.
Risks Relating to Our Bitcoin Mining Business • Our limited operating history in the Bitcoin mining business and history of operating losses and negative cashflow makes evaluating our business difficult. • Operating results may fluctuate due to the highly volatile nature of Bitcoin markets. • The uncertain impact of geopolitical and economic events on the demand for Bitcoin may adversely affect our business. • The sale of our Bitcoins to pay for expenses at a time of low Bitcoin prices could adversely affect an investment in us. • The development and acceptance of cryptographic and algorithmic protocols governing the issuance of and transactions in digital assets is subject to a variety of factors that are difficult to evaluate. • We will be exposed to risks and potential unexpected costs related to disruptions or other failures in the supply chain for Bitcoin hardware and difficulties in obtaining new hardware. • Mining machines rely on components and raw materials that may be subject to price fluctuations or shortages. • If we are unable to maintain power and hosting arrangements or secure sites for data centers, our business results may suffer. • Because our miners are designed specifically to mine Bitcoin and may not be readily adaptable to mining other cryptocurrencies, a sustained decline in Bitcoin's value could adversely affect our business and results of operations. • The reward for successfully solving a block will halve in the future and its value may not adjust to compensate us for the reduction in the rewards we receive from our mining efforts. 9 • Transaction fees may decrease demand for Bitcoin and prevent expansion. • Our reliance on a third-party mining pool service provider for our mining revenue payouts may adversely affect us. • We face risks from the open-source structure of the Bitcoin network protocol and any failure to properly monitor and upgrade the protocol. • Bitcoins held by us are not subject to FDIC or SIPC protections. • Bitcoins we mine or hold for our own account may be subject to loss, theft, or restriction on access. • The irreversibility of incorrect or fraudulent Bitcoin transactions creates risks for our business. • We face the risk of the possibility that a cryptocurrency other than Bitcoin could become more desirable to the digital asset user base. • We will likely need to raise additional capital to fund our Bitcoin mining business. • Bitcoin mining activities are energy-intensive, which may restrict the geographic locations of miners and have a negative environmental impact.
If our assumptions about, or interpretation or implementation of, tax and other laws are incorrect; if tax laws or regulations are substantially modified or rescinded; if the tax incentives from which we benefit in the jurisdictions in which we operate are substantially modified or rescinded; if we fail to meet the conditions of any of the tax incentives; or if we do not prevail in disputes with tax authorities, we could suffer material adverse tax and other financial consequences, including owing significant amounts of taxes and penalties that would increase our expenses, reduce our profitability and adversely affect our cash flows, results of operations and financial condition.
If our assumptions about, or interpretation or implementation of, tax and other laws are incorrect; if tax laws or regulations are substantially modified or rescinded; if the tax incentives from which we benefit in the jurisdictions in which we operate are substantially modified or rescinded; if we fail to meet the conditions of any of the tax incentives; or if we do not prevail in disputes with tax authorities, we could suffer material adverse tax and other financial consequences, including owing significant amounts of taxes and penalties that would increase our expenses, reduce our profitability and adversely affect our cash flows, results of operations and financial condition. 24 Future developments regarding the treatment of digital assets for U.S. federal income and applicable state, local and non-U.S. tax purposes could adversely impact our business .
Under the Dodd-Frank Act, the CFPB is the principal supervisor and enforcer of federal consumer financial protection laws with respect to nondepository institutions, or “nonbanks”, including, without limitation, any 22 “covered person” who is a “larger participant” in a market for other consumer financial products or services.
Under the Dodd-Frank Act, the CFPB is the principal supervisor and enforcer of federal consumer financial protection laws with respect to nondepository institutions, or “nonbanks”, including, without limitation, any “covered person” who is a “larger participant” in a market for other consumer financial products or services. We do not know if our unique business model makes us a covered person.
Risks Relating to our Business -- General Risks Our quarterly operating results may fluctuate and cause our stock price to decline. Because of the nature of our business, our quarterly operating results may fluctuate, which may adversely affect the market price of our common stock.
Because of the nature of our business, our quarterly operating results may fluctuate, which may adversely affect the market price of our common stock.
We had 5,133,412 shares of common stock issued and outstanding as of December 31, 2024. In addition, pursuant to our 2021 Omnibus Incentive Plan, options to purchase 593,378 shares of our common stock were outstanding as of December 31, 2024, of which 386,169 options were exercisable.
We had 14,123,497 shares of common stock issued and outstanding as of December 31, 2025. In addition, pursuant to our 2021 Omnibus Incentive Plan, options to purchase 1,780,198 shares of our common stock were outstanding as of December 31, 2025, of which 593,378 options were exercisable.
Risks Relating to Our Securities • Our common shares could be delisted from the Nasdaq Capital Market. • Future sales of our common stock by our affiliates or other stockholders may depress our stock price. • The market price and trading volume of our shares of common stock may be volatile. • Securities analysts may not initiate coverage of our securities or may issue negative reports. • We have the right to designate and issue additional shares of preferred stock. • Any future issuance of preferred stock may adversely affect holders of our common stock. • Our management may identify material weaknesses in its internal control over financial reporting in the future. • We qualify as a smaller reporting company and are subject to scaled disclosure requirements. • We may become subject to a threatened direct or derivative claim by stockholders.
Risks Relating to Our Securities • Our common shares could be delisted from the Nasdaq Capital Market. • Securities analysts may not initiate coverage of our securities or may issue negative reports. • We have the right to designate and issue additional shares of preferred stock. • Our management may identify material weaknesses in its internal control over financial reporting in the future. • We qualify as a smaller reporting company and are subject to scaled disclosure requirements. 10 Risks Relating to our Business – General Risks Our quarterly operating results may fluctuate and cause our stock price to decline.
Furthermore, we plan to focus our business on Bitcoin mining, a new and developing field, which could further exacerbate the risks. In the event that actual results differ from our plans and expectations, our business, prospects, financial condition and operating results could be adversely affected. Our operating results may fluctuate due to the highly volatile nature of Bitcoin.
In the event that actual results differ from our plans and expectations, our business, prospects, financial condition and operating results could be adversely affected. Our operating results may fluctuate due to the highly volatile nature of Bitcoin. The revenue from our Bitcoin mining business is dependent on Bitcoin and the broader blockchain and Bitcoin mining ecosystem.
The issuance of shares of Preferred Stock, depending on the rights, preferences and privileges attributable to the Preferred Stock, could reduce the voting rights and powers of the common stock and the portion of our assets allocated for distribution to common stockholders in a liquidation event, and could also result in dilution in the book value per share of the common stock.
Our Board of Directors is empowered, without stockholder approval, to issue Preferred Stock in one or more series, and to fix for any series the dividend rights, dissolution or liquidation preferences, redemption prices, conversion rights, voting rights, and other rights, preferences and privileges for the Preferred Stock. 30 The issuance of shares of Preferred Stock, depending on the rights, preferences and privileges attributable to the Preferred Stock, could reduce the voting rights and powers of the common stock and the portion of our assets allocated for distribution to common stockholders in a liquidation event, and could also result in dilution in the book value per share of the common stock.
In the event Bitcoin adopts a similar system, it could make Bitcoin mining substantially less profitable and could even render the business obsolete. Where there is no assurance that Bitcoin will not adopt a “proof of stake” system.
In the event Bitcoin adopts a similar system, it could make Bitcoin mining substantially less profitable and could even render the business obsolete.
While Bitcoin prices are determined primarily using data from various exchanges, over-the-counter markets and derivative platforms, they have historically been volatile and are impacted by a variety of factors.
Because we do not currently hedge our investment in Bitcoin and do not intend to for the foreseeable future, we are directly exposed to Bitcoin’s price volatility and surrounding risks. While Bitcoin prices are determined primarily using data from various exchanges, over-the-counter markets and derivative platforms, they have historically been volatile and are impacted by a variety of factors.
There were 4,747,547 warrants outstanding and exercisable as of December 31, 2024 that allowed for the issuance of 4,747,547 shares of common stock, respectively.
There were 36,630,689 warrants outstanding and exercisable as of December 31, 2025 that may be exercised for the issuance of an aggregate of 36,630,689 shares of common stock, respectively.
We have limited operating history in the Bitcoin mining business upon which an investor may evaluate our business, prospects, financial condition and operating results. It is difficult to predict our future revenues and appropriately budget for our expenses, and we have limited insight into trends that may emerge and affect our Bitcoin mining business.
It is difficult to predict our future revenues and appropriately budget for our expenses, and we have limited insight into trends that may emerge and affect our Bitcoin mining business. Furthermore, we plan to focus our business on Bitcoin mining, a new and developing field, which could further exacerbate the risks.
If such banking institutions were to fail, we could lose all or a portion of those amounts held in excess of such insurance limitations. 11 Risks Relating to Our Bitcoin Mining Business Our limited operating history in the Bitcoin mining business makes evaluating our business and future prospects difficult and increases the risk of an investment in our securities.
If such banking institutions were to fail, we could lose all or a portion of those amounts held in excess of such insurance limitations. Risks Relating to Our Bitcoin Treasury Strategy Our operating results are dependent on the price of Bitcoin. If prices decline, our business, operating results, and financial condition would be adversely affected.
Risks Related to Governmental Regulation and Enforcement Operations If regulatory changes or interpretations of our activities require our registration as a money services business (an “MSB”) under the regulations promulgated by the Financial Crimes Enforcement Network (“FinCEN”) under the authority of the U.S.
While there is no assurance that Bitcoin will not adopt a “proof of stake” system, even if Bitcoin decided to adopt such a system, we do not believe that the adoption would occur in the near term, given the number of years it took Ethereum to create and implement its alternative system. 23 Risks Related to Governmental Regulation and Enforcement Operations If regulatory changes or interpretations of our activities require our registration as a money services business (an “MSB”) under the regulations promulgated by the Financial Crimes Enforcement Network (“FinCEN”) under the authority of the U.S.
Alternatively, global crises and economic downturns may discourage investment in Bitcoin and digital assets in general as investors shift their investments towards less volatile asset classes. Such events could have a material adverse effect on our business, prospects or operations and potentially the value of Bitcoin we mine or otherwise acquire or hold for our own account.
Such events could have a material adverse effect on our business, prospects or operations and potentially the value of Bitcoin we mine or otherwise acquire or hold for our own account. 16 The value of Bitcoin has historically been subject to wide swings.
We expect to negotiate for certain sale and use tax incentives from U.S. state governments in exchange for encouraging investment and employment. Our interpretations and conclusions regarding these potential tax incentives are not binding on any taxing authority.
Our interpretations and conclusions regarding these potential tax incentives are not binding on any taxing authority.
Any of the foregoing could result in a material adverse effect on our business and financial condition. If we fail to qualify for certain state government tax incentives or to comply with local tax regulations, we may suffer financial losses.
If we fail to qualify for certain state government tax incentives or to comply with local tax regulations, we may suffer financial losses. We expect to negotiate for certain sale and use tax incentives from U.S. state governments in exchange for encouraging investment and employment.
Even though we have regained compliance with the Nasdaq Capital Market’s minimum closing bid price requirement, there is no guarantee that we will remain in compliance with such listing requirements or other listing requirements in the future.
In accordance with listing rules, the Company was afforded 180 days, or until July 6, 2026, to regain compliance. There is no guarantee that we will regain and remain in compliance with such listing requirements or other listing requirements in the future.
Removed
The value of Bitcoin has historically been subject to wide swings. Because we do not currently hedge our investment in Bitcoin and do not intend to for the foreseeable future, we are directly exposed to Bitcoin’s price volatility and surrounding risks.
Added
Risks Relating to our Bitcoin Treasury Strategy • Our operating results are dependent on the price of Bitcoin.
Removed
Even if Bitcoin decided to adopt such a system, we do not believe that the adoption would occur during in the near term, given the number of years it took Ethereum to create and implement its alternative system.
Added
If prices decline, our business, operating results and financial condition would be adversely affected. • Because our common stock value is closely tied to our Bitcoin holdings, significant price declines could cause holders of our common stock to lose all or substantially all of their investment. • If a third-party custodian holding our Bitcoin enters bankruptcy or similar insolvency proceedings, our digital assets could be treated as part of the custodian's insolvency estate, resulting in significant delays in recovery, partial recovery, or total loss of those assets. • Our holdings are also subject to cyberattacks, hacking, and other unauthorized access that could result in a total loss of affected assets. • We are not registered as an investment company or investment adviser.
Removed
Finally, with the change in presidential administration in 2025, there is substantial uncertainty as to how, if at all, the new administration will seek to modify or revise the requirements and policies governing Bitcoin mining and cryptocurrency generally. The impending uncertainty could present new challenges or potential opportunities as we navigate continue to develop and grow our Bitcoin mining business.
Added
Holders of our common stock do not benefit from protections afforded to investors in registered funds or clients of registered advisers, including requirements relating to custody, diversification, leverage, and fiduciary duties. • If Bitcoin or other crypto assets we hold are determined to be securities under U.S. federal or state law, we could become subject to extensive registration, reporting, and compliance obligations, as well as potential enforcement actions, which could materially and adversely affect our business and financial condition. • Our Bitcoin treasury strategy is novel and may attract heightened scrutiny from the SEC, banking regulators, and state authorities, potentially resulting in significant compliance costs and required changes to our business strategy.
Removed
Future developments regarding the treatment of digital assets for U.S. federal income and applicable state, local and non-U.S. tax purposes could adversely impact our business .
Added
Any declines in the volume of crypto asset transactions, the price of crypto assets, or market liquidity for crypto assets generally may adversely affect our operating results. We have significant investments in Bitcoin. Thus, changes in the value of Bitcoin will generally have a significant impact on our results.
Removed
We do not know if our unique business model makes us a covered person.
Added
Our operating results will be impacted by the revenues and profits we generate from the purchase, sale, and trading of crypto assets. The price of crypto assets and associated demand for buying, selling, and trading of crypto assets have historically been subject to significant volatility. Bitcoin is a highly volatile asset.
Removed
In accordance with listing rules, the Company was afforded 180 days, or until October 11, 2023, to regain compliance. The Company was unable to regain compliance with the bid price requirement by October 11, 2023.
Added
The trading price of Bitcoin significantly decreased during prior periods, and such declines may occur again in the future. Such extreme fluctuations could significantly increase or reduce the value of our holdings within a short period.
Removed
However, on October 12, 2023, the Company received a notice from Nasdaq granting the Company an additional 180 calendar days, or until April 8, 2024, to regain compliance with the minimum $1.00 bid price per share requirement for continued listing on the Nasdaq Capital Market.
Added
The price and trading volume of any crypto asset is subject to significant uncertainty and volatility, and may significantly decline in the future, without recovery. Furthermore, crypto asset prices may be subject to market manipulation or distortion, including pump-and-dump schemes, wash trading, spoofing, and front-running, particularly on unregulated exchanges.
Removed
Nasdaq determined that the Company is eligible for the second compliance period due to the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market, with the exception of the bid price requirement, and the Company’s written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.
Added
Such manipulation could significantly impact the perceived value and trading volume and undermine investor confidence in the crypto asset market, adversely affecting our business. There is no assurance that any crypto asset will maintain its value or that there will be meaningful levels of trading activities.
Removed
On March 7, 2024, we filed an Amendment to our Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a one-for-six reverse stock split of our common stock which became effective at 12:01 a.m. eastern time, on March 12, 2024.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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The Chief Executive Officer and Chief Financial Officer provide information to our Board of Directors regarding its activities, including those related to cybersecurity risks, and are responsible for notifying the Board of material cybersecurity incidents. 28
The Chief Executive Officer and Chief Financial Officer provide information to our Board of Directors regarding its activities, including those related to cybersecurity risks, and are responsible for notifying the Board of material cybersecurity incidents . 32

Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties. Our executive and administrative offices are located in Tampa, Florida, where we lease approximately 5,600 square feet of general office space for approximately $9,800 per month, plus utilities. The lease began on July 15, 2019 and, as extended, expires on July 31, 2028. We also lease property in Calumet, Oklahoma for approximately $135,000 per year.
Item 2. Properties. Our executive and administrative offices are located in Tampa, Florida, where we lease approximately 5,600 square feet of general office space for approximately $9,800 per month, plus utilities. The lease began on July 15, 2019 and, as extended, expires on July 31, 2028. We also lease land in Calumet, Oklahoma for approximately $140,000 per year.
The lease was assumed upon the acquisition of the Tech Infrastructure Assets and expires on September 1, 2029. We believe our existing facilities and equipment are in good operating condition and are suitable for the conduct of our business. Please refer to the discussion contained in our Item 1- “Business” for additional information.
The lease for the land in Calumet, Oklahoma expires on June 6, 2029. We recently constructed a building on the land. We own approximately six acres in Columbus, Mississippi. We believe our existing facilities and equipment are in good operating condition and are suitable for the conduct of our business.
Added
Please refer to the discussion contained in our Item 1- “Business” for additional information.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Regardless of the outcome, litigation can have an adverse impact on us because of prosecution, defense, and settlement costs, diversion of management resources and other factors. Item 4. Mine Safe ty Disclosures. None. PART II
Regardless of the outcome, litigation can have an adverse impact on us because of prosecution, defense, and settlement costs, diversion of management resources and other factors. Item 4. Mine Safe ty Disclosures. Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Item 5. Market for Registrant’s Common Equity, Related Stock holder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is quoted on the Nasdaq Capital Market under the symbol “LMFA”. On December 31, 2024, there were 5 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stock holder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is quoted on the Nasdaq Capital Market under the symbol “LMFA”. On December 31, 2025, there were 5 holders of record of our common stock.
Securities Authorized for Issuance Under Equity Compensation Plans See “Equity Compensation Plan Information” in Part III, Item 12 of this Annual Report on Form 10-K. Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer None. Item 6. [Reserved ] 29
Securities Authorized for Issuance Under Equity Compensation Plans See “Equity Compensation Plan Information” in Part III, Item 12 of this Annual Report on Form 10-K. Dividend Policy We do not anticipate declaring or paying any cash dividends on our shares of common stock in the foreseeable future.
Added
It is presently intended that we will retain our earnings for use in business operations and, accordingly, it is not anticipated that our Board of Directors will declare dividends in the foreseeable future. Recent Sales of Unregistered Securities None.
Added
Purchases of Equity Securities by the Issuer 33 The following is a summary of stock repurchases for the three-month period ended December 31, 2025: Period (a) Total number of shares purchased (1) (b) Average Price per share (1) (c) Total number of shares purchased as part of publicly announced plans or programs (d) Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs October 1 to 31, 2025 3,308,575 $ 2.41 - $ - November 1 to 30, 2025 - $ - - $ - December 1 to 31, 2025 - $ - - $ - Total 3,308,575 - $ - (1) On October 29, 2025, we entered into Securities Repurchase Agreements with seven institutional investors (the “Investors”) whereby we agreed to repurchase from the Investors an aggregate of 3,308,575 shares of our common stock together with common stock purchase warrants to purchase an aggregate of 3,308,575 shares of common stock (which were subsequently adjusted to represent the right to purchase an aggregate of 7,248,787 shares of common stock.
Added
We paid $2.41 per unit of common stock and common stock purchase warrant for an aggregate repurchase price of $8 million. Item 6. [Reserved ] 34

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Income Tax Expense During the year ended December 31, 2024, the Company generated a $7.7 million net loss before income taxes. The Company's income tax due was nil as of December 31, 2024. The Company recognized net income tax expense of nil for the year ended December 31, 2024.
During the year ended December 31, 2024, the Company generated a $7.7 million net loss before income taxes. The Company's income tax due was nil as of December 31, 2024. The Company recognized net income tax expense of nil for the year ended December 31, 2024.
We also disclose Earnings before Interest, Tax, Depreciation and Amortization (“EBITDA”) and Core Earnings before Interest, Tax, Depreciation and Amortization (“Core EBITDA”) which adjusts for unrealized loss on investment and equity securities, unrealized gain on convertible 38 debt securities, gain on adjustment of note receivable allowance, impairment loss on mined digital assets, impairment of intangible long-lived assets, impairment of prepaid hosting deposits, impairment of prepaid mining machine deposits and gain on adjustment of note receivable allowance, non-cash lease expenses, costs associated with At-the-Market Equity program, contract termination costs, Impairment loss on Symbiont assets, impairment loss on mining equipment, and stock compensation expense and option expense, all of which are non-GAAP financial measures.
We also disclose Earnings before Interest, Tax, Depreciation and Amortization (“EBITDA”) and Core Earnings before Interest, Tax, Depreciation and Amortization (“Core EBITDA”) which adjusts for unrealized loss on investment and equity securities, unrealized gain on convertible debt securities, gain on adjustment of note receivable allowance, impairment loss on mined digital assets, impairment of intangible long-lived assets, impairment of prepaid hosting deposits, impairment of prepaid mining machine deposits and gain on adjustment of note receivable allowance, non-cash lease expenses, costs associated with At-the-Market Equity program, contract termination costs, Impairment loss on Symbiont assets, impairment loss on mining equipment, and stock compensation expense and option expense, all of which are non-GAAP financial measures.
The decrease in Bitcoin mining revenue for the twelve months ended December 31, 2024 was attributable to the halving that occurred in April 2024 and approximately 4,000 mining machines that were off-line as we repositioned the miners to our Oklahoma site offset in part by the increase in Bitcoin prices.
The decrease in Bitcoin mining revenue for the twelve months ended December 31, 2025 was attributable to the halving that occurred in April 2024 and approximately 4,000 mining machines that were off-line as we repositioned the miners to our Oklahoma site offset in part by the increase in Bitcoin prices.
Historically, we provided funding against such delinquent accounts, which 30 we refer to as “Accounts,” in exchange for a portion of the proceeds collected by the Associations from the account debtors on the Accounts.
Historically, we provided funding against such delinquent accounts, which we refer to as “Accounts,” in exchange for a portion of the proceeds collected by the Associations from the account debtors on the Accounts.
Down payment of $47,990 was required upfront and ten installment payments of $47,990 are to be made over the loan term. The note matures on August 1, 2025. Annualized interest is 9.35%. 382,013 Financing agreement with Imperial PFS that is unsecured. Down payment of $14,040 was required upfront.
Down payment of $47,990 was required upfront and ten installment payments of $47,990 are to be made over the loan term. The note matured on August 1, 2025. Annualized interest is 9.35%. - 382,013 Financing agreement with Imperial PFS that is unsecured. Down payment of $14,040 was required upfront.
There are no critical accounting estimates for the year ended December 31, 2024. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements. Item 7A. Quantitative and Qualitat ive Disclosures About Market Risk Not applicable
There are no critical accounting estimates for the year ended December 31, 2025 or 2024. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements. Item 7A. Quantitative and Qualitat ive Disclosures About Market Risk Not applicable
The Company records depreciation expense (a non-cash expense) on its miners on a straight-line basis over the miners' expected useful life. Such non-cash depreciation amounts are recorded within the Consolidated Statements of Operations and Comprehensive Loss as “Depreciation and Amortization”.
The Company records depreciation expense (a non-cash expense) on its miners on a straight-line basis over the miners' expected useful life. Such non-cash depreciation amounts are recorded within the consolidated statements of operations as “Depreciation and Amortization”.
We conduct this business through a wholly owned subsidiary, US Digital, which we formed in 2021 to develop and operate our Bitcoin mining business. With respect to our specialty finance business, the Company has historically engaged in the business of providing funding to nonprofit community associations primarily located in the state of Florida.
We conduct this business through our wholly owned subsidiary, US Digital, a Florida limited liability company, which we formed in 2021 to develop and operate our Bitcoin mining business. 35 With respect to our specialty finance business, the Company has historically engaged in the business of providing funding to nonprofit community associations primarily located in the state of Florida.
Net Loss Attributable to Common Shareholders During the year ended December 31, 2024, net loss attributable to common shareholders was $6.8 million higher than net loss attributable to LM Funding America, Inc. due to deemed dividends related to warrant repricing and warrant inducement.
Net Loss Attributable to Common Shareholders During the year ended December 31, 2025 and 2024, net loss attributable to common shareholders was $1.6 million and $6.8 million higher, respectively, than net loss attributable to LM Funding America, Inc. due to deemed dividends related to warrant repricing and warrant inducement.
The following table provides a range of intraday low and intraday high Bitcoin prices between January 1, 2022 through December 31, 2024.
The following table provides a range of intraday low and intraday high Bitcoin prices between January 1, 2022 through December 31, 2025.
As a result, the Company believes that a valuation allowance continues to be necessary based on the more-likely-than-not threshold noted above. The Company recorded a valuation allowance of approximately $16.2 million and $14.1 million for the year ended December 31, 2024 and 2023, respectively. Net Loss Attributable to Non-Controlling Interest The Company owns 69.5% of LMFAO Sponsor LLC (“Sponsor”).
As a result, the Company believes that a valuation allowance continues to be necessary based on the more-likely-than-not threshold noted above. The Company recorded a valuation allowance of approximately $21.7 million and $16.2 million for the year ended December 31, 2025 and 2024, respectively. Net Loss Attributable to Non-Controlling Interest The Company owns 69.5% of LMFAO Sponsor LLC (“Sponsor”).
Bitcoin mining revenues decreased to approximately $10.4 million for the year ended December 31, 2024 from $12.3 million for the year ended December 31, 2023. Bitcoin mining revenues are determined by two main drivers: quantity of Bitcoin mined and the price of Bitcoin on the date the Bitcoin is mined.
Bitcoin mining revenues decreased to approximately $8.3 million for the year ended December 31, 2025 from $10.4 million for the year ended December 31, 2024. Bitcoin mining revenues are determined by two main drivers: quantity of Bitcoin mined and the price of Bitcoin on the date the Bitcoin is mined.
During the year ended December 31, 2024, the Company generated a net loss attributable to LM Funding America, Inc. of approximately $7.3 million as compared with net loss attributable to LM Funding America, Inc. of approximately $15.9 million for the year ended December 31, 2023, for the reasons mentioned above.
During the year ended December 31, 2025, the Company generated a net loss attributable to LM Funding America, Inc. of approximately $26.9 million as compared with net loss attributable to LM Funding America, Inc. of approximately $7.3 million for the year ended December 31, 2024, for the reasons mentioned above.
As such, approximately $0.3 million and $2.9 million of the $1.1 million and $9.8 million net unrealized loss recognized by the Sponsor’s ownership of Seastar Medical Holding Corporation (formerly LMAO) is attributed to the Non-Controlling Interest for the years ended December 31, 2024 and 2023, respectively. Net Loss Attributable to LM Funding America, Inc.
As such, approximately $55 thousand and $0.3 million of the $0.2 million and $1.1 million net unrealized loss recognized by the Sponsor’s ownership of Seastar Medical Holding Corporation (formerly LMAO) is attributed to the Non-Controlling Interest for the years ended December 31, 2025 and 2024, respectively. Net Loss Attributable to LM Funding America, Inc.
The table above presents the non-cash miner depreciation expense on a “per Bitcoin” basis, calculated by dividing miner depreciation expense in our hosted facilities by the number of Bitcoin mined in the hosted facilities. On a “cost per Bitcoin” ratio, miner depreciation expense was approximately $45,300 and $11,600 for the years ended December 31, 2024, and 2023, respectively.
The table above presents the non-cash miner depreciation expense on a “per Bitcoin” basis, calculated by 37 dividing miner depreciation expense in our hosted facilities by the number of Bitcoin mined in the hosted facilities. On a “cost per Bitcoin” ratio, miner depreciation expense was approximately $94,100 and $45,300 for the years ended December 31, 2025, and 2024, respectively.
Legal fees for BLG and BLGAL for the year ended December 31, 2024 were approximately $0.5 million compared with approximately $0.6 million for the year ended December 31, 2023. See Note 11 Related Party Transactions for further discussion regarding the service agreements with BLG and BLGAL.
Legal fees for BLGAL for the year ended December 31, 2025 were approximately $0.5 million compared with approximately $0.5 million for the year ended December 31, 2024. See Note 11 Related Party Transactions for further discussion regarding the service agreements with BLGAL.
Digital mining cost of revenues Bitcoin mining costs of revenues for the year ended December 31, 2024 were approximately $7.0 million or 67% of digital mining revenues compared with approximately $9.4 million or 77% of digital mined revenues for the year ended December 31, 2023 as the Company transitioned approximately 4,000 miners from various hosting sites over a 6 month period to the recently acquired Oklahoma site resulting in no hosting costs for those idled machines.
Digital mining cost of revenues Bitcoin mining costs of revenues for the year ended December 31, 2025 were approximately $5.8 million or 69.9% of digital mining revenues compared with approximately $7.0 million or 67% of digital mined revenues for the year ended December 31, 2024 as the 38 Company transitioned approximately 4,000 miners from various hosting sites over a six month period to the recently acquired Oklahoma site resulting in no hosting costs for those idled machines.
Interest Expense During the year ended December 31, 2024, interest expense was approximately $0.4 million as compared with nil for the year ended December 31, 2023 due to $6.5 million of new loans used for working capital and the purchase of the Oklahoma site in 2024.
Interest Expense During the year ended December 31, 2025, interest expense was approximately $1.1 million as compared with $0.4 million for the year ended December 31, 2024 due to $6.5 million of new loans used for working capital and the purchase of the Oklahoma site in late 2024 and the Mississippi site in 2025.
LIQUIDITY AND CAPITAL RESOURCES General As of December 31, 2024, we had $3.4 million of cash and cash equivalents and $14.0 million of digital assets (150.2 Bitcoin with average cost of approximately $93 thousand), of which $5.0 million is pledged as collateral against outstanding borrowings, compared with $2.4 million of cash and cash equivalents and $3.4 million of digital assets (95.1 Bitcoin with average cost of approximately $36 thousand) at December 31, 2023).
LIQUIDITY AND CAPITAL RESOURCES General As of December 31, 2025, we had $1.4 million of cash and cash equivalents and $18.5 million of digital assets (211.4 Bitcoin with average cost of approximately $88 thousand), of which $7.7 million is pledged as collateral against outstanding borrowings, compared with $3.4 million of cash and cash equivalents and $14.0 million of digital assets (150.2 Bitcoin with average cost of approximately $93 thousand) at December 31, 2024).
The Company considers all positive and negative evidence available in determining the potential realization of deferred tax assets including, primarily, the recent history of taxable earnings or losses. Based on operating losses reported by the Company during 2023, 2022, 2020, 2019 and 2018, the Company concluded there was not sufficient positive evidence to overcome this recent operating history.
The Company considers all positive and negative evidence available in determining the potential realization of deferred tax assets including, primarily, the recent history of taxable earnings or losses. Based on operating losses reported by the Company in prior years, the Company concluded there was not sufficient positive evidence to overcome this recent operating history.
During 2024, the Company received net proceeds from borrowings of $6.3 million for working capital and acquisition purposes and raised $6.9 million in net proceeds from equity offerings. 37 Outstanding Debt Debt of the Company consisted of the following: December 31, 2024 December 31, 2023 Financing agreement with Imperial PFS that is unsecured.
During the year ended December 31, 2024, the Company received net proceeds from borrowings of $6.3 million for working capital and acquisition purposes and raised $6.9 million in net proceeds from equity offerings and the exercise of warrants. 42 Outstanding Debt Debt of the Company consisted of the following: December 31, 2025 December 31, 2024 Financing agreement with Imperial PFS that is unsecured.
Range of intraday Bitcoin prices Quarterly Reporting Periods Ended Minimum Price Maximum Price December 31, 2022 $ 15,486 $ 21,474 March 31, 2023 $ 16,489 $ 29,178 June 30, 2023 $ 24,750 $ 31,422 September 30, 2023 $ 24,915 $ 31,838 December 31, 2023 $ 26,544 $ 44,800 March 31, 2024 $ 38,501 $ 73,836 June 30, 2024 $ 56,500 $ 72,777 September 30, 2024 $ 49,050 $ 70,000 December 31, 2024 $ 58,864 $ 108,389 Effective January 1, 2024, we adopted ASC 350-60 which required Bitcoin to be measured at fair value.
Range of intraday Bitcoin prices Quarterly Reporting Periods Ended Minimum Price Maximum Price December 31, 2022 $ 15,486 $ 21,474 March 31, 2023 $ 16,489 $ 29,178 June 30, 2023 $ 24,750 $ 31,422 September 30, 2023 $ 24,915 $ 31,838 December 31, 2023 $ 26,544 $ 44,800 March 31, 2024 $ 38,501 $ 73,836 June 30, 2024 $ 56,500 $ 72,777 September 30, 2024 $ 49,050 $ 70,000 December 31, 2024 $ 58,864 $ 108,389 March 31, 2025 $ 76,555 $ 109,358 June 30, 2025 $ 74,421 $ 112,000 September 30, 2025 $ 105,120 $ 124,533 December 31, 2025 $ 80,525 $ 126,296 Effective January 1, 2024, we adopted ASC 350-60 which required Bitcoin to be measured at fair value.
Professional fees Professional fees (excluding fees paid pursuant to our service agreement with BLG and BLGAL), for the years ended December 31, 2024 and 2023 were approximately $1.5 million and $1.2 million, respectively. The $0.3 million increase was due in part to various regulatory filings, deal costs for potential acquisitions and various other matters.
Professional fees Professional fees (excluding fees paid pursuant to our service agreement with BLGAL), for the years ended December 31, 2025 and 2024 were approximately $1.1 million and $1.5 million, respectively. The $0.4 million decrease was due in part to reduced regulatory filings, deal costs for potential acquisitions and various other matters.
Unrealized loss on investment and equity securities The Company recognized an unrealized loss on securities of approximately $1.1 million for the year ended December 31, 2024 as compared with an unrealized loss of approximately $9.8 million for the year ended December 31, 2023 from the revaluation of Seastar Medical Holding Corporation common stock and warrants.
Other Income and Loss Unrealized loss on investment and equity securities The Company recognized an unrealized loss on securities of approximately $0.2 million for the year ended December 31, 2025 as compared with an unrealized loss of approximately $1.1 million for the year ended December 31, 2024 from the revaluation of Seastar Medical Holding Corporation common stock and warrants.
Except as required by law, we assume no duty to update or revise any forward-looking statements. Overview LM Funding America, Inc. (“we”, “our”, “LMFA”, or the “Company”) currently has two lines of business: our cryptocurrency mining business and our specialty finance business.
Except as required by law, we assume no duty to update or revise any forward-looking statements. Overview LM Funding America, Inc. (“we”, “our”, “LMFA”, or the “Company”) currently has three distinct business operations: our Bitcoin treasury operations, Bitcoin mining business and our specialty finance business.
Important factors which could materially affect our results and our future performance include, without limitation, the following risks, as well as other factors set forth under “Risk Factors” in this report. • our ability to retain the listing of our securities on the Nasdaq Capital market; • our ability to obtain funds to purchase receivables; • the early stage of our cryptocurrency mining business and our lack of operating history in such business; • volatility surrounding the value of Bitcoin and other cryptocurrencies; • the uncertainty surrounding the cryptocurrency mining business in general; • bankruptcy or financial problems of our hosting vendors in our mining business; • reliance to date on a single model of Bitcoin miner; • the ability to scale our mining business; • our ability to purchase defaulted consumer Association receivables at appropriate prices, • competition to acquire such receivables; • our dependence upon third party law firms to service our accounts; • our ability to manage growth or declines in the business; • changes in government regulations that affect our ability to collect sufficient amounts on our defaulted consumer Association receivables; • the impact of class action lawsuits and other litigation on our business or operations; • our ability to keep our software systems updated to operate our business; • our ability to employ and retain qualified employees; • our ability to establish and maintain internal accounting controls; • changes in the credit or capital markets; • changes in interest rates; • deterioration in economic conditions; • negative press regarding the debt collection industry which may have a negative impact on a debtor’s willingness to pay the debt we acquire; and • other factors set forth under “Risk Factors” in this report.
Important factors which could materially affect our results and our future performance include, without limitation, the following risks, as well as other factors set forth under “Risk Factors” in this report. • our ability to retain the listing of our securities on the Nasdaq Capital market; • our ability to obtain funds to purchase receivables; • the early stage of our Bitcoin mining business and our lack of operating history in such business; • volatility surrounding the value of Bitcoin and other cryptocurrencies; • the uncertainty surrounding the cryptocurrency mining business in general; • bankruptcy or financial problems of our hosting vendors in our mining business; • our Bitcoin treasury strategy exposes us to various risks associated with holding Bitcoin; • our Bitcoin treasury strategy has not been tested over an extended period of time or under different market conditions; • our ability to successfully execute our strategy for acquiring and holding Bitcoin as a treasury reserve asset; • we are subject to counterparty risks, including in particular risks relating to our custodians; • the ability to scale our mining business; • our ability to purchase defaulted consumer Association receivables at appropriate prices, • competition to acquire such receivables; • our dependence upon third party law firms to service our accounts; • our ability to manage growth or declines in the business; • changes in government regulations that affect our ability to collect sufficient amounts on our defaulted consumer Association receivables; • the impact of class action lawsuits and other litigation on our business or operations; • our ability to keep our software systems updated to operate our business; • our ability to employ and retain qualified employees; • our ability to establish and maintain internal accounting controls; • changes in the credit or capital markets; • changes in interest rates; • deterioration in economic conditions; • negative press regarding the debt collection industry which may have a negative impact on a debtor’s willingness to pay the debt we acquire; and • other factors set forth under “Risk Factors” in this report.
During the year ended December 31, 2023, the Company generated a $18.8 million net loss before income taxes. The Company's income tax due was $0.1 million as of December 31, 2023. The Company recognized net income tax expense of $0.1 million for the year ended December 31, 2023.
Income Tax Expense During the year ended December 31, 2025, the Company generated a $27.0 million net loss before income taxes. The Company's income tax due was nil as of December 31, 2025. The Company recognized net income tax expense of nil for the year ended December 31, 2025.
Cash from Operations Net cash used in operations was approximately $11.9 million during the year ended December 31, 2024 compared with net cash used in operations of $3.4 million during the year ended December 31, 2023.
Cash from Operations Net cash used in operations was approximately $14.0 million during the year ended December 31, 2025 compared with net cash used in operations of $11.9 million during the year ended December 31, 2024.
Interest Income During the year ended December 31, 2024, interest income increased to approximately $0.3 million as compared with $0.2 million for the year ended December 31, 2023 due to various loans provided to the Arthur Group for the Oklahoma site before it was purchased by the Company.
Interest Income During the year ended December 31, 2025, interest income was approximately $3 thousand as compared with $307 thousand for the year ended December 31, 2024 due to various loans provided to the Arthur Group for the Oklahoma site before it was purchased by the Company in late 2024.
During the 35 year ended December 31, 2024, net loss attributable to common shareholders was $14.1 million as compared with $15.9 million for the year ended December 31, 2023.
During the year ended December 31, 2025, net loss attributable to common shareholders was $28.5 million as compared with $14.1 million for the year ended December 31, 2024.
Three installment payments of $14,830 and eight installment payments of $717 are to be made over the loan term. The note matures on July 1, 2025. Annualized interest is 10.45%. 4,299 - Financing agreement with Imperial PFS that is unsecured.
Three installment payments of $14,830 and eight installment payments of $717 are to be made over the loan term. The note matured on July 1, 2025. Annualized interest is 10.45%. - 4,299 Financing agreement with Imperial PFS that is unsecured. Down payment of $9,218 was required upfront. Eleven installment payments of $16,743 are to be made over the loan term.
During the twelve months ended December 31, 2024, we mined 170.6 Bitcoin with an average Bitcoin price of approximately $61 thousand as compared with 423.4 Bitcoin with an average Bitcoin price of approximately $29 thousand during the twelve months ended December 31, 2023.
During the twelve months ended December 31, 2025, we mined 82.3 Bitcoin with an average Bitcoin price of approximately $102 thousand as compared with 170.6 Bitcoin with an average Bitcoin price of approximately $61 thousand during the twelve months ended December 31, 2024.
We curtail when power prices exceed the value we would receive for the corresponding fixed Bitcoin reward. This means if Bitcoin’s value decreases or energy prices increase, our curtailment will increase; likewise, when Bitcoin’s value increases and energy prices decrease, our curtailment will decrease. Our management team manages this decision on an hour-by-hour basis for our owned site.
This means if Bitcoin’s value decreases or energy prices increase, our curtailment will increase; likewise, when Bitcoin’s value increases and energy prices decrease, our curtailment will decrease. Our management team manages this decision on an hour-by-hour basis for our owned site.
Cash from Financing Activities Net cash from financing activities was $12.5 million during the year ended December 31, 2024 as compared with net cash used in financing activities of $0.7 million for the year ended December 31, 2023.
Cash from Financing Activities Net cash provided by financing activities was $31.6 million during the year ended December 31, 2025 as compared with net cash provided by financing activities of $12.5 million for the year ended December 31, 2024.
Loss (gain) on fair value of Bitcoin, net The gain on fair value of Bitcoin, net for the twelve months ended December 31, 2024 and 2023, was $7.4 million and nil, respectively.
Loss (gain) on fair value of Bitcoin, net The loss (gain) on fair value of Bitcoin, net for the year ended December 31, 2025 and 2024, was a loss of $1.8 million and a gain of $7.4 million, respectively.
December 31, 2024 December 31, 2023 Bitcoin Balance 150.2 95.1 December 31, 2024 December 31, 2023 Beginning of Year 95.1 54.9 Production of Bitcoin 170.6 423.4 Purchase of Bitcoin 5.0 2.0 Sale of Bitcoin (120.2 ) (385.0 ) Fees (0.3 ) (0.2 ) End of Period 150.2 95.1 31 The table below describes the average cost of mining each Bitcoin for the years ended December 31, 2024 and 2023.
The table below describes the Company's Bitcoin activity for the years ended December 31, 2025 and 2024. 36 December 31, 2025 December 31, 2024 Bitcoin Balance 211.4 150.2 December 31, 2025 December 31, 2024 Beginning of Year 150.2 95.1 Production of Bitcoin 82.3 170.6 Purchase of Bitcoin 211.0 5.0 Sale of Bitcoin (86.7 ) (120.2 ) Bitcoin transferred for loan collateral (145.0 ) - Fees (0.4 ) (0.3 ) End of Period 211.4 150.2 The table below describes the average cost of mining each Bitcoin for the years ended December 31, 2025 and 2024.
Interest was 10% per annum for the year ended December 31, 2024, with an increase to 11% per annum as of the amendment date. 1,500,000 - Loan with SE & SJ Liebel Limited Partnership. $5.0 million of Bitcoin has been pledged as collateral. The note matures on August 6, 2026.
The note matures on June 30, 2026. Interest was 10% per annum for the year ended December 31, 2024, with an increase to 11% per annum as of March 27, 2025. 1,500,000 1,500,000 Loan with SE & AJ Liebel Limited Partnership. $2.2 million of Bitcoin has been pledged as collateral. The note matures on September 15, 2027.
Operating Costs and Expenses During the year ended December 31, 2024, operating costs and expenses decreased by approximately $5.6 million, or 24.3%, to approximately $17.5 million from approximately $23.1 million for the year ended December 31, 2023 primarily due to a decrease in digital mining costs, staff costs and payroll and professional fees and an increase in fair market value gain on digital assets, offset in part by an increase in depreciation expense.
Operating Costs and Expenses During the year ended December 31, 2025, operating costs and expenses increased by approximately $14.2 million, or 81.1%, to approximately $31.7 million from approximately $17.5 million for the year ended December 31, 2024 primarily due to an increase in fair market value loss on digital assets, an impairment loss on mining equipment and staff costs and payroll along with depreciation expense offset in part by professional fees and mining costs of revenue.
Specialty finance revenues for the year ended December 31, 2024 was approximately $444 thousand which represents a decrease of 19.4% as compared with the approximately $550 thousand generated in the year ended December 31, 2023.
Specialty finance revenues for the year ended December 31, 2025 was approximately $452 thousand which represents an increase of 2.0% as compared with the approximately $444 thousand generated in the year ended December 31, 2024.
Years Ended December 31, Cost of Revenues - Analysis of costs to mine one Bitcoin (per Bitcoin amounts are actual) 2024 2023 Bitcoin Mined 170.6 423.4 Digital mining revenues $ 10,432,605 $ 12,289,131 Average revenue of each Bitcoin mined (1) $ 61,152 $ 29,025 Digital mining cost of revenues $ 6,990,856 $ 9,406,940 Miner depreciation $ 7,730,208 $ 4,918,332 Direct costs to mine including non-cash depreciation $ 14,721,064 $ 14,325,272 Direct costs to mine one Bitcoin - hosting fees only (2) $ 40,978 $ 22,218 Direct costs to mine one Bitcoin - including miner depreciation expense $ 86,290 $ 33,834 Cost of mining one Bitcoin as % of average Bitcoin mining revenue - hosting fees only 67 % 77 % Cost of mining one Bitcoin as % of average Bitcoin mining revenue - including miner depreciation expense 141 % 117 % (1) Average revenue of each Bitcoin mined is calculated by dividing the sum of Bitcoin mining revenue for hosted facilities by the total number of Bitcoin mined during the respective periods.
Year ended December 31, Cost of Revenues - Analysis of costs to mine one Bitcoin (per Bitcoin amounts are actual) 2025 2024 Bitcoin Mined 82.3 170.6 Digital mining revenues $ 8,283,423 $ 10,432,605 Average revenue of each Bitcoin mined (1) $ 100,649 $ 61,152 Digital mining cost of revenues and curtailment and energy sales $ 5,134,385 $ 6,990,856 Miner related depreciation (2) $ 7,747,406 $ 7,730,208 Direct costs to mine including non-cash depreciation $ 12,881,791 $ 14,721,064 Direct costs to mine one Bitcoin - Energy/hosting fees only (3) $ 62,386 $ 40,978 Direct costs to mine one Bitcoin - including miner related depreciation expense $ 156,522 $ 86,290 Cost of mining one Bitcoin as % of average Bitcoin mining revenue - energy/hosting fees only 62 % 67 % Cost of mining one Bitcoin as % of average Bitcoin mining revenue - including miner related depreciation expense 156 % 141 % (1) Average revenue of each Bitcoin mined is calculated by dividing the sum of Bitcoin mining revenue for hosted facilities by the total number of Bitcoin mined during the respective periods.
As of December 31, 2024 and December 31, 2023, our liquidity was comprised of: December 31, 2024 December 31, 2023 Cash and cash equivalents $ 3,378,152 $ 2,401,831 Bitcoin - current portion 9,021,927 3,416,256 Bitcoin - long-term 5,000,000 - Marketable securities 27,050 17,860 End of Period $ 17,427,129 $ 5,835,947 The Company's Bitcoin balance as of December 31, 2024, and 2023, was as follows: Bitcoin December 31, 2024 December 31, 2023 Number of Bitcoin held 150.2 95.1 Carrying basis - per Bitcoin $ 65,332 $ 35,816 Fair value - per Bitcoin $ 93,354 $ 42,273 Carrying basis of Bitcoin $ 9,812,891 $ 3,406,096 Fair value of Bitcoin $ 14,019,205 $ 4,020,202 The Company's cash flow summary for the years ended December 31, 2024 and 2023 are as follows: Years Ended December 31, 2024 2023 Cash Flows used in operating activities $ (11,946,179 ) $ (3,404,681 ) Cash Flows provided by investing activities 379,421 2,299,537 Cash Flows provided by (used in) financing activities 12,543,079 (731,031 ) Net increase (decrease) in cash 976,321 (1,836,175 ) Cash - beginning of year 2,401,831 4,238,006 Cash - end of period $ 3,378,152 $ 2,401,831 36 Recent Capital Raising Transactions The Company received $6.9 million in net proceeds from equity financing transactions during the year ended December 31, 2024 compared with nil for the year ended December 31, 2023.
As of December 31, 2025 and December 31, 2024, our liquidity was comprised of: December 31, 2025 December 31, 2024 Cash and cash equivalents $ 1,424,426 $ 3,378,152 Bitcoin - current portion 8,063,474 9,021,927 Bitcoin - long-term 10,433,035 5,000,000 Bitcoin receivable 12,678,014 - Marketable securities 37,380 27,050 End of Period $ 32,636,329 $ 17,427,129 The Company's Bitcoin balance as of December 31, 2025, and 2024, was as follows: Bitcoin December 31, 2025 December 31, 2024 Number of Bitcoin held 211.4 150.2 Carrying basis - per Bitcoin $ 100,863 $ 65,332 Fair value - per Bitcoin $ 87,505 $ 93,354 Carrying basis of Bitcoin $ 21,322,419 $ 9,812,891 Fair value of Bitcoin $ 18,494,338 $ 14,019,205 The Company's cash flow summary for the years ended December 31, 2025 and 2024 are as follows: Year ended December 31, 2025 2024 Cash flows used in operating activities $ (13,987,759 ) $ (11,946,179 ) Cash flows provided by (used in) investing activities (19,543,085 ) 379,421 Cash flows provided by financing activities 31,577,118 12,543,079 Net increase (decrease) in cash (1,953,726 ) 976,321 Cash - beginning of year 3,378,152 2,401,831 Cash - end of period $ 1,424,426 $ 3,378,152 41 Recent Capital Raising Transactions The Company received $27.3 million in net proceeds from equity financing transactions during the year ended December 31, 2025 compared with $6.9 million for the year ended December 31, 2024.
Therefore, negative swings in the market price of Bitcoin could have a material impact on our earnings and on the carrying value of our Bitcoin. As of December 31, 2024 and 2023, we held approximately 150 and 95 Bitcoin, respectively.
Therefore, negative swings in the market price of Bitcoin could have a material impact on our earnings and on the carrying value of our Bitcoin. As of December 31, 2025 and 2024, we held approximately 211 and 150 Bitcoin, respectively. This does not include 145 Bitcoin valued at $12.7 million classified as Digital assets receivable, net.
Mining Site As of December 31, 2024, we own a 15 MW hosting site located in Oklahoma (the “Oklahoma site”) with 3,006 installed S19J Pro Antminer machines which have a total projected hashrate of 301 PH.
Mining Sites As of December 31, 2025, we own: • 15 MW hosting site located in Calumet Oklahoma (the “Oklahoma site”) with 4,480 installed Antminer machines which have a total projected hashrate of 503 PH. • 11 MW hosting site located in Columbus Mississippi (the “Columbus site”) with 2,380 installed Antminer machines which have a total projected hashrate of 238 PH.
Impairment loss on mining equipment The Company incurred a $1.4 million impairment and nil loss on mining equipment for the year ended December 31, 2024, respectively, primarily related to machines disposed of in April 2024. Other operating costs was relatively flat at $0.9 million and $1.0 million for the year ended December 31, 2024 and 2023, respectively.
Impairment loss on mining equipment The Company incurred a $5.4 million impairment on mining equipment for the year ended December 31, 2025 primarily related to machines to be held and used as compared to $1.4 million impairment for the year ended December 31, 2024, primarily related to machines disposed of in April 2024.
Energy prices are also highly sensitive to weather events, such as winter storms, polar vortices and hurricanes, which increase the demand for power regionally. When such events occur, we may curtail our operations to avoid using power at increased rates. Our management team makes real-time determinations on the need and timing during which we should curtail our operations.
When such events occur, we may curtail our operations to avoid using power at increased rates. Our management team makes real-time determinations on the need and timing during which we should curtail our operations. We curtail when power prices exceed the value we would receive for the corresponding fixed Bitcoin reward.
However, such sales totaling approximately $10.9 million are reported in 2023 as net cash provided from operating activities. Cash from Investing Activities Net cash provided by investing activities was $0.4 million during the year ended December 31, 2024 as compared with net cash provided by investing activities of $2.3 million during the year ended December 31, 2023.
Cash from Investing Activities Net cash used in investing activities was $19.5 million during the year ended December 31, 2025 as compared with net cash provided by investing activities of $0.4 million during the year ended December 31, 2024.
Such prices are governed by power purchase agreements and said prices can change hour to hour. While this renders energy prices less predictable, it also gives us greater ability and flexibility to actively manage the energy we consume with a goal of increasing profitability and energy efficiency.
While this renders energy prices less predictable, it also gives us greater ability and flexibility to actively manage the energy we consume with a goal of increasing profitability and energy efficiency. Energy prices are also highly sensitive to weather events, such as winter storms, polar vortices and hurricanes, which increase the demand for power regionally.
Energy prices can be highly volatile and global events (including the war in Ukraine and the resulting natural gas shortage) can cause power prices to increase. Our wholly owned and operated site in Oklahoma is currently subject to variable prices and market rate fluctuations with respect to wholesale power costs.
Power prices are the most significant cost driver for our wholly owned locations. Energy prices can be highly volatile and global events (including the war in Ukraine and the resulting natural gas shortage) can cause power prices to increase.
Bitcoin received from mining operations of approximately $10.4 million for 2024 and $12.3 million for 2023 is not considered a cash generative activity for cashflow purposes. Due to ASC 350-60, proceeds from sale of digital assets (primarily Bitcoin) of approximately $8.3 million are reported in 2024 as a net cash provided by investing activity.
Bitcoin received from mining operations of approximately $8.3 million for 2025 and $10.4 million for 2024 is not considered a cash generative activity for cashflow purposes.
The number of Bitcoin received by the Company as a result of its mining operations was reduced by approximately 50% effective April 19, 2024 when the Bitcoin algorithm halved the rewards from 6.25 per block to 3.125 per block. 32 Results of Operations Summarized Consolidated Statements of Operations Years Ended December 31, 2024 2023 Revenue $ 10,999,648 $ 12,984,090 Operating costs and expenses 17,461,199 23,055,398 Operating loss (6,461,551 ) (10,071,308 ) Other loss (1,193,881 ) (8,743,488 ) Loss before income taxes (7,655,432 ) (18,814,796 ) Income tax expense - (60,571 ) Net loss (7,655,432 ) (18,875,367 ) Less: loss attributable to non-controlling interest 340,056 2,931,113 Net loss attributable to LM Funding America Inc. $ (7,315,376 ) $ (15,944,254 ) Less: deemed dividends (6,794,924 ) - Net loss attributable to common shareholders $ (14,110,300 ) $ (15,944,254 ) The Year Ended December 31, 2024 compared with the Year Ended December 31, 2023 Revenues During the year ended December 31, 2024, total revenues decreased by approximately $2.0 million to approximately $11.0 million from approximately $13.0 million in the year ended December 31, 2023.
Results of Operations Summarized Consolidated Statements of Operations Year ended December 31, 2025 2024 Revenue $ 8,844,733 $ 10,999,648 Operating costs and expenses 31,729,620 17,461,199 Operating loss (22,884,887 ) (6,461,551 ) Other loss (4,090,304 ) (1,193,881 ) Loss before income taxes (26,975,191 ) (7,655,432 ) Income tax expense - - Net loss (26,975,191 ) (7,655,432 ) Less: loss attributable to non-controlling interest 54,994 340,056 Net loss attributable to LM Funding America Inc. $ (26,920,197 ) $ (7,315,376 ) Less: deemed dividends (1,579,020 ) (6,794,924 ) Net loss attributable to common shareholders $ (28,499,217 ) $ (14,110,300 ) The Year Ended December 31, 2025 compared with the Year Ended December 31, 2024 Revenues During the year ended December 31, 2025, total revenues decreased by approximately $2.2 million to approximately $8.8 million from approximately $11.0 million in the year ended December 31, 2024.
The increase in cash for the year ended December 31, 2024 is due primarily to several equity and warrant transaction net proceeds totaling $6.9 million, net borrowings totaling $6.3 million and the receipt of $1.4 million of loan repayments from Seastar Medical Holding Corporation offset in part by the purchase of $0.5 million of digital assets and $3.6 million used towards the purchase of the Oklahoma site.
The decrease in cash for the year ended December 31, 2025 is due primarily to several equity and warrant transactions with net proceeds totaling $27.3 million and net borrowings totaling $13.0 million offset in part by the purchase of $22.8 million of digital 40 assets, $8.0 million for the repurchase of common stock and warrants and $4.2 million used towards the purchase of the Mississippi site.
The carrying value of our Bitcoin as of December 31, 2024 and 2023 was approximately $14.0 million and $3.4 million, respectively, on our Consolidated Balance Sheet. As of December 31, 2024, we own approximately 5,840 machines with total hashing capacity of approximately 0.634 EH/s.
The carrying value of the total Bitcoin and Digital assets receivable as of December 31, 2025 and 2024 was approximately $31.2 million and $14.0 million, respectively, on our consolidated balance sheets.
Down payment of $36,544 was required upfront and equal installment payments of $41,879 to be made over an 10 month period. The note matured on August 1, 2024. Annualized interest is 9.6%. - 335,022 Financing agreement with Imperial PFS that is unsecured.
The note matures on June 1, 2026. Annualized interest is 9.45%. 100,461 - Financing agreement with Imperial PFS that is unsecured. Down payment of $6,900 was required upfront. Six installment payments of $12,604 are to be made over the loan term. The note matures on June 1, 2026.
Interest is 12% per annum. 5,000,000 - Debt discount (134,655 ) $ 6,751,657 $ 567,586 Minimum required principal payments on the Company’s debt as of December 31, 2024 are as follows: Maturity Amount 2025 $ 386,312 2026 $ 6,500,000 $ 6,886,312 During the years ended December 31, 2024 and 2023 the Company paid $709 thousand and $624 thousand in principal and financing repayments, respectively.
Interest is 0% per annum. 11,000,000 - Debt discount (196,259 ) (134,655 ) $ 19,860,252 $ 6,751,657 Minimum required principal payments on the Company’s debt as of December 31, 2025 are as follows: Maturity Amount 2026 18,056,511 2027 2,000,000 $ 20,056,511 During the years ended December 31, 2025 and 2024 the Company paid $734 thousand and $709 thousand in principal and financing repayments, respectively. 43 Non-GAAP Financial Measures Our reported results are presented in accordance with U.S. generally accepted accounting principles (“GAAP”).
The Company recorded accelerated depreciation on certain of its miners based on the reduction of the estimated useful life from 5 years to 4 years.
The Company recorded accelerated depreciation on certain of its miners based on the reduction of the estimated useful life from five years to four years. The Company utilizes a third-party broker to facilitate our participation in demand response programs at our Oklahoma site.
The following tables reconcile net loss, which we believe is the most comparable GAAP measure, to EBITDA and Core EBITDA: Years Ended December 31, 2024 2023 Net loss $ (7,655,432 ) $ (18,875,367 ) Income tax expense - 60,571 Interest expense 443,700 - Depreciation and amortization 7,774,161 4,983,480 Income (loss) before interest, taxes & depreciation $ 562,429 $ (13,831,316 ) Unrealized loss on investment and equity securities 1,097,433 9,771,050 Gain on adjustment of note receivable allowance - (1,052,542 ) Impairment loss on mined digital assets - 965,967 Impairment loss on prepaid machine deposits 12,941 36,691 Impairment loss on prepaid hosting deposits - 184,236 Costs associated with At-the-Market Equity program 119,050 - Contract termination costs 250,001 - Impairment loss on Symbiont assets - 750,678 Impairment loss on mining equipment 1,379,375 - Stock compensation and option expense 519,542 2,939,436 Core income (loss) before interest, taxes & depreciation $ 3,940,771 $ (235,800 ) Critical Accounting Estimates and Policies Our financial statements are prepared in accordance with generally accepted accounting principles in the United States, or GAAP.
The following tables reconcile net loss, which we believe is the most comparable GAAP measure, to EBITDA and Core EBITDA: Year ended December 31, 2025 2024 Net loss $ (26,975,191 ) $ (7,655,432 ) Income tax expense - - Interest expense 1,124,685 443,700 Depreciation and amortization 8,171,570 7,774,161 Income (loss) before interest, taxes & depreciation $ (17,678,936 ) $ 562,429 Unrealized loss on investment and equity securities 179,972 1,097,433 Loss on disposal of mining equipment 501,800 136,100 Impairment loss on mining equipment 5,391,857 1,379,375 Impairment loss on prepaid machine deposits 4,885 12,941 Costs associated with At-the-Market Equity program - 119,050 Contract termination costs - 250,001 Stock compensation and option expense 687,748 519,542 Core income (loss) before interest, taxes & depreciation $ (10,912,674 ) $ 4,076,871 Core loss for the year ended December 31, 2025 includes a loss on fair value of Bitcoin, net of $1.8 million and a $3.0 million loss on fair value of digital assets receivable.
Depreciation and amortization The increase in depreciation and amortization expense of $2.8 million to $7.8 million for the twelve months ended December 31, 2024 was primarily due to the change in useful life of mining machines from 60 months to 48 months effective January 1, 2024.
Depreciation and amortization The increase in depreciation and amortization expense of $0.4 million to $8.2 million for the year ended December 31, 2025 was primarily due to the acquisition of the Mississippi site.
(2) Weighted average cost of mining one Bitcoin is calculated by dividing the sum of total hosting fee expense by the total Bitcoin mined during the respective periods. Power prices are the most significant cost driver for our wholly owned locations.
(2) Miner related depreciation includes depreciation and amortization related to intangible assets, buildings, equipment and mining machines used in the mining process. (3) Weighted average cost of mining one Bitcoin is calculated by dividing the sum of total hosting fee expense by the total Bitcoin mined during the respective periods.
The improved direct mining cost to revenue metric was achieved as the result of lower hosting and electrical costs associated with our Oklahoma mining activity. 33 Staff costs and payroll The net decrease of approximately $1.3 million in staff costs and payroll is due to a decrease in the non-cash stock compensation expense to $0.5 million for the year ended December 31, 2024 as compared with $2.9 million for the year ended December 31, 2023, offset in part by an increase in payroll and bonuses of approximately $1.1 million for the year ended December 31, 2024.
Staff costs and payroll The net increase of approximately $1.7 million in staff costs and payroll is due to an increase in the non-cash stock compensation expense and adding approximately nine staff at the Oklahoma and Mississippi sites. In addition, incentive pay for the year ended December 31, 2025 was greater compared to the year ended December 31, 2024.
Accordingly, (gains) losses recognized on fair value of Bitcoin in fiscal year 2024 are not comparable to fiscal year 2023. The Company recognized an impairment loss on the holding of mined digital assets (Bitcoin) of nil for the year ended December 31, 2024 and $1.0 million for the year ended December 31, 2023.
Unrealized gain on Galaxy loan derivative The Company incurred a $0.3 million unrealized gain on the Galaxy loan derivative for the year ended December 31, 2025. 39 Loss on fair value of digital assets receivable The Company incurred a $3.0 million and nil loss on the fair value of the digital assets receivable Bitcoin assets in custody for the Galaxy loan for the year ended December 31, 2025 and 2024, respectively.
Down payment of $30,000 was required upfront and equal installment payments of $35,103 to be made over a 6 month period. The note matured on June 1, 2024. Annualized interest is 12.05%. - 210,619 Secured loan with Brown Family Enterprises LLC. The note matures on March 31, 2026.
Annualized interest is 9.45%. 75,627 - Financing agreement with Imperial PFS that is unsecured. Down payment of $50,635 was required upfront. Ten installment payments of $47,553 are to be made over the loan term. The note matures on August 1, 2026. Annualized interest is 8.6%. 380,423 - Secured loan with Brown Family Enterprises LLC.
During the year ended December 31, 2023, the Company invested $1.6 million in deposits for mining equipment but received $2.7 million from a notes receivable for Seastar Medical Holding Corporation and $1.8 million from the sale of Symbiont assets.
During the year ended December 31, 2025, the Company invested $2.2 million in mining equipment, purchased Bitcoin for $22.8 million and acquired a mining site for approximately $4.2 million.
Removed
The Bitcoin mining business operation deploys our computing power to mine Bitcoin and validate transactions on the Bitcoin network. We believe that developments in Bitcoin mining have created an opportunity for us to deploy capital and conduct large-scale mining operations in the United States.
Added
Our investment strategy with respect to our Bitcoin treasury operations involves retaining a majority of our currently held Bitcoin and acquiring new Bitcoin through our mining operations. We may sell or leverage our Bitcoin to support operational needs and strategic initiatives. Our Bitcoin mining operation deploys our computing power to mine Bitcoin on the Bitcoin network.
Removed
As of March 15, 2025, we have 4,320 installed S19 J Pro Antminer machines at this location which have a total projected hashrate of 432 PH. We have another 719 mining machines in storage at the Oklahoma site.
Added
As of December 31, 2025, we own approximately 7,200 machines with total hashing capacity of approximately 0.75 EH/s as compared to approximately 5,840 machines as of December 31, 2024 with total hashing capacity of approximately 0.63 EH/s.
Removed
During fiscal year 2024, we moved 5,039 mining machines from our three hosting companies to the Oklahoma site of which approximately 2,033 were stored in containers at Oklahoma site and not plugged into power as of December 31, 2024. The table below describes the Bitcoin activity for the years ended December 31, 2024 and 2023.
Added
In January 2026, the Company subsequently increased the number of active machines at the Oklahoma site by 128 S21 Immersion Antminer machines which increased total projected active hashrate to 778 PH.
Removed
As discussed in the financial statements, the Company adopted the amendments per ASC 350-60 as of January 1, 2024, accordingly, we measured crypto assets at fair value in accordance with ASC Topic 820 - Fair Value Measurement and included the gains and losses from remeasurement in net income.
Added
Our wholly owned and operated site in Oklahoma is currently subject to variable prices and market rate fluctuations with respect to wholesale power costs. Such prices are governed by power purchase agreements and said prices can change hour to hour.
Removed
The gain pertains to the change in Bitcoin's fair value from January 1, 2024, through December 31, 2024. The fair value of Bitcoin was approximately $93 thousand per Bitcoin at December 31, 2024 and $42 thousand per Bitcoin at December 31, 2023.
Added
The sale of power under these programs was approximately $0.7 million and nil for the year ended December 31, 2025 and 2024, respectively.
Removed
Prior to adoption of ASC Topic 350-60 - Intangibles - Goodwill and Other - Crypto Assets, Bitcoin was classified as indefinite-lived intangible assets and were measured at cost less impairment. Additionally, in the previous guidance, subsequent increases in Bitcoin prices are not allowed to be recorded unrealized gains unless the Bitcoin is sold, at which point the gain is recognized.
Added
The number of Bitcoin received by the Company as a result of its mining operations was reduced by approximately 50% effective April 19, 2024 when the Bitcoin algorithm halved the rewards from 6.25 per block to 3.125 per block.
Removed
The Company recognized a realized gain on the sale of mined digital assets of nil for the year ended December 31, 2024 compared with $2.1 million for year ended December 31, 2023.
Added
The improved direct mining cost to revenue metric was achieved as the result of lower hosting and electrical costs associated with our Oklahoma mining activity.
Removed
Other Income and Loss Impairment loss on prepaid mining machine deposits The Company incurred an impairment loss on prepaid mining machine deposits of $13 thousand and $37 thousand for the years ended December 31, 2024 and 2023, respectively.
Added
Curtailment and energy sales The sale of power at our Oklahoma site increased to approximately $0.7 million for the year ended December 31, 2025 as compared to nil for 2024 due to participation in energy sales beginning in 2025.
Removed
Impairment loss on prepaid hosting deposits The Company incurred an impairment loss on prepaid hosting deposits of nil for the year ended December 31, 2024 versus a $0.2 million for the year ended December 31, 2023 due to a $0.2 million impairment charge on the deposits held by Compute North LLC, which is in bankruptcy.
Added
Selling, general and administrative The increase in selling, general and administrative expense of $0.8 million to $1.6 million for the year ended December 31, 2025 was primarily due to increases in travel, rent, insurance, office expenses and repairs and maintenance related to the recently acquired Oklahoma and Mississippi sites.

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